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EXHIBIT 4.D
THE COASTAL CORPORATION
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
--------------------------
PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF , 1999
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TABLE OF CONTENTS
Page
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RECITALS1
ARTICLE I
Definitions and Other Provisions of General Applications....................................... 1
Section 1.1. Definitions....................................................................1
Section 1.2. Compliance Certificates and Opinions...........................................15
Section 1.3. Form of Documents Delivered to Agent...........................................16
Section 1.4. Acts of Holders; Record Dates..................................................16
Section 1.5. Notices........................................................................18
Section 1.6. Notice to Holders; Waiver......................................................19
Section 1.7. Effect of Headings and Table of Contents.......................................19
Section 1.8. Successors and Assigns.........................................................20
Section 1.9. Separability Clause............................................................20
Section 1.10. Benefits of Agreement..........................................................20
Section 1.11. Governing Law..................................................................20
Section 1.12. Legal Holidays.................................................................20
Section 1.13. Counterparts...................................................................21
Section 1.14. Inspection of Agreement........................................................21
ARTICLE II
Certificate Forms................................................................................21
Section 2.1. Forms of Certificates Generally................................................21
Section 2.2. Form of Agent's Certificate of Authentication..................................23
ARTICLE III
The Securities...................................................................................23
Section 3.1. Title and Terms; Denominations.................................................23
Section 3.2. Rights and Obligations Evidenced by the Certificates...........................23
Section 3.3. Execution, Authentication, Delivery and Dating.................................24
Section 3.4. Temporary Certificates.........................................................25
Section 3.5. Registration; Registration of Transfer and Exchange............................26
Section 3.6. Book-Entry Interests...........................................................27
Section 3.7. Notices to Holders.............................................................28
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Section 3.8. Appointment of Successor Clearing Agency.......................................29
Section 3.9. Definitive Certificates........................................................29
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.............................29
Section 3.11. Persons Deemed Owners..........................................................31
Section 3.12. Cancellation...................................................................31
Section 3.13 Establishment or Restablishment of Growth PRIDES...............................32
Section 3.14. Establishment or Reestablishment of Income PRIDES..............................34
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event....................36
Section 3.16. No Consent to Assumption.......................................................36
ARTICLE IV
The Debentures...................................................................................37
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice..............................37
Section 4.2. Notice and Voting..............................................................38
Section 4.3. Tax Event Redemption...........................................................39
ARTICLE V
The Purchase Contracts...........................................................................40
Section 5.1. Purchase of Shares of Common Stock.............................................40
Section 5.2. Contract Adjustment Payments...................................................42
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.....................43
Section 5.4. Payment of Purchase Price......................................................45
Section 5.5. Issuance of Shares of Common Stock.............................................50
Section 5.6. Adjustment of Settlement Rate..................................................51
Section 5.7. Notice of Adjustments and Certain Other Events.................................57
Section 5.8. Termination Event; Notice......................................................58
Section 5.9. Early Settlement...............................................................59
Section 5.10. No Fractional Shares...........................................................61
Section 5.11. Charges and Taxes..............................................................62
ARTICLE VI
Remedies.........................................................................................62
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock...............................62
Section 6.2. Restoration of Rights and Remedies.............................................63
Section 6.3. Rights and Remedies Cumulative.................................................63
Section 6.4. Delay or Omission Not Waiver...................................................63
Section 6.5. Undertaking for Costs..........................................................63
Section 6.6. Waiver of Stay or Extension Laws...............................................64
ARTICLE VII
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The Agent........................................................................................64
Section 7.1. Certain Duties and Responsibilities............................................64
Section 7.2. Notice of Default..............................................................65
Section 7.3. Certain Rights of Agent........................................................66
Section 7.4. Not Responsible for Recitals or Issuance of Securities.........................67
Section 7.5. May Hold Securities............................................................67
Section 7.6. Money Held in Custody..........................................................67
Section 7.7. Compensation and Reimbursement.................................................67
Section 7.8. Corporate Agent Required; Eligibility..........................................68
Section 7.9. Resignation and Removal; Appointment of Successor..............................68
Section 7.10. Acceptance of Appointment by Successor.........................................70
Section 7.11. Merger, Conversion, Consolidation or Succession to Business....................70
Section 7.12. Preservation of Information; Communications to Holders.........................71
Section 7.13. No Obligations of Agent........................................................71
Section 7.14. Tax Compliance.................................................................72
ARTICLE VIII
Supplemental Agreements..........................................................................72
Section 8.1. Supplemental Agreements Without Consent of Holders.............................72
Section 8.2. Supplemental Agreements with Consent of Holders................................73
Section 8.3. Execution of Supplemental Agreements...........................................74
Section 8.4. Effect of Supplemental Agreements..............................................75
Section 8.5. Reference to Supplemental Agreements...........................................75
ARTICLE IX
Consolidation, Merger, Sale or Conveyance........................................................75
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.......................................75
Section 9.2. Rights and Duties of Successor Corporation.....................................76
Section 9.3. Opinion of Counsel Given to Agent..............................................77
ARTICLE X
Covenants........................................................................................77
Section 10.1. Performance Under Purchase Contracts...........................................77
Section 10.2. Maintenance of Office or Agency................................................77
Section 10.3. Company to Reserve Common Stock................................................78
Section 10.4. Covenants as to Common Stock...................................................78
EXHIBIT A Form of Face Income PRIDES Certificate
EXHIBIT B Form of Face Growth PRIDES Certificate
EXHIBIT C Instruction From Purchase Contract Agent to Collateral Agent
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EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle by Separate Cash
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PURCHASE CONTRACT AGREEMENT, dated as of , 1999 between The Coastal
Corporation, a Delaware corporation (the "Company"), and The Bank of New York, a
national banking association, acting as purchase contract agent for the Holders
of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in this Section
1.1(d).
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"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1993, as amended, as is in effect on the date hereof.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
"Applicable Ownership Interest" means, with respect to an Income PRIDES
and the Treasury Securities in the Treasury Portfolio, (A) a, or %, undivided
beneficial ownership interest in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to 15, 2002 and (B) for each
scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a % undivided beneficial ownership interest in a $1,000
face amount of such U.S. Treasury Security which is a principal or interest
strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to 16, 2002, the aggregate principal amount of the
Debentures which are components of Income PRIDES on the Tax Event Redemption
Date or (ii) if the Tax Event Redemption occurs on or after 16, 2002, the
aggregate principal amount of the Debentures outstanding on such Tax Event
Redemption Date.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are Legal Holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
purposes of the Reset Announcement Date is currently anticipated to be The Wall
Street Journal.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the 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).
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"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in Xxx Xxxx Xxxx (xx xxx Xxxxx xx Xxx Xxxx)
are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, $0.33 1/3 par value, of the
Company.
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"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means (i) in the case of Income PRIDES,
the amount payable by the Company in respect of each Purchase Contract initially
constituting a part of an Income PRIDES, equal to o% per annum of the Stated
Amount and (ii) in the case of Growth PRIDES, the amount payable by the Company
in respect of each Purchase Contract initially constituting a part of a Growth
PRIDES, equal to % per annum of the Stated Amount, in each case computed on the
basis of a 360 day year of twelve 30 day months, plus any Deferred Contract
Adjustment Payments accrued pursuant to Section 5.2 or 5.3.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at The Bank of New
York, 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, XX 00000, Attention:
Corporate Trust Administration.
"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the % Debentures due 16, 2004, to be issued under the Indenture as of the date
hereof.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
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"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section 5.4(b).
"Global Debenture Certificate" means a certificate evidencing the
respective rights and obligations of Holders in respect of the number of
Debentures specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Growth PRIDES" means the collective rights and obligations of a Holder
of a Growth PRIDES Certificate in respect of the Treasury Securities, subject to
the Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Guarantee" means the guarantee agreement to be dated as of , 1999 of
the Company in respect of the Common Securities and the Debentures.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Debenture or an appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
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"Indenture" means, collectively, the Base Indenture and the First
Supplemental Indenture, and any other indentures supplemental thereto pursuant
to which the Debentures are to be issued.
"Indenture Trustee" means Xxxxxx Trust and Savings Bank, a national
banking association, as trustee under the Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"New York Office" shall have the meaning set forth in Section 10.2
"Officer's Certificate" means a certificate of the Company signed on
its behalf by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to the Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES, as the case may be, evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES for
which the Stated Amount of Treasury Securities has been theretofore
deposited with the Agent in trust for the Holders of such Growth PRIDES
and (B) Income PRIDES for which the Stated Amount of the related
Debenture or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered to the
Agent for cancellation or deemed cancelled pursuant to the provisions
of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such Certificate in respect
of which there shall have been presented to
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the Agent proof satisfactory to it that such Certificate is held by a
bona fide purchaser in whose hands the Income PRIDES or Growth PRIDES
evidenced by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have been
pledged in good faith may be regarded as Outstanding Securities if the pledgee
establishes to the satisfaction of the Agent the pledgee's right so to act with
respect to such Income PRIDES or Growth PRIDES and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing 16, .
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof or any other entity of whatever nature.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Debentures
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, and of the Treasury Securities, in each case constituting a
part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities, as the same may hereafter be amended in accordance with the terms
thereof.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to
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evidence the same rights and obligations of the Company and the Holder as the
mutilated, destroyed, lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means 16, 2002.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quotation Agent" means (i) Xxxxxxx Xxxxx Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Sponsor shall substitute therefor
another Primary Treasury Dealer or (ii) any other Primary Treasury Dealer
selected by the Sponsor.
"Record Date" for the distribution payable in respect of the Debentures
and Contract Adjustment Payments, if any, payable on any Payment Date means the
first day of the month in which the relevant Payment Date occurs.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"Redemption Price" means the redemption price per Security equal to the
Redemption Amount plus any accrued and unpaid Distributions to the date of
redemption
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or, in the case of any redemption in connection with the final maturity of the
Debentures, an amount per Security equal to the redemption price for $ in
principal amount of Debentures plus accrued and unpaid Distributions to the date
of redemption.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated as of ,
1999 by and among the Company, the Remarketing Agent and the Purchase Contract
Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Reset Agent" means a nationally recognized investment banking firm
chosen by the Sponsor to determine the Reset Rate. It is currently anticipated
that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated will act in such
capacity.
"Reset Announcement Date" means the tenth Business Day immediately
preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be determined by
the Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the rate of
interest on the Two-Year Benchmark Treasury in effect on the third Business Day
immediately preceding the Purchase Contract Settlement Date that the Capital
Securities should bear in order for the Debentures to have an approximate market
value of % of their aggregate stated liquidation amount on the third Business
Day immediately preceding the Purchase Contract Settlement Date; provided, that
the Company may limit such Reset Spread to be no higher than basis points ( %)
and the Sponsor shall limit the Reset Rate, if applicable, to the maximum rate
permitted by applicable law.
"Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth Business Day immediately preceding the Purchase Contract
Settlement Date.
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on a
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parity in right of payment with or subordinate in right of payment to the
Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $ .
"Tax Event" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Debentures are issued, which amendment, change or proposed change is effective
or which interpretation or pronouncement is announced on or after the date of
the first issuance of Debentures under the Indenture, there is more than an
insubstantial risk that (i) interest payable by the Company on the Debentures
would not be deductible, in whole or in part, by the Company for United States
federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Debentures, at the option of the Company, in
whole but not in part, on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days, or (iii) at any time on or
prior to the Purchase Contract Settlement Date the
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Company shall file a petition for relief under the Bankruptcy Code, or shall
consent to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization or liquidation under the
Bankruptcy Code or any other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent to the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to 16,
2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to 15, 2002 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of U.S. Treasury Securities which mature on or prior to such
date in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the Debentures on such date, and
(b) if the Tax Event Redemption Date occurs after 16, 2002, a portfolio of
zero-coupon U.S. Treasury Securities consisting of (i) principal or interest
strips of U.S. Treasury Securities which mature on or prior to 15, 2004 in an
aggregate amount equal to the Applicable Principal Amount and (ii) with respect
to each scheduled interest payment date on the Debentures that occurs after the
Tax Event Redemption Date, principal or interest strips of such U.S. Treasury
Securities which mature on or prior to such date in an aggregate amount equal to
the aggregate interest payment that would be due on the Applicable Principal
Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Treasury Portfolio for settlement on the Tax Event Redemption
Date.
"Treasury Security" means zero-coupon U.S. Treasury Securities (CUSIP
Number ) which are the principal strip of the U.S. Treasury Securities which
mature on 15, 2002.
"Two-Year Benchmark Treasury" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having a
maturity comparable to the remaining term to maturity of the Debentures, as
agreed upon by the Sponsor and the Reset Agent. The rate for the Two-Year
Benchmark Treasury will be the
17
bid side rate displayed at 10:00 A.M., New York City time, on the third Business
Day immediately preceding the Purchase Contract Settlement Date in the Telerate
system (or if the Telerate system is (a) no longer available on the third
Business Day immediately preceding the Purchase Contract Settlement Date or (b)
in the opinion of the Reset Agent (after consultation with the Company) no
longer an appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the opinion of the Reset Agent
(after consultation with the Company) is appropriate). If such rate is not so
displayed, the rate for the Two-Year Benchmark Treasury shall be, as calculated
by the Reset Agent, the yield to maturity for the Two-Year Benchmark Treasury,
expressed as a bond equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by taking the arithmetic
mean of the secondary market bid rates, as of 10:30 A.M., New York City time, on
the third Business Day immediately preceding the Purchase Contract Settlement
Date of three leading United States government securities dealers selected by
the Reset Agent (after consultation with the Company) (which may include the
Reset Agent or an Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement dated , 1999
among the Company, and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and
Xxxxxx Brothers Inc. and Banc of America Securities LLC.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
reasonably requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
18
(3) a statement that, in the opinion of each such Person, he
or she or it has made such examination or investigation as is necessary
to enable such individual to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless the Company knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless the Person giving such certificate or
Opinion of Counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Income PRIDES or the Growth PRIDES,
as the case may be, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the pro posed action
by Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
20
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Agent at The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx
Xxxx, XX 00000, Attention: Corporate Trust Administration, or at any
other address previously furnished in writing by the Agent to the
Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Company at The Coastal Corporation, Coastal Tower, Nine Xxxxxxxx Xxxxx,
Xxxxxxx, XX 00000-0000, Attention: [Chief Financial Officer], or at any
other address previously furnished in writing to the Agent by the
Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed
in writing and person ally delivered or mailed, first-class postage
prepaid, addressed to the Collateral Agent at , Attention: [Corporate
Trust Administration], or at any other address previously furnished in
writing by the Collateral Agent to the Agent, the Company and the
Holders; or
(4) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at c/o Bank of Montreal Trust Company, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Trust Officer, or at any
other address previously furnished in writing by the Indenture Trustee
to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to
21
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, then, to the extent permitted by law, the
validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the applicable terms and conditions hereof and of the Securities evidenced by
their Certificates by their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
22
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date unless there shall be a default in the payment due on such next
succeeding Business Day, except that, if such next succeeding Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by
23
the officers of the Company executing such Income PRIDES Certificates, as
evidenced by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Income PRIDES Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase Contract
forming part of the Growth PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit B hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Growth PRIDES Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
24
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES and Growth PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.9, 3.10, 3.13, 3.14, 5.9 or
8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the owner
ship by the Holder thereof of a beneficial interest in a Debenture or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject to the Pledge of such Debenture or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Agent as attorney-in-fact for, and on
behalf of, the Holder of each Income PRIDES shall pledge, pursuant to the Pledge
Agreement, the Debenture or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming a part of such Income PRIDES, to the
Collateral Agent and grant to the Collateral Agent a security interest in the
right, title, and interest of such Holder in such Debenture or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for the
benefit of the Company, to secure the obligation of the Holder under each
Purchase Contract to purchase the Common Stock of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the owner
ship by the Holder thereof of a 1/100 undivided beneficial interest in a
Treasury Security with a principal amount at maturity equal to $ , subject to
the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the Company
under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf
of, the Holder of each Growth PRIDES shall pledge, pursuant to the Pledge
Agreement, the Treasury Security to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such Treasury Security, for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase the Common
Stock of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
25
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers or its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES are listed, or
as may, consistently herewith, be deter mined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
26
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office or the New York office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, one or more definitive Certificates of like tenor and
denominations and evidencing a like number of Income PRIDES or Growth PRIDES, as
the case may be, as the temporary Certificate or Certificates so surrendered.
Until so exchanged, the temporary Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Income PRIDES or
Growth PRIDES, as the case may be, evidenced thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a Register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
and transfers of Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or the New York Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any authorized
denominations, like tenor, and evidencing a like number of Income PRIDES or
Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office or the New York
Office. Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver the Certificates which the Holder
making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or Growth PRIDES, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Income
PRIDES or Growth PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
27
Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.4,
3.6, 3.9 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver, any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate (together with any cash or other property to which the Holder is
entitled), or (ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Debentures, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.9. The Agent shall enter
into an agreement with the Depositary if so requested by the Company. Unless and
until definitive, fully registered Certificates have been issued to Beneficial
Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force
and effect;
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including the payment of Contract
Adjustment Payments, if any, and receiving approvals, votes or consents
hereunder) as the Holder of the Securities
28
and the sole holder of the Global Certificate(s) and shall have no obligation to
the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and transmit payments
of Contract Adjustment Payments, if any, to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, or one or more Debentures,
then upon surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company shall not be liable for any delay in delivery of
such instructions and may conclusively rely on and shall be protected in relying
on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
29
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Income PRIDES or
Growth PRIDES, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate (together with any cash or other property to which
the Holder is entitled), or (ii) if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Debentures, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees and expenses of
the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
30
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of receiving
interest on the Debentures or on the maturing quarterly interest strips of the
Treasury Portfolio, as applicable, receiving payments of Contract Adjustment
Payments, if any, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any interest on the Debentures or the
Contract Adjustment Payments, if any, payable in respect of the Purchase
Contracts constituting a part of the Income PRIDES or Growth PRIDES evidenced
thereby shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Debentures,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early Settlement, or upon the registration of a transfer
or exchange of a Security, or a Collateral Substitution or the re-establishment
of an Income PRIDES or a Growth PRIDES shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
upon written request be returned to the Company.
31
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Establishment or Reestablishment of Growth PRIDES.
A Holder may separate the Debentures or the appropriate Applicable
Owner ship Interest of the Treasury Portfolio, as applicable, from the related
Purchase Contracts in respect of an Income PRIDES by substituting for such
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, Treasury Securities in an aggregate principal
amount of such Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any time from and
after the date of this Agreement and on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the case of the
Debentures and on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the appropriate Applicable
Ownership Interest of the Treasury Portfolio, in each case by (a) depositing
with the Collateral Agent Treasury Securities having an aggregate principal
amount of the Debentures comprising part of such Income PRIDES or for the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio comprising part of such
Income PRIDES, as the case may be, and (b) (i) delivering cash in an amount
equal to the excess of the Contract Adjustment Payments that would have accrued
since the last date that Contract Adjustment Payments were made to the date of
substitution on the Growth PRIDES being created by the holder, over the Contract
Adjustment Payments that have accrued over the same time period on the related
Income PRIDES, which amount the Agent shall promptly remit to the Company, and
(ii) transferring the related Income PRIDES to the Agent accompanied by a notice
to the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent to
release the Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Income PRIDES, whereupon
the Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the Treasury
Securities described in clause (a) above and the instruction described in clause
(b) above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder, Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, having the appropriate aggregate principal amount in the case of such
Debentures or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, from the Pledge, free and clear of the Company's security interest
therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
32
(ii) transfer the Debentures or the appropriate Applicable
Owner ship Interest of the Treasury Portfolio, as the case may be, to the
Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were evidenced
by the cancelled Income PRIDES.
Holders who elect to separate the Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the related Purchase Contract and to substitute Treasury Securities for
such Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as Collateral Agent in respect
of the substitution, and the Company shall not be responsible for any such fees
or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of [40] Income PRIDES if Debentures are being substituted by Treasury
Securities, or (ii) only in integral multiples of [ ] Income PRIDES if the
appropriate Applicable Ownership Interests of the Treasury Portfolio are being
substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting a part of such Income PRIDES, and any interest on such Debenture or
the Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Income PRIDES is so transferred or the Income PRIDES
Certificate is so delivered, as the case may be, or, with respect to an Income
PRIDES Certificate, such Holder provides evidence satisfactory to the Company
and the Agent that such Income PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and Purchase Contract
comprising such Income PRIDES may be acquired, and may be transferred and
exchanged, only as an Income PRIDES.
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES at any
time (i) on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has not occurred,
and (ii) on or prior to the
33
second Business Day immediately preceding the Purchase Contract Settlement Date,
if a Tax Event Redemption has occurred and an Applicable Owner ship Interest in
the Treasury Portfolio has become a component of the Income PRIDES, in each case
by (a) depositing with the Collateral Agent Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
having an aggregate principal amount in the case of the Debentures, or an
appropriate Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, equal to
the aggregate principal amount of the Treasury Securities comprising part of the
Growth PRIDES and (b) transferring the related Growth PRIDES to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, to the Collateral Agent and requesting that the
Agent instruct the Collateral Agent to release the Treasury Securities
underlying such Growth PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, described in clause (a)
above and the instruction described in clause (b) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release to the Agent,
on behalf of the Holder, of the Treasury Securities having a corresponding
aggregate principal amount from the Pledge, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were evidenced
by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income PRIDES in
integral multiples of [25] Growth PRIDES for [25] Income PRIDES if a Tax Event
Redemption has not occurred, and in integral multiples of Growth PRIDES for
Income PRIDES if a Tax Event Redemption has occurred.
In the event a Holder establishing or re-establishing Income PRIDES
pursuant to this Section 3.14 fails to effect a book-entry transfer of the
Growth PRIDES or fails to deliver a Growth PRIDES Certificate(s) to the Agent
after depositing Debentures or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, with the Collateral Agent, the
Treasury Securities constituting a part of such Growth PRIDES shall be held in
the name of the Agent or its nominee in trust for the benefit of such Holder,
until such Growth PRIDES is so transferred or the Growth PRIDES Certificate is
so delivered, as the case may be, or, with respect to a Growth PRIDES
Certificate, such Holder provides evidence satisfactory to the Company and the
Agent
34
that such Growth PRIDES Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Agent and the Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged, only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Debentures, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Income PRIDES and the Growth PRIDES pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, from each Holder by
written request mailed to such Holder at its address as it appears in the Income
PRIDES Register or the Growth PRIDES Register, as the case may be. Upon
book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an
Income PRIDES Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Debentures, the Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Income PRIDES or Growth PRIDES, as the case may be, to
such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions; provided, however, that, to the extent that a
Holder of Income PRIDES or Growth PRIDES would otherwise be entitled to receive
less than $1,000 principal amount at maturity of the Treasury Portfolio or the
Treasury Securities, the Agent shall dispose of such securities for cash, and
transfer the appropriate amount of such cash to such Holder in accordance with
such Holder's instructions. In the event a Holder of Income PRIDES or Growth
PRIDES fails to effect such transfer or delivery, the Debentures, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Income PRIDES or Growth PRIDES,
as the case may be, and any distributions thereon, shall be held in the name of
the Agent or its nominee in trust for the benefit of such Holder, until such
Income PRIDES or Growth PRIDES are transferred or the Income PRIDES Certificate
or Growth PRIDES Certificate is surrendered or such Holder provides satisfactory
evidence that such Income PRIDES Certificate or Growth PRIDES Certificate has
been destroyed, lost or stolen, together with any indemnity that may be required
by the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person
35
or entity performing similar functions, its trustee in the event that the
Company becomes the debtor under the Bankruptcy Code or subject to other similar
state or federal law providing for reorganization or liquidation.
ARTICLE IV
The Debentures
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Debenture or on the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, which is paid
on any Payment Date shall, subject to receipt thereof by the Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, be paid to
the Person in whose name the Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificates) of which such Debenture or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, is a part is registered at the close of business on the Record Date for
such Payment Date.
Each Income PRIDES Certificate evidencing Debentures delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu of
any other Income PRIDES Certificate shall carry the rights to distributions
accrued and unpaid, and distributions to accrue, which were or will be carried
by the Debentures underlying such other Income PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, interest on the Debentures
or on the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, underlying such Income PRIDES otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Cash
Settlement or Early Settlement or Collateral Substitution, and such
distributions shall, subject to receipt thereof by the Agent, be payable to the
Person in whose name the Income PRIDES Certificate (or one or more Predecessor
Certificates) was registered at the close of business on the Record Date. Except
as otherwise expressly provided in the immediately preceding sentence, in the
case of any Income PRIDES with respect to which Cash Settlement or Early
Settlement of the underlying Purchase Contract is effected on the Business Day
immediately preceding the Purchase Contract Settlement Date or an Early
Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, distributions on the related Debentures or on
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may
36
be, that would otherwise be payable after the Purchase Contract Settlement Date
or Early Settlement Date shall not be payable hereunder to the Holder of such
Income PRIDES; provided, however, that to the extent that such Holder continues
to hold the separated Debentures that formerly comprised a part of such Holder's
Income PRIDES, such Holder shall be entitled to receive the distributions on
such separated Debentures.
The applicable Coupon Rate on the Debentures on and after the Purchase
Contract Settlement Date will be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date to the Reset Rate (such Reset
Rate to be in effect on and after the Purchase Contract Settlement Date). On the
Reset Announcement Date the Reset Spread and the Two-Year Benchmark Treasury to
be used to determine the Reset Rate will be announced by the Company. On the
Business Day immediately following the Reset Announcement Date, the Debentures
Holders will be notified of such Reset Spread and Two-Year Benchmark Treasury by
the Company. Such notice shall be sufficiently given to Holders of Debentures if
published in an Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify the DTC or its nominee (or
any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency Participants holding
Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Debentures
pledged with the Collateral Agent but only to the extent instructed by the
Holders as described below. Upon receipt of notice of any meeting at which
holders of Debentures are entitled to vote or upon any solicitation of consents,
waivers or proxies of holders of Debentures, the Agent shall, as soon as
practicable thereafter, mail to the Holders of Income PRIDES a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Holder on the record date set by the Agent therefor (which, to
the extent possible, shall be the same date as the record date for determining
the holders of Debentures entitled to vote) shall be entitled to instruct the
Agent as to the exercise of the voting rights pertaining to the Debentures
underlying their Income PRIDES and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of Income
PRIDES on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Debentures as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Debentures
underlying such Income PRIDES. The Company hereby agrees, if applicable, to
solicit Holders of Income
37
PRIDES to timely instruct the Agent in order to enable the Agent to vote such
Debentures.
Section 4.3. Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES. The
Treasury Portfolio will be substituted for the Pledged Debentures, and will be
held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders of
Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Income PRIDES and the Collateral Agent had in respect of the Debentures, as the
case may be, subject to the Pledge thereof as provided in Sections 2, 3, 4, 5
and 6 of the Pledge Agreement, and any reference herein or in the Certificates
to the Debenture shall be deemed to be a reference to such Treasury Portfolio
and any reference herein or in the Certificates to interest on the Debentures
shall be deemed to be a reference to corresponding distributions on the Treasury
Portfolio. The Company may cause to be made in any Income PRIDES Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the substitution of the Treasury
Portfolio for Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.9 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is equal to or greater than $ (the "Threshold
Appreciation Price"), o shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $ , the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market
38
Value is less than or equal to $ , shares of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or down xxxx to the nearest 1/10,000th of a share). As provided
in Section 5.10, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Settlement, the third Trading Day immediately
preceding the relevant Early Settlement Date. The "Closing Price" of the Common
Stock on any date of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of the Common Stock on
The New York Stock Exchange, Inc. (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock is so listed, or if the Common Stock is not so listed on
a United States national or regional securities exchange, as reported by the
Nasdaq National Market or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, or, if such bid price
is not available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on which
the Common Stock (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Debentures, the Treasury Portfolio or
the Treasury Securities pursuant to the Pledge Agreement; provided that upon a
Termination Event, the rights of the Holder of such Security under the Purchase
Contract may be enforced without regard to any other rights or obligations. Each
Holder of an Income PRIDES or a Growth PRIDES, by its acceptance thereof,
further covenants and agrees, that, to the extent and in the manner provided in
Section 5.4 and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the principal amount of the Debentures or the Proceeds of the
Treasury Securities or the Treasury Portfolio on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company
39
in satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The Company
covenants and agrees, and each Holder of a Certificate, by its acceptance
thereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments, if any, payable in respect of each
Purchase Contract to the Person in whose name a Certificate (or one or more
Predecessor Certificates) is registered at the close of business on the Record
Date next preceding such Payment Date. The Contract Adjustment Payments, if any,
will be payable at the New York Office maintained for that purpose or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Income PRIDES Register or
the Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments), if any, shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the rights to Contract Adjustment Payments, if any,
accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which
were carried by the Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, or in respect of which Cash Settlement of the underlying
Purchase Contract is effected on the Business Day immediately preceding the
Purchase Contract Settlement Date, or with respect to which a Collateral
Substitution or an establishment or re-establishment or Income PRIDES pursuant
to Section 3.14 is effected, in each case on a date that is after any Record
Date and on or prior to the next succeeding Payment Date, Contract Adjustment
Payments on the Purchase Contracts underlying such Securities otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement, Early Settlement, Collateral Substitution or establishment or
re-establishment of Income PRIDES, and such Contract Adjustment Payments shall
be paid to the Person in whose name the Certificate evidencing such Security (or
one or more
40
Predecessor Certificates) is registered at the close of business on such Record
Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Cash Settlement or
Early Settlement of the underlying Purchase Contract is effected on the Business
Day immediately preceding the Purchase Contract Settlement Date or an Early
Settlement Date, as the case may be, or with respect to which a Collateral
Substitution or an establishment or re-establishment of Income PRIDES has been
effected, Contract Adjustment Payments, if any, that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement Date with
respect to such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments,
if any, will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) at least ten
Business Days prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Contract Adjustment Payments, if
any, to the NYSE or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than one Business Day prior to such
Record Date. Any Contract Adjustment Payments, if any, so deferred shall, to the
extent permitted by law, bear additional Contract Adjustment Payments thereon at
the rate of % per annum (computed on the basis of 360 day year of twelve 30 day
months), compounding on each succeed ing Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, being referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date and no such deferral period may end other
than on a Payment Date. If the Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments, if any, and Deferred Contract Adjustment Payments will
terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
41
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date in lieu of a cash payment a number of shares of Common Stock (in
addition to a number of shares of Common Stock equal to the Settlement Rate)
equal to (x) the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan or the
declaration thereunder of a dividend of rights in the future).
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder
settles the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section
5.9, each Holder of an Income PRIDES must notify the Agent by use of a
notice in substantially the form of Exhibit E hereto of its intention
to pay in cash ("Cash Settlement") the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract. Such
notice shall be made on or prior to 5:00 p.m., New York City time, on
the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent
of the receipt of such a notice from a Holder intending to make a Cash
Settlement.
42
(ii) A Holder of an Income PRIDES who has so notified the
Agent of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, such failure shall constitute an event of
default and the Holder shall be deemed to have consented to the
disposition of the pledged Debentures pursuant to the remarketing as
described in paragraph (b) below. If a Holder of an Income PRIDES does
notify the Agent as provided in paragraph (a)(i) above of its intention
to pay the Purchase Price in cash, but fails to make such payment as
required by paragraph (a)(ii) above, such failure shall also constitute
a default; however, the Debentures of such a Holder will not be
remarketed but instead the Collateral Agent, for the benefit of the
Company, will exercise its rights as a secured party with respect to
such Debentures, including but not limited to those rights specified in
paragraph (c) below.
(b) In order to dispose of the Debentures of Income PRIDES
Holders who have not notified the Agent of their intention to effect a Cash
Settlement as provided in paragraph (a)(i) above, the Company shall engage a
nationally recognized investment bank (the "Remarketing Agent") pursuant to the
Remarketing Agreement to sell such Debentures. In order to facilitate the
remarketing, the Agent shall notify, by 10:00 a.m., New York City time, on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
the Remarketing Agent of the aggregate principal amount of Debentures to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, will present for remarketing such Debentures to the
Remarketing Agent. Upon receipt of such notice from the Agent and such
Debentures from the Collateral Agent, the Remarketing Agent will, on the third
Business Day immediately preceding the Purchase Contract Settlement Date, use
its reasonable efforts to remarket such Debentures on such date at a price of
approximately [ ]% (but not less than 100%) of the aggregate stated liquidation
amount of such aggregate principal amount of Debentures, plus accrued and unpaid
interest (including deferred interest), if any, thereon; provided that the
Company may limit the Reset Rate to be no higher than the rate on the Two-Year
Benchmark Treasury plus [ basis points ( %)] and provided further that the Reset
Rate shall in no event exceed (and the Company shall limit
43
the Reset Rate so that it does not exceed) the maximum rate permitted by law.
After deducting as the remarketing fee ("Remarketing Fee") an amount not
exceeding basis points ( %)] of the aggregate principal amount of the remarketed
Debentures from any amount of such proceeds in excess of the aggregate principal
amount of the remarketed Debentures plus accrued and unpaid interest (including
deferred interest), if any, then the Remarketing Agent will remit the entire
amount of the proceeds from such remarketing to the Collateral Agent. Such
portion of the proceeds, equal to the aggregate principal amount of Debentures
will automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement to satisfy in full such Income PRIDES holders' obligations to
pay the Purchase Price for the Common Stock under the related Purchase Contracts
on the Purchase Contract Settlement Date. Any proceeds in excess of those
required to pay the Purchase Price and the Remarketing Fee will be remitted to
the Agent for payment to the Holders of the related Income PRIDES. Income PRIDES
Holders whose Debentures are so remarketed will not otherwise be responsible for
the payment of any Remarketing Fee in connection therewith. If, in spite of
using its reasonable efforts, the Remarketing Agent cannot remarket the related
Debentures (other than to the Company) of such Holders of Income PRIDES at a
price not less than 100% of the aggregate principal amount of Debentures plus
accrued and unpaid interest (including deferred interest), if any, the
remarketing will be deemed to have failed (a "Failed Remarketing") and in
accordance with the terms of the Pledge Agreement the Collateral Agent for the
benefit of the Company will exercise its rights as a secured party with respect
to such Debentures, including those actions specified in paragraph (c) below;
provided, that if upon a Failed Remarketing the Collateral Agent exercises such
rights for the benefit of the Company with respect to such Debentures, any
accrued and unpaid interest (including deferred interest) on such Debentures
will become payable and be paid in cash by the Company to the Agent for payment
to the Holder of the Income PRIDES to which such Debentures relates. Such
payment will be made by the Company on or prior to 11 a.m. New York City time on
the Purchase Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately available funds
payable to or upon the order of the Agent. The Company will cause a notice of
such Failed Remarketing to be published on the second Business Day immediately
preceding the Purchase Contract Settlement Date in a daily newspaper in the
English language of general circulation in The City of New York, which is
expected to be The Wall Street Journal.
(c) With respect to any Debentures beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as required
in (a)(ii) above, or with respect to Debentures which are subject to a Failed
Remarketing, the Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject to applicable
law and paragraph (h) below, may, among other things, (i) retain the Debentures
in full satisfaction of the Holders obligations under the Purchase Contracts or
(ii) sell the Debentures in one or more public or private sales.
(d) (i) Unless a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) settles the underlying Purchase Contract
through the early delivery of cash to the Purchase Contract Agent in
the manner described in
44
Section 5.9, each Holder of an Income PRIDES (if a Tax Event Redemption
has occurred) must notify the Agent by use of a notice in substantially
the form of Exhibit E hereto of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant
to a Purchase Contract on or prior to 5:00 p.m., New York City time, on
the second Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent
of the receipt of such a notice from a Holder intending to make such a
Cash Settlement.
(ii) A Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) who has so notified the Agent of its intention
to make a Cash Settlement in accordance with paragraph (d)(i) above is
required to pay the Purchase Price to the Collateral Agent prior to
11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) fails to notify the Agent of its intention to
make a Cash Settlement in accordance with paragraph (d)(i) above, or if
a Holder of an Income PRIDES (if a Tax Event Redemption has occurred)
does notify the Agent as provided in paragraph (d)(i) above its
intention to pay the Purchase Price in cash, but fails to make such
payment as required by paragraph (d)(ii) above, then upon the maturity
of the appropriate Applicable Ownership Interest of the Treasury
Portfolio held by the Collateral Agent on the Business Day immediately
prior to the Purchase Contract Settlement Date, the appropriate
Applicable Ownership Interest of the Treasury Portfolio received by the
Collateral Agent will be invested promptly in overnight Permitted
Investments. On the Purchase Contract Settlement Date an amount equal
to the Purchase Price will be remitted to the Company as payment
thereof without receiving any instructions from the Holder. In the
event the sum of the proceeds from the related appropriate Applicable
Ownership Interest of the Treasury Portfolio and the investment
earnings earned from such investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent will distribute such excess to the Agent for the
benefit of the Holder of the related Income PRIDES when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the New York Office maintained for that
purpose or, at the option of
45
the Holder, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Register.
(f) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Collateral Agent in the manner
described herein, the Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge Agreement cause
the Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or the Pledged Treasury Securities
underlying the relevant Security to be released from the Pledge by the
Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof, transfer such
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, or such Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold such
Debentures or the Treasury Portfolio, as the case may be, or such Treasury
Securities, and any distributions thereon, in the name of the Agent or its
nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price
are non-recourse obligations and are payable solely out of any Cash Settlement
or the proceeds of any Collateral pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency between the
proceeds of Collateral disposition and the Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
on the Purchase Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates representing
newly issued shares of Common Stock registered in the name of the Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which both a record date
and payment date for such dividend or distribution has occurred on or after the
Purchase Contract Settlement Date, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly
46
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive pursuant to the
provisions of this Article Five (after taking into account all Securities then
held by such Holder) together with cash in lieu of fractional shares as provided
in Section 5.10 and any dividends or distributions with respect to such shares
constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon, and the Certificate so surrendered shall forthwith be
cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Agent. If any shares of Common Stock issued in respect of a
Purchase Contract are to be registered to a Person other than the Person in
whose name the Certificate evidencing such Purchase Contract is registered, no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them, for a period expiring
within 45 days after the record date for the determination of stockholders
entitled to receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan or share purchase
plan), the Settlement Rate in effect at the opening of
47
business on the day following the date fixed for such determination shall be
increased by dividing such Settlement Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of Common
Stock shall each be combined into a smaller number of shares of Common Stock,
the Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of capital stock, securities, cash or other property (but excluding any
rights or warrants referred to in paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in paragraph (1) of this Section), the Settlement Rate shall be increased so
that the same shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Agent) on such
date of the portion of the evidences of indebtedness, shares of capital stock,
securities, cash or other property so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price per share of
the Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall not be
applicable.
48
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i) regular
quarterly cash distributions, (ii) any cash that is distributed in a
Reorganization Event to which Section 5.6(b) applies or (iii) cash that is
distributed as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (II) the aggregate
amount of any other distributions to all holders of its Common Stock (other than
regular quarterly cash distributions) made exclusively in cash within the 12
months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value, as of the expiration of the applicable tender or exchange offer referred
to below (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), of consideration payable in
respect of any tender or exchange offer (other than consideration payable in
respect of any odd-lot tender offer) by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of the distribution described in clause (I) above
and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the Current Market Price per share of
the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer) by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this
49
Section or this paragraph (6) has been made and (III) the aggregate amount of
any distributions (other than regular quarterly cash distributions) to all
holders of the Company's Common Stock made exclusively in cash within the 12
months preceding the expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business as of the Expiration Time by a fraction (i) the
numerator of which shall be equal to (A) the product of (I) the Current Market
Price per share of the Common Stock as of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any tendered shares) as
of the Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the transactions described in clauses (I), (II) and (III) above
(assuming in the case of clause (I) the acceptance, up to any maximum specified
in the terms of the tender or exchange offer, of Purchased Shares), and (ii) the
denominator of which shall be equal to the product of (A) the Current Market
Price per share of the Common Stock as of the Expiration Time and (B) the number
of shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the
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issuance or distribution requiring such computation. For purposes of this
paragraph, the term "ex date", when used with respect to any issuance or
distribution, shall mean the first date on which the Common Stock trades regular
way on such exchange or in such market without the right to receive such
issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if there is
not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant
to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of Settlement Rate
in Section 5.1 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10) of
this Section 5.6(a) during the period taken into consideration for determining
the Applicable Market Value, appropriate and customary adjustments shall be made
to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"), the Settlement Rate will be adjusted
to provide that each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part thereof
(or upon any Early Settlement), the kind and amount of securities, cash and
other property receivable upon such
51
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of Common
Stock issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (any such Person,
a "Constituent Person"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by Affiliates of the Company and non-affiliates and such Holder failed to
exercise its rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by of the non-electing
shares). In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires or leases the
assets of the Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Out standing Security shall have the rights
provided by this Section 5.6. Such supple mental agreement shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate, the method of
calculation thereof in reason able detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such occurrence, as soon
as practicable after becoming so aware), provide a written notice to
the Holders of the Securities of the occurrence of such event and a
statement in reasonable detail setting forth the
52
method by which the adjustment to the Settlement Rate was deter mined
and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility
to any Holder of Securities to determine whether any facts exist which may
require any adjustment of the Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed in making the same. The Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders to purchase
Common Stock, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accordance with the
provisions of Section 4.3 of the Pledge Agreement; provided, however, that, to
the extent that a Holder of Income PRIDES or Growth PRIDES would otherwise be
entitled to receive less than $1,000 principal amount at maturity of the
Treasury Portfolio or the Treasury Securities, the Agent shall dispose of such
securities for cash, and transfer the appropriate amount of such cash to such
Holder in accordance with such Holder's instructions. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") in the case of Income
PRIDES (unless a Tax Event Redemption has occurred) on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and in
the case of Growth PRIDES on or prior to
53
the second Business Day immediately preceding the Purchase Contract Settlement
Date, in each case, as provided herein; provided however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Purchase Contracts underlying Income PRIDES may be settled early
on or prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, but only in an aggregate amount of Income PRIDES or in
an integral multiple thereof. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts, the Holder of the Certificate
evidencing Securities shall deliver such Certificate to the Agent at the
Corporate Trust Office or the New York Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the Company) in
immediately available funds in an amount (the "Early Settlement Amount") equal
to (i) the product of (A) the Stated Amount times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement plus (ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment Date, an
amount equal to the Contract Adjustment Payments, if any, payable on such
Payment Date with respect to such Purchase Contracts; provided that no payment
shall be required pursuant to clause (ii) of this sentence if the Company shall
have elected to defer the Contract Adjustment Payments which would otherwise be
payable on such Payment Date. Except as provided in the immediately preceding
sentence and subject to the next to last paragraph of Section 5.2, no payment or
adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract or
on account of any dividends on the Common Stock issued upon such Early
Settlement or on account of any Deferred Contract Adjustment Payments. If the
foregoing requirements are first satisfied with respect to Purchase Contracts
underlying any Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m., New
York City time, on a Business Day or on a day that is not a Business Day, the
"Early Settlement Date" with respect to such Securities shall be the next
succeed ing Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities and payment of any transfer or similar taxes payable by such
Holder in connection with the issuance of the related Common Stock to any person
other than such Holder, the Company shall issue, and the Holder shall be
entitled to receive, shares of newly issued Common Stock on account of each
Purchase Contract as to which Early Settlement is effected (the "Early
Settlement Rate"); provided, however, that upon the Early Settlement of the
Purchase Contracts, the Holder of such related Securities will forfeit the right
to receive any Deferred Contract Adjustment Payments and future Contract
Adjustment Payments, if any, except to the extent that the Early Settlement Date
is after the close of business on a Record Date and prior to the opening of
business on the corresponding Payment Date. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the
54
provisions of this Section 5.9, the Company shall issue and shall deliver to the
Agent at the Corporate Trust Office a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early Settlement together
with payment in lieu of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, in the case of Income PRIDES, or the related Treasury
Securities, in the case of Growth PRIDES, to be released from the Pledge by the
Collateral Agent and transferred, in each case to the Agent for delivery to the
Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Debentures, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Debentures, Treasury Portfolio or Treasury Securities, as the case may be,
forming a part of such Securities, and (ii) deliver to the Holder a certificate
or certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
55
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid
or that no such tax is due.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
The Holder of any Income PRIDES or Growth PRIDES shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, and to the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive payment of
each installment of the Contract Adjustment Payments, if any, with respect to
the Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock pursuant to such
Purchase Contract and, in each such case, to institute suit for the enforcement
of any such payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
56
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Agent, to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
by any Holder for the enforcement of interest on any Debentures or Contract
Adjustment Payments, if any, on any Purchase Contract on or after the respective
Payment Date therefor in respect of any Security held by such Holder, or for
enforcement of the right to purchase shares of Common Stock under the Purchase
Contracts constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
57
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Agent; and
(2) The Agent may, with respect to the Securities, conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the case of any
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Agent, the Agent shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own wilful misconduct or bad faith, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it
shall be proved that the Agent was negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights
or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement
in its capacity as Agent.
Section 7.2. Notice of Default.
58
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the
59
Agent shall not be responsible for any misconduct or negligence on the part of
any agent or attorney or an Affiliate appointed with due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise expressly provided herein or as
otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such compensation
for all services rendered by it hereunder as the parties shall agree from time
to time;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, willful misconduct or bad
faith; and
(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of its duties hereunder,
including the costs and expenses of defending
60
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a subsidiary of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
an office in the Borough of Manhattan, The City of New York, if there be such a
corporation in the Borough of Manhattan, The City of New York, qualified and
eligible under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Agent shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
61
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office and New York
Office, if any.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
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(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Agent, and furnish to the Agent reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their rights
under this Agreement or under the Securities and is accompanied by a copy of the
form of proxy or other communication which such applicants propose to transmit,
then the Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article V hereof.
Section 7.14. Tax Compliance.
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(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of the
Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
64
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein, or
to make any other provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not adversely affect the
interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts or the provisions of this Agreement or the rights of the
Holders in respect of the Securities (other than the Debentures, which may be
modified only in accordance with the applicable provisions of the Indenture;
provided, however, that, except as contemplated herein, no such supplemental
agreement shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under any Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute the Treasury Securities for the
Pledged Debentures or the rights of holders of Growth PRIDES to
substitute Debentures for the Pledged Treasury Securities) or otherwise
adversely affect the Holder's rights in or to such Collateral or
adversely alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payment, or change any place where, or the
coin or currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract, any Contract Adjustment Payment, if any, or any
Deferred Contract Adjustment Payment, if any;
(5) reduce the number of shares of Common Stock (or the amount
of any other property) to be purchased pursuant to any Purchase
Contract, increase the price to purchase shares of Common Stock (or any
other property) upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect the
Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
65
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected class
of Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement and the Securities shall be modified in accordance therewith, and
such supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder shall
be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
66
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially all
of its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement, the Indenture, the Remarketing Agreement and
the Pledge Agreement by one or more supplemental agreements in form reasonably
satisfactory to the Agent and the Collateral Agent, executed and delivered to
the Agent and the Collateral Agent by such corporation, and (ii) the Company or
such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale, assignment, transfer, lease or
conveyance, be in default of its payment obligations under this Agreement or the
Debentures, or in default of its obligations to deliver Common Stock (or other
property) on the Purchase Contract Settlement Date or any Early Settlement Date,
or in material default in the performance of any other covenant hereunder or
under the Debentures, the Indenture, the Remarketing Agreement, the Purchase
Contracts or the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company, and its predecessor shall, except in the case of a lease, be
released from its obligations under this Agreement. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of The Coastal Corporation any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Agent; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Agreement prescribed, the Agent shall authenticate and
execute on behalf of the Holders and deliver any Certificates which previously
shall have been signed and delivered by the officers of the Company to the Agent
for authentication and execution, and any Certificate evidencing Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Agent for that purpose. All the Certificates so issued shall in
all respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance, such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
67
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent hereunder
to the consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain or cause to be maintained in the Borough of
Manhattan, The City of New York an office or agency (a "New York Office") and in
where Certificates may be presented or surrendered for payment and for
acquisition of shares of Common Stock (or other property) upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or Early Settlement
and for transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or re-establishment of an Income PRIDES and where
notices and demands to or upon the Company in respect of the Securities and this
Agreement may be served. The Company will give prompt written notice to the
Agent of the location, and any change in the location, of such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Agent as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency.
68
The Company hereby designates the Borough of Manhattan, the City of New
York and , as the places of payment for the Securities, and hereby
appoints the Agent, acting through its Corporate Trust Office in The Bank of New
York, 000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx, Xxx Xxxx, XX 00000 and through its
office located at c/o , as the registrar, paying agent and transfer agent
for the Income PRIDES and the Growth PRIDES and for the other purposes
contemplated by this Section 10.2.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The Company shall
comply with all applicable securities laws regulating the offer, issuance and
delivery of shares of Common Stock upon settlement of Purchase Contracts and
will endeavor to list such shares on each national securities exchange or
automated quotation system on which the Common Stock is then listed.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE COASTAL CORPORATION
By:
----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
The Bank of New York
as Purchase Contract Agent
By:
-----------------------------------
69
Name:
Title:
70
EXHIBIT A
(Form of Face of Income PRIDES Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ CUSIP No.
Number of Income PRIDES _______
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of $
principal amount of % Xxxxxxxxxx xxx , 00, 0000 (xxx "Debenture"), subject
to the Pledge of such Debenture by such Holder pursuant to the Pledge Agreement
or (b) upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the appropriate Applicable Ownership Interest of the
Treasury Portfolio, subject to the Pledge of such Applicable Ownership Interest
of the Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract with
The Coastal Corporation, a Xxxx xxxx corporation (the "Company," which term, as
used herein, includes its successors pursuant to the Purchase Contract
Agreement). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
71
Pursuant to the Pledge Agreement, the Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of each Income PRIDES evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising a portion of such Income
PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, or cash
distributions on any Pledged Debentures (as defined in the Pledge Agreement) or
the appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be,
constituting part of the Income PRIDES received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds (i) in the case
of (A) cash distributions with respect to Pledged Debentures or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and (B) any payments
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such terms) of the Treasury
Portfolio, as the case may be, with respect to any Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
that have been released from the Pledge pursuant to the Pledge Agreement, to the
Agent to the account designated by the Agent, no later than 2:00 p.m., New York
City time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day) and (ii) in the case of payments
of the Stated Amount of any Pledged Debentures or the appropriate Applicable
Owner ship Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio that has not been released from the Pledge pursuant to
the Pledge Agreement, as the case may be, to the Company on the Purchase
Contract Settlement Date (as defined herein) in accordance with the terms of the
Pledge Agreement, in full satisfaction of the respective obligations of the
Holders of the Income PRIDES of which such Pledged Debentures or the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming a
part of such Income PRIDES. Interest on any Debentures or Distributions on the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, forming
part of an Income PRIDES evidenced hereby which are payable quarterly in arrears
on February 16, May 16, August 16 and November 16 each year, commencing 16, (a
"Payment Date"), shall, subject to receipt thereof by the Agent from the
Collateral Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on 16, 2002 (the
"Purchase Contract Settlement Date"), at a price equal to $25 (the "Stated
Amount"), a number of
72
shares of Common Stock, $0.33 1/3 par value per share ("Common Stock"), of the
Company equal to the Settlement Rate, unless on or prior to the Purchase
Contract Settlement Date there shall have occurred a Termination Event or an
Early Settlement with respect to the Income PRIDES of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The purchase price (the "Purchase Price")
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the Stated
Amount or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, as the case may
be, of the Pledged Debentures or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, pledged to secure the obligations
under such Purchase Contract of the Holder of the Income PRIDES of which such
Purchase Contract is a part.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of an Income PRIDES evidenced hereby an amount (the
"Contract Adjustment Payments") equal to % per annum of the Stated Amount,
computed on the basis of a 360-day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Income PRIDES Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Interest on the Debentures or Distributions on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and Contract
Adjustment Payments, if any, will be payable at the Corporate Trust Office of
the Agent and at the New York Office or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
THE COASTAL CORPORATION
73
By:
---------------------------------------
Name:
Title:
By:
---------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
Obligations of such Holder under the
Purchase Contracts evidenced
hereby)
By: THE BANK OF NEW YORK
not individually but soley
as attorney-in-fact of such
Holder
By:
----------------------------------------
Name:
Title:
Dated: , 1999
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
------------------------------------
Authorized Signatory
(Form of Reverse of Income PRIDES Certificate)
74
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of , 1999 (as may be supplemented from time
to time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Income PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Purchase Price, a number of
shares of Common Stock of the Company equal to the Settlement Rate, unless, on
or prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event or an Early Settlement with respect to the Security of which
such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $ (the
"Threshold Appreciation Price"), shares of Common Stock per Purchase Contract,
(b) if the Applicable Market Value is less than the Threshold Appreciation Price
but is greater than $ , the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Amount is less than or equal to $ , shares of
Common Stock per Purchase Contract, in each case subject to adjustment as
provided in the Purchase Contract Agreement. No fractional shares of Common
Stock will be issued upon settlement of Purchase Contracts, as provided in the
Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of factional shares in
connection with an Early Settlement, the third Trading Day immediately preceding
the relevant Early Settlement Date. The "Closing Price" of the Common Stock on
any date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange, Inc. (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a United
States
75
national or regional securities exchange, as reported by the Nasdaq National
Market, or, if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or from the proceeds
of a remarketing of the related Pledged Debentures of such holders. A Holder of
Income PRIDES who does not elect, on or prior to 5:00 p.m. New York City time on
the fifth Business Day (or, if a Tax Event Redemption has occurred, the second
Business Day) immediately preceding the Purchase Contract Settlement Date, to
make an effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Common Stock to be issued under the related Purchase
Contract from the Proceeds of the sale of the related Pledged Debentures held by
the Collateral Agent. Such sale will be made by the Remarketing Agent pursuant
to the terms of the Remarketing Agreement and the Remarketing Underwriting
Agreement on the third Business Day immediately preceding the Purchase Contract
Settlement Date. If, as provided in the Purchase Contract Agreement, upon the
occurrence of a Failed Remarketing the Collateral Agent, for the benefit of the
Company, exercises its rights as a secured creditor with respect to the Pledged
Debentures related to this Income PRIDES certificate, any accrued and unpaid
interest (including deferred interest) on such Pledged Debentures will become
payable by the Company to the holder of this Income PRIDES Certificate in the
manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Debentures. Upon receipt of notice of any meeting at which holders of Debentures
are entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Debentures, the Agent shall, as soon as practicable thereafter, mail
to the Income PRIDES holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Income PRIDES
holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of
76
Debentures entitled to vote) shall be entitled to instruct the Agent as to the
exercise of the voting rights pertaining to the Debentures constituting a part
of such holder's Income PRIDES and (c) stating the manner in which such
instructions may be given. Upon the written request of the Income PRIDES Holders
on such record date, the Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Debentures as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of an Income PRIDES, the Agent shall abstain from voting the Debentures
evidenced by such Income PRIDES.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES, the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of the Debentures, as the case may be, subject
to the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge
Agreement and any reference herein to the Debenture shall be deemed to be a
reference to such Treasury Portfolio and any reference herein or in the
Certificates to interest on the Debentures shall be deemed to be a reference to
corresponding distributions on the Treasury Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Treasury
Securities for Debentures or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, thereby creating or recreating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, and
the Purchase Contract constituting such Income PRIDES may be transferred and
exchanged only as an Income PRIDES. A Holder of an Income PRIDES may create or
recreate a Growth PRIDES by
77
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate principal amount of the Pledged Debentures or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such Collateral Substitution, the Security for which
such Pledged Treasury Securities secures the Holder's obligation under the
Purchase Contract shall be referred to as a "Growth PRIDES." A Holder may make
such Collateral Substitution only in integral multiples of 40 Income PRIDES for
40 Growth PRIDES; provided, however, that if a Tax Event Redemption has occurred
and the Treasury Portfolio has become a component of the Income PRIDES, a Holder
may make such Collateral Substitutions only in integral multiples of Income
PRIDES for Growth PRIDES. Such Collateral Substitution may cause
the equivalent aggregate Stated Amount of this Certificate to be increased or
decreased; provided, however, the equivalent aggregate Stated Amount outstanding
under this Income PRIDES Certificate shall not exceed $ . All such
adjustments to the equivalent aggregate Stated Amount of this Income PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Debentures or the appropriate Applicable
Owner ship Interest of the Treasury Portfolio, with an aggregate principal
amount, in the case of such Debentures, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in ex change for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Any such creation or recreation of an Income
PRIDES may be effected only in multiples of 40 Growth PRIDES for 40 Income
PRIDES; provided, however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, a Holder may
make such substitution only in integral multiples of Growth PRIDES
for Income PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the Corporate Trust Office of the Agent and the New
York Office or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the Income PRIDES
Register.
78
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of % per annum (computed on the
basis of a 360-day year of twelve 30 day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of Contract
Adjustment Payments, if any, together with the additional Contract Adjustment
Payments accrued thereon, are referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be
due on the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment
Payments, if any, may be deferred to a date that is after the Purchase Contract
Settlement Date and no such deferral period may end other than on a Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Income PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock equal to the Settlement Rate) equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Income
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
purchase capital stock of the Company, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
or distributions in capital stock of the Company
79
(or rights to acquire capital stock) or repurchases or redemptions of capital
stock solely from the issuance or exchange of capital stock or (v) redemptions
or repurchases of any rights outstanding under a shareholder rights plan or a
declaration thereunder of a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Income PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of Income PRIDES. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Income PRIDES Certificate,
the Holder of this Income PRIDES Certificate shall deliver this Income PRIDES
Certificate to the Agent at the Corporate Trust Office or the New York Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and accompanied by payment in the
form of immediately available funds payable to the Company in an amount (the
"Early Settlement Amount") equal to (i) the product of (A) the Stated Amount
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (ii) if such delivery is made with
respect to any Purchase Contracts during the period from the close of business
on any Record Date for any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts; provided
that no payment shall be required pursuant to clause (ii) of this sentence if
the Company shall have elected to defer the Contract Adjustment Payments which
would otherwise be payable on such Payment Date. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the Pledged Debentures
or the appropriate Applicable Ownership Interest of the Treasury Portfolio
underlying such Securities shall be released from the Pledge as provided in the
Pledge Agreement and the Holder shall be entitled to receive a number of shares
of Common
80
Stock on account of each Purchase Contract forming part of a Income PRIDES as to
which Early Settlement is effected equal to the Early Settlement Rate; provided
however, that upon the Early Settlement of the Purchase Contracts, the Holder
thereof will forfeit the right to receive any Deferred Contract Adjustment
Payments and any future Contract Adjustment Payments, if any, on such Purchase
Contracts, except to the extent that the Early Settlement Date is after the
close of business on a Record Date and prior to the opening of business on the
corresponding Payment Date. The Early Settlement Rate shall initially be equal
to o shares of Common Stock and shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Income PRIDES Certificate. The Company covenants and agrees, and the Holder, by
its acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying this Income PRIDES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged Debentures, or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
81
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the purpose
of receiving payments of interest payable quarterly on the Debentures or on the
maturing quarterly interest strips of the Treasury Portfolio, as applicable,
receiving payments of Contract Adjustment Payments, if any, and any Deferred
Contract Adjustment Payments, if any, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
-------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
82
--------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _____________________________________
attorney to transfer said Income PRIDES Certificates on the books of The Coastal
Corporation with full power of substitution in the premises.
Dated:
----------------- -------------------------------------------
Signature
NOTICE: The signature to this assignment must correspond
with the name as it appears upon the face of the within
Income PRIDES Certificates in every particular, without
alteration or enlargement or any change whatsoever.
Signature Guarantee:
-------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless
83
a different name and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated:
-------------------------------- ------------------------------------
Signature
Signature Guarantee:
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered to
a Person other than the Holder,
please (i) print such Person's
name and address and (ii)
provide a guarantee of your
signature:
Please print name and address of
Registered Holder:
------------------------------------- -----------------------------------
Name Name
------------------------------------- -----------------------------------
Address Address
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
----------------------------------
84
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Income PRIDES Certificate representing any Income PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, deliverable
upon such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:
---------------------------- ------------------------------
Signature
Signature Guarantee (if assigned to another person):
-----------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
PRIDES Certificates are to be regis-
85
tered in the name of and delivered to
and Pledged Debentures, or an
Applicable Ownership Interest in
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please (i) print such
Person's name and address and (ii) provide
a guarantee of your signature:
Please print name and address of
Registered Holder:
------------------------------------- -----------------------------------
Name Name
------------------------------------- -----------------------------------
Address Address
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
----------------------------------
Transfer Instructions for Pledged Debentures, or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, Transferable Upon Early
Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
86
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Signature of authorized officer of
Purchase Contract Agent or Securities
Custodian
Amount of decrease in Stated Amount of
the Global Certificate
Amount of increase in Stated Amount of
the Global Certificate
Stated Amount of this Global Certificate
Following such decrease or increase
EXHIBIT B
(Form of Face of Growth PRIDES Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
87
No.__________ CUSIP NO.
Number of Growth PRIDES __________
_________% Growth PRIDES
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/100 undivided beneficial ownership interest in a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with The Coastal Corporation, a Delaware corporation (the "Company,"
which term, as used herein, includes its successors pursuant to the Purchase
Contract Agreement). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer of same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Growth PRIDES to the accounts designated by them in writing for such
purpose no later than 2:00 p.m. New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day), and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Growth PRIDES
of which such Pledged Treasury Securities are a part under the Purchase
Contracts forming a part of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on o 16, 2002
(the "Purchase Contract Settlement Date"), at a price equal to $o (the "Stated
Amount"), a number of shares of Common stock, $0.33 1/3 par value per share
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Growth PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse
88
hereof. The purchase price (the "Purchase Price") for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the Proceeds from the Treasury Securities pledged to secure the obligations
under such Purchase Contract in accordance with the terms of the Pledge
Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract forming part of a Growth PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to o % per annum of the Stated
Amount, computed on the basis of a 360-day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the Corporate
Trust Office of the Agent and at the New York Office or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
THE COASTAL CORPORATION
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
89
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: THE BANK OF NEW YORK not individually
but solely as attorney-in-fact of
such Holder
By:
--------------------------------
Name:
Title:
Dated: , 1999
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
--------------------------------
Authorized Signatory
90
( Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of o, 1999 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Growth PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at the Purchase Price, a number of shares of Common
Stock of the Company equal to the Settlement Rate, unless, on or prior to the
Purchase Contract Settlement Date, there shall have occurred a Termination Event
or an Early Settlement with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is equal to or greater than $o (the "Threshold
Appreciation Price"), o shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $o, the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Amount is less than or equal to $o, o shares of Common Stock
per Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement, shall obligate the Holder of the related Growth PRIDES to purchase
at the Purchase Price, and the Company to sell, a number of newly issued shares
of Common Stock equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Settlement, the third Trading Day immediately
preceding the relevant Early Settlement Date. The "Closing Price" of the Common
Stock on any date of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of the Common Stock on
The New York Stock Exchange, Inc. (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the NYSE on any such date, as reported in
91
the composite transactions for the principal United States securities exchange
on which the Common Stock is so listed, or if the Common Stock is not so listed
on a United States national or regional securities exchange, as reported by the
Nasdaq National Market or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, or, if such bid price
is not available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on which
the Common Stock (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock. A Holder of Growth PRIDES who does not
elect, on or prior to 5:00 p.m. New York City time on the second Business Day
immediately preceding the Purchase Contract Settlement Date, to make an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued on the related Purchase Contract by applying a principal amount of the
Pledged Treasury Securities as aforesaid.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Debentures or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for Treasury Securities, thereby creating or recreating Income
PRIDES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts, and the rights and
92
obligations of the Holder of such Growth PRIDES in respect of the Treasury
Security and the Purchase Contract constituting such Growth PRIDES may be
transferred and exchanged only as a Growth PRIDES. A Holder of Growth PRIDES may
create or recreate Income PRIDES by delivering to the Collateral Agent
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with an aggregate principal amount, in the case of such Debentures,
or with the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, in the case of
such appropriate Applicable Ownership Interest of the Treasury Portfolio, equal
to the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
substitution, the Security for which such Pledged Debentures or appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
secures the Holder's obligation under the Purchase Contract shall be referred to
as an "Income PRIDES." A Holder may make such a substitution only in integral
multiples of 40 Growth PRIDES for 40 Income PRIDES; provided, however, that if a
Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, a Holder may make such substitution only in
integral multiples of Growth PRIDES for Income PRIDES. Such substitution may
cause the equivalent aggregate Stated Amount of this Certificate to be increased
or decreased; provided, however, the equivalent aggregate Stated Amount
outstanding under this Growth PRIDES Certificate shall not exceed $o. All such
adjustments to the equivalent aggregate Stated Amount of this Growth PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of an Income PRIDES may create or recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount of the Pledged Debentures or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, in exchange for the release of such
Pledged Debentures or the appropriate Applicable Owner ship Interest of the
Treasury Portfolio, as the case may be, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. Any such creation or
recreation of a Growth PRIDES may be effected only in multiples of 45 Income
PRIDES for 45 Growth PRIDES; provided, however, if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income PRIDES,
a Holder may make such Collateral Substitution only in integral multiples of
Income PRIDES for Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the Corporate Trust Office of the Agent and the New
York Office or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the Growth PRIDES
Register.
93
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of per annum (computed on the basis of a
360-day year of twelve 30 day months), compounding on each succeeding Payment
Date, until paid in full (such deferred installments of Contract Adjustment
Payments, if any, together with the additional Contract Adjustment Payments
accrued thereon, are referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the
next succeeding Payment Date except to the extent that payment is deferred
pursuant to the Purchase Contract Agreement. No Contract Adjustment Payments, if
any, may be deferred to a date that is after the Purchase Contract Settlement
Date and no such deferral period may end other than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock equal to the Settlement Rate) equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Growth
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
94
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or repurchases of any rights outstanding under a shareholder rights
plan or a declaration thereunder of a dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Growth PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office or the
New York Office duly endorsed for transfer to the Company or in blank with the
form of Election to Settle Early set forth below duly completed and accompanied
by payment in the form of immediately available funds payable to the Company in
an amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts; provided
that no payment shall be required pursuant to clause (ii) of this sentence if
the Company shall have elected to defer the Contract Adjustment Payments which
would otherwise be payable on such Payment Date. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the Pledged Treasury
Securities underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive a
number of shares of Common Stock on account of each Purchase Contract forming
part of a Growth PRIDES as to which Early Settlement is effected equal to the
Early Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract
95
Adjustment Payments and any future Contract Adjustment Payments on such Purchase
Contracts, except to the extent that the Early Settlement Date is after the
close of business on a Record Date and prior to the opening of business on the
corresponding Payment Date. The Early Settlement Rate shall initially be equal
to o shares of Common Stock and shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Growth PRIDES Certificate. The Company covenants and agrees, and the Holder, by
his acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Treasury Securities underlying this Growth PRIDES Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees, that,
to the extent and in the manner provided in the Purchase Contract Agreement and
the Pledge Agreement, but subject to the terms thereof, payments in respect to
the Stated Amount of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the purpose
of receiving payments of interest on the Treasury Securities, receiving payments
of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, if any,
96
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Agent nor any such
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
---------------------------------------------------------
--------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
--------------------------------------------------------------------------------
97
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
--------------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of The Coastal
Corporation with full power of substitution in the premises.
Dated:
----------------- --------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Growth PRIDES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee:
--------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
--------------------------- ----------------------------
Signature
98
----------------------------
Signature Guarantee:
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered to
a Person other than the Holder,
please (i) print such Person's name
and address and (ii) provide a
guarantee of your signature:
Please print name and address of
Registered Holder:
------------------------------------- -----------------------------------
Name Name
------------------------------------- -----------------------------------
Address Address
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
-----------------------------------
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the
99
Purchase Contract Agreement with respect to the Purchase Contracts underlying
the number of Growth PRIDES evidenced by this Growth PRIDES Certificate
specified below. The option to effect Early Settlement may be exercised only
with respect to Purchase Contracts underlying Growth PRIDES with an aggregate
Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such Early Settlement be registered in the name of, and delivered, together with
a check in payment for any fractional share and any Growth PRIDES Certificate
representing any Growth PRIDES evidenced hereby as to which Early Settlement of
the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement will
be transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer or similar tax payable incident thereto.
Dated:
------------------------------ -----------------------------
Signature
Signature Guarantee:
----------------------------------
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Growth REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Treasury Securities are to
be transferred to a Person other than
the Holder, please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:
Please print name and address of
Registered Holder:
100
------------------------------------- -----------------------------------
Name Name
------------------------------------- -----------------------------------
Address Address
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
--------------------------------
Transfer Instructions for Pledged Treasury
Securities Transferable Upon Early
Settlement or a Termination Event:
-------------------------------------
-------------------------------------
-------------------------------------
101
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Signature of authorized officer of
Purchase Contract Agent or Securities
Custodian
Amount of decrease in Stated Amount of
the Global Certificate
Amount of increase in Stated Amount of
the Global Certificate
Stated Amount of this Global Certificate
Following such decrease or increase
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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102
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
The Chase Manhattan Bank
[Address]
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of The Coastal Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of , 1999, (the "Pledge Agreement") among the
Company, your selves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of the Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities] [$_______ aggregate
principal amount of Debentures or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] in exchange for an equal Value
of [Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Pledged Treasury Securities] [Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:
-------------------- ---------------------------------------
By:
---------------------------------------
Name:
Title:
Signature Guarantee:
103
-------------------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] for the [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
--------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
---------------------------
---------------------------
104
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: FELINE PRIDES of The Coastal Corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered
to , as Collateral Agent, [$_______ aggregate principal amount of
Treasury Securities] [$ aggregate principal amount of Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, the case
may be,] in exchange for an equal Value of [Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section [4.1], [4.2] of the Pledge Agreement, dated o, 1999 (the
"Pledge Agreement"), between you, the Company and the Collateral Agent. The
under signed Holder has paid the Collateral Agent all applicable fees relating
to such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio] [Pledged Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Dated:
------------------------------ ---------------------------------------
Signature
Signature Guarantee:
-------------------
Please print name and address of Registered Holder:
--------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
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105
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Re: FELINE PRIDES of The Coastal Corporation (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.4 of the Purchase Contract Agreement dated as of o, 1999 among
the Company and yourselves, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Collateral Agent, on or prior to 11:00 a.m. New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date, (in
lawful money of the United States by [certified or cashiers check or] wire
transfer, in each case in immediately available funds), $_________ as the
Purchase Price for the shares of Common Stock issuable to such Holder by the
Company under the related Purchase Contract on the Purchase Contract Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holders election to make such cash
settlement with respect to the Purchase Contracts related to such Holder's
[Income PRIDES] [Growth PRIDES].
Dated:
------------------------------ ---------------------------------------
Signature
Signature Guarantee:
-------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
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106
Name Social Security or other Taxpayer
Identification Number, if any
---------------------------
Address
---------------------------
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107
--------------------------------------------------------------------------------
FIRST SUPPLEMENT TO PURCHASE CONTRACT AGREEMENT
DATED AS OF JANUARY 29, 2001
AMONG
THE COASTAL CORPORATION,
EL PASO ENERGY CORPORATION
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS ......................................... 2
ARTICLE II
CONCERNING THE MERGER
SECTION 2.1. EL PASO AS ISSUER OF COMMON STOCK UPON SETTLEMENT ........... 3
SECTION 2.2. ACCEPTANCE BY AGENT ......................................... 3
ARTICLE III
CONCERNING SETTLEMENT
SECTION 3.1. PURCHASE CONTRACT SETTLEMENT ................................ 3
SECTION 3.2. SETTLEMENT RATE ............................................. 4
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. RATIFICATION OF PURCHASE CONTRACT AGREEMENT.................. 4
SECTION 4.2. EFFECTIVENESS ............................................... 4
SECTION 4.3. SECURITIES DEEMED CONFORMED ................................. 5
SECTION 4.4. GOVERNING LAW ............................................... 5
SECTION 4.5. SEPARABILITY ................................................ 5
SECTION 4.6. COUNTERPARTS ................................................ 5
109
FIRST SUPPLEMENT TO PURCHASE CONTRACT AGREEMENT, dated as of January
29, 2001 (this "Supplemental Agreement"), among The Coastal Corporation, a
Delaware corporation (the "Company"), El Paso Energy Corporation, a Delaware
corporation ("El Paso"), and The Bank of New York, a New York banking
corporation, acting as purchase contract agent for the Holders of Securities
from time to time (the "Agent").
WHEREAS, the Company and the Agent executed and delivered a Purchase
Contract Agreement, dated as of August 3, 1999 (the "Purchase Contract
Agreement"), to provide for the execution and delivery of the Purchase Contracts
and Certificates related to the Income PRIDES or Growth PRIDES (collectively,
the "Securities");
WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of
January 17,2000 (the "Merger Agreement"), by and among the Company, El Paso
Merger Company, a wholly owned subsidiary of El Paso, and El Paso, El Paso
Merger Company is to merge (the "Merger") with and into the Company;
WHEREAS, Section 2.1(a) of the Merger Agreement provides that, at the
effective time of the Merger (the "Effective Time"), each share of Common
Stock of the Company issued and outstanding immediately prior to the Effective
Time shall be converted into, and shall be cancelled in exchange for, the right
to receive 1.23 shares of Common Stock of El Paso, par value $3.00 per share,
including any associated preferred stock purchase rights ("El Paso Common
Stock");
WHEREAS, Section 9.1 of the Purchase Contract Agreement permits the
Company to merge with another corporation provided certain terms and conditions
are satisfied;
WHEREAS, Section 5.6(b) of the Purchase Contract Agreement provides
that in the event of a Reorganization Event the Person formed thereby shall
execute and deliver to the Agent an agreement supplemental to the Purchase
Contract Agreement providing that the Holders of each Outstanding Security shall
have the rights provided by Section 5.6 and for adjustments, for subsequent
events, that are as nearly equivalent as may be practicable to the adjustments
provided for in Section 5.6 of the Purchase Contract Agreement.
WHEREAS, Section 8.1 of the Purchase Contract Agreement authorizes the
Company and the Agent to enter into a supplemental agreement without the consent
of any Holders, to, among other things, make provision with respect to the
rights of Holders pursuant to the requirements of Section 5.6(b) of the Purchase
Contract Agreement;
WHEREAS, the Company has furnished the Agent with an Opinion of
Counsel, stating that the Merger and this Supplemental Agreement comply with the
provisions of Article IX of the Purchase Contract Agreement and that all
conditions precedent to the
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110
consummation of the Merger set forth in the Purchase Contract Agreement have
been met;
WHEREAS, pursuant to Section 8.3 of the Purchase Contract Agreement, in
executing this Supplemental Agreement the Agent shall be fully protected in
relying upon an Opinion of Counsel furnished by the Company stating that the
execution of this Supplemental Agreement is authorized or permitted by the
Purchase Contract Agreement; and
WHEREAS, the Company has requested that the Agent execute and deliver
this Supplemental Agreement.
NOW THEREFORE, in consideration of the premises El Paso and the Company
covenant and agree with the Agent as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS.
Unless the context otherwise requires:
(a) a term defined in the Purchase Contract Agreement has the same
meaning when used in this Supplemental Agreement;
(b) a term defined anywhere in this Supplemental Agreement has the same
meaning throughout;
(c) the singular includes the plural and vice versa; and
(d) headings are for convenience of reference only and do not affect
interpretation.
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111
ARTICLE II
CONCERNING THE MERGER
SECTION 2.1. EL PASO AS ISSUER OF COMMON STOCK UPON SETTLEMENT.
(a) The parties hereby agree that, from and after the Effective Time,
El Paso shall issue and deliver the number of shares of El Paso Common Stock
which is sufficient to settle the Purchase Contracts as provided in Article III
of this Supplemental Agreement, against payment in full of the Purchase Price in
the manner set forth in the Purchase Contract Agreement and Section 2.1(b)
hereof.
(b) The Company hereby agrees that it will immediately forward to El
Paso all funds received by it under Section 5.4, 5.9 or otherwise under the
Purchase Contract Agreement for payment of the purchase price upon settlement of
the Purchase Contract for the shares of El Paso Common Stock to be so issued.
SECTION 2.2. ACCEPTANCE BY AGENT.
The Agent accepts this Supplemental Agreement and agrees to execute its
duties and responsibilities as hereby supplemented upon the terms and conditions
set forth in the Purchase Contract Agreement, including the terms and provisions
defining and limiting the liabilities and responsibilities of the Agent, which
terms and provisions shall in like manner define and limit its liabilities and
responsibilities in the performance of its duties created by the Purchase
Contract Agreement as hereby supplemented; and without limiting the generality
of the foregoing, the Agent shall not be responsible in any manner whatsoever
for or with respect to any of the recitals or statements contained herein, all
of which recitals or statements are made solely by El Paso and the Company, or
for or with respect to the validity or sufficiency of this Supplemental
Agreement or any of the terms or provisions hereof.
ARTICLE III
CONCERNING SETTLEMENT
SECTION 3.1. PURCHASE CONTRACT SETTLEMENT.
(a) The parties understand and agree that, pursuant to Section 5.6(b)
of the Purchase Contract Agreement, the Merger will constitute a Reorganization
Event as a result of which as of the Effective Time the Settlement Rate shall be
adjusted such that each Holder of Securities will receive on the Purchase
Contract Settlement Date with
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112
respect to each Purchase Contract forming a part thereof (or upon any Early
Settlement) the number of shares of El Paso Common Stock receivable pursuant to
the Merger (without any interest thereon, and without any right to dividends or
distribution thereon which have a record date that is prior to the Purchase
Contract Settlement Date) by a holder of the number of shares of the Company's
Common Stock that would have been issuable on account of each Purchase Contract
if the Purchase Contract Settlement Date had occurred immediately prior to the
Effective Time, subject to any further adjustments in the Settlement Rate under
Article V of the Purchase Contract Agreement prior to settlement. Attached as
Exhibit A hereto is an Officer's Certificate, pursuant to Section 5.7(a)(i) of
the Purchase Contract Agreement, which sets forth the method of calculation of
the Settlement Rate as of the Effective Time, as adjusted for the Merger.
(b) The parties hereby agree that, subject to the other provisions of
this Supplemental Agreement from and after the Effective Time, the provisions of
the Purchase Contract Agreement and the Purchase Contracts that refer to the
delivery of "Common Stock" of the Company, including without limitation Sections
5.4, 5.5, 5.9, 10.3 and 10.4 of the Purchase Contract Agreement, shall relate to
El Paso Common Stock by operation of Section 5.6(b) of the Purchase Contract
Agreement.
SECTION 3.2. SETTLEMENT RATE.
In accordance with the last two sentences of Section 5.6(b) of the
Purchase Contract Agreement, the Settlement Rate shall be adjusted for events
subsequent to the Effective Time, in a manner that is as nearly equivalent as
may be practicable to the adjustments provided for in Section 5.6 of the
Purchase Contract Agreement, as if El Paso was the original "Company" and El
Paso Common Stock was the original "Common Stock" under the provisions of
Section 5.6 of the Purchase Contract Agreement.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. RATIFICATION OF PURCHASE CONTRACT AGREEMENT.
The Purchase Contract Agreement, as supplemented by this Supplemental
Agreement, is in all respects ratified and confirmed, and this Supplemental
Agreement shall be deemed part of the Purchase Contract Agreement in the manner
and to the extent herein and therein provided.
SECTION 4.2. EFFECTIVENESS.
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113
This Supplemental Agreement shall become a legally effective and
binding instrument upon the later of (i) execution and delivery hereof by all
parties hereto and (ii) the Effective Time.
SECTION 4.3. SECURITIES DEEMED CONFORMED.
As of the Effective Time, the provisions of each Security then
outstanding shall be deemed to be conformed, without the necessity for any
reissuance or exchange of such Security or any other action on the part of the
Holders, El Paso, the Company or Agent, so as to reflect this Supplemental
Agreement.
SECTION 4.4. GOVERNING LAW.
This Supplemental Agreement shall be governed by and construed in
accordance with the laws (other than the choice of law provisions) of the State
of New York.
SECTION 4.5. SEPARABILITY.
In came any one or more of the provisions contained in this
Supplemental Agreement or in the Securities shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Agreement or of the Securities, but this Supplemental Agreement and the
Securities shall be construed as if such invalid or illegal or unenforceable
provision had never been contained herein or therein.
SECTION 4.6. COUNTERPARTS.
This Supplemental Agreement may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
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114
TN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Agreement to be duly executed as of the day and year first above written.
THE COASTAL CORPORATION
By /s/ XXXXXX X. X'XXXXX
----------------------------------------------
Name: Xxxxxx X. X'Xxxxx
Title: Senior Vice President &
Corporate Secretary
EL PASO ENERGY CORPORATION
By /s/ XXXXX X. XXXXXXX
----------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
THE BANK OF NEW YORK, as Agent
By /s/ XXXX X. XXXXX
----------------------------------------------
Name: Reno X. XXXXX
Title: Vice President
6
115
EXHIBIT A
OFFICER'S CERTIFICATE
OF
THE COASTAL CORPORATION
UNDER SECTION 5.7(a)(i) AND SECTION 9.1 OF THE
PURCHASE CONTRACT AGREEMENT
THE UNDERSIGNED, XXXXXX X. X'XXXXX, the Senior Vice President and
Corporate Secretary of The Coastal Corporation, a Delaware corporation (the
"Company"), hereby certifies:
(i) Accompanying this Certificate is the duly executed
Supplemental Purchase Contract Agreement (the
"Supplemental Agreement"), dated as of January,
2001, among the Company, El Paso Energy Corporation, a
Delaware corporation ("El Paso"), and The Bank of New
York, as purchase contract agent (the "Agent"), which
will become effective as of Effective Time of the
Merger of El Paso Merger Company, a wholly-owned
subsidiary of El Paso (the "Merger Sub") into the
Company and which amends the Purchase Contract
Agreement dated as of August 3,1999 among the Company
and the Agent.
(ii) Pursuant to Section 5.7(a)(i) of the Purchase Contract
Agreement, the Settlement Rate from and after the
Effective Time, the method of calculation thereof, and
the facts requiring such adjustment and upon which
such adjustment is based, are as follows:
As of the Effective Time, the Merger Sub will
merge with and into the Company and the
Company's Common Stock will no longer exist.
Section 5.6(b) of the Purchase Contract
Agreement provides that the Merger constitutes
a Reorganization Event whereupon the
Settlement Rate will be adjusted to provide
that each Holder of Securities will receive on
the Purchase Contract Settlement date with
respect to each Purchase Contract forming a
part thereof (or upon Early Settlement), the
kind and amount of securities, cash and other
property receivable upon such Reorganization
Event (without any interest thereon, and
without any right to dividends or distribution
thereon which have a record date that is prior
to the Purchase Contract Settlement Date) by a
holder of the number of shares of the
Company's Common Stock issuable on account of
each Purchase Contract as if the Purchase
Contract Settlement Date had occurred
immediately prior to such Reorganization Event
and assuming such holder failed to exercise
his rights of election as to the kind or
amount of securities, cash and other property
so receivable.
METHOD OF CALCULATION:
1) Settlement Rate prior to the Effective Time
a) If the Applicable Market Value is equal to or
greater than $46.4363 (the "Threshold
Appreciation Price"), 0.5384 shares of Company
Common Stock per Purchase Contract;
A-1
116
b) if the Applicable Market Value is less than the Threshold
Appreciation Price, but greater than $38.0625, the number
of shares of Company Common Stock equal to the Stated
Amount divided by the Applicable Market Value, and
c) if the Applicable Market Value is less than or equal to
$38.0625, 0.6568 shares of Company Common Stock per
Purchase Contract.
2) The Applicable Market Value of the Company's Common Stock
calculated prior to the Merger is greater than the Threshold
Appreciation Price ($46.4363). Accordingly, as described in 1)a)
above, the applicable Settlement Rate as if the Purchase
Contract Settlement Date had occurred immediately prior to the
Merger (but prior to adjustment for the Merger) is 0.5384 shares
of Company Common Stock per Purchase Contract.
3) Securities Receivable Upon Reorganization Event: Upon
consummation of the Merger, each holder of a share of the
Company's Common Stock will receive 1.23 shares of El Paso
Common Stock.
4) Adjustment Settlement Rate: Accordingly, unless there shall have
occurred a Termination Event, each Holder of a Purchase Contract
will be obligated to purchase on the Purchase Contract
Settlement Date (subject to the next sentence) at a price equal
to the Stated Amount ($25), and El Paso will be required to sell
at such price, 0.6622 shares of El Paso Common Stock (the
product of 0.5384 times 1.23), subject to any further
adjustments in the Settlement Rate under Article V of the
Purchase Contract Agreement prior to settlement. Pursuant to the
Purchase Contract Agreement, in the case of Early Settlement,
Cash Settlement, or through the application of Proceeds from
related Treasury Securities, the Cash Settlement Rate and Early
Settlement Rate (as applicable) will also be determined based on
the adjusted Settlement Rate as applicable to the El Paso Common
Stock.
5) The Company is not in default in the performance of any covenant
or condition under the Purchase Contract Agreement, any of the
Securities, or the Pledge Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Supplemental Agreement and the Purchase
Contract Agreement.
IN WITNESS WHEREOF, I have executed this Certificate on this ___ day of
January, 2001.
THE COASTAL CORPORATION
------------------------------
By: Xxxxxx X. X'Xxxxx
Title: Senior Vice President
and Corporate Secretary
A-2
117
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Agreement to be duly executed as of the day and year first above written.
THE COASTAL CORPORATION
By__________________________
Name:
Title:
EL PASO ENERGY CORPORATION
By__________________________
Name:
Title:
THE BANK OF NEW YORK, as Agent
By__________________________
Name:
Title:
