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EXHIBIT 4.13
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VALERO ENERGY CORPORATION
and
________________________________ ,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of _______________, 2000
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TABLE OF CONTENTS
RECITALS 1
ARTICLE I. Definitions and Other Provisions of General Applications........................................1
Section 1.1. Definitions..........................................................................................1
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS................................................................10
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO PURCHASE CONTRACT AGENT..............................................11
SECTION 1.4. ACTS OF HOLDERS; RECORD DATES.......................................................................11
SECTION 1.5. NOTICES.............................................................................................12
SECTION 1.6. NOTICE TO HOLDERS; WAIVER...........................................................................14
SECTION 1.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS............................................................14
SECTION 1.8. SUCCESSORS AND ASSIGNS..............................................................................14
SECTION 1.9. SEPARABILITY CLAUSE.................................................................................14
SECTION 1.10. BENEFITS OF AGREEMENT..............................................................................15
SECTION 1.11. GOVERNING LAW......................................................................................15
SECTION 1.12. LEGAL HOLIDAYS.....................................................................................15
SECTION 1.13. COUNTERPARTS.......................................................................................15
SECTION 1.14. INSPECTION OF AGREEMENT............................................................................15
SECTION 1.15. APPOINTMENT OF FINANCIAL INSTITUTION AS AGENT FOR THE COMPANY......................................15
ARTICLE II. CERTIFICATE FORMS....................................................................................16
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY.....................................................................16
SECTION 2.2. FORM OF PURCHASE CONTRACT AGENT'S CERTIFICATE OF AUTHENTICATION.....................................17
ARTICLE III. The Securities......................................................................................17
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SECTION 3.1. AMOUNT; FORM AND DENOMINATIONS......................................................................17
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES................................................17
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING......................................................18
SECTION 3.4. TEMPORARY CERTIFICATES..............................................................................19
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.................................................19
SECTION 3.6. BOOK-ENTRY INTERESTS................................................................................21
SECTION 3.7. NOTICES TO HOLDERS..................................................................................21
SECTION 3.8. APPOINTMENT OF SUCCESSOR DEPOSITARY.................................................................21
SECTION 3.9. DEFINITIVE CERTIFICATES.............................................................................22
SECTION 3.10. MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.................................................22
SECTION 3.11. PERSONS DEEMED OWNERS..............................................................................23
SECTION 3.12. CANCELLATION.......................................................................................24
SECTION 3.13. CREATION OF TREASURY PEPS UNITS BY SUBSTITUTION OF TREASURY SECURITIES.............................24
SECTION 3.14. REESTABLISHMENT OF PEPS UNITS......................................................................26
SECTION 3.15. TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT........................................27
SECTION 3.16. NO CONSENT TO ASSUMPTION...........................................................................28
ARTICLE IV. THE PREFERRED SECURITIES, SENIOR DEFERRABLE NOTES AND APPLICABLE OWNERSHIP INTEREST OF THE TREASURY
PORTFOLIO..................................................................................28
SECTION 4.1. INTEREST PAYMENTS; RIGHTS TO INTEREST PAYMENTS PRESERVED............................................28
SECTION 4.2. NOTICE AND VOTING...................................................................................29
SECTION 4.3. DISTRIBUTION OF SENIOR DEFERRABLE NOTES; TAX EVENT REDEMPTION.......................................30
ARTICLE V. THE PURCHASE CONTRACTS................................................................................31
SECTION 5.1. PURCHASE OF SHARES OF COMMON STOCK..................................................................31
SECTION 5.2. PURCHASE CONTRACT PAYMENTS..........................................................................33
SECTION 5.3. DEFERRAL OF PURCHASE CONTRACT PAYMENTS..............................................................34
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SECTION 5.4. PAYMENT OF PURCHASE PRICE...........................................................................34
SECTION 5.5. ISSUANCE OF SHARES OF COMMON STOCK..................................................................39
SECTION 5.6. ADJUSTMENT OF SETTLEMENT RATE.......................................................................39
SECTION 5.7. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS......................................................46
SECTION 5.8. TERMINATION EVENT; NOTICE...........................................................................47
SECTION 5.9. EARLY SETTLEMENT....................................................................................47
SECTION 5.10. INTENTIONALLY OMITTED..............................................................................49
SECTION 5.11. NO FRACTIONAL SHARES...............................................................................49
SECTION 5.12. CHARGES AND TAXES..................................................................................50
ARTICLE VI. REMEDIES.............................................................................................50
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PURCHASE CONTRACT PAYMENTS AND TO PURCHASE SHARES
OF COMMON STOCK............................................................................50
SECTION 6.2. RESTORATION OF RIGHTS AND REMEDIES..................................................................50
SECTION 6.3. RIGHTS AND REMEDIES CUMULATIVE......................................................................50
SECTION 6.4. DELAY OR OMISSION NOT WAIVER........................................................................51
SECTION 6.5. UNDERTAKING FOR COSTS...............................................................................51
SECTION 6.6. WAIVER OF STAY OR EXTENSION LAWS....................................................................51
ARTICLE VII. THE PURCHASE CONTRACT AGENT.........................................................................52
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES.................................................................52
SECTION 7.2. NOTICE OF DEFAULT...................................................................................52
SECTION 7.3. CERTAIN RIGHTS OF PURCHASE CONTRACT AGENT...........................................................53
SECTION 7.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES..............................................54
SECTION 7.5. MAY HOLD SECURITIES.................................................................................54
SECTION 7.6. MONEY HELD IN CUSTODY...............................................................................54
SECTION 7.7. COMPENSATION AND REIMBURSEMENT......................................................................54
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SECTION 7.8. CORPORATE PURCHASE CONTRACT AGENT REQUIRED; ELIGIBILITY.............................................55
SECTION 7.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR...................................................55
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.............................................................56
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS........................................57
SECTION 7.12. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.............................................57
SECTION 7.13. NO OBLIGATIONS OF PURCHASE CONTRACT AGENT..........................................................57
SECTION 7.14. TAX COMPLIANCE.....................................................................................58
ARTICLE VIII. SUPPLEMENTAL AGREEMENTS............................................................................59
SECTION 8.1. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS..................................................59
SECTION 8.2. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.....................................................59
SECTION 8.3. EXECUTION OF SUPPLEMENTAL AGREEMENTS................................................................60
SECTION 8.4. EFFECT OF SUPPLEMENTAL AGREEMENTS...................................................................61
SECTION 8.5. REFERENCE TO SUPPLEMENTAL AGREEMENTS................................................................61
ARTICLE IX. MERGER, CONSOLIDATION, SHARE EXCHANGE, SALE OR CONVEYANCE...........................................61
SECTION 9.1. COVENANT NOT TO MERGE, CONSOLIDATE, ENTER INTO A SHARE EXCHANGE, SELL OR CONVEY PROPERTY EXCEPT
UNDER CERTAIN CONDITIONS...................................................................61
SECTION 9.2. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION..........................................................62
SECTION 9.3. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL GIVEN TO PURCHASE CONTRACT AGENT.......................62
ARTICLE X. COVENANTS...........................................................................................62
SECTION 10.1. PERFORMANCE UNDER PURCHASE CONTRACTS...............................................................62
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY....................................................................63
SECTION 10.3. COMPANY TO RESERVE COMMON STOCK....................................................................63
SECTION 10.4. COVENANTS AS TO COMMON STOCK.......................................................................63
SECTION 10.5. STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT................................................63
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SECTION 10.6. ERISA..............................................................................................64
EXHIBIT A FACE OF PEPS UNITS CERTIFICATE..............................................................A - 1
EXHIBIT B FACE OF TREASURY PEPS CERTIFICATE...........................................................B - 1
EXHIBIT C INSTRUCTION TO PURCHASE CONTRACT AGENT......................................................C - 1
EXHIBIT D NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS..............................................D - 1
EXHIBIT E NOTICE TO SETTLE BY CASH....................................................................E - 1
EXHIBIT F NOTICE FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT AND INDENTURE TRUSTEE...............F - 1
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PURCHASE CONTRACT AGREEMENT, dated as of ______________, 2000, between
VALERO ENERGY CORPORATION, a Delaware corporation (the "COMPANY"), and
_________________________, a [national banking association], acting as purchase
contract agent for the Holders of Securities from time to time (the "PURCHASE
CONTRACT 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 Purchase Contract 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. 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, Exhibit or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Applicable Ownership Interest; (ii) Applicable Principal
Amount; (iii) Guarantee; (iv) Primary Treasury Dealer; (v) Pro Rata, (vi)
Quotation Agent; (vii) Redemption Amount; (viii) Redemption Price; (ix)
Remarketing, (x) Reset Rate, (xi) Tax Event Redemption, (xii) Tax Event
Redemption Date; (xiii) Two-Year Benchmark Treasury Rate; and (xiv) Treasury
Portfolio; and
(e) the following terms have the meanings given to them in this Section
1.1(e):
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"ACT" has the meaning, with respect to any Holder, set forth in Section
1.4.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.1.
"APPLICANTS" has the meaning set forth in Section 7.12(b).
"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 beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"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 Purchase Contract Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.6.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banking institutions in New York City are authorized or required by law
or executive order to remain closed or a day on which the Indenture Trustee or
the Property Trustee is closed for business; provided that for purposes of the
second paragraph of Section 1.12 only, the term "Business Day" shall also be
deemed to exclude any day on which trading on the New York Stock Exchange, Inc.
is closed or suspended.
"CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i).
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"CERTIFICATE" means a PEPS Units Certificate or a Treasury PEPS Units
Certificate.
"CLOSING PRICE" has the meaning set forth in Section 5.1.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in Section 1 of the Pledge
Agreement.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 1 of the
Pledge Agreement.
"COLLATERAL AGENT" means ________________________________, 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 set forth in Section 3.13.
"COMMON STOCK" means the Valero Energy Corporation common stock, par
value $0.01 per share.
"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.
"CONSTITUENT PERSON" has the meaning set forth in Section 5.6(b).
"CORPORATE TRUST OFFICE" means the principal corporate trust office of
the Purchase Contract Agent at which, at any particular time, its corporate
trust business shall be administered, which office at the date hereof is located
at ______________________, Attention: __________________________.
"COUPON RATE" means the percentage rate per annum at which each Senior
Deferrable Note will bear interest initially and, on and after
_________________, 200__, the Reset Rate.
"CURRENT MARKET PRICE" has the meaning set forth in Section 5.6(a)(8).
"DECLARATION" means the Amended and Restated Declaration of Trust of
VEC Trust I, dated as of _____________, 2000, among the Company as sponsor, the
trustees named therein and the holders from time to time of individual
beneficial interests in the assets of the Trust.
"DEPOSITARY" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities as contemplated by
Sections 3.6, 3.7, 3.8 and 3.9.
"DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
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"DTC" means The Depository Trust Company.
"EARLY SETTLEMENT" has the meaning set forth in Section 5.9(a).
"EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.9(a).
"EARLY SETTLEMENT DATE" has the meaning set forth in Section 5.9(a).
"EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.9(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and any statute successor thereto, in each case as amended from time to time,
and the rules and regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning set forth in Section 1.4(e).
"EXPIRATION TIME" has the meaning set forth in Section 5.6(a)(6).
"FAILED REMARKETING" has the meaning set forth in Section 5.4(b).
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Clearing Agency or a nominee
thereof.
"HOLDER" means, with respect to a Security, the Person in whose name
the Security evidenced by a Certificate is registered in the Security Register;
provided, however, that in determining whether the Holders of the requisite
number of Securities have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Security
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the Securities are credited on the record date, the term "HOLDER" shall mean
such Depositary Participant acting at the direction of the Beneficial Owners.
"INDENTURE" means the Senior Indenture, dated as of _________________,
2000, between the Company and the Indenture Trustee (including any provisions of
the TIA that are deemed incorporated therein), as supplemented by the [First]
Supplemental Indenture dated as of ______________, 2000, pursuant to which the
Senior Deferrable Notes will be issued.
"INDENTURE TRUSTEE" means _____________________, 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
one of its Vice Presidents, and by
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its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Purchase Contract Agent.
"NON-ELECTING SHARE" has the meaning set forth in Section 5.6(b).
"NYSE" has the meaning set forth in Section 5.1.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, its President or one of its Vice Presidents, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Purchase Contract Agent. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Agreement shall include:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(iii) a statement that, in the opinion of each such officer,
each such officer has made such examination or investigation as is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent. An opinion of
counsel may rely on certificates as to matters of fact.
"OUTSTANDING SECURITIES" means, with respect to any Security and as of
the date of determination, all Securities evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (i) Treasury PEPS
Units and (ii) PEPS Units for which the underlying Senior Deferrable
Notes have been theretofore deposited with the Purchase Contract Agent
in trust for the Holders of such PEPS Units;
(ii) Securities evidenced by Certificates theretofore
cancelled by the Purchase Contract Agent or delivered to the Purchase
Contract Agent for cancellation or deemed cancelled pursuant to the
provisions of this Agreement; and
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(iii) Securities 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 the Purchase Contract Agent proof satisfactory to it that
such Certificate is held by a bona fide purchaser in whose hands the
Securities evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding Securities, except that, in determining whether the Purchase
Contract Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Purchase Contract Agent knows to be so owned shall
be so disregarded. Securities so owned that have been pledged in good faith may
be regarded as Outstanding Securities if the pledgee establishes to the
satisfaction of the Purchase Contract Agent the pledgee's right so to act with
respect to such Securities and that the pledgee is not the Company or any
Affiliate of the Company.
"PAYMENT DATE" means each ______________, ______________,
______________ and ______________, commencing _________________.
"PEPS UNIT" means the collective rights and obligations of a Holder of
a PEPS Units Certificate in respect of a Preferred Security, the Senior
Deferrable Notes 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; provided, that the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio shall not be subject to the Pledge.
"PEPS UNITS CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of PEPS Units specified on such
certificate.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1 of the
Pledge Agreement.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"PLAN" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the Code or
any entity whose assets are considered assets of any such plan.
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"PLEDGE" means the pledge under the Pledge Agreement of the Preferred
Securities, the Senior Deferrable Notes, the Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, in each case constituting a
part of the Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of
_______________, 2000, among the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact for the Holders from time to time of the Securities.
"PLEDGED SENIOR DEFERRABLE NOTES" has the meaning set forth in the
Pledge Agreement.
"PLEDGED PREFERRED SECURITIES" has the meaning set forth in the Pledge
Agreement.
"PREDECESSOR CERTIFICATE" means a Predecessor PEPS Units Certificate or
a Predecessor Treasury PEPS Units Certificate.
"PREDECESSOR PEPS UNITS CERTIFICATE" of any particular PEPS Units
Certificate means every previous PEPS Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
PEPS Units evidenced thereby; and, for the purposes of this definition, any PEPS
Units Certificate authenticated and delivered under Section 3.10 in exchange for
or in lieu of a mutilated, destroyed, lost or stolen PEPS Units Certificate
shall be deemed to evidence the same rights and obligations of the Company and
the Holder as the mutilated, destroyed, lost or stolen PEPS Units Certificate.
"PREDECESSOR TREASURY PEPS UNITS CERTIFICATE" of any particular
Treasury PEPS Units Certificate means every previous Treasury PEPS Units
Certificate evidencing all or a portion of the rights and obligations of the
Company and the Holder under the Treasury PEPS Units evidenced thereby; and, for
the purposes of this definition, any Treasury PEPS Units Certificate
authenticated and delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Treasury PEPS Units Certificate shall be
deemed to evidence the same rights and obligations of the Company and the Holder
as the mutilated, destroyed, lost or stolen Treasury PEPS Units Certificate.
"PREFERRED SECURITIES" means the Preferred Securities of the Trust,
each having a stated liquidation amount of $___, representing preferred
undivided beneficial interests in the assets of the Trust.
"PROCEEDS" has the meaning set forth in Section 1 of the Pledge
Agreement.
"PROPERTY TRUSTEE" means __________________, as property trustee under
the Declaration, or any successors thereto that is a financial institution
unaffiliated with the Company.
"PURCHASE CONTRACT" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and the
Holder of such Security to
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purchase, shares of Common Stock and (ii) pay the Holder Purchase Contract
Payments on the terms and subject to the conditions set forth in Article Five
hereof.
"PURCHASE CONTRACT AGENT" means the Person named as the "PURCHASE
CONTRACT AGENT" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "PURCHASE CONTRACT AGENT" shall
mean such Person.
"PURCHASE CONTRACT PAYMENTS" means the payments payable by the Company
on the Payment Dates in respect of each Purchase Contract, equal to _____% per
annum of the Stated Amount.
"PURCHASE CONTRACT SETTLEMENT DATE" means ____________________.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in
Section 5.5.
"PURCHASE PRICE" has the meaning set forth in Section 5.1.
"PURCHASED SHARES" has the meaning set forth in Section 5.6(a)(6).
"RECORD DATE" for the interest and Purchase Contract Payments payable
on any Payment Date means, as to any Global Certificate, the Business Day next
preceding such Payment Date, and as to any other Certificate, the fifteenth
Business Day prior to such Payment Date.
"REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.
"REFERENCE PRICE" has the meaning set forth in Section 5.1.
"REMARKETING AGENT" has the meaning set forth in Section 5.4(b).
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
_________________, 2000, between the Company and the Remarketing Agent.
"REORGANIZATION EVENT" has the meaning set forth in Section 5.6(b).
"RESPONSIBLE OFFICER" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer its corporate trust matters.
"SECURITIES INTERMEDIARY" means ___________________, as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"SECURITY" means a PEPS Unit or a Treasury PEPS Unit, as the case may
be.
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"SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings set forth in Section 3.5.
"SENIOR DEFERRABLE NOTES" means the series of Senior Deferrable Notes
issued by the Company under the Indenture and held by the Property Trustee.
"SETTLEMENT RATE" has the meaning set forth in Section 5.1.
"STATED AMOUNT" means $___.
"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;
(ii) 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 termination 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 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 set forth in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"TRADING DAY" has the meaning set forth in Section 5.1.
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"TREASURY PEPS UNIT" means, following the substitution of Treasury
Securities for Preferred Securities or Senior Deferrable Notes as collateral to
secure a Holder's obligations under the Purchase Contract, the collective
rights and obligations of a Holder of a Treasury PEPS Units Certificate in
respect of such Treasury Securities, subject to the Pledge thereof, and the
related Purchase Contract.
"TREASURY PEPS UNITS CERTIFICATE" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Treasury PEPS
Units specified on such certificate.
"TREASURY SECURITIES" means zero-coupon U.S. Treasury Securities (CUSIP
No. _______) which mature on _______________.
"TRUST" means VEC Trust I, a statutory business that formed under the
laws of the State of Delaware, or any successor thereto by merger or
consolidation.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated
_______________, 2000, between the Company, __________________ and
___________________________________________________.
"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 Purchase Contract Agent to take
any action in accordance with any provision of this Agreement, the Company
shall furnish to the Purchase Contract Agent an Officers' Certificate stating
that all conditions precedent, if any, provided for in this Agreement relating
to the proposed action have been complied with and, if requested by the
Purchase Contract 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:
(i) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) 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;
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(iii) a statement that, in the opinion of each such
individual, he or she 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
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO PURCHASE CONTRACT 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 an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. 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 an 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 Purchase Contract 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 Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.
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(c) The ownership of Securities shall be proved by the PEPS Units
Register or the Treasury PEPS Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Certificate evidencing such
Security 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 Purchase Contract 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 date 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 PEPS Units and the Outstanding Treasury PEPS Units,
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 PEPS Units or the Treasury PEPS
Units, 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 prior to or on the applicable Expiration Date by Holders of the requisite
number of Outstanding Securities on such record date. Nothing contained 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 be of no effect), and nothing
contained 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 proposed action by Holders and the applicable Expiration Date to be
given to the Purchase Contract 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 Purchase Contract Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.6, prior to or on 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.
SECTION 1.5. NOTICES.
Any notice or communication is duly given if in writing and delivered
in Person or mailed by first-class mail (registered or certified, return
receipt requested), telecopier (with
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receipt confirmed) or overnight air courier guaranteeing next day delivery, to
the others' address; provided that notice shall be deemed given to the Purchase
Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Telecopier No.:
--------------------
Attention:
-------------------------
If to the Company:
Valero Energy Corporation
Xxx Xxxxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
Telecopier No.:
--------------------
Attention:
-------------------------
If to the Collateral Agent:
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Telecopier No.:
--------------------
Attention:
-------------------------
If to the Property Trustee:
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Telecopier No.:
--------------------
Attention:
-------------------------
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If to the Indenture Trustee:
-----------------------------------
-----------------------------------
-----------------------------------
-----------------------------------
Telecopier No.:
--------------------
Attention:
-------------------------
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 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
Purchase Contract 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 Purchase
Contract 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 and the
Purchase Contract Agent shall bind their respective 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, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
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SECTION 1.10. BENEFITS OF AGREEMENT.
Nothing contained 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 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.
SECTION 1.12. LEGAL HOLIDAYS.
In any case where any Payment Date, any Purchase Contract Settlement
Date or Early Settlement Date shall not be a Business Day, (notwithstanding any
other provision of this Agreement or the Securities), Purchase Contract
Payments shall not be made, Purchase Contracts shall not be performed and Early
Settlement shall not be effected on such date, but such payments shall be made,
Purchase Contracts performed or Early Settlement effected, as applicable, on
the next succeeding Business Day with the same force and effect as if made on
such Payment Date, Purchase Contract Settlement Date, or Early Settlement Date,
as applicable, provided that no interest shall accrue or be payable by the
Company or to any Holder for the period from and after any such Payment Date,
Purchase Contract Settlement Date, or Early Settlement Date, as applicable,
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, Purchase
Contract Settlement Date, or Early Settlement Date, as applicable.
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 or Beneficial Owner.
SECTION 1.15. APPOINTMENT OF FINANCIAL INSTITUTION AS AGENT FOR THE COMPANY.
The company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05
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hereof. Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY.
The Certificates (including the form of Purchase Contract forming part
of each Security evidenced thereby) shall be in substantially the form set
forth in Exhibit A hereto (in the case of Certificates evidencing PEPS Units)
or Exhibit B hereto (in the case of Certificates evidencing Treasury PEPS
Units), 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
Securities are listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.
The definitive Certificates shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing the Securities evidenced by
such 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 HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE
IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO
TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR
SUCH OTHER
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NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN."
SECTION 2.2. FORM OF PURCHASE CONTRACT AGENT'S CERTIFICATE OF
AUTHENTICATION.
The form of the Purchase Contract Agent's certificate of
authentication of the Securities shall be in substantially the form set forth
on the form of the applicable Certificates.
ARTICLE III
THE SECURITIES
SECTION 3.1. AMOUNT; FORM AND DENOMINATIONS.
The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to __________ (subject to increase up to a maximum of ________ to the
extent the over-allotment option granted to the Underwriters in the
Underwriting Agreement is exercised), 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, 3.10, 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 PEPS Unit or Treasury PEPS Unit and any integral
multiple thereof.
SECTION 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each PEPS Units Certificate shall evidence the number of PEPS Units
specified therein, with each such PEPS Unit representing (1) the ownership by
the Holder thereof of a beneficial interest in a Preferred Security, a Senior
Deferrable Note or the [Applicable Ownership Interest of the Treasury
Portfolio], as the case may be, subject to the Pledge of such Preferred
Security, such Senior Note or the Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, by such Holder pursuant to the Pledge Agreement, and (2) the
rights and obligations of the Holder thereof and the Company under one Purchase
Contract. The Purchase Contract Agent as attorney-in-fact for, and on behalf
of, the Holder of each PEPS Unit shall pledge, pursuant to the Pledge
Agreement, the Preferred Security, the Senior Note or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, forming a part of such PEPS Unit, to
the Collateral Agent and grant to the Collateral Agent a security interest in
the right, title and interest of such Holder in such Preferred Security, such
Senior Note or the
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Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) 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 shares of Common Stock.
Upon the formation of a Treasury PEPS Unit pursuant to Section 3.13,
each Treasury PEPS Units Certificate shall evidence the number of Treasury PEPS
Units specified therein, with each such Treasury PEPS Unit representing (1) the
ownership by the Holder thereof of a [1/40] undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Security to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
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
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract 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. 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 Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized signatory of the
Purchase Contract 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.
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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 Purchase Contract 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 Purchase Contract Agent, and the Purchase Contract
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
PEPS Units or Treasury PEPS Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.
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, 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
Purchase Contract Agent, and the Purchase Contract 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 Securities 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 Securities, evidenced thereby as definitive Certificates.
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "SECURITY REGISTRAR"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing PEPS Units and Treasury PEPS Units
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract 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 PEPS
Units or Treasury PEPS Units, as the case may be.
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At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
PEPS Units or Treasury PEPS Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract 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 PEPS Units
or Treasury PEPS Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the PEPS
Units or Treasury PEPS Units, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Purchase Contract Agent) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract 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 Purchase Contract 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 3.6 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other 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 Purchase Contract 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 other
Certificate; or
(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Preferred Securities,
the Senior Deferrable Notes, the Treasury Securities, or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, 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.
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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 or its custodian by, or on behalf of, the Company. The Company
hereby designates DTC as the initial Depositary. Such Global Certificates 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 Purchase Contract
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:
(i) the provisions of this Section 3.6 shall be in full force
and effect;
(ii) the Company shall be entitled to deal with the Depositary
for all purposes of this Agreement (including making Purchase Contract
Payments and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificates
and shall have no obligation to the Beneficial Owners;
(iii) 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
(iv) the rights of the Beneficial Owners shall be exercised
only through the Depositary and shall be limited to those established
by law and agreements between such Beneficial Owners and the Depositary
or the Depositary 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 the Depositary or the nominee of the
Depositary, 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 DEPOSITARY.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.
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SECTION 3.9. DEFINITIVE CERTIFICATES.
If:
(i) the Depositary elects to discontinue its services as
securities depositary with respect to the Securities and a successor
Depositary is not appointed within 90 days after such discontinuance
pursuant to Section 3.8; or
(ii) [the Company elects after consultation with the Purchase
Contract Agent to terminate the book-entry system for the Securities,]
then (x) definitive Certificates shall be prepared by the Purchase Contract
Agent on behalf of the Company with respect to such Securities and (y) upon
surrender of the Global Certificates representing the Securities by the
Depositary, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Depositary. 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. Each definitive Certificate so
delivered shall evidence Securities of the same kind and tenor as the Global
Certificate so surrendered in respect thereof.
SECTION 3.10. MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent,
and the Purchase Contract Agent shall authenticate, execute on behalf of the
Holder, and deliver in exchange therefor, a new Certificate, evidencing the
same number of PEPS Units or Treasury PEPS Units, as the case may be, and
bearing a Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity 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 Purchase Contract Agent that such
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
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 PEPS Units or Treasury PEPS Units,
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 Purchase Contract Agent, and the Purchase Contract
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 Purchase Contract 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; or
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(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Preferred Securities,
the Senior Deferrable Notes, the Treasury Securities 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,
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 Purchase Contract Agent may require the payment by the Holder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Purchase Contract 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.
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 Purchase Contract Agent, and any agent of the
Company or the Purchase Contract Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Security evidenced thereby, for
the purpose of receiving distributions on the Preferred Securities, the
Treasury Securities, the Senior Deferrable Notes, or on the maturing quarterly
interest strips of the Treasury Portfolio, as applicable, receiving Purchase
Contract Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any distributions on the Preferred
Securities, the Treasury Securities, the Senior Deferrable Notes, or Treasury
Portfolio, as applicable, or Purchase Contract Payments payable in respect of
the Purchase Contracts constituting a part of the Security evidenced thereby
shall be overdue and notwithstanding any notice to the contrary, and neither
the Company nor the Purchase Contract Agent, nor any agent of the Company or
the Purchase Contract Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate.
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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 Preferred
Securities, Senior Deferrable Notes, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of that term) 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 transfer or exchange of a Security, or a Collateral
Substitution or the reestablishment of PEPS Units shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by
it. The Company may at any time deliver to the Purchase Contract 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 Purchase Contract 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 Purchase
Contract Agent shall be destroyed by the Purchase Contract Agent unless
otherwise directed by Issuer Order.
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 Purchase
Contract Agent cancelled or for cancellation.
SECTION 3.13. CREATION OF TREASURY PEPS UNITS BY SUBSTITUTION OF TREASURY
SECURITIES.
Subject to the conditions set forth in this Agreement, a Holder may
separate the Preferred Securities or the Senior Deferrable Notes, as
applicable, from the related Purchase Contracts in respect of such Holder's
PEPS Units by substituting for such Preferred Securities or Senior Deferrable
Notes, as applicable, Treasury Securities in an aggregate principal amount
equal to the aggregate liquidation amount of such Preferred Securities or the
aggregate principal amount of such Senior Deferrable Notes, as applicable (a
"COLLATERAL SUBSTITUTION"), at any time from and after the date of this
Agreement and prior to or on the seventh Business Day immediately preceding
________________, 200_. To effect such substitution, the Holder must:
(1) deposit with the Securities Intermediary Treasury
Securities having an aggregate principal amount equal
to the aggregate liquidation amount of the Preferred
Securities or the aggregate principal amount of the
Senior Deferrable Notes comprising part of such PEPS
Units, as the case may be; and
(2) transfer the related PEPS Units to the Purchase
Contract Agent accompanied by a notice to the
Purchase Contract Agent, substantially in the form of
Exhibit C hereto, (i) stating that the Holder has
transferred the relevant amount of Treasury
Securities to the Securities Intermediary and (ii)
requesting that the Purchase Contract Agent instruct
the Collateral Agent to release the Preferred
Securities or the Senior Deferrable Notes, as
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the case may be, underlying such PEPS Units,
whereupon the Purchase Contract Agent shall promptly
provide an instruction to such effect to the
Collateral Agent, substantially in the form of
Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (1) above
and the instruction described in clause (2) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Preferred Securities or the Senior
Deferrable Notes, as the case may be, from the Pledge, free and clear of the
Company's security interest therein, and the transfer of such Preferred
Securities or the Senior Deferrable Notes, as the case may be, to the Purchase
Contract Agent on behalf of the Holder. Upon receipt thereof, the Purchase
Contract Agent shall promptly:
(i) cancel the related PEPS Units;
(ii) transfer the Preferred Securities or the Senior
Deferrable Notes, as the case may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Treasury PEPS Units Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled PEPS Units.
Holders who elect to separate the Preferred Securities or the Senior
Deferrable Notes, as the case may be, from the related Purchase Contracts and
to substitute Treasury Securities for such Preferred Securities or the Senior
Deferrable Notes, 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 only in integral multiples
of [40] PEPS Units. If a Tax Event Redemption has occurred, Holders may no
longer convert their PEPS Units into Treasury PEPS Units.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the PEPS Units or
fails to deliver PEPS Units Certificates to the Purchase Contract Agent after
depositing Treasury Securities with the Collateral Agent, any distributions on
the Preferred Securities or the Senior Deferrable Notes constituting a part of
such PEPS Units, as the case may be, shall be held in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder, until
such PEPS Units are so transferred or the PEPS Units Certificate is so
delivered, as the case may be, or, such Holder provides evidence satisfactory
to the Company and the Purchase Contract Agent that such PEPS Units Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Purchase Contract Agent and the Company.
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Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a PEPS Unit remains in effect, such PEPS Unit shall not be
separable into its constituent parts, and the rights and obligations of the
Holder in respect of the Preferred Securities or the Senior Deferrable Notes,
as the case may be, and the Purchase Contract comprising such PEPS Unit may be
acquired, and may be transferred and exchanged, only as a PEPS Unit.
SECTION 3.14. REESTABLISHMENT OF PEPS UNITS.
Subject to the conditions set forth in this Agreement, a Holder of
Treasury PEPS Units may reestablish PEPS Units at any time (i) prior to or on
the seventh Business Day immediately preceding ________________, 200_, by:
(1) depositing with the Securities Intermediary Preferred
Securities or Senior Deferrable Notes, as the case
may be, having an aggregate liquidation amount (in
the case of Preferred Securities) or aggregate
principal amount (in the case of Senior Deferrable
Notes), as the case may be, equal to the aggregate
principal amount at maturity of the Treasury
Securities comprising part of the Treasury PEPS
Units; and
(2) transferring the related Treasury PEPS Units to the
Purchase Contract Agent accompanied by a notice to
the Purchase Contract Agent, substantially in the
form of Exhibit C hereto, (i) stating that the Holder
has transferred the relevant amount of Preferred
Securities or Senior Deferrable Notes, as the case
may be, to the Securities Intermediary and (ii)
requesting that the Purchase Contract Agent instruct
the Collateral Agent to release the Treasury
Securities underlying such Treasury PEPS Units,
whereupon the Purchase Contract Agent shall promptly
provide an instruction to such effect to the
Collateral Agent, substantially in the form of
Exhibit C to the Pledge Agreement.
Upon receipt of the Preferred Securities or the Senior Deferrable Notes, as the
case may be, described in clause (1) above and the instruction described in
clause (2) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will cause the Securities Intermediary to effect the release
of the Treasury Securities having a corresponding aggregate principal amount at
maturity from the Pledge, free and clear of the Company's security interest
therein, and the transfer to the Purchase Contract Agent on behalf of the
Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly:
(i) cancel the related Treasury PEPS Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a PEPS Units Certificate executed by the Company in accordance
with Section 3.3 evidencing the same number of Purchase Contracts as
were evidenced by the cancelled Treasury PEPS Units.
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Holders who elect to reestablish PEPS Units shall be responsible for
any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the reestablishment, and the Company shall not
be responsible for any such fees or expenses.
Holders of Treasury PEPS Units may only reestablish PEPS Units in
integral multiples of [40] Treasury PEPS Units. If a Tax Event Redemption has
occurred, Holders may no longer convert their Treasury PEPS Units into PEPS
Units.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury PEPS Unit remains in effect, such Treasury PEPS
Unit shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Treasury PEPS Unit in respect of the [1/40]
of a Treasury Security and the Purchase Contract comprising such Treasury PEPS
Unit may be acquired, and may be transferred and exchanged, only as a Treasury
PEPS Unit.
SECTION 3.15. TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Preferred Securities, Senior Deferrable Notes,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, underlying the PEPS Units and the
Treasury PEPS Units, as the case may be, pursuant to the terms of the Pledge
Agreement, the Purchase Contract Agent shall request transfer instructions with
respect to such Preferred Securities, Senior Deferrable Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities,
as the case may be, from each Holder by written request, substantially in the
form of Exhibit D hereto, mailed to such Holder at its address as it appears in
the Security Register.
Upon book-entry transfer of the PEPS Units or the Treasury PEPS Units
or delivery of a PEPS Units Certificate or Treasury PEPS Units Certificate to
the Purchase Contract Agent with such transfer instructions, the Purchase
Contract Agent shall transfer the Preferred Securities, Senior Deferrable
Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio
or Treasury Securities, as the case may be, underlying such PEPS Units or
Treasury PEPS Units, as the case may be, to such Holder by book-entry transfer,
or other appropriate procedures, in accordance with such instructions. In the
event a Holder of PEPS Units or Treasury PEPS Units fails to effect such
transfer or delivery, the Preferred Securities, Senior Deferrable Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such PEPS Units or Treasury PEPS
Units, as the case may be, and any distributions thereon, shall be held in the
name of the Purchase Contract Agent or its nominee in trust for the benefit of
such Holder, until the earlier to occur of:
(i) the transfer of such PEPS Units or Treasury PEPS Units or
surrender of the PEPS Units Certificate or Treasury PEPS Units
Certificate or receipt by the Company and the Purchase Contract Agent
from such Holder of satisfactory evidence that such PEPS Units
Certificate or Treasury PEPS Units Certificate has been destroyed, lost
or stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and
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(ii) the expiration of the time period specified in the
abandoned property laws of the relevant State.
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 or
its trustee, receiver, liquidator or a person or entity performing similar
functions 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 PREFERRED SECURITIES, SENIOR DEFERRABLE NOTES AND APPLICABLE OWNERSHIP
INTEREST OF THE TREASURY PORTFOLIO
SECTION 4.1. INTEREST PAYMENTS; RIGHTS TO INTEREST PAYMENTS PRESERVED.
Any distribution on any Preferred Security, any Senior Deferrable Note
or on the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, which is paid on any Payment Date shall, subject to receipt
thereof by the Purchase Contract Agent from the Collateral Agent as provided by
the terms of the Pledge Agreement, be paid to the Person in whose name the PEPS
Units Certificate (or one or more Predecessor PEPS Units Certificates) of which
such Preferred Security, such Senior Deferrable Note or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, is
registered at the close of business on the Record Date for such Payment Date.
Each PEPS Units Certificate evidencing Preferred Securities, Senior
Deferrable Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio delivered under this Agreement upon registration of transfer
of or in exchange for or in lieu of any other PEPS Units Certificate shall
carry the right to distributions accrued and unpaid, and to accrue
distributions interest, which were carried by the Preferred Securities, Senior
Deferrable Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio underlying such other PEPS Units Certificate.
In the case of any PEPS Units with respect to which Cash Settlement of
the underlying Purchase Contract is properly effected pursuant to Section 5.4
hereof, or with respect to which Early Settlement of the underlying Purchase
Contract is properly effected pursuant to Section 5.9 hereof, or with respect
to which a Collateral Substitution is effected, in each case on a date that is
after any Record Date and prior to or on the next succeeding Payment Date,
distributions on the Preferred Securities, Senior Deferrable Notes or on the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, underlying such PEPS Unit 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,
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subject to receipt thereof by the Purchase Contract Agent, be payable to the
Person in whose name the PEPS Units Certificate (or one or more Predecessor
PEPS Units 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 PEPS Unit with respect to which Cash Settlement or
Early Settlement of the underlying Purchase Contract is properly effected, or
with respect to which a Collateral Substitution has been effected,
distributions on the related Preferred Securities, Senior Deferrable Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may 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 PEPS Units; provided, however, that to the extent that such
Holder continues to hold separated Preferred Securities or Senior Deferrable
Notes that formerly comprised a part of such Holder's PEPS Unit, such Holder
shall be entitled to receive distributions on such separated Preferred
Securities or Senior Deferrable Notes.
Not later than 15 calendar days nor more than 30 calendar days prior
to the Remarketing Date, the Company shall request the Depositary, to notify
the Beneficial Owners or Depositary Participants holding Securities of the
procedures to be followed by Holders of Securities who intend to effect a Cash
Settlement.
SECTION 4.2. NOTICE AND VOTING.
Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Preferred Securities or Pledged Senior Deferrable
Notes, but only to the extent instructed in writing by the Holders as described
below. Upon receipt of notice of any meeting at which holders of Preferred
Securities or Senior Deferrable Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Preferred Securities
or Senior Deferrable Notes, the Purchase Contract Agent shall, as soon as
practicable thereafter, mail to the Holders of PEPS Units a notice:
(i) containing such information as is contained in the notice
or solicitation;
(ii) stating that each Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of
Preferred Securities or Senior Deferrable Notes, as the case may be,
entitled to vote) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting rights pertaining to such
Preferred Securities or Senior Deferrable Notes underlying their PEPS
Units; and
(iii) stating the manner in which such instructions may be
given.
Upon the written request of the Holders of PEPS Units on such record date
received by the Purchase Contract Agent at least six days prior to such
meeting, the Purchase Contract 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 Preferred Securities or Senior
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Deferrable Notes, as the case may be, as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting the
Preferred Securities or Senior Deferrable Notes underlying such PEPS Unit. The
Company hereby agrees, if applicable, to solicit Holders of PEPS Units to timely
instruct the Purchase Contract Agent in order to enable the Purchase Contract
Agent to vote such Preferred Securities or Senior Deferrable Notes and the Trust
shall covenant to this effect in the Declaration.
SECTION 4.3. DISTRIBUTION OF SENIOR DEFERRABLE NOTES; TAX EVENT REDEMPTION.
Upon the dissolution and liquidation of the Trust in accordance with
the Declaration, a principal amount at maturity of Senior Deferrable Notes
constituting the assets of the Trust and underlying the Preferred Securities
equal to the aggregate liquidation amount of the Pledged Preferred Securities
shall be delivered to the Securities Intermediary in exchange for the Pledged
Preferred Securities. Thereafter, the Senior Deferrable Notes will be
substituted for the Pledged Preferred Securities as the Collateral, and will be
held by the Securities Intermediary in the Collateral Account in accordance
with the terms of the Pledge Agreement to secure the obligations of each Holder
of a PEPS Unit to purchase the Common Stock of the Company under the Purchase
Contracts constituting a part of such PEPS Unit. Following the dissolution and
liquidation of the Trust, the Holders and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Senior
Deferrable Notes as the Holders and the Collateral Agent had in respect of the
Preferred Securities subject to the Pledge thereof as provided in the Pledge
Agreement. The Company may cause to be made in any PEPS Unit Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the dissolution and liquidation of
the Trust and the substitution of Senior Deferrable Notes for Preferred
Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount shall be
deposited in the Collateral Account in exchange for the Pledged Preferred
Securities or the Pledged Senior Deferrable Notes. Thereafter, pursuant to the
terms of the Pledge Agreement, the Collateral Agent shall cause the Securities
Intermediary to apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of PEPS Units the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Purchase Contract Agent for payment to the Holders of such PEPS
Units. The Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio will be substituted as
Collateral for the Pledged Preferred Securities or the Pledged Senior
Deferrable Notes, as the case may be, 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 a PEPS Unit to purchase the Common Stock of the Company under
the Purchase Contract constituting a part of such PEPS Unit. Following the
occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement
Date, the Holders of PEPS Units and the Collateral Agent shall have such
security interest rights and obligations with respect to the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio as the Holders of PEPS Units and the Collateral Agent
had in respect of
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the Preferred Securities or Senior Deferrable Notes, as the case may be, subject
to the Pledge thereof as provided in the Pledge Agreement, and any reference
herein to the Preferred Securities or the Senior Deferrable Notes shall be
deemed to be reference to such Treasury Portfolio. The Company may cause to be
made in any PEPS Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
liquidation of the Trust and the substitution of the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio for Preferred Securities or Senior Deferrable Notes as
Collateral.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1. PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless a Cash Settlement has occurred in
accordance with Section 5.4 hereof or 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
shares of Common Stock (subject to Section 5.11) equal to the Settlement Rate
unless, prior to or on 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:
(i) if the Applicable Market Value (as defined below) is
greater than or equal to $_______ (the "THRESHOLD APPRECIATION PRICE"),
_______ shares of Common Stock per Purchase Contract;
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $_______ (the "REFERENCE PRICE"),
the number of shares of Common Stock per Purchase Contract having a
value, based on the Applicable Market Value, equal to the Stated
Amount; and
(iii) if the Applicable Market Value is less than or equal to
the Reference Price, _______ 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 downward to the nearest 1/10,000th of a share).
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.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means:
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(i) the closing sale price as of the 4:15 p.m. close of
trading (or, if no closing price is reported, the last reported sale
price) per share on the New York Stock Exchange, Inc. (the "NYSE") on
such date;
(ii) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities
exchange on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per
share as reported by The Nasdaq Stock Market, Inc.;
(iv) 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
(v) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of the Common Stock on such
date from at least three nationally recognized independent investment
banking firms retained for this purpose by the Company.
A "TRADING DAY" means a day on which the Common Stock (1) 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 (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of a PEPS Unit or a Treasury PEPS Unit, by its acceptance
thereof:
(i) irrevocably authorizes the Purchase Contract 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);
(ii) agrees to be bound by the terms and provisions thereof;
(iii) covenants and agrees to perform its obligations under
such Purchase Contracts;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to
enter into and perform this Agreement and the Pledge Agreement on its
behalf as its attorney-in-fact; and
(vi) consents to, and agrees to be bound by, the Pledge of the
Preferred Securities, Senior Deferrable Notes, the Applicable Ownership
Interest (as
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specified in clause (A) of the definition of such term) of 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 a PEPS Unit or a Treasury PEPS
Unit, 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 Preferred Securities
or the Senior Deferrable Notes or the proceeds from the Treasury Securities or
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio at maturity on the Purchase Contract
Settlement Date, as the case may be, shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate, the Declaration and the Pledge Agreement and the transferor
shall be released from the obligations under this Agreement, the Purchase
Contracts underlying the Certificate 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. PURCHASE CONTRACT PAYMENTS.
The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name a Certificate is registered at the close of business on the Record Date
next preceding such Payment Date. The Purchase Contract Payments will be
payable at the office of the Purchase Contract Agent in [New York City]
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 Security Register. If any date on which Purchase Contract
Payments are to be made is not a Business Day, then payment of the Purchase
Contract Payments payable on such date will be made on the next day that is a
Business Day (and without any interest in respect of any such delay), except
that, if such Business Day is in the next calendar year, such payment will be
made on the preceding Business Day.
Upon the occurrence of a Termination Event, the Company's obligation
to pay Purchase Contract Payments (including any accrued or deferred Purchase
Contract Payments) 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 reestablishment of PEPS Units) any other
Certificate shall carry the right to accrued and unpaid or deferred Purchase
Contract Payments and the right to accrue Purchase Contract Payments, which
rights were carried by the Purchase Contracts underlying such other
Certificates.
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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 that is after any Record Date and prior to or on the next
succeeding Payment Date, Purchase Contract Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Purchase Contract Payments shall be paid to the Person in
whose name the Certificate evidencing such Security 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 Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Purchase Contract Payments that would otherwise be
payable after the Early Settlement Date with respect to such Purchase Contract
shall not be payable.
SECTION 5.3. DEFERRAL OF PURCHASE CONTRACT PAYMENTS.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to _______% per annum, compounding quarterly, until such deferred
installments are paid. If a Holder effects an Early Settlement or if a
Termination Event shall occur, such Holder will have no right to receive any
accrued deferred Purchase Contract Payments.
SECTION 5.4. PAYMENT OF PURCHASE PRICE.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder of a
PEPS Unit effects an Early Settlement of the underlying Purchase Contract in the
manner described in Section 5.9, each Holder who intends to pay in cash to
satisfy such Holder's obligations under the Purchase Contract shall notify the
Purchase Contract Agent by use of a notice in substantially the form of Exhibit
E hereto of his intention to pay in cash ("CASH SETTLEMENT") the Purchase Price
for the shares of Common Stock to be purchased pursuant to the related Purchase
Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on
the seventh Business Day immediately preceding ________________, 200_. Prior to
11:00 a.m. (New York City time) on the next succeeding Business Day, the
Purchase Contract Agent shall notify the Collateral Agent and the Indenture
Trustee of the receipt of such notices from Holders intending to make a Cash
Settlement.
(ii) A Holder of a PEPS Unit who has so notified the Purchase
Contract Agent of his intention to effect a Cash Settlement in
accordance with paragraph (a)(i) above shall pay the Purchase Price to
the Securities Intermediary for deposit in the Collateral Account prior
to 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding ________________, 200_, 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
Securities Intermediary. Any cash received by the Collateral Agent
shall be
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invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement
Date in settlement of the Purchase Contracts in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by
the Securities Intermediary in respect of the investment earnings from
such Permitted Investments in excess of the Purchase Price for the
shares of Common Stock to be purchased by such Holder shall be
distributed to the Purchase Contract Agent when received for payment to
the Holder.
(iii) If a Holder of a PEPS Unit fails to notify the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph (a)(i) above, or does notify the Purchase Contract Agent
as provided in paragraph (a)(i) above of his intention to pay the
Purchase Price in cash, but fails to make such payment as required by
paragraph (a)(ii) above, such Holder shall be deemed to have consented
to the disposition of the Pledged Preferred Securities or the Pledged
Senior Deferrable Notes pursuant to the Remarketing as described in
paragraph (b) below.
(iv) Promptly after 11:00 a.m. (New York City time) on the
fifth Business Day preceding the Purchase Contract Settlement Date, the
Purchase Contract Agent, based on notices received by the Purchase
Contract Agent pursuant to Section 5.4(a) hereof and notice from the
Securities Intermediary regarding cash received by it prior to such
time, shall notify the Collateral Agent and the Property Trustee of the
aggregate number of Preferred Securities or Senior Deferrable Notes to
be tendered for purchase in the Remarketing in a notice substantially
in the form of Exhibit F hereto.
(b) In order to dispose of the Preferred Securities or Senior
Deferrable Notes, PEPS Units Holders who have not notified the Purchase Contract
Agent of their intention to effect a Cash Settlement as provided in paragraph
(a)(i) above, or who have so notified the Purchase Contract Agent but failed to
make such payment as required by paragraph (a)(ii) above, the Company shall
engage ________________ (the "REMARKETING AGENT") pursuant to the Remarketing
Agreement to sell such Preferred Securities or Senior Deferrable Notes. In order
to facilitate the Remarketing, the Purchase Contract Agent, based on the notices
specified in Section 5.4(a)(iv), shall notify the Remarketing Agent, promptly
after 11:00 a.m. (New York City time) on the fifth Business Day immediately
preceding ________________, 200_, of the aggregate number of Preferred
Securities or Senior Deferrable Notes that are part of PEPS Units to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, shall cause such Preferred Securities or Senior Deferrable
Notes to be presented to the Remarketing Agent for Remarketing.
Upon receipt of such notice from the Purchase Contract Agent and such
Preferred Securities or Senior Deferrable Notes, the Remarketing Agent shall,
on the third Business Day immediately preceding ________________, 200_, use
reasonable efforts to remarket such Preferred Securities or Senior Deferrable
Notes on such date at a price equal to at least 100.25%
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of the Stated Amount ($[25.0625]) per Preferred Security or Senior Deferrable
Note, as provided in the Remarketing Agreement. The proceeds from the
Remarketing shall be invested by the Collateral Agent in Permitted Investments,
in accordance with the Pledge Agreement, and then applied to satisfy in full
such PEPS Units Holders' obligations to pay the Purchase Price for the shares of
Common Stock under the related Purchase Contracts on the Purchase Contract
Settlement Date. In addition, $____________ per Preferred Security or Senior
Deferrable Note of the proceeds shall automatically be remitted to the
Remarketing Agent for services rendered in connection with the Remarketing (the
"REMARKETING FEE"). Any proceeds remaining after satisfaction of the Purchase
Contract and payment of the Remarketing Fee shall be payable to the Holder of
such PEPS Unit.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the related Preferred Securities or Senior Deferrable Notes of
such Holders of PEPS Units at a price equal to at least 100.25% of the Stated
amount ($[25.0625]), then the Remarketing Agent shall increase the distribution
rate on the Preferred Securities or the interest rate on the Senior Deferrable
Notes, as the case may be, so that the market value of such Preferred
Securities will equal $[25.0625]. If the Remarketing Agent cannot Remarket the
Preferred Securities or the Senior Deferrable Notes, as the case may be, after
such increase the Remarketing shall be deemed to have failed (a "FAILED
REMARKETING"), an event of default shall be deemed to have occurred under this
Agreement and the Pledge Agreement and in accordance with the terms of the
Pledge Agreement, the Collateral Agent, for the benefit of the Company, shall
exercise its rights as a secured party with respect to such Preferred
Securities or Senior Deferrable Notes, 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
Preferred Securities or Senior Deferrable Notes, any accrued and unpaid
distributions on such Preferred Securities or Senior Deferrable Notes shall
become payable by the Company to the Purchase Contract Agent for payment to the
Beneficial Owner of the PEPS Units to which such Preferred Securities or Senior
Deferrable Notes relate. The Company shall 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 New York City, which is expected to be The
Wall Street Journal, and on Bloomberg News.
(c) With respect to any Preferred Securities or Senior Deferrable Notes
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 (g) below, may, among other
things, (i) retain the Preferred Securities or Senior Deferrable Notes in full
satisfaction of the Holders' obligations under the Purchase Contracts or (ii)
sell the Preferred Securities or Senior Deferrable Notes in one or more public
or private sales.
(d) (i) Unless a Holder of a Treasury PEPS Units or PEPS Units (if a
Tax Event Redemption has occurred) effects an Early Settlement of 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 a Treasury PEPS
Unit or PEPS Unit (if a Tax Event Redemption has occurred) who intends to pay in
cash shall notify the Purchase Contract Agent by use of a notice
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in substantially the form of Exhibit E hereto of his intention to pay in cash
the Purchase Price for the shares of Common Stock to be purchased pursuant to
the related Purchase Contract. Such notice shall be given prior to 5:00 p.m.
(New York City time) on the second Business Day immediately preceding
________________, 200_. Prior to 11:00 a.m. (New York City time) on the next
succeeding Business Day, the Purchase Contract Agent shall notify the Collateral
Agent of the receipt of such notices from such Holders intending to make a Cash
Settlement. Treasury PEPS Unit holders may make Cash Settlements only in
integral multiples of [40] Treasury PEPS Units.
(ii) A Holder of a Treasury PEPS Unit or PEPS Units (if a Tax
Event Redemption has occurred) who has so notified the Purchase
Contract Agent of his intention to make a Cash Settlement in
accordance with paragraph (d)(i) above shall pay the Purchase Price to
the Securities Intermediary for deposit in the Collateral Account
prior to 11:00 a.m. (New York City time) on the Business Day
immediately preceding ________________, 200_, 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 Securities Intermediary. Any cash received by the Collateral
Agent shall be invested promptly by the Securities Intermediary 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 Securities Intermediary in respect of the investment
earnings from the investment in such Permitted Investments in excess
of the Purchase Price for the shares of common stock to be purchased
by such Holder shall be distributed to the Purchase Contract Agent
when received for payment to the Holder.
(iii) If a Holder of a Treasury PEPS Unit or Holder of a PEPS
Unit (if a Tax Event Redemption has occurred) fails to notify the
Purchase Contract Agent of his intention to make a Cash Settlement in
accordance with paragraph (d)(i) above, or does notify the Purchase
Contract Agent as provided in paragraph (d)(i) above of his 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
Pledged Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio held by the Securities Intermediary on the
Business Day immediately preceding the Purchase Contract Settlement
Date, the principal amount of the Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio received by
the Securities Intermediary shall be invested promptly in Permitted
Investments. On the Purchase Contract Settlement Date, an amount equal
to the Purchase Price shall 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 Pledged Treasury
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) 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 shall
cause the Securities
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Intermediary to distribute such excess to the Purchase Contract Agent
for the benefit of the Holder of the related Treasury PEPS Unit or PEPS
Unit when received.
(iv) A holder of a ________________ of a Preferred Security
or Senior Deferred Note that is no longer part of a PEPS Unit may
elect to have such Preferred Security or Senior Deferrable Note, as
the case may be, remarketed. A holder making such an election must
notify the Property Trustee prior to 11:00 a.m. (New York City time)
on the fifth Business Day immediately preceding ________________,
200_, of the aggregate number of Preferred Securities or Senior
Deferrable Notes, as the case may be, that are not part of PEPS Units
to be remarketed. Any such notice will be irrevocable and may not be
conditioned upon the level at which the Reset Rate is established in
the Remarketing. Concurrently, the Property Trustee shall cause such
Preferred Securities or Senior Deferrable Notes, as the case may be,
to be presented to the Remarketing Agent for Remarketing.
(e) Any distribution to Holders of excess funds described above shall
be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Security Register.
(f) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the terms of
the Pledge Agreement cause the Pledged Preferred Securities, Pledged
Senior Deferrable Notes, the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the
Treasury Portfolio or the Pledged Treasury Securities, as the case may
be, underlying the relevant Security to be released from the Pledge,
free and clear of any security interest of the Company, and transferred
to the Purchase Contract Agent for delivery to the Holder thereof or
its designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase Contract
Agent shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Preferred Securities, Senior Deferrable Notes, or the
appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio or such
Treasury Securities, as the case may be (or, if no such instructions
are given to the Purchase Contract Agent by the Holder, the Purchase
Contract Agent shall hold such Preferred Securities, Senior Deferrable
Notes, or the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio
or such Treasury Securities, as the case may be, and any interest
payment thereon, in the name of the Purchase Contract Agent or its
nominee in trust for the benefit of such Holder until the expiration of
the time period specified in the abandoned property laws of the
relevant state).
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(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early Settlement
or Cash Settlement, are payable solely out of 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 the disposition of Collateral
and the Purchase Price.
(h) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates thereof to
the Holder of the related Security unless the Company shall have received
payment in full for the aggregate purchase price for the Common Stock to be
purchased thereunder in the manner herein set forth.
SECTION 5.5. ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section 5.6(b), on the Purchase Contract Settlement Date upon
receipt of the aggregate Purchase Price payable on all Outstanding Securities,
the Company shall issue and deposit with the Purchase Contract Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing the shares of Common Stock registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such certificates
for shares of Common Stock, together with any dividends or distributions for
which a record date and payment date for such dividend or distribution has
occurred 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
Purchase Contract Agent on or after the Purchase Contract Settlement Date,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith 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
5.11 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 Purchase Contract 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.
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(1) In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in
effect at the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such
dividend or other distribution shall be increased by dividing such
Settlement Rate by a fraction of which:
(i) 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
(ii) 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 include shares held in the
treasury of the Company and shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of
shares of Common Stock.
(2) In case the Company shall issue rights, warrants or
options 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) (except pursuant to the
[Company's Dividend Reinvestment and Common Stock Purchase Plan])
entitling them, for a period expiring within 45 days after the record
date for the determination of shareholders entitled to receive such
rights, warrants or options, to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market Price
per share of Common Stock on the date fixed for the determination of
shareholders entitled to receive such rights, warrants or options
(except pursuant to the [Company's Dividend Reinvestment and Common
Stock Purchase Plan]) the Settlement Rate in effect at the opening of
business on the day following the date fixed for such determination
shall be increased by dividing such Settlement Rate by a fraction of
which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock
which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase
would purchase at such Current Market Price; and
(ii) 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
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agrees that it shall not issue any such rights, warrants or options 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 or assets (including securities, but excluding any
rights, warrants or options referred to in paragraph (2) of this
Section 5.6(a), any dividend or distribution paid exclusively in cash
and any dividend or distribution referred to in paragraph (1) of this
Section 5.6(a)), the Settlement Rate shall be adjusted 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 shareholders entitled to receive such
distribution by a fraction of which:
(i) the numerator shall be the Current Market Price per
share of Common Stock on the date fixed for such determination
less the then fair market value (as reasonably determined by the
Board of Directors, whose determination shall be conclusive and
the basis for which shall be described in a Board Resolution) of
the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock; and
(ii) the denominator shall be such Current Market Price per
share of 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 shareholders entitled to receive such distribution. In any case in
which this paragraph (4) is applicable, paragraph (2) of this Section
5.6(a) shall not be applicable.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding:
(x) any quarterly cash dividend on Common Stock to the
extent that the aggregate cash dividend per share of Common Stock
in any fiscal quarter does not exceed $___________ (the "REGULAR
DIVIDEND"), and
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(y) any dividend or distribution in connection with the
liquidation, dissolution or termination of the Company, whether
voluntary or involuntary),
then, in such case, 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 such record date by a fraction of
which:
(i) the numerator shall be the Current Market Price of
Common Stock on the record date less the amount of cash so
distributed (and not excluded as provided above) applicable
to one share of Common Stock; and
(ii) the denominator shall be the Current Market Price
of Common Stock,
such increase to be effective immediately prior to the opening of
business on the day following the record date; provided, however, that
in the event the portion of cash so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market
Price per share of Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
holder of a Security shall have the right to receive upon settlement
of the Securities the amount of cash such Holder would have received
had such Holder settled each Security on the record date. In the event
that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate
which would then be in effect if such dividend or distribution had not
been declared. If any adjustment is required to be made as set forth
in this Section 5.6(a)(5) as a result of a distribution that is a
quarterly dividend, such adjustment shall be based upon the amount by
which such distribution exceeds the amount of the Regular Dividend. If
an adjustment is required to be made as set forth in this Section
5.6(a)(5) above as a result of a distribution that is not a quarterly
dividend, such adjustment shall be based upon the full amount of the
distribution.
(6) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of Common Stock
shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to shareholders (based
on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of Purchased Shares) of (I) an aggregate
consideration having a fair market value (as reasonably determined by
the Board of Directors, whose determination shall be conclusive and
the basis for which shall be described in a Board Resolution) that
combined together with the aggregate of the cash plus the fair market
value (as reasonably determined by the Board of Directors, whose
determination shall be conclusive and the basis for which shall be
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, by the Company or any subsidiary of the
Company for all or any portion of 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 this
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paragraph (6) has been made, and (II) the aggregate amount of any
distributions to all holders of 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 (6) has been made, exceeds 15% of the product of the Current
Market Price per share of 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 on the date 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 Common
Stock on the date of the Expiration Time and (II) the number
of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid)
of the aggregate consideration payable to shareholders based
on the transactions described in clauses (I) and (II) 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 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:
(i) a distribution of such securities other than Common
Stock to all holders of Common Stock (and the effective date
of such reclassification shall be deemed to be "the date
fixed for the determination of shareholders entitled to
receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this
Section); and
(ii) a subdivision, 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
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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 date of determination 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 such date of determination and the day before the
"ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when
used with respect to any issuance or distribution, shall mean the
first date on which Common Stock trades 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 thereof; 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 prior to 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 reason.]
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(1) 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
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continuing corporation and in which the shares of Common Stock
outstanding immediately prior to the merger or consolidation are
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 share exchange of the Company with
another Person (other than in connection with a merger or
acquisition);
(iv) any liquidation, dissolution or termination 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, 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 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
his 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 a plurality of the
non-electing shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of
the Company or, in the event of a liquidation, dissolution or termination of
the Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Purchase Contract Agent an
agreement supplemental hereto providing that each Holder of an Outstanding
Security shall have the rights provided by this Section 5.6(b). Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
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Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
(2) In the event of a 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) where more than [30]% of the purchase price with
respect to each share of Common Stock is payable in cash on the closing date of
such consolidation or merger, then a Holder of a Security, may settle his
Purchase Contract for cash as described in Section 5.4(a)(i) or 5.4(d)(i)
hereof, as applicable, during the one week period beginning on the twenty-first
Trading Day after the closing date of such merger (the "EARLY SETTLEMENT WEEK")
at the then applicable Settlement Rate. For the purposes of this Section, the
twenty-fourth Trading Day after the closing of the merger or consolidation
shall be deemed to be the Purchase Contract Settlement Date for the purpose of
determining the Applicable Market Value and that the deadline for submitting
the notice to settle early and the related cash payment shall be 5:00 p.m. (New
York City time) of the last Business Day of the Early Settlement Week.
(c) All calculations and determinations pursuant to this Section 5.6
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
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 adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the
Purchase Contract Agent an Officers' Certificate setting forth
the Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment and
upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that 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 method by which the adjustment to the
Settlement Rate was determined and setting forth the adjusted
Settlement Rate.
(b) The Purchase Contract 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 Purchase Contract 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 Purchase Contract Agent makes no representation with respect thereto.
The Purchase Contract Agent shall not be
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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 any Purchase
Contract Payments (including any deferred or accrued and unpaid Purchase
Contract 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 Purchase Contract Agent or the Company, if, prior to or on 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 Preferred Securities, the
Senior Deferrable Notes, the Treasury Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, forming part
of such Securities, in accordance with the provisions of Section 5.4 of the
Pledge Agreement. 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 Purchase Contract Agent, the Collateral Agent and the Holders, at
their addresses as they appear in the Security 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 may be settled early ("EARLY SETTLEMENT") on or prior to 5:00 p.m.
(New York City time) on the seventh Business Day immediately preceding the
Purchase Contract Settlement Date. Holders of Treasury PEPS Units may only
settle the related Purchase Contracts in integral multiples of [40] Purchase
Contracts. 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 to the Purchase Contract Agent at the Corporate Trust
Office an Election to Settle Early form (on the reverse side of the Certificate)
and any other documents requested by the Purchase Contract Agent 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 sum of (x)
the Purchase Contract Payments payable on such Payment
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Date with respect to such Purchase Contracts plus (y) in the case of a
PEPS Units Certificate, the distributions on the related Preferred
Securities or Senior Deferrable Notes payable on such Payment Date.
Except as provided in the immediately preceding sentence and subject to the
penultimate paragraph of Section 5.2, no payment shall be made upon Early
Settlement of any Purchase Contract on account of any Purchase Contract
Payments accrued on such Purchase Contract or on account of any dividends on
the Common Stock issued upon such Early Settlement. If the foregoing
requirements are first satisfied with respect to Purchase Contracts underlying
any Securities prior to or at 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 succeeding
Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be entitled to
receive _______ [INSERT NUMBER OF SHARES DELIVERABLE IF APPLICABLE MARKET VALUE
IS GREATER THAN OR EQUAL TO THRESHOLD APPRECIATION PRICE] shares of Common Stock
on account of each Purchase Contract as to which Early Settlement is effected
(the "EARLY SETTLEMENT RATE"). The Early Settlement Rate shall be adjusted in
the same manner and at the same time as the Settlement Rate is adjusted.
(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,
together with payment in lieu of any fraction of a share, as
provided in Section 5.11; and
(ii) the related Preferred Securities, Senior Deferrable
Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, in the case of PEPS Units, or the related
Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, in the case of Treasury PEPS
Units, to be released from the Pledge by the Collateral Agent and
transferred, in each case, to the Purchase Contract 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 Preferred Securities,
Senior Deferrable Notes, the appropriate Applicable Ownership Interest as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, or Treasury Securities, as the case may be, from the Securities
Intermediary, as applicable, the Purchase Contract Agent shall, in accordance
with the instructions provided by the Holder thereof on the Election to Settle
Early form (on the reverse of the Certificate evidencing the related
Securities):
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(i) transfer to the Holder the Preferred Securities, Senior
Deferrable Notes, the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of
the 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 5.11.
(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
Purchase Contract 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.
(f) A Holder of a Security who effects Early Settlement may elect to
have the Preferred Securities or Senior Deferrable Notes, as the case may be, no
longer a part of a PEPS Unit, or Treasury PEPS Unit, as the case may be,
remarketed. A Holder making such an election must notify the Property Trustee
prior to 11:00 a.m. (New York City time) on the fifth Business Day immediately
preceding ________________, 200_, of the aggregate number of Preferred
Securities or Senior Deferrable Notes that are not part of PEPS Units or
Treasury PEPS Units, as the case may be, to be remarketed. Any such notice will
be irrevocable and may not be conditioned upon the level at which the Reset Rate
is established in the Remarketing. Concurrently, the Property Trustee shall
cause such Preferred Securities or Senior Deferrable Notes, as the case may be,
to be presented to the Remarketing Agent for Remarketing.
SECTION 5.10. INTENTIONALLY OMITTED.
SECTION 5.11. 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 Purchase Contract 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
Purchase Contract Agent from time to time with sufficient funds to permit the
Purchase Contract Agent to make all cash payments required by this Section 5.11
in a timely manner.
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SECTION 5.12. CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a 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 Purchase Contract 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.
ARTICLE VI
REMEDIES
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PURCHASE CONTRACT
PAYMENTS AND TO PURCHASE SHARES OF COMMON STOCK.
Each Holder of a Security shall have the right, which is absolute and
unconditional, (1) subject to the payment by such Holder of Purchase Contract
Payments pursuant to Section 5.9(a), to receive each Purchase Contract Payment
with respect to the Purchase Contract constituting a part of such Security on
the respective Payment Date for such Security, provided, however, that a Holder
will have no right to receive any accrued deferred Purchase Contract Payments
if he effects an Early Settlement or if a Termination Event shall occur and (2)
to purchase shares of Common Stock pursuant to such Purchase Contract and, in
each such case, to institute suit for the enforcement of any such Purchase
Contract Payment and right to purchase shares of 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.
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
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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 a Security, by
its acceptance of such Security 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 Purchase Contract Agent
for any action taken, suffered or omitted by it as Purchase Contract 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
Purchase Contract 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 distributions on
any Preferred Securities, interest on any Senior Deferrable Notes or Purchase
Contract Payments 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 Purchase Contract Agent or the Holders, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
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ARTICLE VII
THE PURCHASE CONTRACT AGENT
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Purchase Contract Agent:
(1) 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 or the Pledge Agreement
against the Purchase Contract Agent; and
(2) in the absence of bad faith or negligence on its part,
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 Purchase
Contract Agent and conforming to the requirements of this Agreement or
the Pledge Agreement, as applicable, but in the case of any
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Purchase Contract Agent,
the Purchase Contract Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Agreement or the Pledge Agreement, as applicable.
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Purchase Contract 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 Purchase Contract Agent was negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement
shall require the Purchase Contract Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights
or powers, if adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement in its capacity as Purchase Contract Agent.
SECTION 7.2. NOTICE OF DEFAULT.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract
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Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Security Register, notice of such
default hereunder, unless such default shall have been cured or waived.
SECTION 7.3. CERTAIN RIGHTS OF PURCHASE CONTRACT AGENT.
Subject to the provisions of Section 7.1:
(1) the Purchase Contract 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, Senior Note, 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;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Directors
of the Company may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the
Pledge Agreement the Purchase Contract Agent shall deem it desirable
that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Purchase Contract Agent (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officers' Certificate of the
Company;
(4) the Purchase Contract Agent may consult with counsel and
the written 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;
(5) the Purchase Contract 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 Purchase Contract
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 Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable
opportunity to examine the relevant books, records and premises of the
Company, personally or by agent or attorney; and
(6) the Purchase Contract 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 Purchase Contract
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.
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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 Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract 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 Purchase
Contract 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 Security Registrar or any other agent of the Company, or the
Purchase Contract 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 Security Registrar or such other agent, or the
Purchase Contract Agent. The Company may become the owner or pledgee of
Securities.
SECTION 7.6. MONEY HELD IN CUSTODY.
Money held by the Purchase Contract Agent in custody hereunder need
not be segregated from the other funds except to the extent required by law or
provided herein. The Purchase Contract Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder except as
otherwise provided hereunder agreed in writing with the Company.
SECTION 7.7. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for
all services rendered by it hereunder and under the Pledge Agreement
as the Company and the Purchase Contract Agent shall from time to time
agree in writing;
(2) except as otherwise expressly provided for herein, to
reimburse the Purchase Contract Agent upon its request for all
reasonable expenses, disbursements and advances incurred or made by
the Purchase Contract Agent in accordance with any provision of this
Agreement and the Pledge Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Purchase Contract Agent and any
predecessor Purchase Contract Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of its duties hereunder, including the
costs and expenses of
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defending 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 PURCHASE CONTRACT AGENT REQUIRED; ELIGIBILITY.
There shall at all times be a Purchase Contract 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 member 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 a corporate trust office in the Borough of Manhattan, New
York City, if there be such a corporation in the Borough of Manhattan, New York
City, 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 Purchase Contract 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 Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract 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 Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Securities delivered to
the Purchase Contract Agent and the Company.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section
310(b) of the TIA, as if the Purchase Contract 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;
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(2) the Purchase Contract 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
(3) the Purchase Contract Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of
the Purchase Contract Agent or of its property shall be appointed or
any public officer shall take charge or control of the Purchase
Contract 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
Purchase Contract 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 Purchase Contract Agent and the appointment of a successor
Purchase Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract 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 itself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
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 Purchase Contract
Agent and the address of its Corporate Trust Office.
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.
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(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph (a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Purchase Contract 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 Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, with 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 Purchase Contract
Agent then in office, any successor by merger, conversion or consolidation to
such Purchase Contract Agent may adopt such authentication and execution and
deliver the Certificates so authenticated and executed with the same effect as
if such successor Purchase Contract Agent had itself authenticated and executed
such Securities.
SECTION 7.12. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Purchase Contract Agent shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Purchase Contract Agent, and furnish to the Purchase Contract
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 Purchase Contract 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
Purchase Contract 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 PURCHASE CONTRACT AGENT.
Except to the extent otherwise expressly provided in this Agreement,
the Purchase Contract 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
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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
Purchase Contract 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
Purchase Contract Agent shall have no obligation to perform such Purchase
Contracts on behalf of the Holders, except to the extent expressly provided in
Article Five hereof. Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Purchase Contract Agent or its officers,
employees or agents be liable under this Agreement to any third party for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including lost profits, whether or not the likelihood of such loss
or damage was known to the Purchase Contract Agent, incurred without any act or
deed that is found to be attributable to negligence or willful misconduct on the
part of the Purchase Contract Agent.
SECTION 7.14. TAX COMPLIANCE. - [DPW TAX DEP'T TO REVIEW]
(a) 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 Purchase Contract Agent shall comply in accordance with the
terms hereof with any written direction received from the Company with respect
to the execution or certification of any required documentation and 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 Purchase Contract 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.
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ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Purchase
Contract 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
Purchase Contract Agent, to:
(1) 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;
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent
with any other provisions herein, or 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 Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract 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;
provided, however, that, except as contemplated herein, no such supplemental
agreement shall, without the unanimous consent of the Holders of each
outstanding Purchase Contract 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 the 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 PEPS Units to substitute Treasury Securities for the Pledged
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Preferred Securities or Pledged Senior Deferrable Notes or the
Applicable Ownership Interest of the Treasury Portfolio or the rights
of Holders or Treasury PEPS Units to substitute Preferred Securities,
Senior Deferrable Notes or the Applicable Ownership Interest of the
Treasury Portfolio 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 Purchase Contract Payments or change any place
where, or the coin or currency in which, any Purchase Contract Payment
is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the 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;
provided that if any amendment or proposal referred to above would adversely
affect only the PEPS Units or the Treasury PEPS Units, then only the affected
class of Holders 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; and provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (1) through (6) above.
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 Purchase Contract Agent shall be
provided, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement. The Purchase Contract Agent may, but shall not be obligated to,
enter into any such supplemental agreement which affects the Purchase Contract
Agent's own rights, duties or immunities under this Agreement or otherwise.
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SECTION 8.4. EFFECT OF SUPPLEMENTAL AGREEMENTS.
Upon the execution of any supplemental agreement under this Article,
this Agreement 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 Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract 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 Purchase
Contract 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 Purchase Contract Agent in exchange for
outstanding Certificates.
ARTICLE IX
MERGER, CONSOLIDATION, SHARE EXCHANGE, SALE OR CONVEYANCE
SECTION 9.1. COVENANT NOT TO MERGE, CONSOLIDATE, ENTER INTO A SHARE
EXCHANGE, SELL OR CONVEY PROPERTY EXCEPT UNDER CERTAIN
CONDITIONS.
The Company covenants that it will not merge, consolidate or enter
into a share exchange 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 and
the Pledge Agreement by one or more supplemental agreements in
form reasonably satisfactory to the Purchase Contract Agent and
the Collateral Agent, executed and delivered to the Purchase
Contract 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, consolidation
or share exchange, or such sale, assignment, transfer, lease or
conveyance, be in default in the performance of any covenant or
condition hereunder, under any of the Securities or under the
Pledge Agreement.
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SECTION 9.2. RIGHTS AND DUTIES OF SUCCESSOR CORPORATION.
In case of any such merger, consolidation, share exchange, 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. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of Valero Energy 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 Purchase Contract
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 Purchase Contract 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
Purchase Contract Agent for authentication and execution, and any Certificate
evidencing Securities which such successor corporation thereafter shall cause
to be signed and delivered to the Purchase Contract Agent for that purpose. All
the Certificates 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 merger, consolidation, share exchange, 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.
SECTION 9.3. OFFICERS' CERTIFICATE AND OPINION OF COUNSEL GIVEN TO PURCHASE
CONTRACT AGENT.
The Purchase Contract Agent, subject to Sections 7.1 and 7.3, shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such merger, consolidation, share exchange, sale, assignment,
transfer, lease or conveyance, and any such assumption, complies with the
provisions of this Article and that all conditions precedent to the
consummation of any such merger, consolidation, share exchange, 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.
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SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, New York City
an office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock 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 reestablishment of PEPS Units 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 Purchase Contract
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 Purchase Contract 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 Purchase Contract 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, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or
agency. The Company hereby designates as the place of payment for the
Securities the Corporate Trust Office and appoints the Purchase Contract Agent
at its Corporate Trust Office as paying agent in such city.
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.
SECTION 10.5. STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT.
The Company will deliver to the Purchase Contract Agent, within 140
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate
(one of the signers of which shall be the principal executive officer,
principal financial officer or principal accounting officer of the Company),
stating whether or not to the knowledge of the signers thereof the Company is
in default in the performance and observance of any of the terms, provisions
and conditions hereof, and if the
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Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 10.6. ERISA.
Each Holder from time to time of the Securities that is a Plan hereby
represents that its acquisition of the PEPS Units and the holding of the same
satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of
ERISA and the Code in accordance with one or more prohibited transaction
exemptions or otherwise will not result in a nonexempt prohibited transaction.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
VALERO ENERGY CORPORATION
By:
--------------------------------
Name:
Title:
-----------------------------------
as Purchase Contract Agent
By:
--------------------------------
Name:
Title:
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EXHIBIT A
FACE OF PEPS UNITS CERTIFICATE
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE
FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER
OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY 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 DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
No. Cusip No.
-------- ------------
Number of PEPS Units
--------
VALERO ENERGY CORPORATION
VEC TRUST I
PEPS UNITS
This PEPS Units Certificate certifies that Cede & Co. is the
registered Holder of the number of PEPS Units set forth above. Each PEPS Unit
consists of (i) either (a) the beneficial ownership by the Holder of one
Preferred Security (the "PREFERRED SECURITY") of VEC Trust I, a Delaware
statutory business trust (the "TRUST"), having a stated liquidation amount of
$[25], subject to the Pledge of such Preferred Security 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 (as specified in clause (A) of the definition of such term)
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
Valero Energy Corporation, a Delaware corporation (the "COMPANY"). All
capitalized
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terms used herein which are defined in the Purchase Contract Agreement (as
defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Preferred Securities 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,
constituting part of each PEPS Unit evidenced hereby has been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations of
the Holder under the Purchase Contract comprising part of such PEPS Unit.
The Pledge Agreement provides that all payments of the liquidation
amount with respect to any of the Pledged Preferred Securities 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 Preferred Securities (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 PEPS Units received by the Securities
Intermediary shall be paid by wire transfer in same day funds (i) in the case
of (A) cash distributions with respect to Pledged Preferred Securities 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 liquidation amount with respect to any Preferred Securities
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,
that have been released from the Pledge pursuant to the Pledge Agreement, to
the Purchase Contract Agent to the account designated by the Purchase Contract
Agent, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Securities Intermediary (provided that in the event
such payment is received by the Securities Intermediary 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
liquidation amount with respect to any of the Pledged Preferred Securities or
the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, to the Company on the
Purchase Contract Settlement Date (as described herein) in accordance with the
terms of the Pledge Agreement, in full satisfaction of the respective
obligations of the Holders of the PEPS Units of which such Pledged Preferred
Securities or the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, are
a part under the Purchase Contracts forming a part of such PEPS Units.
Distributions on any Preferred Security 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, forming part of a PEPS Unit evidenced
hereby, which are payable quarterly in arrears on ____________, ____________,
____________, and ____________ of each year, commencing ____________, 2000 (a
"PAYMENT DATE"), shall, subject to receipt thereof by the Purchase Contract
Agent from the Securities Intermediary, be paid to the Person in whose name
this PEPS Unit Certificate (or a Predecessor PEPS Unit Certificate) is
registered at the close of business on the Record Date for such Payment Date.
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Each Purchase Contract evidenced hereby obligates the Holder of this
PEPS Units Certificate to purchase, and the Company to sell, on ____________,
200_ (THE "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $[25] (the
"STATED AMOUNT"), a number of shares of Common Stock, $0.01 par value ("COMMON
STOCK"), of the Company, equal to the Settlement Rate, unless on or prior to
the Purchase Contract Settlement Date there shall have such occurred a
Termination Event or an Early Settlement with respect to the PEPS Unit 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 liquidation amount with respect to any Pledged Preferred
Securities pursuant to the Remarketing 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, pledged to secure the obligations under
such Purchase Contract of the Holder of the PEPS Unit 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 a PEPS Unit evidenced hereby, an amount (the
"PURCHASE CONTRACT PAYMENTS") equal to __% per annum of the Stated Amount. Such
Purchase Contract Payments shall be payable to the Person in whose name this
PEPS Units Certificate is registered at the close of business on the Record
Date for such Payment Date. The Company may, at its option, defer Purchase
Contract Payments.
Distributions on the Preferred Securities, the Applicable Ownership
(as specified in clause (B) of the definition of such term) and Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the PEPS
Units 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 Purchase Contract Agent by manual signature, this PEPS Units 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.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
VALERO ENERGY CORPORATION
By:
--------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase
Contracts evidenced hereby)
By: ________________________________, not
individually but solely as Attorney-in-Fact
of such Holder
By:
--------------------------------------
Name:
Title:
DATED: _______________, 2000
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CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the PEPS Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: _____________________________, as
Purchase Contract Agent
By:
-----------------------------------
Authorized Officer
Dated: _______________, 2000
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(FORM OF REVERSE OF PEPS UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _______________, 2000 (as may be supplemented
from time to time, the "PURCHASE CONTRACT AGREEMENT"), between the Company and
________________________, as Purchase Contract Agent (including its successors
hereunder, the "PURCHASE CONTRACT 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 Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the PEPS Units Certificates are, and are to
be, executed and delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each
Purchase Contract evidenced hereby obligates the Holder of this PEPS Units
Certificate 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 shares of Common Stock equal to the Settlement Rate, unless, prior to
or on 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 or an Early Settlement shall have occurred. The "SETTLEMENT RATE" is
equal to:
(1) if the Applicable Market Value (as defined below) is
greater than or equal to $_________ (the "THRESHOLD APPRECIATION
PRICE"), _______ shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the
Threshold Appreciation Price but greater than $_______ (the
"REFERENCE PRICE"), the number of shares of Common Stock per
Purchase Contract having a value, based on the Applicable Market
Value, equal to _______________; and
(3) if the Applicable Market Amount is less than or equal to
the Reference Price, ________ shares of Common Stock per Purchase
Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.11 of 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 PEPS Unit to purchase at the Purchase Price, and the Company to sell, a
number of 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.
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The "CLOSING PRICE" per share of Common Stock on any date of
determination means:
(1) the closing sale price (or, if no closing price is
reported, the last reported sale price) per share on the New York
Stock Exchange, Inc. (the "NYSE") on such date;
(2) if Common Stock is not listed for trading on the NYSE on
any such date, the closing sale price per share as reported in
the composite transactions for the principal United States
securities exchange on which Common Stock is so listed;
(3) if Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price
per share as reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid
price for Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of Common Stock on such
date from at least three nationally recognized independent
investment banking firms retained for this purpose by the
Company.
A "TRADING DAY" means a day on which Common Stock (1) 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 (2) 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 Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this PEPS Units Certificate may pay the Purchase Price for the shares
of Common Stock purchased pursuant to each Purchase Contract evidenced hereby
by effecting a Cash Settlement or an Early Settlement or from the proceeds of
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio or a Remarketing of the related
Pledged. A Holder of PEPS Units who does not effect, on or prior to 11:00 a.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date (or in the event a Tax Event Redemption has
occurred, the Business Day prior to the Purchase Contract Settlement Date), an
effective Cash Settlement or, who does not effect on or prior to 5:00 p.m. (New
York City time) on the seventh Business Day prior to the Purchase Contract
Settlement Date, an effective Early Settlement, shall pay the Purchase Price
for the shares of Common Stock to be delivered under the related Purchase
Contract from the proceeds of the sale of the related Pledged Preferred
Securities held by the Collateral Agent. Such sale will be made by the
Remarketing Agent pursuant to the terms of the Remarketing Agreement on the
third Business Day prior to 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 Preferred
Securities related to this PEPS Units certificate, any accrued and unpaid
distributions on such
X-0
00
Xxxxxxx Xxxxxxxxx Securities will become payable by the Company to the holder of
this PEPS Units 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 of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the PEPS Unit Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Preferred Security or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio forming a part of each PEPS Unit from the Pledge. A PEPS Unit shall
thereafter represents the right to receive the Preferred Security or the
appropriate Applicable Ownership Interest of the Treasury Portfolio forming a
part of such PEPS Unit in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Preferred Securities. Upon receipt of notice of any
meeting at which holders of Preferred Securities are entitled to vote or upon
the solicitation of consents, waivers or proxies of holders of Preferred
Securities, the Purchase Contract Agent shall, as soon as practicable
thereafter, mail to the PEPS Units Holders a notice:
(1) containing such information as is contained in the
notice or solicitation;
(2) stating that each PEPS Unit Holder on the record date
set by the Purchase Contract Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Preferred Securities entitled to vote)
shall be entitled to instruct the Purchase Contract Agent as to
the exercise of the voting rights pertaining to the Preferred
Securities constituting a part of such Holder's PEPS Unit; and
(3) stating the manner in which such instructions may be
given.
Upon the written request of the PEPS Unit Holders on such record date, the
Purchase Contract 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 Preferred Securities as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a PEPS Unit, the Purchase Contract Agent shall abstain from voting
the Preferred Security evidenced by such PEPS Unit.
Upon the dissolution and liquidation of the Trust, a principal amount
of the Senior Deferrable Notes constituting the assets of the Trust and
underlying the Preferred Securities
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equal to the aggregate liquidation amount of the Pledged Preferred Securities
shall be delivered to the Securities Intermediary in exchange for the Pledged
Preferred Securities. Thereafter, the Senior Deferrable Notes shall be held by
the Securities Intermediary to secure the obligations of each Holder of PEPS
Units to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such PEPS Units. Following the dissolution and
liquidation of the Trust, the Holders and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Subordinated
Senior Deferrable Notes as the Holders and the Collateral Agent had in respect
of the Pledged Preferred Securities, any reference herein to the Preferred
Securities shall be deemed to be a reference to the Senior Deferrable Notes and
any reference herein to the liquidation amount of the Preferred Securities shall
be deemed to be a reference to the principal amount of the Senior Deferrable
Notes.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Senior
Deferrable Notes shall be delivered to the Securities Intermediary in exchange
for the Pledged Preferred Securities. Thereafter, pursuant to the terms of the
Pledge Agreement, the Securities Intermediary will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase on behalf of the Holders
of PEPS Units, the Treasury Portfolio and promptly (a) transfer the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio to the Collateral Account to secure the obligations
of each Holder of PEPS Units to purchase shares of Common Stock under the
Purchase Contracts constituting a part of such PEPS Units, (b) transfer the
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio to the Purchase Contract Agent for the
benefit of the Holders of such PEPS Units and (C) remit the remaining portion
of such Redemption Price to the Purchase Contract Agent for payment to the
Holders of such PEPS Units.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of PEPS Units and the Collateral
Agent shall have such security interest rights and obligations with respect to
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio as the Holder of PEPS Units and the
Collateral Agent had in respect of the Preferred Securities or Senior
Deferrable Notes, as the case may be, subject to the Pledge thereof as provided
in the Pledge Agreement and any reference herein to the Preferred Securities
shall be deemed to be a reference to such Treasury Portfolio.
The PEPS Certificates are issuable only in registered form and only in
denominations of a single PEPS Unit and any integral multiple thereof. The
transfer of any PEPS Units Certificate will be registered and PEPS Units
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The PEPS Units 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 Purchase Contract
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 a Treasury Security for Preferred Securities, thereby creating
Treasury PEPS
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Units, 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 PEPS Unit remains in effect, such PEPS Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such PEPS Unit in respect of the Preferred
Securities and Purchase Contract constituting such PEPS Unit may be transferred
and exchanged only as a PEPS Unit.
The Holder of PEPS Units may substitute for the Pledged Preferred
Securities securing such Holder's obligations under the related Purchase
Contracts Treasury Securities in an aggregate principal amount equal to the
aggregate liquidation amount of the Pledged Preferred Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement.
From and after such Collateral Substitution, each Security for which such
Pledged Treasury Securities secures the Holder's obligation under the Purchase
Contract shall be referred to as a "TREASURY PEPS UNIT". A Holder may make such
Collateral Substitution only in integral multiples of [40] PEPS Units for [40]
Treasury PEPS Units.
A Holder of Treasury PEPS Units may recreate PEPS Units by delivering
to the Securities Intermediary Preferred Securities 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. A Holder may recreate
PEPS Units in integral multiples of [40] Treasury PEPS Units for [40] PEPS
Units.
If a Tax Event Redemption has occurred, a PEPS Unit Holder may not
create Treasury Peps Units, and a Treasury PEPS Unit Holder may not recreate a
PEPS Unit.
The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the PEPS Units Certificate evidencing such Purchase Contract is registered
at the close of business on the Record Date for such Payment Date. Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City 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
PEPS Units Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to ____% per annum, compounding quarterly, until such deferred
installments are paid. If a Holder effects an Early Settlement or if a
Termination Event shall occur, such Holder will have no right to receive any
accrued and unpaid or deferred Purchase Contract Payments.
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 any Purchase
Contract Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract
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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 Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the PEPS Units
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Preferred Securities 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 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 Holder thereof, Purchase Contracts
underlying Securities 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 PEPS Units
Certificate, the Holder of this PEPS Units Certificate shall deliver to the
Purchase Contract Agent at the Corporate Trust Office an Election to Settle
Early form set forth below and any other documents requested by the Purchase
Contract Agent duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to:
(1) the product of (A) the $[25] times (B) the number of
Purchase Contracts with respect to which the Holder has elected
to effect Early Settlement, plus
(2) 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 sum of (x) the Purchase
Contract Payments payable on such Payment Date with respect to
such Purchase Contracts plus (x) the distributions on the related
Preferred Securities payable on such Payment Date.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Pledged Preferred Securities 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, 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 PEPS Unit as to which Early Settlement
is effected equal to _____ shares of Common Stock per Purchase Contract (the
"EARLY SETTLEMENT RATE"). The Early Settlement Rate 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 PEPS Units 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 Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this PEPS Units Certificate. The Company covenants and agrees, and
the Holder, by its
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acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this PEPS Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the PEPS Units evidenced hereby on its
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 his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Preferred Securities 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, underlying this PEPS
Units 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 liquidation amount of the Pledged
Preferred Securities 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, 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 be governed by, and construed in
accordance with, the laws of the State of New York.
The Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this PEPS Units Certificate is registered as the owner of the PEPS
Units evidenced hereby for the purpose of receiving payments of distributions
payable quarterly on the Preferred Securities, receiving payments of Purchase
Contract Payments, 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
Purchase Contract 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 Purchase Contract Agent.
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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 of
-------
--------------------------------------------
TENANT: 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)
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within PEPS Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to
transfer said PEPS Units Certificates on the books of Valero Energy Corporation
and VEC Trust I 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 PEPS Units
Certificates in every
particular, without alteration
or enlargement or any change
whatsoever.
Signature Guarantee:
-----------------------------------
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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 PEPS Units evidenced by
this PEPS Units 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
Signature Guarantee:
-----------
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
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
-------------------------------
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ELECTION TO SETTLE EARLY
The undersigned Holder of this PEPS Units 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 PEPS Units evidenced by this PEPS Units
Certificate specified below. 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 PEPS Units Certificate representing any PEPS Units
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 Preferred
Securities 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:
-----------------------
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Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or PEPS REGISTERED HOLDER
Units Certificates are to be registered
in the name of and delivered to and
Pledged Preferred Securities, or the
Applicable Ownership Interest of the
Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Please print name and
address of Registered
Holder:
------------------------------------ ---------------------------
Name Name
------------------------------------ ---------------------------
Address Address
------------------------------------ ---------------------------
------------------------------------ ---------------------------
------------------------------------ ---------------------------
Social Security or other
Taxpayer Identification
Number, if any
---------------------------
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Transfer Instructions for Pledged Preferred Securities or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, transferable
upon Early Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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[TO BE ATTACHED TO GLOBAL CERTIFICATES]
(4) SCHEDULE OF INCREASES OR DECREASES IN GLOBAL
CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
=======================================================================================================================
Amount of decrease in Amount of decrease in Number of PEPS Units
Number of PEPS Units Number of PEPS Units evidenced by this Signature of
evidenced by the Global evidenced by the Global Global Certificate authorized officer of
Date Certificate Certificate following such decrease Trustee or Securities
or increase Custodian
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X-00
00
XXXXXXX X
FACE OF TREASURY PEPS CERTIFICATE
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE
FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER
OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY 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 DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
No. Cusip No.
----- ----------------
Number of Treasury PEPS Units
---------
VALERO ENERGY CORPORATION
VEC TRUST I
TREASURY PEPS UNITS
This Treasury PEPS Units Certificate certifies that Cede & Co. is the
registered Holder of the number of Treasury PEPS Units set forth above. Each
Treasury PEPS Unit consists of (i) a [1/40] undivided beneficial ownership
interest of 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 Valero Energy Corporation, a Delaware
corporation (the "COMPANY"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement (as defined on the reverse hereof)
have the meaning set forth therein.
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Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury PEPS Unit 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 part of such Treasury PEPS
Unit. Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PEPS Units Certificate to purchase, and the Company, to sell,
on__________________, 200_, at a price equal to $[25] (the "STATED AMOUNT"), a
number of shares of Common Stock, $0.01 par value ("COMMON STOCK") of the
Company, equal to the Settlement Rate, unless prior to or on the Purchase
Contract Settlement Date there shall have occurred a Termination Event or an
Early Settlement with respect to the Treasury PEPS Unit 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 the proceeds from the Treasury
Securities at maturity pledged to secure the obligations of the Holder under
such Purchase Contract of the Treasury PEPS Unit of which such Purchase
Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract evidenced hereby an amount (the "PURCHASE CONTRACT PAYMENTS")
equal to ____% per annum of the Stated Amount. Such Purchase Contract Payments
shall be payable to the Person in whose name this Treasury PEPS Units
Certificate is registered at the close of business on the Record Date for such
Payment Date. The Company may, at its option, defer Purchase Contract Payments.
Purchase Contract Payments will be payable at the office of the
Purchase Contract Agent in New York City or, at the option of the Company, by
check mailed to the address of the Person entitled thereto as such address
appears on the Treasury PEPS Units 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 Purchase Contract Agent by manual signature, this Treasury PEPS Units
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.
B-2
92
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
VALERO ENERGY CORPORATION
By:
----------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts)
By: _______________________________, not
individually but solely as
Attorney-in-Fact of such Holder
By:
-----------------------------------------
Name:
Title:
Dated: _______________, 2000
B-3
93
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury PEPS Units referred to in the
within-mentioned Purchase Contract Agreement.
By: _____________________________, as
Purchase Contract Agent
By:
----------------------------------
Authorized Officer
Dated: _________________, 2000
B-4
94
(REVERSE OF TREASURY PEPS UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of __________________, 2000 (as may be
supplemented from time to time, the "PURCHASE CONTRACT AGREEMENT") between the
Company and __________________________, as Purchase Contract Agent (including
its successors thereunder, herein called the "PURCHASE CONTRACT 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
Purchase Contract Agent, the Company and the Holders and of the terms upon
which the Treasury PEPS Units Certificates are, and are to be, executed and
delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each
Purchase Contract evidenced hereby obligates the Holder of this Treasury PEPS
Units Certificate 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 shares of Common Stock equal to the Settlement Rate, unless
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 or an Early Settlement shall have occurred. The "SETTLEMENT RATE" is
equal to:
(1) if the Applicable Market Value (as defined below) is
greater than or equal to $________ (the "THRESHOLD APPRECIATION
PRICE"), _____ shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $_______ (the "REFERENCE PRICE"),
the number of shares of Common Stock per Purchase Contract having a
value, based on the Applicable Market Value, equal to $______; and
(3) if the Applicable Market Amount is less than or equal to
$________, then _________ shares of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in the Purchase
Contract Agreement (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.11 of 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 Treasury PEPS Unit to purchase at the Purchase Price for cash, and the
Company to sell, a number of 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 Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day
B-5
95
immediately preceding the Purchase Contract Settlement Date or applicable Early
Settlement Date.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means the:
(1) closing sale price (or, if no closing price is reported,
the last reported sale price) per share on the New York Stock Exchange,
Inc. (the "NYSE") on such date;
i (2) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities
exchange on which the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per
share as reported by The Nasdaq Stock Market, Inc.;
(4) 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
(5) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of the Common Stock on such
date from at least three nationally recognized independent investment
banking firms retained for this purpose by the Company.
A "TRADING DAY" means a day on which the Common Stock (1) 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 (2) 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 Treasury PEPS Unit shall pay the Purchase Price for the shares
of the Common Stock purchased pursuant to each Purchase Contract evidenced
hereby either by effecting a Cash Settlement or an Early Settlement of each
such Purchase Contract or by applying a principal amount of the Pledged
Treasury Securities underlying such Holder's Treasury PEPS Unit equal to the
Stated Amount of such Purchase Contract to the purchase of the Common Stock. A
Holder of Treasury PEPS Unit who does not effect, prior to or on 11:00 a.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, an effective Cash Settlement or who does not
effect on or prior to 5 p.m. (New York City time) on the seventh Business Day
prior to the Purchase Contract Settlement Date an effective 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 Pledged Treasury
Securities.
B-6
96
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 of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Treasury PEPS Units Register. Upon and after
the occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Treasury Securities (as defined in the Pledge Agreement) forming a part
of each Treasury PEPS Unit. A Treasury PEPS Unit shall thereafter represent the
right to receive the interest in the Treasury Security forming a part of such
Treasury PEPS Unit, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
The Treasury PEPS Units Certificates are issuable only in registered
form and only in denominations of a single Treasury PEPS and any integral
multiple thereof. The transfer of any Treasury PEPS Certificate will be
registered and Treasury PEPS Certificates may be exchanged as provided in the
Purchase Contract Agreement. The Treasury PEPS 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 Purchase Contract 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 Preferred Securities or Senior Deferrable Notes, for
Treasury Securities, thereby recreating PEPS Units, shall be responsible for
any fees or expenses associated therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract underlying a Treasury
PEPS Unit remains in effect, such Treasury PEPS Unit shall not be separable
into its constituent parts, and the rights and obligations of the Holder of
such Treasury PEPS Unit in respect of the Treasury Security and the Purchase
Contract constituting such Treasury PEPS Unit may be transferred and exchanged
only as a Treasury PEPS Unit.
A Holder of Treasury PEPS Units may recreate PEPS Units by delivering
to the Collateral Agent, Preferred Securities or Senior Deferrable Notes with a
liquidation amount, in the case of such Preferred Securities or with a
principal amount in the case of such Senior Deferrable Notes, equal to the
aggregate principal amount at maturity 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 Holder's Security shall be referred to as a "PEPS
UNIT". Any such creation of PEPS Units may be effected in multiples of [40]
Treasury PEPS Units for [40] PEPS Units.
A Holder of PEPS Units may recreate Treasury PEPS Units by delivering
to the Collateral Agent Treasury Securities in an aggregate principal amount
equal to the aggregate liquidation amount of the Pledged Preferred Securities
or the aggregate principal amount at maturity of the Pledged Senior Deferrable
Notes, as the case may be, in accordance with the
B-7
97
terms of the Purchase Contract Agreement and the Pledge Agreement. Any such
recreation of Treasury PEPS Units may be effected only in multiples of [40] PEPS
Units for [40] Treasury PEPS Units.
If a Tax Event Redemption has occurred, a Treasury PEPS Unit Holder
may not recreate PEPS Units, and a PEPS Unit Holder may not create a Treasury
PEPS Unit.
The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury PEPS Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City 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 Treasury PEPS Units Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to ___% per annum, compounding quarterly, until such deferred
installments are paid. If a Holder effects an Early Settlement or if a
Termination Event shall occur, such Holder will have no right to receive any
accrued and unpaid or deferred Purchase Contract Payments.
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 Purchase Contract
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract 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 Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Treasury PEPS
Units 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. A Treasury PEPS Unit
shall thereafter represent the right to receive the interest in the Treasury
Security forming a part of such Treasury PEPS Unit, in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities 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 Treasury
PEPS Unit, the Holder of this Treasury PEPS Units Certificate shall deliver to
the Purchase Contract Agent at the Corporate Trust Office an Election to Settle
Early form set forth below and any other documents requested by the Purchase
Contract Agent duly completed and
B-8
98
accompanied by payment in the form of immediately available funds payable to the
order of the Company in an amount (the "EARLY SETTLEMENT AMOUNT") equal to:
(1) the product of (A) $[25] times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement, plus
(2) 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 Purchase Contract Payments payable, if
any, on such Payment Date with respect to such Purchase Contracts.
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 Treasury PEPS Unit as to which Early
Settlement is effected equal to ______ shares of Common Stock per Purchase
Contract (the "EARLY SETTLEMENT RATE"). The Early Settlement Rate 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 Treasury PEPS 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 Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury PEPS Units 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 Treasury PEPS Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Treasury PEPS Units evidenced
hereby on its 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 Purchase Contract Agent to enter into and perform the Purchase
Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Treasury PEPS Units 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 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.
B-9
99
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 Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Treasury PEPS Units Certificate is registered as the owner of
the Treasury PEPS Units evidenced hereby for the purpose of receiving payments
of interest on the Treasury Securities, receiving payments of Purchase Contract
Payments, 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
Purchase Contract 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 Purchase Contract Agent.
B-10
100
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 of
-------
-------------------------------------------
TENANT: 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)
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury PEPS Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _________ attorney to transfer said
Treasury PEPS Units Certificates on the books of Valero Energy Corporation. and
VEC Trust I 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 Treasury PEPS
Units Certificates in every
particular, without alteration
or enlargement or any change
whatsoever.
Signature Guarantee:
------------------------------
X-00
000
XXXXXXXXXX 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 Treasury PEPS Units
evidenced by this Treasury PEPS Units 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
Signature Guarantee:
-----------
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
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
-------------------------------
B-12
102
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury PEPS Units Certificate
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 Treasury PEPS Units evidenced by this
Treasury PEPS Units Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts underlying
Treasury PEPS 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 Treasury PEPS Units Certificate representing any Treasury PEPS
Units 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 tax payable incident thereto.
Dated: ------------------------
------------------ Signature
Signature Guarantee:
-------------------------------------
B-13
103
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock of
Treasury PEPS Units Certificates are to be REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Treasury Securities are to be
transferred to a Person other than the
Holder, please print such Person's name and
address:
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 Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
B-14
104
[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:
====================================================================================================================
Amount of decrease in Amount of decrease in Number of Treasury PEPS
Number of Treasury PEPS Number of Treasury PEPS Units evidenced by this Signature of
Units evidenced by the Units evidenced by the Global Certificate authorized officer of
Date Global Certificate Global Certificate following such decrease Trustee or Securities
or increase Custodian
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
B-15
105
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
----------------------
----------------------
----------------------
----------------------
Attention:
Re: [_______ PEPS Units] [_______ Treasury PEPS Units] of Valero
Energy Corporation, a Delaware corporation (the "COMPANY") and
VEC Trust I.
The undersigned Holder hereby notifies you that it has delivered to
________,as Securities Intermediary, for credit to the Collateral Account,
$______ aggregate [principal] [liquidation] amount of [Preferred Securities]
[Senior Deferrable Notes] [Treasury Securities] in exchange for the [Pledged
Preferred Securities] [Pledged Senior Deferrable Notes] [Pledged Treasury
Securities] held in the Collateral Account, in accordance with the Pledge
Agreement, dated as of _______________, 2000 (the "PLEDGE AGREEMENT"; unless
otherwise defined herein, terms defined in the Pledge Agreement are used herein
as defined therein), between you, the Company, the Collateral Agent and the
Securities Intermediary. The undersigned Holder has paid 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 Preferred Securities] [Pledged Senior Deferrable Notes]
[Pledged Treasury Securities] related to such [PEPS Units] [Treasury PEPS
Units].
Date:
------------------------ ----------------------------------------
Signature
Signature Guarantee:
--------------------
C-1
106
Please print name and address of Registered Holder:
---------------------------- ----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
----------------------------
----------------------------
----------------------------
----------------------------
C-2
107
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
----------------------
----------------------
Attention:
Telecopy: __________
Re: [__________ PEPS Units] [______ Treasury PEPS Units]
of Valero Energy Corporation, a Delaware corporation
(the "COMPANY") and VEC Trust I
Please refer to the Purchase Contract Agreement, dated as of
_________________, 2000 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise
defined herein, terms defined in the Purchase Contract Agreement are used
herein as defined therein), between the Company and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of PEPS Units
and Treasury PEPS Units from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Senior Deferrable Notes][the Treasury Securities] underlying your
ownership interest in _____ [PEPS Units] [Treasury PEPS Units] have been
released and are being held by us for your account pending receipt of transfer
instructions with respect to such [Senior Deferrable Notes][Treasury
Securities] (the "RELEASED SECURITIES").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [PEPS
Units][Treasury PEPS Units] effected through book-entry or by delivery to us of
your [PEPS Units Certificate][Treasury PEPS Units Certificate], we shall
transfer the Released Securities by book-entry transfer or other appropriate
procedures, in accordance with your instructions. In the event you fail to
effect such transfer or delivery, the Released Securities and any distributions
thereon, shall be held in our name, or a nominee in trust for your benefit,
until such time as such [PEPS Units][Treasury PEPS Units] are transferred or
your [PEPS Units Certificate] [Treasury PEPS Units Certificate] is surrendered
or satisfactory evidence is provided that such [PEPS Units
Certificate][Treasury PEPS Units Certificate] has been destroyed, lost or
stolen, together with any indemnification that we or the Company may require.
Date: By:
--------------------------------
-----------------------------------
Name:
D-1
108
Title: Authorized Officer
D-2
109
EXHIBIT E
NOTICE TO SETTLE BY CASH
----------------------
----------------------
----------------------
----------------------
Attention:
Re: [_______ PEPS Units] [Treasury PEPS Units] of Valero
Energy Corporation, a Delaware corporation (the
"COMPANY") and VEC Trust I
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.4 of the Purchase Contract Agreement, dated as of ____________,
2000 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, 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 Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the fifth 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 immediately
available funds), $______ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related Purchase Contracts 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 [PEPS Units] [Treasury PEPS Units].
Date:
------------------------------- ---------------------------------
Signature
---------------------------------
Signature Guarantee:
Please print name and address of Registered Holder:
E-1
110
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT AND INDENTURE TRUSTEE
(Settlement of Purchase Contract through Remarketing)
------------------------
------------------------
------------------------
------------------------
Attention:
Telecopier No.:
------------------------
------------------------
------------------------
------------------------
Attention:
Telecopy:
Re: __________ PEPS Units of Valero Energy Corporation, a
Delaware corporation (the "COMPANY") and VEC Trust I
Please refer to the Purchase Contract Agreement, dated as of
_______________, 2000 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise
defined herein, terms defined in the Purchase Contract Agreement are used
herein as defined therein), between the Company and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the Holders of PEPS Units
from time to time.
In accordance with Section 5.4 of the Purchase Contract Agreement and,
based on instructions and Cash Settlements received from Holders of PEPS Units
as of 11:00 a.m. (New York City time), the fifth Business Day preceding the
Purchase Contract Settlement Date, we hereby notify you that ______ [Preferred
Securities] [Senior Deferrable Notes] are to be tendered for purchase in the
Remarketing.
Date: By:
--------------------------------
-----------------------------------
Name:
Title: Authorized Officer
F-1
