EXHIBIT 4.3
PNM RESOURCES, INC.
and
JPMORGAN CHASE BANK,
Purchase Contract Agent and Trustee
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PURCHASE CONTRACT AGREEMENT
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Dated as of ________ __, _____
Table of Contents
Page
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Article I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............................................. 1
Section 1.01 Definitions............................................................................. 1
Section 1.02 Compliance Certificates and Opinions.................................................... 12
Section 1.03 Form of Documents Delivered to Purchase Contract Agent.................................. 12
Section 1.04 Acts of Holders; Record Dates........................................................... 13
Section 1.05 Notices................................................................................. 14
Section 1.06 Notice to Holders; Waiver............................................................... 15
Section 1.07 Effect of Headings and Table of Contents................................................ 15
Section 1.08 Successors and Assigns.................................................................. 15
Section 1.09 Separability Clause..................................................................... 15
Section 1.10 Benefits of Agreement................................................................... 15
Section 1.11 GOVERNING LAW........................................................................... 15
Section 1.12 Legal Holidays.......................................................................... 15
Section 1.13 Counterparts............................................................................ 16
Section 1.14 Inspection of Agreement................................................................. 16
Section 1.15 Appointment of Financial Institution as Agent for the Company........................... 16
Section 1.16 No Waiver............................................................................... 16
Article II CERTIFICATE FORMS.................................................................................. 16
Section 2.01 Forms of Certificates Generally......................................................... 16
Section 2.02 Form of Purchase Contract Agent's Certificate of Authentication......................... 17
Article III THE UNITS......................................................................................... 17
Section 3.01 Amount; Form and Denominations.......................................................... 17
Section 3.02 Rights and Obligations Evidenced by the Certificates.................................... 17
Section 3.03 Execution, Authentication, Delivery and Dating.......................................... 18
Section 3.04 Temporary Certificates.................................................................. 19
Section 3.05 Registration; Registration of Transfer and Exchange..................................... 19
Section 3.06 Book-Entry Interests.................................................................... 20
Section 3.07 Notices to Holders...................................................................... 21
Section 3.08 Appointment of Successor Depositary..................................................... 21
Section 3.09 Definitive Certificates................................................................. 21
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates...................................... 21
Section 3.11 Persons Deemed Owners................................................................... 22
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Section 3.12 Cancellation............................................................................ 23
Section 3.13 Creation of Treasury Units by Substitution of Treasury Securities....................... 23
Section 3.14 Recreation of Corporate Units........................................................... 25
Section 3.15 Transfer of Collateral upon Occurrence of Termination Event............................. 26
Section 3.16 No Consent to Assumption................................................................ 26
Article IV THE DEBT SECURITIES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO................... 27
Section 4.01 Interest Payments; Rights To Interest Payments Preserved................................ 27
Section 4.02 Notice and Voting....................................................................... 27
Section 4.03 Special Event Redemption................................................................ 28
Article V THE PURCHASE CONTRACTS.............................................................................. 29
Section 5.01 Purchase of Shares of Common Stock...................................................... 29
Section 5.02 Remarketing; Payment of Purchase Price.................................................. 31
Section 5.03 Issuance of Shares of Common Stock...................................................... 37
Section 5.04 Adjustment of Settlement Rate........................................................... 38
Section 5.05 Notice of Adjustments and Certain Other Events.......................................... 45
Section 5.06 Termination Event; Notice............................................................... 46
Section 5.07 Early Settlement........................................................................ 46
Section 5.08 Intentionally Omitted................................................................... 48
Section 5.09 No Fractional Shares.................................................................... 48
Section 5.10 Charges and Taxes....................................................................... 48
Section 5.11 Contract Adjustment Payments............................................................ 48
Article VI REMEDIES........................................................................................... 53
Section 6.01 Unconditional Right of Holders to Receive Contract Adjustment Payments and to
Purchase Shares of Common Stock......................................................... 53
Section 6.02 Restoration of Rights and Remedies...................................................... 53
Section 6.03 Rights and Remedies Cumulative.......................................................... 53
Section 6.04 Delay or Omission Not Waiver............................................................ 53
Section 6.05 Undertaking for Costs................................................................... 53
Section 6.06 Waiver of Stay or Extension Laws........................................................ 54
Article VII THE PURCHASE CONTRACT AGENT....................................................................... 54
Section 7.01 Certain Duties and Responsibilities..................................................... 54
Section 7.02 Notice of Default....................................................................... 55
Section 7.03 Certain Rights of Purchase Contract Agent............................................... 55
Section 7.04 Not Responsible for Recitals or Issuance of Units....................................... 57
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Section 7.05 May Hold Units.......................................................................... 57
Section 7.06 Money Held in Custody................................................................... 57
Section 7.07 Compensation and Reimbursement.......................................................... 57
Section 7.08 Corporate Purchase Contract Agent Required; Eligibility................................. 58
Section 7.09 Resignation and Removal; Appointment of Successor....................................... 58
Section 7.10 Acceptance of Appointment by Successor.................................................. 59
Section 7.11 Merger, Conversion, Consolidation or Succession to Business............................. 59
Section 7.12 Preservation of Information; Communications to Holders.................................. 60
Section 7.13 No Obligations of Purchase Contract Agent............................................... 60
Section 7.14 Tax Compliance.......................................................................... 60
Article VIII SUPPLEMENTAL AGREEMENTS.......................................................................... 61
Section 8.01 Supplemental Agreements without Consent of Holders...................................... 61
Section 8.02 Supplemental Agreements with Consent of Holders......................................... 61
Section 8.03 Execution of Supplemental Agreements.................................................... 62
Section 8.04 Effect of Supplemental Agreements....................................................... 62
Section 8.05 Reference to Supplemental Agreements.................................................... 62
Article IX MERGER, CONVEYANCE, TRANSFER OR LEASE.............................................................. 63
Section 9.01 Covenant not to Consolidate, Merge, Convey, Transfer or Lease Property
Except under Certain Conditions......................................................... 63
Section 9.02 Rights and Duties of Successor Person................................................... 63
Section 9.03 Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent........... 63
Article X COVENANTS........................................................................................... 64
Section 10.01 Performance under Purchase Contracts.................................................... 64
Section 10.02 Maintenance of Office or Agency......................................................... 64
Section 10.03 Company to Reserve Common Stock......................................................... 64
Section 10.04 Covenants as to Common Stock............................................................ 64
Section 10.05 Statements of Officers of the Company as to Default..................................... 64
Section 10.06 ERISA................................................................................... 65
Section 10.07 Tax Treatment........................................................................... 65
Article XI TRUST INDENTURE ACT................................................................................ 65
Section 11.01 Trust Indenture Act; Application........................................................ 65
Section 11.02 List of Holders of Units................................................................ 65
Section 11.03 Reports by the Purchase Contract Agent.................................................. 65
Section 11.04 Periodic Reports to the Purchase Contract Agent......................................... 65
Section 11.05 Evidence of Compliance with Conditions Precedent........................................ 66
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Section 11.06 Defaults; Waiver........................................................................ 66
Section 11.07 Purchase Contract Agent's Knowledge of Defaults......................................... 66
Section 11.08 Direction of Purchase Contract Agent.................................................... 66
EXHIBITS
Exhibit A - Form of Corporate Units Certificate
Exhibit B - Form of Treasury Units Certificate
Exhibit C - Instruction to Purchase Contract Agent
Exhibit D - Notice from Purchase Contract Agent to Holders
Exhibit E - Notice to Settle by Separate Cash
Exhibit F - Notice from Purchase Contract Agent to Collateral Agent
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This PURCHASE CONTRACT AGREEMENT dated as of ________ __, ____ is
between PNM Resources, Inc., a New Mexico corporation (the "Company"), and
JPMorgan Chase Bank, a New York banking corporation, acting as purchase contract
agent, attorney-in-fact and trustee for the Holders of Units (as defined herein)
from time to time in any one or more of such capacities (the "Purchase Contract
Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.
All things necessary to make the Purchase Contracts (as defined
herein), when the Certificates (as defined herein) 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 the Holders, and to constitute these presents a valid agreement
of the Company, in accordance with its terms, have been done.
W I T N E S S E T H :
For and in consideration of the premises and the purchase of the Units
by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular,
and 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; and
(d) the following terms have the meanings given to them in
this Section 1.01(d):
"Accounting Event" means the receipt by the audit committee of the
Board of Directors of a written report in accordance with Statement on Auditing
Standards ("SAS") No. 97, "Amendment to SAS No. 50 -Reports on the Application
of Accounting Principles", from the Company's independent auditors, provided at
the request of the management of the Company, to the effect that, as a result of
a change in accounting rules after the date hereof, the Company must either (i)
account for all or any portion of the Purchase Contracts as a derivative under
SFAS 133 (or otherwise xxxx-to-market or measure at fair value all or any
portion of the Purchase Contracts, with changes appearing in the Company's
income statement) or (ii) account for the Units using the if-converted method
under SFAS 128, and that such accounting treatment will cease to apply upon
redemption of the Debt Securities.
"Act" has the meaning, with respect to any Holder, specified in Section
1.02.
"Adjusted Applicable Market Value" has the meaning specified in Section
5.01(a).
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.01(a).
"Applicable Ownership Interests" shall mean, with respect to a
Corporate Unit and the Treasury Portfolio contained in a Corporate Unit, (i) a
___% undivided beneficial ownership interest in $1,000 face amount of U.S.
treasury securities (or principal or interest strips thereof) included in such
Treasury Portfolio that mature on or prior to ________ __, _____, and (ii) (x)
for the scheduled Payment Date on the Debt Securities that occurs on the
Purchase Contract Settlement Date, in the case of a Successful Remarketing prior
to the Final Remarketing Date, or (y) for each scheduled Payment Date on the
Debt Securities that occurs after the Special Event Redemption Date to and
including the Purchase Contract Settlement Date, in the case of a Special Event
Redemption, a ___% undivided beneficial ownership interest in $1,000 face amount
of U.S. treasury securities (or principal or interest strips thereof) included
in such Treasury Portfolio that mature on or prior to the business day
immediately preceding such scheduled Payment Date.
"Applicable Principal Amount" means the aggregate principal amount of
the Debt Securities that are components of Corporate Units.
"Applicants" has the meaning specified 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 3.06.
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"Business Day" or "business day" means any day other than a Saturday or
Sunday or any other day on which banking institutions and trust companies in Xxx
Xxxx Xxxx (xx xxx Xxxxx xx Xxx Xxxx) are permitted or required by applicable law
to close.
"Cash Merger" has the meaning specified in Section 5.04(b)(ii).
"Cash Merger Early Settlement" has the meaning specified in Section
5.04(b)(ii).
"Cash Merger Early Settlement Date" has the meaning specified in
Section 5.04(b)(ii).
"Cash Settlement" has the meaning specified in Section 5.02(b)(i).
"Certificate" means a Corporate Units Certificate or a Treasury Units
Certificate.
"Closing Price" has the meaning specified in Section 5.01(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning specified in Section 1.01(d) of the Pledge
Agreement.
"Collateral Account" has the meaning specified in Section 1.01(d) of
the Pledge Agreement.
"Collateral Agent" means JPMorgan Chase Bank, a New York banking
corporation, 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" means (i) with respect to a Corporate Unit,
(x) the substitution for the Pledged Debt Securities included in such Corporate
Unit by Treasury Securities in an aggregate principal amount at maturity equal
to the aggregate principal amount of such Pledged Debt Securities, or (y) the
substitution for the Pledged Applicable Ownership Interests in the Treasury
Portfolio included in such Corporate Unit by Treasury Securities in an aggregate
principal amount equal to such Pledged Applicable Ownership Interests in the
Treasury Portfolio, or (ii) with respect to a Treasury Unit, (x) the
substitution for the Pledged Treasury Securities included in such Treasury Unit
(if the Applicable Ownership Interests in the Treasury Portfolio has not
replaced the Debt Securities as a component of the Corporate Unit) by Debt
Securities in an aggregate principal amount equal to the aggregate principal
amount at stated maturity of the Pledged Treasury Securities, or (y) the
substitution for the Pledged Treasury Securities included in such Treasury Unit
(if the Applicable Ownership Interests in the Treasury Portfolio has replaced
the Debt Securities as a component of the Corporate Unit) by the appropriate
Applicable Ownership Interests in the Treasury Portfolio.
"Common Stock" means the Common Stock, no par value per share, of the
Company.
"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 specified in Section 5.04(b)(i).
"Contract Adjustment Payments" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract issued in
connection with Corporate Units and Treasury Xxxxx,
0
equal to ___% per annum of the Stated Amount computed on the basis of a 360-day
year of twelve 30-day months.
"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 principally administered, which office at the date
hereof is located at 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Telecopy: 000-000-0000, Attention: Institutional Trust Services.
"Corporate Unit" means the collective rights and obligations of a
Holder of a Corporate Units Certificate in respect of the Debt Securities or an
appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, subject in each case (except for the appropriate Applicable
Ownership Interests specified in clause (ii) of the definition of such term) to
the Pledge thereof, and the related Purchase Contract.
"Corporate Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"Coupon Rate" means the percentage rate per annum at which each Debt
Security will bear interest.
"Current Market Price" has the meaning specified in Section
5.04(a)(viii).
"Custodial Agent" means JPMorgan Chase Bank, a New York banking
corporation, as Custodial Agent under the Pledge Agreement until a successor
Custodial Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "Custodial Agent" shall mean the Person who
is then the Custodial Agent thereunder.
"Debt Securities" means the series of debt securities designated the
___% Notes due ________ __, _____ to be issued by the Company under the
Indenture as of the date hereof.
"Depositary" means a "clearing agency" registered under Section 17A of
the Exchange Act that is designated to act as Depositary for the Units as
contemplated by Sections 3.06 and 3.08.
"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.
"DTC" means The Depository Trust Company.
"Early Settlement" has the meaning specified in Section 5.07(a).
"Early Settlement Amount" has the meaning specified in Section 5.07(b).
"Early Settlement Date" has the meaning specified in Section 5.07(b).
"Early Settlement Rate" has the meaning specified in Section 5.07(c).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
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"Expiration Date" has the meaning specified in Section 1.04(e).
"Expiration Time" has the meaning specified in Section 5.04(a)(vi).
"Failed Final Remarketing" has the meaning specified in Section
5.02(c)(iii).
"Failed Initial Remarketing" has the meaning specified in Section
5.02(a)(i).
"Failed Remarketing" shall mean a Failed Initial Remarketing or a
Failed Final Remarketing.
"Final Remarketing" has the meaning specified in Section 5.02(c)(i).
"Final Remarketing Date" has the meaning specified in Section
5.02(c)(i).
"Final Remarketing Fee" has the meaning specified in Section
5.02(c)(ii).
"Global Certificate" means a Certificate that evidences all or part of
the Units and is registered in the name of the Depositary or a nominee thereof.
"Holder" means, with respect to a Unit, the Person in whose name the
Unit evidenced by a Certificate is registered in the Security Register;
provided, however, that solely for the purpose of determining whether the
Holders of the requisite number of Units have voted on any matter (and not for
any other purpose hereunder), if the Unit remains in the form of one or more
Global Certificates and if the Depositary that is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Units are credited on the record
date, the term "Holder" shall mean such Depositary Participant acting at the
direction of the Beneficial Owners.
"Indemnitee" has the meaning as specified in Section 7.07(c).
"Indenture" means the Indenture, dated as of ________ __, _____,
between the Company and the Indenture Trustee (including any provisions of the
TIA that are deemed incorporated therein), as supplemented an officers'
certificate pursuant to which the Debt Securities will be issued.
"Indenture Trustee" means JPMorgan Chase Bank, a New York banking
corporation, as trustee under the Indenture, or any successor thereto.
"Initial Remarketing" has the meaning specified in Section 5.02(a)(i).
"Initial Remarketing Date" means the third Business Day immediately
preceding ________ __, _____.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by (i) either its Chief Executive Officer, its
President or one of its Vice Presidents, and (ii) either its Corporate Secretary
or one of its Assistant Corporate Secretaries or its Treasurer or one of its
Assistant Treasurers, and delivered to the Purchase Contract Agent.
"non-electing share" has the meaning specified in Section 5.04(b)(i).
"NYSE" has the meaning specified in Section 5.01(a).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board of Directors, a Vice Chairman of the Board of Directors, the President
or a Vice President, and by the Treasurer, an
5
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Purchase Contract Agent; provided, that an
Assistant Treasurer or Assistant Secretary need not be an officer of the Company
under the Company's Bylaws.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company or an Affiliate (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 Units" means, with respect to any Unit and as of the date
of determination, all Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) if a Termination Event has occurred, (x) Corporate Units
for which the underlying Debt Securities or Applicable Ownership
Interests in the Treasury Portfolio have been theretofore deposited
with the Purchase Contract Agent in trust for the Holders of such
Corporate Units and (y) Treasury Units for which Treasury Securities
have been deposited with the Purchase Contract Agent for the Holders of
such Treasury Units;
(ii) Units 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
(iii) Units 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
Units evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
number of the Units have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Units owned by the Company or any Affiliate
of the Company shall be disregarded and deemed not to be Outstanding Units,
except that, in determining whether the Purchase Contract Agent shall be
authorized and protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Units so owned that have been pledged in good faith may
be regarded as Outstanding Units if the pledgee establishes to the satisfaction
of the Purchase Contract Agent the pledgee's right so to act with respect to
such Units and that the pledgee is not the Company or any Affiliate of the
Company.
"Payment Date" means each ___________,___________,___________ and
___________ of each year, commencing ________ __, _____.
"Permitted Investments" has the meaning specified in Section 1.01(d) 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 association 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 Debt
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio, as the case may be, in each case constituting a part of the
Units (it being understood that the appropriate Applicable Ownership Interests
(as specified in clause (ii) of the definition of such term) in the Treasury
Portfolio shall not be subject to the Pledge).
"Pledge Agreement" means the Pledge Agreement, dated as the date
hereof, by and among the Company, the Collateral Agent, the Custodial 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 Units, as amended
from time to time.
"Pledged Applicable Ownership Interests" has the meaning specified in
Section 1.01(d) of the Pledge Agreement.
"Pledged Debt Securities" has the meaning specified in Section 1.01(d)
of the Pledge Agreement.
"Pledged Treasury Securities" has the meaning specified in Section
1.01(d) of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Corporate Units
Certificate or a Predecessor Treasury Units Certificate.
"Predecessor Corporate Units Certificate" of any particular Corporate
Units Certificate means every previous Corporate Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Corporate Units evidenced thereby; and, for the purposes of this
definition, any Corporate Units Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate 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 Corporate Units Certificate.
"Predecessor Treasury Units Certificate" of any particular Treasury
Units Certificate means every previous Treasury Units Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Treasury Units evidenced thereby; and, for the purposes of this definition,
any Treasury Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury 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
Units Certificate.
"Primary Treasury Dealer" shall mean a primary U.S. government
securities dealer in New York City.
"Proceeds" has the meaning specified in Section 1.01(d) of the Pledge
Agreement.
"Prospectus" means the prospectus relating to the delivery of shares of
any securities in connection with an Early Settlement pursuant to Section 5.07
or a Cash Merger Early Settlement of Purchase Contracts pursuant to Section
5.04(b)(ii), in the form in which first filed, or transmitted for filing, with
the Securities and Exchange Commission after the effective date of the
Registration Statement pursuant to Rule 424(b) under the Securities Act,
including the documents incorporated by reference therein as of the date of such
Prospectus.
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"Purchase Contract" means, with respect to any Unit, the contract
forming a part of such Unit and obligating the Company to (i) sell, and the
Holder of such Unit to purchase, shares of Common Stock and (ii) pay the Holder
thereof Contract Adjustment Payments, if any, in each case, on the terms and
subject to the conditions specified in Article V 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 or any subsequent successor who is appointed pursuant to this
Agreement.
"Purchase Contract Settlement Date" means ________ __, _____.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 1.03.
"Purchase Price" has the meaning specified in Section 5.01(a).
"Purchased Shares" has the meaning specified in Section 5.04(a)(vi)(B).
"Put Right" means the right of Holders of Separate Debt Securities and
Holders of Debt Securities that are a component of Corporate Units, if there has
not been a Successful Remarketing prior to the Purchase Contract Settlement
Date, to require the Company to purchase their Debt Securities, on the Purchase
Contract Settlement Date, at a price per Debt Security equal to $____ plus
accrued and unpaid interest to but excluding the Purchase Contract Settlement
Date.
"Quotation Agent" means any Primary Treasury Dealer selected by the
Company.
"Record Date" for any distribution and Contract Adjustment Payment
payable on any Payment Date means, as to any Global Certificate or any other
Certificate, the first business day of the calendar month in which the relevant
Payment Date falls; provided that the Company may, at its option, select any
other day as the Record Date for any Payment Date so long as such Record Date
selected is more than one Business Day but less than 60 Business Days prior to
such Payment Date (and which shall correspond to the related record date for the
Debt Securities).
"Redemption Amount" means, for each Debt Security, an amount equal to
the product of the principal amount of that Debt Security and a fraction, the
numerator of which is the Treasury Portfolio Purchase Price and the denominator
of which is the Applicable Principal Amount.
"Redemption Price" means, for each Debt Security, the Redemption Amount
plus any accrued and unpaid interest on such Debt Security to but excluding the
Special Event Redemption Date.
"Reference Dealer" means a dealer engaged in trading of convertible
securities.
"Reference Price" has the meaning specified in Section 5.01(a)(ii).
"Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of any securities in connection with an Early Settlement on the Early
Settlement Date or a Cash Merger Early Settlement of Purchase Contracts on the
Cash Merger Early Settlement Date under Section 5.04(b)(ii), including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in such registration statement, and any post-effective amendments
thereto.
8
"Remarketing" means the remarketing of the Debt Securities by the
Remarketing Agent pursuant to the Remarketing Agreement.
"Remarketing Agent" has the meaning set forth in the Remarketing
Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as of
________ __, _____ among the Company, ___________, as Remarketing Agent and the
Purchase Contract Agent, as amended from time to time.
"Remarketing Date" means the Initial Remarketing Date or the Final
Remarketing Date.
"Remarketing Fee" has the meaning specified in Section 5.02(a)(i).
"Remarketing Per Debt Security Price" means the Treasury Portfolio
Purchase Price divided by the number of Debt Securities held as components of
Corporate Units and remarketed in the Initial Remarketing or the Final
Remarketing, as the case may be.
"Reorganization Event" has the meaning specified in Section 5.04(b)(i).
"Reset Rate" means the interest rate per annum on the Debt Securities
(i) in the case of a Successful Remarketing prior to the Final Remarketing Date,
as determined by the Remarketing Agent as necessary to remarket the remarketed
Debt Securities at a price per remarketed debt security such that the aggregate
price for the remarketed Debt Securities is equal to approximately 100.50% of
the sum of the Treasury Portfolio Purchase Price and Separate Debt Securities
Purchase Price, and (ii) in the case of a Successful Remarketing on the Final
Remarketing Date, as the rate necessary to remarket the remarketed Debt
Securities at a price per remarketed debt security such that the aggregate price
for the remarketed Debt Securities is equal to approximately 100.50% of the
aggregate principal amount of the remarketed Debt Securities; provided that if
there are no Corporate Units outstanding and none of the Holders elect to have
Separate Debt Securities held by them remarketed, or in the case of a Failed
Remarketing, the interest rate payable on the Debt Securities will not be reset
and the interest rate payable on the Debt Securities shall continue to be the
Coupon Rate; provided further that in no event shall the Reset Rate exceed the
maximum rate, if any, permitted by applicable law.
"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 Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Securities Intermediary" means JPMorgan Chase Bank, a New York banking
corporation, 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 or any subsequent successor who is
appointed pursuant to the Pledge Agreement.
"Security Register" and "Securities Registrar" have the respective
meanings specified in Section 3.05.
9
"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on a parity in right of payment with or subordinate in right
of payment to the Contract Adjustment Payments.
"Separate Debt Securities" means Debt Securities that are no longer a
component of Corporate Units.
"Separate Debt Securities Purchase Price" means the amount in cash
equal to the Remarketing Per Debt Security Price multiplied by the number of
Separate Debt Securities remarketed in the Initial Remarketing.
"Settlement Rate" has the meaning specified in Section 5.01(a).
"Special Event" means [either an Accounting Event or] a Tax Event.
"Special Event Redemption" means the redemption of the Debt Securities
pursuant to the Indenture following the occurrence of a Special Event.
"Special Event Redemption Date" means the date upon which a Special
Event Redemption is scheduled to occur pursuant to the Indenture.
"Stated Amount" means $_____, which is equal to the stated amount of a
Corporate Unit and the face amount of a Treasury Unit.
"Successful Final Remarketing" has the meaning specified in Section
5.02(c)(ii).
"Successful Initial Remarketing" has the meaning specified in Section
5.02(a)(i).
"Successful Remarketing" means a Successful Initial Remarketing or a
Successful Final Remarketing.
"Tax Event" means the receipt by the Company of an opinion of counsel,
rendered by a law firm having a recognized national law practice, to the effect
that, as a result of any amendment to, change in or announced proposed change in
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative decision, pronouncement, judicial decision or action
interpreting or applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement, action or decision is
announced on or after the date hereof, there is more than an insubstantial
increase in the risk that interest payable by the Company on the Debt Securities
is not, or within 90 days of the date of such opinion, will not be, deductible
by the Company, in whole or in part, for United States federal income tax
purposes.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following
events:
(iv) 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 if such judgment, decree or
order shall have been entered more than 60 days prior to the
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Purchase Contract Settlement Date, such decree or order shall have
continued undischarged and unstayed for a period of 60 days;
(v) at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the termination or
liquidation of its affairs, shall have been entered and if such
judgment, decree or order shall have been entered more than 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
(vi) 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 specified in Section
5.01(a).
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor.
"Trading Day" has the meaning specified in Section 5.01(a).
"Trailing 12 Month Period" has the meaning specified in Section
5.04(a)(v).
"Treasury Portfolio" means a portfolio of (i) U.S. treasury securities
(or principal or interest strips thereof) that mature on or prior to ________
__, _____ in an aggregate amount equal to the Applicable Principal Amount, and
(ii) (x) in the case of a Successful Remarketing prior to the Final Remarketing
Date, for the scheduled Payment Date on the Debt Securities that occurs on the
Purchase Contract Settlement Date, U.S. treasury securities (or principal or
interest strips thereof) that mature on or prior to ________ __, _____ in an
aggregate amount at maturity equal to the aggregate interest payment (assuming
no reset of the interest rate) that would have been due on the Purchase Contract
Settlement Date on the Applicable Principal Amount, and (y) in the case of a
Special Event Redemption, for each scheduled Payment Date that occurs after the
Special Event Redemption Date to and including the Purchase Contract Settlement
Date, U.S. treasury securities (or principal or interest strips thereof) that
mature on or prior to the business day immediately preceding such scheduled
Payment Date in an aggregate amount at maturity equal to the aggregate interest
payment (assuming no reset of the interest rate) that would have been due on
such scheduled Payment Date on the Applicable Principal Amount.
"Treasury Portfolio Purchase Price" means the lowest aggregate ask-side
price quoted by a Primary Treasury Dealer to the Quotation Agent between 9:00
a.m. and 11:00 a.m. (New York City time) (i) in the case of a Special Event
Redemption, on the third Business Day immediately preceding the Special Event
Redemption Date for the purchase of the applicable Treasury Portfolio for
settlement on the Special Event Redemption Date, and (ii) in the case of any
Successful Remarketing prior to the Final Remarketing Date, on the date of such
Successful Remarketing for the purchase of the applicable Treasury Portfolio for
settlement on the third Business Day immediately following the date of such
Successful Remarketing.
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"Treasury Securities" means zero-coupon U.S. treasury securities that
mature on ________ __, _____ (CUSIP No. __________).
"Treasury Unit" means, following the substitution of Treasury
Securities for Pledged Debt Securities or for the Pledged Applicable Ownership
Interests in the Treasury Portfolio as collateral to secure a Holder's
obligations under a Purchase Contract, the collective rights and obligations of
a Holder of a Treasury Units Certificate in respect of such Treasury Securities,
subject to the Pledge thereof, and the related Purchase Contract.
"Treasury Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Units specified
on such certificate.
"Underwriters" means the underwriters identified in Schedule I to the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated
________ __, _____, among the Company and the Underwriters, relating to the
issuance of Corporate Units by the Company.
"Unit" means a Corporate Unit or a Treasury Unit, as the case may be.
"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 1.02 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 under 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 (other than the Officers'
Certificate provided for in Section 10.05) 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;
(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 1.03 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
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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 its 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 certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.04 Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by 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 7.01) 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.
(c) The ownership of Units shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Unit shall bind every future
Holder of the same Unit and the Holder of every Certificate evidencing such Unit
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
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 Units entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made or
taken by Holders of Units. If any record date is set pursuant to this paragraph,
the Holders of the Outstanding Corporate Units and the Outstanding Treasury
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 Corporate Units or the
Treasury 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 Units on such record date. Nothing in
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this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding Units on the date
such action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Purchase Contract Agent in writing and to each Holder of Units in
the manner set forth in Section 1.04
With respect to any record date set pursuant to this Section 1.04(e),
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
Units in the manner set forth in Section 1.06, 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 1.05 Notices. Any notice, consent, waiver, communication or Act
of Holders is duly given if in writing and delivered in Person or mailed by
first-class mail (registered or certified, return receipt requested), telecopier
(with 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:
(a) the Purchase Contract Agent by any Holder or by the
Company shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, to the Agent at JPMorgan Chase
Bank, 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy:
000-000-0000, Attention: Institutional Trust Services, or at any other address
previously furnished in writing by the Agent to the Holders and the Company;
(b) the Company by the Purchase Contract Agent or by any
Holder shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, to the Company at PNM
Resources, Inc., Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, Telecopy: (505)
241-2368, Attention: Chief Financial Officer, or at any other address previously
furnished in writing to the Agent by the Company, with a copy to Xxxxxxx &
XxXxxx, P.A., 000 Xxxxxx Xxxxxx, X.X., Xxxxxxxxxxx, Xxx Xxxxxx 00000, Attention:
Xxxxxxx X. Xxxxx, Esq.;
(c) the Collateral Agent by the Purchase Contract Agent, the
Company or any Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed in
writing and personally delivered or mailed, first-class postage prepaid,
addressed to the Collateral Agent at JPMorgan Chase Bank, 0 Xxx Xxxx Xxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopy: 000-000-0000, Attention:
Institutional Trust Services, or at any other address previously furnished in
writing by the Collateral Agent to the Agent, the Company and the Holders; or
(d) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Indenture Trustee at
14
JPMorgan Chase Bank, 4 New York Plaza, 15th Floor, New York, New York 10004,
Telecopy: 000-000-0000, Attention: Institutional Trust Services, or at any other
address previously furnished in writing by the Indenture Trustee to the Company.
The Purchase Contract Agent shall send to the Indenture Trustee at the
telecopier number set forth above a copy of any notices in the form of Exhibits
C, D, E or F it sends or receives.
Section 1.06 Notice to Holders; Waiver. Where this Agreement provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at its
address as it appears in the Security 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 1.07 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.08 Successors and Assigns. All covenants and agreements in
this Agreement by the Company and the Purchase Contract Agent shall bind their
respective successors and assigns, whether so expressed or not.
Section 1.09 Separability Clause. In case any provision in this
Agreement or in the Units shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.
Section 1.10 Benefits of Agreement. Nothing in this Agreement or in the
Units, 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 Units evidenced by their Certificates by their acceptance of delivery of
such Certificates.
Section 1.11 GOVERNING LAW. THIS AGREEMENT AND THE UNITS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS THAT WOULD REQUIRE APPLICATION OF
THE LAW OF ANY OTHER JURISDICTION.
Section 1.12 Legal Holidays. In any case where any Payment Date shall
not be a Business Day (notwithstanding any other provision of this Agreement or
the Units), Contract Adjustment Payments or other distributions shall not be
paid on such date, but Contract Adjustment Payments or such other distributions
shall be paid on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, provided that no interest shall accrue or be
payable by the Company or to any Holder for the period from and after any such
Payment Date. In any case where the Purchase Contract Settlement Date or any
Early Settlement Date or Cash Merger Early Settlement Date shall not be a
15
Business Day (notwithstanding any other provision of this Agreement or the
Units), Purchase Contracts shall not be performed and Early Settlement and Cash
Merger Early Settlement shall not be effected on such date, but Purchase
Contracts shall be performed or Early Settlement or Cash Merger Early Settlement
shall be effected, as applicable, on the next succeeding Business Day with the
same force and effect as if made on such Purchase Contract Settlement Date,
Early Settlement Date or Cash Merger 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 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
Section 1.16 No Waiver. No failure on the part of the Company, the
Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or
any of their respective agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Company, the Collateral Agent, the Securities Intermediary or any of their
respective agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
ARTICLE II
CERTIFICATE FORMS
Section 2.01 Forms of Certificates Generally. The Certificates
(including the form of Purchase Contract forming part of each Unit evidenced
thereby) shall be in substantially the form set forth in Exhibit A hereto (in
the case of Certificates evidencing Corporate Units) or Exhibit B hereto (in the
case of Certificates evidencing Treasury 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 Units 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 manner as determined by the
officers of the Company executing the Units 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:
16
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), THE
DEPOSITARY OR ANOTHER 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.
Section 2.02 Form of Purchase Contract Agent's Certificate of
Authentication. The form of the Purchase Contract Agent's certificate of
authentication of the Units shall be in substantially the form set forth on the
form of the applicable Certificates.
ARTICLE III
THE UNITS
Section 3.01 Amount; Form and Denominations. The aggregate number of
Units evidenced by Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to _____________ (or _____________ if the
over-allotment option granted to the Underwriters pursuant to the Underwriting
Agreement is exercised in full), except for Certificates authenticated, executed
and delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Sections 3.04, 3.05, 3.09, 3.10, 3.13, 3.14 or
8.05.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
Section 3.02 Rights and Obligations Evidenced by the Certificates. Each
Corporate Units Certificate shall evidence the number of Corporate Units
specified therein, with each such Corporate Unit representing (1) the ownership
by the Holder thereof of a beneficial interest in a Debt Security or the
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
subject to the Pledge of such Debt Security or the Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in 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 is hereby
authorized, as attorney-in-fact for, and on behalf of, the Holder of each
Corporate Unit, to pledge, pursuant to the Pledge Agreement, the Debt Security
or the
17
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, if any, forming a part of such Corporate
Unit, to the Collateral Agent for the benefit of the Company, and to grant to
the Collateral Agent, for the benefit of the Company, a security interest in the
right, title and interest of such Holder in such Debt Security or the Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, if any, to secure the obligation of the Holder under
each Purchase Contract to purchase shares of Common Stock. Upon the formation of
a Treasury Unit pursuant to Section 3.13, each Treasury Unit Certificate shall
evidence the number of Treasury Units specified therein, with each such Treasury
Unit representing (1) the ownership by the Holder thereof of a ___ undivided
beneficial interest in a Treasury Security with a principal amount equal to
$1,000, subject to the Pledge of such interest 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 is hereby authorized, as attorney-in-fact
for, and on behalf of, the Holder of each Treasury Unit, to pledge, pursuant to
the Pledge Agreement, such Holder's interest in the Treasury Security forming a
part of such Treasury Unit to the Collateral Agent, for the benefit of the
Company, and to grant to the Collateral Agent, for the benefit of the Company, a
security interest in the right, title and interest of such Holder in such
Treasury Security to secure the obligation of the Holder under each Purchase
Contract to purchase shares of Common Stock.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Unit 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 stockholder in respect of the meetings of
stockholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a stockholder of the Company.
Section 3.03 Execution, Authentication, Delivery and Dating. Subject to
the provisions of Section 3.13 and Section 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 of Directors, its Chief Executive Officer, its President,
its Treasurer, or one of its Vice Presidents or by any other officer or employee
of the Company who is authorized by a Board Resolution to execute the
Certificates on behalf of the Company. 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 officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contract evidenced by such
Certificate. Each Certificate shall be dated the date of its
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authentication. No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized officer 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 3.04 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 Corporate Units or Treasury 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
Units 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 Units evidenced thereby as
definitive Certificates.
Section 3.05 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
Corporate Units and Treasury 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 Corporate
Units or Treasury Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate Units or Treasury 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 Corporate
Units or Treasury Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations under this Agreement as the
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Corporate Units or Treasury 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 3.04, 3.06 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the 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 earliest to occur of any Early Settlement
Date with respect to such Certificate, any Cash Merger Early Settlement Date
with respect to such Certificate, 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 (including upon
any Cash Settlement) or an Early Settlement Date or a Cash Merger Early
Settlement Date with respect to such other Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such other
Certificate; or
(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Debt Securities, the
Treasury Securities, or the appropriate Applicable Ownership Interests
in 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 Section 3.15 and Article V hereof.
Section 3.06 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 3.09. 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 3.09:
(i) the provisions of this Section 3.06 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, without limitation,
making Contract Adjustment Payments, if any, and receiving approvals,
votes or consents hereunder) as the Holder of the Units and the sole
holder of the Global Certificates and shall have no obligation to the
Beneficial Owners;
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(iii) to the extent that the provisions of this Section
3.06 conflict with any other provisions of this Agreement, the
provisions of this Section 3.06 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. The Depositary will make
book entry transfers among Depositary Participants and receive and
transmit payments of Contract Adjustment Payments to such Depositary
Payments. Transfers of securities evidenced by Global Certificates
shall be made through the facilities of the Depositary, and any
cancellation of, or increase or decrease in the number of, such
securities (including the creation of Treasury Units and the recreation
of Corporate Units pursuant to Sections 3.13 and 3.14, respectively)
shall be accomplished by making appropriate annotations on the Schedule
of Increases and Decreases for such Global Certificate.
Section 3.07 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 Units 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 3.08 Appointment of Successor Depositary. If the Depositary
elects to discontinue its services as securities depositary with respect to the
Units, the Company may, in its sole discretion, appoint a successor Depositary
with respect to the Units.
Section 3.09 Definitive Certificates. If:
(i) the Depositary notifies the Company that it is
unwilling or unable to continue its services as securities depositary
with respect to the Units and no successor Depositary has been
appointed pursuant to Section 3.08 within 90 days after such notice; or
(ii) the Depositary ceases to be a "clearing agency"
registered under Section 17A of the Exchange Act when the Depositary is
required to be so registered to act as the Depositary and so notifies
the Company, and no successor Depositary has been appointed pursuant to
Section 3.08 within 90 days after such notice; or
(iii) the Company determines in its discretion that the
Global Certificates shall be exchangeable for definitive Certificates,
then (x) definitive Certificates shall be prepared by the Company with
respect to such Units and delivered to the Purchase Contract Agent and
(y) upon surrender of the Global Certificates representing the Units 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 and the Purchase Contract Agent shall not be liable for any
delay in delivery of such instructions and may conclusively rely on and
shall be authorized and protected in relying on, such instructions.
Each definitive Certificate so delivered shall evidence Units 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 at the cost of the Holder, evidencing
the same number of Corporate Units or Treasury Units, as the case may be, and
bearing a Certificate number not
21
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 at the cost of the Holder as may be required by them to hold each of
them and any agent of any of them harmless, then, in the absence of notice to
the Company or the 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 Corporate Units or Treasury 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 earliest of any Early Settlement Date with respect to
such lost or mutilated Certificate, any Cash Merger Early Settlement Date with
respect to such lost or mutilated Certificate, 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 or Early
Settlement Date or Cash Merger Early Settlement Date with respect to
such lost, stolen, destroyed or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such Certificate; or
(ii) if a Cash Settlement with respect to such lost or
mutilated Certificate or if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Debt
Securities, the Treasury Securities or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of
such term) in 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 Section 3.15 and Article V
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 fees and expenses (including, without
limitation, 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 Units
evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and
the Units 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
Units evidenced thereby for purposes of (subject to any applicable record date)
any payment
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or distribution on the Debt Securities or on the Applicable Ownership Interests
(as specified in clause (ii) of the definition of such term) in the Treasury
Portfolio (if any), as applicable, payment of Contract Adjustment Payments and
performance of the Purchase Contracts and for all other purposes whatsoever in
connection with such Units, whether or not such payment, distribution, or
performance 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. None of the Company, the Purchase Contract Agent or any agent of
the Company or the Purchase Contract Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of a Global Certificate or maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Section 3.12 Cancellation. All Certificates surrendered for delivery of
shares of Common Stock on or after the Purchase Contract Settlement Date or upon
the transfer of Debt Securities, or for delivery of the appropriate Applicable
Ownership Interests in the Treasury Portfolio or Treasury Securities, as the
case may be, after the occurrence of a Termination Event or pursuant to a Cash
Settlement, an Early Settlement or a Cash Merger Early Settlement, or upon the
registration of transfer or exchange of a Unit, or a Collateral Substitution or
the recreation of Corporate Units shall, if surrendered to any Person other than
the Purchase Contract Agent, be delivered to the Purchase Contract Agent along
with appropriate written instructions regarding the cancellation thereof 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 an 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 disposed of in
accordance with its customary practices. 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 with appropriate written
instructions regarding the cancellation thereof.
Section 3.13 Creation of Treasury Units by Substitution of Treasury
Securities. Unless the Treasury Portfolio has replaced the Debt Securities as a
component of the Corporate Units, and subject to the conditions set forth in
this Agreement, a Holder may, at any time from and after the date of this
Agreement and prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, effect a Collateral
Substitution and separate the Debt Securities from the related Purchase
Contracts in respect of such Holder's Corporate Units by substituting for such
Debt Securities, Treasury Securities in an aggregate principal amount at
maturity equal to the aggregate principal amount of such Debt Securities;
provided that Holders may make Collateral Substitutions only in integral
multiples of ___ Corporate Units. To effect such substitution, the Holder must:
(1) deposit with the Securities Intermediary Treasury Securities having
an aggregate principal amount at maturity equal to the aggregate principal
amount of the Debt Securities comprising part of such Corporate Units; and
23
(2) transfer the related Corporate 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 deposited 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
Debt Securities underlying such Corporate Units, whereupon the Purchase Contract
Agent shall promptly give such 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 Debt Securities from the Pledge, free and clear of
the Company's security interest therein, and the transfer of such Debt
Securities to the Purchase Contract Agent on behalf of the Holder. Upon receipt
of such Debt Securities, the Purchase Contract Agent shall promptly:
(i) cancel the related Corporate Units;
(ii) transfer the Debt Securities to the Holder (such Debt
Securities shall be tradeable as a separate security, independent of
the resulting Treasury Units); and
(iii) authenticate, execute on behalf of such Holder and
deliver Treasury Units in book-entry form or, if applicable, in the
form of a Treasury Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Corporate Units.
Holders who elect to separate the Debt Securities from the related
Purchase Contracts and to substitute Treasury Securities for such Debt
Securities shall be responsible for any fees or expenses (including, without
limitation, fees and expenses payable to the Collateral Agent for its services
as Collateral Agent) in respect of the substitution, and neither the Company nor
the Purchase Contract Agent shall be responsible for any such fees or expenses.
If the Treasury Portfolio has replaced the Debt Securities as a
component of the Corporate Units and subject to the conditions set forth in this
Agreement, a Holder may, at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, substitute Treasury
Securities for the Applicable Ownership Interests in the Treasury Portfolio
included in such Corporate Units, but only in integral multiples of ______
Corporate Units. In such an event, the Holder shall transfer Treasury Securities
having an aggregate principal amount at maturity equal to the aggregate Stated
Amount of the Purchase Contracts underlying such Corporate Units to the
Collateral Agent, and the Purchase Contract Agent shall instruct the Collateral
Agent to release the Pledge of and transfer to the Holder the appropriate
Applicable Ownership Interests in the Treasury Portfolio in the manner set forth
above.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Corporate Units or
fails to deliver Corporate Units Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Securities Intermediary, any
distributions on the Debt Securities or Applicable Ownership Interests in the
Treasury Portfolio constituting a part of such Corporate Units shall be held in
the name of the Purchase Contract Agent or its nominee in trust for the benefit
of such Holder, until such Corporate Units are so transferred or the Corporate
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
Corporate Units Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Purchase Contract Agent and the
Company.
24
Except as described in Section 5.02 or in this Section 3.13 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Corporate Unit remains in effect, such Corporate Unit shall not be
separable into its constituent parts, and the rights and obligations of the
Holder in respect of the Debt Securities or Applicable Ownership Interests in
the Treasury Portfolio, as the case may be, and the Purchase Contract comprising
such Corporate Units may be acquired, and may be transferred and exchanged, only
as a Corporate Unit.
Section 3.14 Recreation of Corporate Units. Unless the Treasury
Portfolio has replaced the Debt Securities as a component of the Corporate
Units, and subject to the conditions set forth in this Agreement, a Holder of
Treasury Units may recreate Corporate Units at any time on or prior to 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date; provided that Holders of Treasury Units may
only recreate Corporate Units in integral multiples of __ Treasury Units. To
recreate Corporate Units, the Holder must:
(1) transfer to the Securities Intermediary Debt Securities having an
aggregate principal amount equal to the aggregate principal amount at stated
maturity of the Treasury Securities comprising part of the Treasury Units; and
(2) transfer the related Treasury 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 Debt Securities to the Securities Intermediary and (ii)
requesting that the Purchase Contract Agent instruct the Collateral Agent to
release the Treasury Securities underlying such Treasury 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 Debt 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 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 thereof to
the Purchase Contract Agent on behalf of the Holder. Upon receipt of such
Treasury Securities, the Purchase Contract Agent shall promptly:
(i) cancel the related Treasury Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver Corporate Units in book-entry form or, if applicable, in the
form of a Corporate Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Treasury Units.
Holders who elect to recreate Corporate Units shall be responsible for
any fees or expenses (including, without limitation, fees and expenses payable
to the Collateral Agent for its services as Collateral Agent) in respect of the
recreation, and neither the Company nor the Purchase Contract Agent shall be
responsible for any such fees or expenses.
If the Treasury Portfolio has replaced the Debt Securities as a
component of the Corporate Units, a Holder of Treasury Units may at any time on
or prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date substitute the Applicable Ownership Interests in the Treasury
Portfolio in an amount such that the aggregate principal amount at maturity of
the portion of such Applicable Ownership Interests specified in clause (i) of
the definition of such term is equal to the
25
aggregate Stated Amount of the Purchase Contract underlying such Treasury
Units, for Treasury Securities, but only in multiples of _____ Treasury Units.
In such an event, the Holder shall transfer the appropriate Applicable
Ownership Interests in the Treasury Portfolio to the Collateral Agent, and the
Purchase Contract Agent shall instruct the Collateral Agent to release the
Pledge of and transfer to the Holder Treasury Securities in the manner set
forth above.
Except as provided in Section 5.02 or in this Section 3.14 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Treasury Unit remains in effect, such Treasury Unit shall not be
separable into its constituent parts and the rights and obligations of the
Holder of such Treasury Unit in respect of the _____ of a Treasury Security and
the Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged, only as a Treasury 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 Debt Securities, the appropriate Applicable
Ownership Interests in the Treasury Portfolio or the Treasury Securities, as the
case may be, underlying the Corporate Units and the Treasury 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 Debt Securities,
the appropriate Applicable Ownership Interests in the Treasury Portfolio or the
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 Corporate Units or the Treasury Units
or delivery of a Corporate Units Certificate or Treasury Units Certificate to
the Purchase Contract Agent with such transfer instructions, the Purchase
Contract Agent shall transfer the Debt Securities, the appropriate Applicable
Ownership Interests in the Treasury Portfolio or the Treasury Securities, as the
case may be, underlying such Corporate Units or Treasury 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 Corporate Units or
Treasury Units fails to effect such transfer or delivery, the Debt Securities,
the appropriate Applicable Ownership Interests in the Treasury Portfolio or the
Treasury Securities, as the case may be, underlying such Corporate Units or
Treasury 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 Corporate Units or Treasury
Units or surrender of the Corporate Units Certificate or Treasury Units
Certificate or the receipt by the Company and the Purchase Contract
Agent from such Holder of satisfactory evidence that such Corporate
Units Certificate or Treasury 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
(ii) the expiration of the time period specified in the
abandoned property laws of the relevant State in which the Purchase
Contract Agent holds such property.
Section 3.16 No Consent to Assumption. Each Holder of a Unit, 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 in bankruptcy, receiver,
liquidator or a person or entity performing similar functions, its trustee in
the event that the Company becomes a debtor under the Bankruptcy Code or subject
to other similar state or federal law providing for reorganization or
liquidation.
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ARTICLE IV
THE DEBT SECURITIES AND APPLICABLE
OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
Section 4.01 Interest Payments; Rights To Interest Payments Preserved.
Any payment of interest on any Debt Security or on the appropriate Applicable
Ownership Interests (as specified in clause (ii) of the definition of such term)
in 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 Corporate Units Certificate (or one or more
Predecessor Corporate Units Certificates) of which such Debt Security or the
appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, forms a part is registered at the close of business on the Record
Date for such Payment Date.
Each Corporate Units Certificate evidencing Debt Securities or the
appropriate Applicable Ownership Interests in the Treasury Portfolio delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Corporate Units Certificate shall carry the right to accrued
and unpaid interest or distributions, and to accrue future interest or
distributions, which were carried by the Debt Securities or the appropriate
Applicable Ownership Interests in the Treasury Portfolio underlying such other
Corporate Units Certificate.
In the case of any Corporate Unit with respect to which (A) Cash
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.02(b) or Section 5.02(e) hereof, (B) Early Settlement of the
underlying Purchase Contract is properly effected pursuant to Section 5.07
hereof, (C) Cash Merger Early Settlement of the underlying Purchase Contract is
properly effected pursuant to Section 5.04(b)(ii) hereof, (D) a Collateral
Substitution is properly effected pursuant to Section 3.13, or (E) a Successful
Initial Remarketing occurs with respect to the Debt Security that is part of
such Corporate Unit, in each case on a date that is after any Record Date and on
or prior to the next succeeding Payment Date, interest on the Debt Securities or
distributions with respect to the appropriate Applicable Ownership Interests in
the Treasury Portfolio, as the case may be, underlying such Corporate Unit
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement, Early Settlement, Cash Merger Early
Settlement, Collateral Substitution or Successful Initial Remarketing, and such
payment or distributions shall, subject to receipt thereof by the Purchase
Contract Agent, be payable to the Person in whose name the Corporate Units
Certificate (or one or more Predecessor Corporate Units Certificates) was
registered at the close of business on the Record Date. Except as otherwise
expressly provided in the immediately preceding paragraph, in the case of any
Corporate Units with respect to which Cash Settlement, Early Settlement or Cash
Merger Early Settlement of the underlying Purchase Contract is properly
effected, or with respect to which a Collateral Substitution has been effected,
payment of interest on the related Debt Securities or distributions with respect
to the appropriate Applicable Ownership Interests in the Treasury Portfolio, as
the case may be, that would otherwise be payable or made after the Purchase
Contract Settlement Date, Early Settlement Date, Cash Merger Early Settlement
Date or the date of the Collateral Substitution, as the case may be, shall not
be payable hereunder to the Holder of such Corporate Units; provided, however,
that to the extent that such Holder continues to hold Separate Debt Securities
or Applicable Ownership Interests in the Treasury Portfolio that formerly
comprised a part of such Holder's Corporate Units, such Holder shall be entitled
to receive the payment of interest on such Separate Debt Securities or
distributions on the Applicable Ownership Interests in the Treasury Portfolio.
Section 4.02 Notice and Voting. Under and subject to 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 Debt
Securities, but only to the extent instructed in writing by the Holders as
described
27
below. Upon receipt of notice of any meeting at which holders of Debt
Securities are entitled to vote or upon any solicitation of consents, waivers
or proxies of holders of Debt Securities, the Purchase Contract Agent shall, as
soon as practicable thereafter, mail, first-class, postage pre-paid, to the
Holders of Corporate 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 Debt Securities, 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 Debt Securities underlying their
Corporate Units; and
(iii) stating the manner in which such instructions may be
given.
Upon the written request of the Holders of Corporate 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 Debt
Securities, 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 Corporate Unit, the Purchase Contract Agent shall
abstain from voting the Debt Securities underlying such Corporate Unit.
The Company hereby agrees, if applicable, to solicit Holders of
Corporate Units to timely instruct the Purchase Contract Agent in order
to enable the Purchase Contract Agent to vote such Debt Securities.
The Holders of Corporate Units and Treasury Units shall have no voting
or other rights in respect of Common Stock.
Section 4.03 Special Event Redemption. (a) If the Company elects to
redeem the Debt Securities on any Payment Date following the occurrence of a
Special Event as permitted by the Indenture, it shall notify the Collateral
Agent in writing that a Special Event has occurred and that it intends to redeem
the Debt Securities on the Special Event Redemption Date. On the Special Event
Redemption Date, the Collateral Agent shall surrender the Pledged Debt
Securities to the Indenture Trustee against delivery of an amount equal to the
aggregate Redemption Price for such Pledged Debt Securities. Thereafter,
pursuant to the terms of the Pledge Agreement, the Collateral Agent shall cause
the Securities Intermediary to apply an amount equal to the aggregate Redemption
Amount of such funds to purchase on behalf of the Holders of Corporate Units the
Treasury Portfolio and promptly remit the remaining portion of such funds to the
Purchase Contract Agent for payment to the Holders of such Corporate Units.
(b) Upon the occurrence of a Special Event Redemption, (i) the
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio will be substituted as Collateral for the
Pledged Debt Securities 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 Corporate Unit to purchase the Common Stock of the Company under the
Purchase Contract constituting a part of such Corporate Unit, (ii) the
Applicable Ownership Interests (as specified in clause (ii) of the definition of
such term) in the Treasury Portfolio will be transferred to the Purchase
Contract Agent for the benefit of the Holders of such Corporate Units, (iii) the
Holders of Corporate Units and the Collateral Agent shall have such security
interest rights and obligations with respect to such Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) as the
Holders of Corporate Units and the Collateral Agent had in respect of the Debt
Securities, as the case may be, subject to the Pledge thereof as provided
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in the Pledge Agreement, and (iv) any reference herein to the Debt Securities
shall be deemed to be a reference to such Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio. The Company may cause to be made in any Corporate Units Certificates
thereafter to be issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the substitution of the Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio for Debt Securities as Collateral.
(c) The Holders of Separate Debt Securities shall directly
receive the Redemption Price for the Separate Debt Securities.
ARTICLE V
THE PURCHASE CONTRACTS
Section 5.01 Purchase of Shares of Common Stock. (a) Each Purchase
Contract shall obligate the Holder of the related Units to purchase, and the
Company to sell, on the Purchase Contract Settlement Date at a price equal to
the Stated Amount (the "Purchase Price"), a number of newly issued shares of
Common Stock (subject to Section 5.09) equal to the Settlement Rate unless an
Early Settlement, a Cash Merger Early Settlement or a Termination Event with
respect to the Units of which such Purchase Contract is a part shall have
occurred. The "Settlement Rate" is equal to:
(i) If the Adjusted 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 Adjusted 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 Contact
having a value equal to the Stated Amount divided by the Adjusted
Applicable Market Value;
(iii) if the Adjusted 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 5.04 (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, subject to adjustments set forth under Section 5.04 hereof.
The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (i), (ii), (iii), (iv),
(v), (vi), (vii) or (x) of Section 5.04(a), the Applicable Market Value, and
(ii) at the time of and after any adjustment of the Settlement Rate pursuant to
paragraph (i), (ii), (iii), (iv), (v), (vi), (vii) or (x) of Section 5.04(a),
the Applicable Market Value multiplied by a fraction of which the numerator
shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (i), (ii), (iii), (iv), (v), (vi), (vii) or (x) of Section 5.04(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 (i), (ii), (iii), (iv), (v), (vi), (vii) or (x) of Section 5.04(a)
during the period taken into consideration for determining the Applicable Market
Value, appropriate and customary adjustments shall be made to the Settlement
Rate.
29
The "Closing Price" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the close of the
principal trading session (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 (or, if no closing price
is reported, the last reported sale price) per share as reported in the
composite transactions for the principal United States national or
regional 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 last reported sale
price per share as reported by The Nasdaq National Market, Inc.;
(iv) if the Common Stock is not so reported by the Nasdaq
National Market, Inc., 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 the bid price referred to in clause (iv) is not
available, the market value of Common Stock on such date as determined
by a nationally recognized independent investment banking firm retained
by the Company for purposes of determining the Closing Price.
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.
(b) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance of such Unit:
(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, without limitation, 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 Contract for so long as such Holder remains a Holder of a
Corporate Unit or a Treasury Unit;
(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 and in its name as its attorney-in-fact;
(vi) consents to, and agrees to be bound by, the Pledge of
such Holder's right, title and interest in and to the Collateral
Account, including the Debt Securities and the Applicable Ownership
Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio or the Treasury Securities pursuant to the
Pledge Agreement; and
30
(vii) for United States federal, state and local income and
franchise tax purposes, agrees to (i) treat an acquisition of the
Corporate Units as an acquisition of the Debt Security and Purchase
Contract constituting the Corporate Units, (ii) treat the Debt
Securities as indebtedness of the Company and (iii) treat itself as the
owner of the applicable interest in the Collateral Account, including
the Debt Securities and the Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of
such term) or the Treasury Securities, provided that upon a Termination
Event, the rights of the Holder of such Units under the Purchase
Contract may be enforced without regard to any other rights or
obligations.
(c) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees that to the extent and in the
manner provided in Section 5.02 hereof and the provisions of the Pledge
Agreement, but subject to the terms thereof, Proceeds of the Debt Securities,
the Treasury Securities or the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio, as
applicable, 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 Proceeds.
(d) 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, except as may be required by the Purchase Contract Agent) by
the terms of this Agreement, the Purchase Contracts underlying such Certificate
and the Pledge Agreement and the transferor shall be released from the
obligations under this Agreement, the Purchase Contracts underlying the
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 5.02 Remarketing; Payment of Purchase Price. (a)(i) Unless a
Special Event Redemption has occurred prior to the Initial Remarketing Date, the
Company shall engage the Remarketing Agent pursuant to the Remarketing Agreement
for Remarketing the Debt Securities. By 11:00 a.m. (New York City time) on the
second Business Day immediately preceding the Initial Remarketing Date, the
Purchase Contract Agent shall notify the Remarketing Agent of the aggregate
principal amount of Pledged Debt Securities, and the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of Separate Debt
Securities (if any) that are to be remarketed pursuant to clause (ii) below.
Concurrently, the Custodial Agent, pursuant to the terms of the Pledge
Agreement, will present for Remarketing the Pledged Debt Securities, and the
Custodial Agent, pursuant to clause (ii) below, will present for Remarketing the
Separate Debt Securities to the Remarketing Agent. Upon receipt of such notice
from the Purchase Contract Agent and Custodial Agent, and the Pledged Debt
Securities and Separate Debt Securities (if any) from the Collateral Agent and
the Custodial Agent, the Remarketing Agent will, on the Initial Remarketing
Date, use its reasonable efforts to remarket (based on the Reset Rate) (the
"Initial Remarketing") such Pledged Debt Securities and Separate Debt Securities
on such date at a price of approximately 100.50% of the sum of the Treasury
Portfolio Purchase Price plus the Separate Debt Securities Purchase Price. If
the Remarketing Agent is able to remarket the Pledged Debt Securities and
Separate Debt Securities at a price equal to or greater than 100.50% of the
Treasury Portfolio Purchase Price plus the Separate Debt Securities Purchase
Price (a "Successful Initial Remarketing"), the Collateral Agent shall, in
accordance with the Pledge Agreement, cause the Securities Intermediary to
transfer the Pledged Debt Securities upon confirmation of deposit by the
Remarketing Agent of the proceeds of such Successful Remarketing in the
Collateral Account, and the portion of the proceeds from such Successful Initial
Remarketing equal to the Treasury Portfolio Purchase Price will be applied to
purchase the Treasury Portfolio. The Remarketing Agent may deduct as a
remarketing fee (the "Remarketing Fee") an amount not exceeding ___ basis points
(___%) of the sum of the Treasury Portfolio Purchase Price plus the Separate
Debt Securities Purchase Price in excess of the Treasury Portfolio Purchase
Price. With respect to Pledged Debt Securities, any proceeds of the Initial
Remarketing in excess of the sum of the
31
Treasury Portfolio Purchase Price plus the Remarketing Fee with respect to such
Pledged Debt Securities will be remitted to the Purchase Contract Agent for
payment to the Holders of the related Corporate Units. The Treasury Portfolio
will be substituted for the Pledged Debt Securities and the appropriate
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio will be pledged to the Collateral Agent to
secure the obligation of the Holders of Corporate Units to pay the Purchase
Price for the Common Stock under the related Purchase Contracts on the Purchase
Contract Settlement Date. With respect to Separate Debt Securities upon a
Successful Initial Remarketing, any proceeds of the Initial Remarketing in
excess of the Remarketing Fee attributable to the Separate Debt Securities will
be remitted to the Custodial Agent for payment to the holders of Separate Debt
Securities. None of the Company, the Purchase Contract Agent, or any Holders of
Corporate Units or holders of Separate Debt Securities whose Debt Securities or
Separate Debt Securities are so remarketed will otherwise be responsible for
the payment of any Remarketing Fee in connection therewith.
Following the occurrence of a Successful Initial Remarketing, the
Holders of Corporate Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio as the Holder of Corporate Units and the Collateral Agent had
in respect of the Debt Securities, subject to the Pledge thereof as provided in
the Pledge Agreement, and any reference herein or in the Certificates to the
Debt Securities shall be deemed to be a reference to such Applicable Ownership
Interests in the Treasury Portfolio and any reference herein or in the
Certificates to interest on the Debt Securities shall be deemed to be a
reference to corresponding distributions on such Applicable Ownership Interests
in the Treasury Portfolio. The Company may cause to be made in any Corporate
Units Certificates thereafter to be issued such change in phraseology and form
(but not in substance) as may be appropriate to reflect the substitution of such
Applicable Ownership Interests in the Treasury Portfolio for Debt Securities.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Debt Securities and the Separate Debt Securities (if
any) in the Initial Remarketing (other than to the Company) at a price not less
than 100.50% of the sum of the Treasury Portfolio Purchase Price plus the
Separate Debt Securities Purchase Price or a condition precedent set forth in
the Remarketing Agreement is not fulfilled, the Initial Remarketing will be
deemed to have failed (a "Failed Initial Remarketing"). Promptly following a
Failed Initial Remarketing, the Remarketing Agent shall return the Pledged Debt
Securities and the Separate Debt Securities (if any) subject to such Remarketing
to the Collateral Agent or to the Custodial Agent, as the case may be.
(ii) Prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the applicable Remarketing Date, but
no earlier than the Payment Date immediately preceding such date,
Holders of Separate Debt Securities may elect to have their Separate
Debt Securities remarketed under the Remarketing Agreement by
delivering their Separate Debt Securities, along with a notice of such
election, substantially in the form of Exhibit F to the Pledge
Agreement, to the Custodial Agent. After such time, such election shall
become an irrevocable election to have such Separate Debt Securities
remarketed in such Remarketing. The Custodial Agent shall hold Separate
Debt Securities in an account separate from the Collateral Account in
which the Pledged Debt Securities (as defined in the Pledge Agreement)
shall be held. Holders of Separate Debt Securities electing to have
their Separate Debt Securities remarketed will also have the right to
withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G to the Pledge Agreement, on or
prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the applicable Remarketing Date, upon which
notice the Custodial Agent shall return such Separate Debt Securities
to such Holder. Promptly after 11:00 a.m. on the Business Day
immediately preceding the applicable Remarketing Date, the Custodial
Agent shall notify the Remarketing Agent of the
32
aggregate principal amount of the Separate Debt Securities to be
remarketed and will deliver to the Remarketing Agent for Remarketing
all such Separate Debt Securities delivered to the Custodial Agent
pursuant to Section 4.07 of the Pledge Agreement and not validly
withdrawn prior to such date.
(iii) Not later than seven calendar days nor more than 15
calendar days prior to the applicable Remarketing Date, the Company
shall request the Depositary or its nominee to notify the Beneficial
Owners or Depositary Participants holding Units of the procedures to be
followed in such Remarketing.
(iv) The Company agrees to use its best efforts to ensure
that, if required by applicable law, a registration statement with
regard to the full amount of the Debt Securities to be remarketed in
the Initial Remarketing or the Final Remarketing, as the case may be,
shall be effective with the Securities and Exchange Commission in a
form that will enable the Remarketing Agent to rely on it in connection
with such Remarketing.
(v) The Company shall cause a notice of a Failed
Remarketing to be published (with a copy of such notice to be provided
to the Purchase Contract Agent) on the second Business Day immediately
following the applicable Remarketing Date, in a daily newspaper in the
English language of general circulation in the City of New York, which
is expected to be The Wall Street Journal.
(b) (i) Unless a Special Event Redemption, an Early Settlement or
a Cash Merger Early Settlement has occurred prior to the Final Remarketing Date,
if no Successful Remarketing has occurred prior to the Final Remarketing Date,
each Holder shall have the right to satisfy such Holder's obligations under the
Purchase Contract on the Purchase Contract Settlement Date in cash by notifying
the Purchase Contract Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash ("Cash Settlement") prior to
5:00 p.m. (New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date. Promptly following 5:00 p.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, 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 Corporate Unit who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement
shall pay the Purchase Price to the Collateral Agent for deposit in the
Collateral Account prior to 5:00 p.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract
Settlement Date, in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in immediately available
funds payable to or upon the order of the Securities Intermediary. Any
cash received by the Collateral Agent shall be invested promptly by the
Securities Intermediary in Permitted Investments pursuant to written
instructions received from the Company 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 Corporate Unit does not notify the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with Section 5.02(b)(ii) above, or does notify the Purchase
Contract Agent in accordance with Section 5.02(b)(i) above but fails to
make such payment as required by Section 5.02(b)(ii) above, such Holder
shall be deemed to have
33
consented to the disposition of the Pledged Debt Securities pursuant to
the Final Remarketing as described in paragraph Section 5.02(c) below.
(iv) Promptly after 5:00 p.m. (New York City time) on the
fourth Business Day preceding the Purchase Contract Settlement Date,
the Collateral Agent, based on cash payments received by the Collateral
Agent pursuant to Section 5.02(b)(ii) hereof, shall promptly notify the
Purchase Contract Agent and the Indenture Trustee of the aggregate
principal amount of Debt Securities to be tendered for purchase in the
Remarketing in a notice pursuant to the terms of the Pledge Agreement.
(c) (i) Unless a Special Event Redemption, an Early Settlement or
a Cash Merger Early Settlement has occurred prior to the Final Remarketing Date,
if a Failed Initial Remarketing has occurred, the Debt Securities of such
Holders of Corporate Units who have not notified the Purchase Contract Agent of
their intention to effect a Cash Settlement as provided in Section 5.02(b)(i)
above, or who have so notified the Purchase Contract Agent in accordance with
Section 5.02(b)(i) above but have failed to make such payment as required by
Section 5.02(b)(ii) above, and the Separate Debt Securities of any holder who
has elected for its Separate Debt Securities to be remarketed pursuant to
Section 5.02(a)(ii) will be remarketed by the Remarketing Agent (the "Final
Remarketing") on the third Business Day immediately preceding the Purchase
Contract Settlement Date (the "Final Remarketing Date"). In order to facilitate
the Final Remarketing, the Purchase Contract Agent, based on the notices
specified in Section 5.02(b)(iv), and the Collateral Agent, based on the notices
specified in Section 5.02(a)(ii), shall notify the Remarketing Agent, by 11:00
a.m. (New York City time) on the Business Day immediately preceding the Final
Remarketing Date, of the aggregate principal amount of Pledged Debt Securities
or aggregate principal amount of Separate Debt Securities that are to be
remarketed pursuant to Section 5.02(a)(ii), as the case may be, to be
remarketed. Concurrently, the Custodial Agent will present for remarketing the
Separate Debt Securities to the Remarketing Agent.
(ii) Upon receipt of such notice from the Purchase
Contract Agent and the Collateral Agent and the Separate Debt
Securities (if any) from the Custodial Agent, as set forth in clause
(i) above, the Remarketing Agent shall, on the Final Remarketing Date,
use its reasonable efforts to remarket (based on the Reset Rate) such
Pledged Debt Securities and the Separate Debt Securities on such date
at a price equal to approximately 100.50% of the aggregate principal
amount of such Debt Securities and Separate Debt Securities being
remarketed, as provided in the Remarketing Agreement. If the
Remarketing Agent is able to remarket the Debt Securities and Separate
Debt Securities at a price equal to or greater than 100.50% of the
aggregate principal amount of the Debt Securities and Separate Debt
Securities (if any) (a "Successful Final Remarketing"), the Collateral
Agent shall, in accordance with the Pledge Agreement, cause the
Securities Intermediary to transfer the Pledged Debt Securities upon
confirmation of deposit by the Remarketing Agent of the proceeds of
such Successful Remarketing in the Collateral Account. The Remarketing
Agent may deduct as the remarketing fee (the "Final Remarketing Fee")
an amount not exceeding ___ basis points (___%) of the aggregate
principal amount of the remarketed Pledged Debt Securities and Separate
Debt Securities (if any) in excess of the aggregate principal amount of
the remarketed Debt Securities. The proceeds from the Remarketing
remitted to the Collateral Agent shall be invested by the Collateral
Agent in Permitted Investments, in accordance with the Pledge
Agreement, and then applied to satisfy in full the obligations of such
Holders of Corporate Units to pay the Purchase Price for the shares of
Common Stock under the related Purchase Contracts on the Purchase
Contract Settlement Date. Any proceeds in excess of those required to
pay the Purchase Price and the Final Remarketing Fee will be remitted
to the Purchase Contract Agent for payment to the Holders of the
related Corporate Units. With respect to Separate Debt Securities upon
a Successful Final Remarketing any proceeds of the Final Remarketing in
excess of the Final
34
Remarketing Fee attributable to the Separate Debt Securities will be
remitted to the Custodial Agent for payment to the holders of Separate
Debt Securities.
(iii) If, in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the Pledged Debt Securities and
Separate Debt Securities (if any) at a price not less than 100.50% of
the aggregate principal amount of the Pledged Debt Securities and
Separate Debt Securities to be remarketed in the Final Remarketing
(other than to the Company) or a condition precedent set forth in the
Remarketing Agreement is not fulfilled, the remarketing will be deemed
to have failed (a "Failed Final Remarketing"). Following a Failed Final
Remarketing, as of the Purchase Contract Settlement Date, each Holder
of any Pledged Debt Securities that are subject to a Failed Final
Remarketing, and any Debt Securities that are a component of a
Corporate Unit with respect to which the Holder has notified the
Purchase Contract Agent of his intent to effect Cash Settlement and
failed to deliver the Purchase Price pursuant to Section 5.02(e)(ii)
shall be deemed to have exercised such Holder's Put Right with respect
to such Debt Securities and to have authorized the Collateral Agent to
pay, in the manner provided for in the Pledge Agreement, the Purchase
Price for the shares of Common Stock to be issued under the related
Purchase Contract from a portion of the Proceeds of the Put Right in
full satisfaction of such Holder's obligations under the related
Purchase Contract; provided that if the Company shall fail to pay the
Put Price when due, the Company shall be deemed to have netted such
Holder's obligation to pay the Company the Purchase Price under the
Purchase Contracts against the Company's obligation to pay the Put
Price, in full satisfaction of such Holder's obligation under the
Purchase Contracts.
(d)(i) Unless a Holder of a Treasury Unit or a Corporate Unit (if
the Treasury Portfolio has replaced the Debt Securities as a component of such
Corporate Unit) 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 5.07 or a Cash Merger Early Settlement of the underlying
Purchase Contract through the early delivery of cash to the Purchase Contract
Agent in the manner described in Section 5.04(b), each Holder of a Treasury Unit
or a Corporate Unit who intends to effect Cash Settlement of the underlying
Purchase Contract shall so notify the Purchase Contract Agent by use of a notice
in substantially the form of Exhibit E hereto prior to 5:00 p.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. Promptly following 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, the
Purchase Contract Agent shall notify the Collateral Agent of the receipt of such
notices from such Holders intending to make a Cash Settlement. Holders of
Treasury Units may make Cash Settlements only in integral multiples of ___
Corporate Units.
(ii) A Holder of a Treasury Unit or a Corporate Unit (if
the Treasury Portfolio has replaced the Debt Security as a component of
such Corporate Unit) who has so notified the Purchase Contract Agent of
its intention to make a Cash Settlement in accordance with Section
5.02(d)(i) above shall pay the Purchase Price to the Collateral Agent
for deposit in the Collateral Account prior to 5:00 p.m. (New York City
time) on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of the
Securities Intermediary. Any cash so received shall be invested
promptly by the Securities Intermediary in Permitted Investments
pursuant to written instructions received from the Company and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments 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.
35
(iii) If a Holder of a Treasury Unit or Corporate Unit (if
the Treasury Portfolio has replaced the Debt Security as a component of
such Corporate Unit) fails to notify the Purchase Contract Agent of its
intention to make a Cash Settlement in accordance with Section
5.02(d)(i), or does notify the Purchase Contract Agent as provided in
Section 5.02(d)(i) of its intention to pay the Purchase Price in cash,
but fails to make such payment as required by Section 5.02(d)(ii), then
upon the maturity of the Pledged Treasury Securities or the appropriate
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio held by the
Securities Intermediary on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date, the principal amount
of the Treasury Securities or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio received by the Collateral Agent 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 of such Holder's obligation to pay
such Purchase Price under the related Purchase Contracts without
receiving any instructions from the Holder. In the event the sum of the
Proceeds from the related Pledged Treasury Securities or appropriate
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio and the Proceeds
from such Permitted Investments is in excess of the aggregate Purchase
Price, the Collateral Agent shall cause the Securities Intermediary to
distribute such excess to the Purchase Contract Agent for the benefit
of the Holder of the related Treasury Units or Corporate Units when
received.
(e)(i) Each Holder of a Corporate Unit who intends to effect a
Cash Settlement of the underlying Purchase Contract following a Failed Final
Remarketing shall so notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto prior to 5:00 p.m. (New York City
time) on the second Business Day immediately preceding the Purchase Contract
Settlement Date. Promptly following 5:00 p.m. (New York City time) on the second
Business Day immediately preceding the Purchase Contract Settlement Date, 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 Corporate Unit who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement
shall pay the Purchase Price to the Collateral Agent for deposit in the
Collateral Account prior to 5:00 p.m. (New York City time) on the
Business Day immediately preceding the Purchase Contract Settlement
Date, in lawful money of the United States by certified or cashiers'
check or wire transfer, in each case in immediately available funds
payable to or upon the order of the Securities Intermediary. Any cash
so received 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 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 Corporate Unit does not notify the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with Section 5.02(e)(i) above, or does notify the Purchase
Contract Agent in accordance with Section 5.02(e)(i) above but fails to
make such payment as required by Section 5.02(e)(ii) above, such Holder
shall be deemed to have automatically exercised such Holder's Put Right
following a Failed Final Remarketing as described in paragraph Section
5.02(c)(iii) above.
(f) Promptly after 5:00 p.m. (New York City time) on the fourth
Business Day preceding the Purchase Contract Settlement Date, the Collateral
Agent, based on cash payments received
36
by the Collateral Agent pursuant to Section 5.02(b)(ii) hereof, shall promptly
notify the Purchase Contract Agent and the Indenture Trustee of the aggregate
principal amount of Debt Securities to be tendered for purchase in the
Remarketing in a notice pursuant to the terms of the Pledge Agreement.
(g) Promptly after 5:00 p.m. (New York city time) on the Business
Day preceding the Purchase Contract Settlement Date, the Collateral Agent, based
on cash payments received by the Collateral Agent pursuant to Section
5.02(e)(ii) hereof, shall promptly notify the Purchase Contract Agent and the
Indenture Trustee of the aggregate principal amount of Debt Securities pursuant
to which a Put Right has been automatically exercised pursuant to Section
5.02(c)(iii) hereof.
(h) Any distribution to Holders of any payments 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.
(i) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the
terms of the Pledge Agreement cause the Pledged Debt Securities, the
appropriate Applicable Ownership Interests (as specified in clause (i)
of the definition of such term) in the Treasury Portfolio or the
Pledged Treasury Securities, as the case may be, underlying the
relevant Units 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 Debt Securities, or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term)
in 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 Debt
Securities, or the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in 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 where such property is held).
(j) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement, Cash Merger 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.
(k) 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 Units unless the Company shall have
received payment for the Common Stock to be purchased thereunder in the manner
herein set forth.
Section 5.03 Issuance of Shares of Common Stock. Unless a
Termination Event, an Early Settlement or a Cash Merger Early Settlement shall
have occurred, subject to Section 5.04(b), on the Purchase Contract Settlement
Date upon receipt of payment in full of the aggregate Purchase Price payable on
all Outstanding Units, the Company shall issue and deposit with the Purchase
Contract Agent,
37
for the benefit of the Holders of the Outstanding Units, one or more
certificates representing newly issued 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, Early Settlement Date or Cash Merger Early
Settlement Date, as the case may be, 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 newly issued whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article V (after taking
into account all Units then held by such Holder), together with cash in lieu of
fractional shares as provided in Section 5.09 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the 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 (but excluding any Depositary
or nominee thereof), 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 5.04 Adjustment of Settlement Rate. (a) Adjustments for
Dividends, Distributions, Stock Splits, Etc. (i) 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 close of business on the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which:
(A) 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
(B) 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 at the opening of
business on the day following the date fixed for such
determination.
For the purposes of this paragraph (i), 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 agrees that it shall not pay any dividend
or make any distribution on shares of Common Stock held in the treasury
of the Company.
(ii) In case the Company shall issue rights, options or
warrants, other than pursuant to any dividend reinvestment plans or
share purchase plans, to all holders of its Common Stock (that are not
available on an equivalent basis to Holders of the Units upon
settlement of the Purchase Contracts underlying such Units) entitling
such holders of the Common Stock, for a period expiring within 45 days
after the record date for the determination of stockholders entitled to
receive such rights, options or warrants, to subscribe for or purchase
shares of Common Stock
38
at a price per share less than the Current Market Price per share of
the Common Stock on the date of such issuance, the Settlement Rate in
effect at the close of business on the date of such announcement shall
be increased by dividing such Settlement Rate by a fraction of which:
(A) the numerator shall be the number of shares
of Common Stock outstanding at the close of business on the date
of such announcement 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
(B) the denominator shall be the number of
shares of Common Stock outstanding at the close of business on
the date of such announcement 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 Business Day following the date of such
announcement. The Company agrees that it shall notify the
Purchase Contract Agent if any issuance of such rights, warrants
or options is cancelled or not completed following the
announcement thereof and the Settlement Rate shall thereupon be
readjusted to the Settlement Rate in effect immediately prior to
the date of such announcement.
For the purposes of this paragraph (ii), 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 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.
(iii) 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 close of business on the day
preceding 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 close of business on the day preceding 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 at the opening of business on the day following the day
upon which such subdivision, split or combination becomes effective.
(iv) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including shares of capital stock, securities,
cash and property but excluding any rights, warrants or options
referred to in paragraph (ii) of this Section 5.04(a), any dividend or
distribution paid exclusively in cash and any dividend or distribution
referred to in paragraph (i) of this Section 5.04(a)), the Settlement
Rate in effect at the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution
shall be adjusted by dividing such rate by a fraction of which:
(A) 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
39
(B) the denominator shall be such Current Market
Price per share of Common Stock,
such adjustment to become effective at the opening of business on
the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case
in which this paragraph (iv) is applicable, paragraph (ii) of
this Section 5.04(a) shall not be applicable. 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.
(v) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed in a Reorganization Event to which Section 5.04(b)
applies, as part of a distribution referred to in paragraph (iv) of
this Section 5.04(a) or as a regular quarterly cash distribution) in an
aggregate amount that, combined together with (I) the aggregate amount
of any other distributions (other than regular quarterly cash
distributions) to all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of payment of such
distribution (the "Trailing 12 Month Period") and in respect of which
no adjustment pursuant to this paragraph (v) or paragraph (vi) of this
Section has been made and (II) the aggregate amount of any cash plus
the fair market value (as reasonably determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) of consideration (other than consideration payable in
respect of any odd-lot tender offer) payable in respect of any tender
or exchange offer by the Company or any of its subsidiaries and
calculated as of the expiration of such tender or exchange offer for
all or any portion of the Common Stock concluded within the Trailing 12
Month Period and in respect of which no adjustment pursuant to this
paragraph (v) or paragraph (vi) of this Section has been made, exceeds
[20]% of the product of the Current Market Price per share of the
Common Stock on the date for the determination of holders of shares of
Common Stock entitled to receive such distribution multiplied by the
number of shares of Common Stock outstanding on such date, then, in
such case, the Settlement Rate in effect at the close of business on
such record date shall be adjusted by dividing such rate by a fraction
of which:
(A) the numerator shall be the Current Market
Price of Common Stock on such record date less the amount of cash
so distributed (and not excluded as provided above) applicable to
one share of Common Stock; and
(B) the denominator shall be the Current Market
Price of Common Stock,
such increase to be effective at 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 Unit shall have the right to receive upon
settlement of the Units the amount of cash such Holder would have
received had such Holder settled each Unit 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.
(vi) If the Company or any subsidiary of the Company shall
make a tender or exchange offer (other than any odd-lot tender offer)
for all or any portion of the Common Stock and upon expiration of such
tender or exchange offer (as amended upon the expiration thereof)
40
the Company or its subsidiary shall be required to pay to stockholders
based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of Purchased Shares (as herein defined)
any consideration, then if the sum of (I) the fair market value of the
aggregate consideration to be paid in such tender offer or exchange
offer (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) plus (II) 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 (other than consideration payable
in respect of any odd-lot tender offer), by the Company or any
subsidiary of the Company for all or any portion of 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 paragraph (vi) has been made, plus (III) the aggregate amount of
any distributions (other than regular quarterly cash 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 (v) has been made,
exceeds [20]% 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, the
Settlement Rate in effect at the close of business on the day of the
Expiration Time shall be adjusted by dividing by a fraction:
(A) 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 date of the Expiration Time less (B) the amount of
cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
transactions described in clauses (I), (II) and (III) above
(assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer,
of Purchased Shares); and
(B) 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"),
such adjustment to become effective at the opening of business on
the date following the date of the Expiration Time.
(vii) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.04(b)
applies) shall be deemed to involve:
(A) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the effective
date of such reclassification shall be deemed to be "the date
fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination"
within the meaning of paragraph (iv) of this Section); and
41
(B) a subdivision, split or combination, as the
case may be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and
the effective date of such reclassification shall be deemed to be
"the day upon which such subdivision or split becomes effective"
or "the day upon which such combination becomes effective", as
the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph
(iii) of this Section).
(viii) 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 thirty (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 regular way on such exchange or
in such market without the right to receive such issuance or
distribution.
(ix) 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.
(x) The Company may, but shall not be required to, make
such increases in the Settlement Rate, in addition to those required by
this Section, as the Board of Directors 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.
(i) In the event of:
(A) any consolidation or merger of the Company
with or into another Person (other than a merger or consolidation
in which the Company is the continuing corporation and in which
the 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);
(B) any sale, transfer, lease or conveyance to
another Person of the property of the Company as an entirety or
substantially as an entirety;
(C) any statutory share exchange of the Company
with another Person (other than in connection with a merger or
acquisition); or
(D) any liquidation, dissolution or termination
of the Company other than as a result of or after the occurrence
of a Termination Event (any event described in clauses (A), (B),
(C) and (D), a "Reorganization Event"),
42
the Settlement Rate will be adjusted to provide that each Holder
of Units 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 with
which such statutory exchange of securities was effected or to
which such sale or transfer was made, as the case may be (any
such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by
Affiliates of the Company and non-affiliates and such Holder
failed to exercise its rights of election, if any, as to the kind
or amount of securities, cash and other property receivable upon
such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common
Stock held immediately prior to such Reorganization Event by
other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this
Section 5.04(b)(i) 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 Unit shall have the rights provided by this Section
5.04(b)(i). Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section
5.04. The above provisions of this Section 5.04 shall similarly
apply to successive Reorganization Events.
(ii) In the event of a consolidation or merger of the
Company with or into another Person, or any merger of another Person
into the Company (other than a merger that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock), in each case in which 30% or more of the total
consideration paid to the Company's stockholders consists of cash or
cash equivalents (a "Cash Merger"), then a Holder of a Unit may settle
("Cash Merger Early Settlement") its Purchase Contract, upon the
conditions set forth below, at the Settlement Rate in effect
immediately prior to the closing of the Cash Merger; provided that (A)
the Cash Merger Early Settlement Date (as defined below) is no later
than the fifth Business Day immediately preceding the Purchase Contract
Settlement Date and (B) no Cash Merger Early Settlement will be
permitted pursuant to this Section 5.04(b)(ii) unless, at the time such
Cash Merger Early Settlement is effected, there is an effective
Registration Statement with respect to any securities to be issued and
delivered in connection with such Cash Merger Early Settlement, if such
a Registration Statement is required (in the view of counsel, which
need not be in the form of a written opinion, for the Company) under
the Securities Act. If such a Registration Statement is so required,
the Company covenants and agrees to use
43
commercially reasonable efforts to (x) have in effect a Registration
Statement covering any securities to be delivered in respect of the
Purchase Contracts being settled and (y) provide a Prospectus in
connection therewith, in each case in a form that may be used in
connection with such Cash Merger Early Settlement.
Within five Business Days of the completion of a Cash Merger, the
Company shall provide written notice to Holders of Units of such completion of a
Cash Merger, which shall specify the deadline for submitting the notice to
settle early in cash pursuant to this Section 5.04(b)(ii), the date on which
such Cash Merger Early Settlement shall occur (which date shall be 10 days after
the date of such written notice by the Company, but which shall in no event be
later than the fifth Business Day immediately preceding the Purchase Contract
Settlement Date) (the "Cash Merger Early Settlement Date"), the applicable
Settlement Rate and the amount (per share of Common Stock) of cash, securities
and other consideration receivable by the Holder upon settlement. In addition,
if a Holder effects a Cash Merger Early Settlement of some or all of its
Purchase Contracts, such Holder shall be entitled to receive, on the Cash Merger
Early Settlement Date, the aggregate amount of any accrued and unpaid Contract
Adjustment Payments since the immediately preceding Payment Date with respect to
such Purchase Contracts. The Company shall pay such amount as a credit against
the amount otherwise payable by the Holders to effect such Cash Merger Early
Settlement.
Corporate Units Holders and Treasury Units Holders may only effect Cash
Merger Early Settlement pursuant to this Section 5.04(b)(ii) in integral
multiples of __ Corporate Units or Treasury Units, as the case may be. If the
Treasury Portfolio has replaced the Debt Securities as a component of the
Corporate Units, Corporate Units Holders may only effect Cash Merger Early
Settlement pursuant to this Section 5.04(b)(ii) in multiples of __ Corporate
Units. Other than the provisions relating to timing of notice and settlement,
which shall be as set forth above, the provisions of Section 5.01(a) shall apply
with respect to a Cash Merger Early Settlement pursuant to this Section
5.04(b)(ii).
In order to exercise the right to effect Cash Merger Early Settlement
with respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, no later than 5:00 p.m. (New York City time) on the third
Business Day immediately preceding the Cash Merger Early Settlement Date, such
Certificate to the Purchase Contract Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds) in an amount equal to
the product of (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Cash Merger Early
Settlement.
If a Holder properly effects an effective Cash Merger Early Settlement
in accordance with the provisions of this Section 5.04(b)(ii), the Company will
deliver (or will cause the Collateral Agent to deliver) to the Holder on the
Cash Merger Early Settlement Date:
(A) the kind and amount of securities, cash and
other property receivable upon such Cash Merger 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 Cash Merger (based on the
Settlement Rate in effect at such time), assuming such Holder of
Common Stock is not a Constituent Person or an Affiliate of a
Constituent Person to the extent such Cash Merger provides for
different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise its
rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Cash
Merger (provided that if the kind or amount of securities, cash
and other property receivable upon such Cash Merger is not the
same for each non-electing share, then for the purpose of this
44
Section 5.04(b)(ii), the kind and amount of securities, cash and
other property receivable upon such Cash Merger 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).
For the avoidance of doubt, for the purposes of determining the
Adjusted Applicable Market Value (in connection with determining
the appropriate Settlement Rate to be applied in the foregoing
sentence), the date of the closing of the Cash Merger shall be
deemed to be the Purchase Contract Settlement Date;
(B) the Debt Securities, the Applicable
Ownership Interests in the Treasury Portfolio or Treasury
Securities, as the case may be, related to the Purchase Contracts
with respect to which the Holder is effecting a Cash Merger Early
Settlement; and
(C) if so required under the Securities Act, a
Prospectus as contemplated by this Section 5.04(b)(ii).
(c) All calculations and determinations pursuant to this Section
5.04 shall be made by the Company or its agent and the Purchase Contract Agent
shall have no responsibility with respect thereto.
(d) The Corporate Units or the Treasury Units of the Holders who
do not elect Cash Merger Early Settlement in accordance with the foregoing will
continue to remain outstanding and be subject to settlement on the Purchase
Contract Settlement Date in accordance with the terms hereof.
Section 5.05 Notice of Adjustments and Certain Other Events. (a)
Whenever the Settlement Rate is adjusted as herein provided, the Company shall
within 10 Business Days following the occurrence of an event that requires an
adjustment to the Settlement Rate pursuant to Section 5.04 (or if the Company is
not aware of such occurrence, as soon as practicable after becoming so aware):
(i) compute the adjusted Settlement Rate in accordance
with Section 5.04 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) provide a written notice to the Holders of the Units
of the occurrence of such event and a statement in reasonable detail
setting forth the method by which the adjustment to the Settlement Rate
was determined and setting forth the adjusted Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under
any duty or responsibility to any Holder of Units to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall be fully authorized and protected in relying on any Officers' Certificate
delivered pursuant to Section 5.05(a)(i) and any adjustment contained therein
and the Purchase Contract Agent shall not be deemed to have knowledge of any
adjustment unless and until it has received such certificate. 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 responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract
45
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article.
Section 5.06 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 Contract Adjustment Payments (including any accrued and
unpaid Contract Adjustment Payments), if the Company shall have such obligation,
and the rights and obligations of Holders to purchase Common Stock, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Purchase Contract Agent or the Company, if, on or
prior to the Purchase Contract Settlement Date, a Termination Event shall have
occurred.
Upon and after the occurrence of a Termination Event, the Units shall
thereafter represent the right to receive the Debt Securities, the Treasury
Securities or the appropriate Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, forming part of such Units, in accordance with
the provisions of Section 4.04 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 5.07 Early Settlement. (a) Subject to and upon compliance with
the provisions of this Section 5.07, at the option of the Holder thereof,
Purchase Contracts underlying Units may be settled early ("Early Settlement") at
any time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that no
Early Settlement will be permitted pursuant to this Section 5.07 unless, at the
time such Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration
Statement is so required, the Company covenants and agrees to use commercially
reasonable efforts to (i) have in effect a Registration Statement covering any
securities to be delivered in respect of the Purchase Contracts being settled
and (ii) provide a Prospectus in connection therewith, in each case in a form
that may be used in connection with such Early Settlement.
(b) In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, at any time prior to 5:00 a.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
such Certificate to the Purchase Contract Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds) in an amount (the "Early
Settlement Amount") equal to the sum of:
(i) the product of (A) the Stated Amount times (B) the
number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts.
Except as provided in the immediately preceding sentence, no payment
shall be made upon Early Settlement of any Purchase Contract on account of any
Contract Adjustment Payments accrued on such
46
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 Units at or prior to 5:00 p.m. (New
York City time) on a Business Day, such day shall be the "Early Settlement Date"
with respect to such Units 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 Units shall be
the next succeeding Business Day.
Upon the receipt of such Certificate and Early Settlement Amount from
the Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 4.06
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) the Purchase Contract Agent has received from such Holder, and
paid to the Company as confirmed in writing by the Company, the related Early
Settlement Amount and (C) all conditions to such Early Settlement have been
satisfied.
Holders of Treasury Units may only effect Early Settlement pursuant to
this Section 5.07 in integral multiples of ___ Treasury Units. If the Treasury
Portfolio has replaced the Debt Securities as a component of the Corporate
Units, Corporate Units Holders may only effect Early Settlement pursuant to this
Section 5.07 in integral multiples of ___ Corporate Units.
Upon Early Settlement of the Purchase Contracts, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments (including any accrued and unpaid Contract Adjustment
Payments) with respect to such Purchase Contracts shall immediately and
automatically terminate.
(c) Upon Early Settlement of Purchase Contracts by a Holder of
the related Units, the Company shall issue, and the Holder shall be entitled to
receive, ____ 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 pursuant to Section 5.04.
(d) 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
5.09; and
(ii) the related Debt Securities or the Applicable
Ownership Interests in the Treasury Portfolio, as applicable, in the
case of Corporate Units, or the related Treasury Securities, in the
case of Treasury 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.
(e) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of shares of Common Stock from the Company and the Debt Securities,
the Applicable Ownership Interests in 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 applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Units:
47
(i) transfer to the Holder the Debt Securities, the
Applicable Ownership Interests in the Treasury Portfolio or Treasury
Securities, as the case may be, forming a part of such Units,
(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 5.09, and
(iii) if so required under the Securities Act, deliver a
Prospectus for the shares of Common Stock issuable upon such Early
Settlement as contemplated by Section 5.07(a).
(f) In the event that Early Settlement is effected with respect
to Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(g) A Holder of a Unit who effects Early Settlement may elect to
have the Debt Securities no longer a part of a Corporate Unit remarketed in
accordance with the provisions of Section 5.02.
Section 5.08 Intentionally Omitted.
Section 5.09 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 or
Cash Merger 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 or Cash Merger 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
percentage of such fractional share times the Applicable Market Value calculated
as if the date of such settlement were the Purchase Contract Settlement Date.
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 5.09 in a timely manner.
Section 5.10 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 Unit 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 Units 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.
Section 5.11 Contract Adjustment Payments. (a) Subject to Section
5.11(d), the Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase
48
Contract to the Person in whose name a Certificate is registered at the close of
business on the Record Date relating to such Payment Date. The Contract
Adjustment Payments will be payable at the office of the Purchase Contract Agent
in the Borough of Manhattan, New York City maintained for that purpose. If the
book-entry system for the Units has been terminated, the Contract Adjustment
Payments will be payable, 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, or by wire transfer to the account designated by such
Person by a prior written notice to the Purchase Contract Agent. If any date on
which Contract Adjustment Payments are to be made is not a Business Day, then
payment of the Contract Adjustment Payments payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest in
respect of any such delay); provided that if such Business Day is in the next
succeeding calendar year, then payment of the Contract Adjustment Payments will
be made on the Business Day immediately preceding such Business Day. Contract
Adjustment Payments payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. The Contract Adjustment Payments will
accrue from ________ __, _____.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay future Contract Adjustment Payments (including any accrued
Contract Adjustment Payments) shall cease.
(c) 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 recreation of Corporate Units) any
other Certificate shall carry the right to accrued and unpaid Contract
Adjustment Payments, which right was carried by the Purchase Contracts
underlying such other Certificates.
(d) In the case of any Unit with respect to which Early
Settlement or Cash Merger Early Settlement of the underlying Purchase Contract
is effected on a date that is after any Record Date and prior to or on the next
succeeding Payment Date, Contract Adjustment Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement or Cash Merger Early Settlement, and such Contract Adjustment
Payments shall be paid to the Person in whose name the Certificate evidencing
such Unit is registered at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, and the
right to receive accrued and unpaid Contract Adjustment Payments as set forth in
Section 5.04(b)(ii), in the case of any Unit with respect to which Early
Settlement or Cash Merger Early Settlement of the underlying Purchase Contract
is effected, Contract Adjustment Payments that would otherwise be payable after
the Early Settlement or Cash Merger Early Settlement Date with respect to such
Purchase Contract shall not be payable.
(e) The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.
(f) In the event (x) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject to the
provisions of Section 5.11(h) below, that (i) a default shall have occurred and
be continuing with respect to the payment of principal, interest or any other
monetary amounts due and payable on any Senior Indebtedness and such default
shall have continued beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness (and the Purchase Contract Agent
shall have received written notice thereof from the Company or one or more
holders of Senior Indebtedness or their representative or representatives or the
trustee or trustees under any indenture pursuant to which any such Senior
Indebtedness may have been issued), or (ii) the maturity of any Senior
Indebtedness shall have been accelerated because of a default in
49
respect of such Senior Indebtedness (and the Purchase Contract Agent shall have
received written notice thereof from the Company or one or more holders of
Senior Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Senior Indebtedness may
have been issued), then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of clause (x) above, payment of all
amounts due or to become due upon all Senior Indebtedness and, in the
case of subclauses (i) and (ii) of clause (y) above, payment of all
amounts due thereon, or provision shall be made for such payment in
money or money's worth, before the Holders of any of the Units are
entitled to receive any Contract Adjustment Payments on the Purchase
Contracts underlying the Units;
(ii) any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property or
securities, to which the Holders of any of the Units would be entitled
except for the provisions of Section 5.11(e) through (q), including any
such payment or distribution which may be payable or deliverable by
reason of the payment of any other indebtedness of the Company being
subordinated to the payment of such Contract Adjustment Payments on the
Purchase Contracts underlying the Units, shall be paid or delivered by
the Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the representative or representatives of the holders of Senior
Indebtedness or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness, before any payment or distribution is made of such
Contract Adjustment Payments to the Holders of such Units; and
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being
subordinated to the payment of Contract Adjustment Payments on the
Purchase Contracts underlying the Units, shall be received by the
Purchase Contract Agent or the Holders of any of the Units when such
payment or distribution is prohibited pursuant to Section 5.11(e)
through (q), such payment or distribution shall be paid over to the
representative or representatives of the holders of Senior Indebtedness
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
(g) For purposes of Sections 5.11(e) through (q), the words
"cash, property or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the Company or any
other Person provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in Section
5.11(e) through (q) with respect to such Contract Adjustment Payments on the
Units to the payment of all Senior Indebtedness which may at the time be
outstanding; provided that (i) the indebtedness or guarantee of indebtedness, as
the case may be, that constitutes Senior Indebtedness is assumed by the Person,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of the Senior Indebtedness are not,
50
without the consent of each such holder adversely affected thereby, altered by
such reorganization or readjustment.
(h) Any failure by the Company to make any payment on or perform
any other obligation under Senior Indebtedness, other than any indebtedness
incurred by the Company or assumed or guaranteed, directly or indirectly, by the
Company for money borrowed (or any deferral, renewal, extension or refunding
thereof) or any indebtedness or obligation as to which the provisions of Section
5.11(e) through (q) shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed, guaranteed or otherwise
created such indebtedness or obligation, shall not be deemed a default or event
of default if (i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Company which is in
full force and effect and is not subject to further review, including a judgment
that has become final by reason of the expiration of the time within which a
party may seek further appeal or review, and (B) in the event a judgment that is
subject to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay of
execution shall have been obtained pending such appeal or review.
(i) Subject to the irrevocable payment in full of all Senior
Indebtedness, the Holders of the Units shall be subrogated (equally and ratably
with the holders of all obligations of the Company which by their express terms
are subordinated to Senior Indebtedness of the Company to the same extent as
payment of the Contract Adjustment Payments in respect of the Purchase Contracts
underlying the Units is subordinated and which are entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all such Contract Adjustment
Payments owing on the Units shall be paid in full, and as between the Company,
its creditors other than holders of such Senior Indebtedness and the Holders, no
such payment or distribution made to the holders of Senior Indebtedness by
virtue of Section 5.11(e) through (q) that otherwise would have been made to the
Holders shall be deemed to be a payment by the Company on account of such Senior
Indebtedness, it being understood that the provisions of Section 5.11(e) through
(q) are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
(j) Nothing contained in Sections 5.11(e) through (q) or
elsewhere in this Agreement or in the Units is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior Indebtedness
and the Holders, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders such Contract Adjustment Payments on the
Units as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
creditors of the Company other than the holders of Senior Indebtedness, nor
shall anything herein or therein prevent the Purchase Contract Agent or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Agreement, subject to the rights, if any, under Section
5.11(e) through (q), of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
(k) Upon payment or distribution of assets of the Company
referred to in Section 5.11(e) through (q), the Purchase Contract Agent and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or Purchase Contract Agent or other
Person making any payment or distribution, delivered to the Purchase Contract
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company,
51
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to these Section 5.11(e)
through (q).
(l) The Purchase Contract Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Purchase Contract Agent determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to Section 5.11(e) through (q), the Purchase Contract Agent may request
such Person to furnish evidence to the reasonable satisfaction of the Purchase
Contract Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
Section 5.11(e) through (q), and, if such evidence is not furnished, the
Purchase Contract Agent may defer payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
(m) Nothing contained in Sections 5.11(e) through (q) shall
affect the obligations of the Company to make, or prevent the Company from
making, payment of the Contract Adjustment Payments, except as otherwise
provided in these Sections 5.11(e) through (q).
(n) Each Holder of Units, by its acceptance thereof, authorizes
and directs the Purchase Contract Agent on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in Sections
5.11(e) through (q) and appoints the Purchase Contract Agent its
attorney-in-fact, as the case may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Purchase
Contract Agent of any fact known to the Company that would prohibit the making
of any payment of moneys to or by the Purchase Contract Agent in respect of the
Units pursuant to the provisions of this Section. Notwithstanding the provisions
of Sections 5.11(e) through (q) or any other provisions of this Agreement, the
Purchase Contract Agent shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of moneys to or by the
Purchase Contract Agent, or the taking of any other action by the Purchase
Contract Agent, unless and until the Purchase Contract Agent shall have received
written notice thereof mailed or delivered to the Purchase Contract Agent at its
Corporate Trust Office from the Company, any Holder, or the holder or
representative of any Senior Indebtedness; provided that if at least two
Business Days prior to the date upon which by the terms hereof any such moneys
may become payable for any purpose, the Purchase Contract Agent shall not have
received with respect to such moneys the notice provided for in this Section,
then, anything herein contained to the contrary notwithstanding, the Purchase
Contract Agent shall have full power and authority to receive such moneys and to
apply the same to the purpose for which they were received and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to or on or after such date.
(p) The Purchase Contract Agent in its individual capacity shall
be entitled to all the rights set forth in this Section with respect to any
Senior Indebtedness at the time held by it, to the same extent as any other
holder of Senior Indebtedness and nothing in this Agreement shall deprive the
Purchase Contract Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
52
covenants of this Agreement, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
(r) Nothing in this Section 5.11 shall apply to claims of, or
payments to, the Purchase Contract Agent under or pursuant to Section 7.07.
(s) With respect to the holders of Senior Indebtedness, (i) the
duties and obligations of the Purchase Contract Agent shall be determined solely
by the express provisions of this Agreement; (ii) the Purchase Contract Agent
shall not be liable to any such holders if it shall, acting in good faith,
mistakenly pay over or distribute to the Holders or to the Company or any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Section 5.11 or otherwise; (iii) no implied
covenants or obligations shall be read into this Agreement against the Purchase
Contract Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a
fiduciary as to such holders.
ARTICLE VI
REMEDIES
Section 6.01 Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock. Each Holder of a
Unit shall have the right, which is absolute and unconditional, (i) subject to
Article V, to receive each Contract Adjustment Payment with respect to the
Purchase Contract comprising part of such Unit on the respective Payment Date
for such Unit and (ii) except upon and following a Termination Event, 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 right to receive
Contract Adjustment Payments and the right to purchase shares of Common Stock,
and such rights shall not be impaired without the consent of such Holder.
Section 6.02 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 6.03 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
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.04 Delay or Omission Not Waiver. No delay or omission of any
Holder to exercise any right upon a default 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 6.05 Undertaking for Costs. All parties to this Agreement
agree, and each Holder of a Unit, by its acceptance of such Unit shall be deemed
to have agreed, that any court may in its discretion
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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 and costs 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 Purchase Contract Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Units, or to any suit instituted by any Holder for
the enforcement of interest on any Debt Securities or Contract Adjustment
Payments on or after the respective Payment Date therefor in respect of any Unit
held by such Holder, or for enforcement of the right to purchase shares of
Common Stock under the Purchase Contracts constituting part of any Unit held by
such Holder.
Section 6.06 Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the 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.
ARTICLE VII
THE PURCHASE CONTRACT AGENT
Section 7.01 Certain Duties and Responsibilities. (a) The Purchase
Contract Agent:
(i) undertakes to perform, with respect to the Units,
such duties and only such duties as are specifically set forth in this
Agreement, the Pledge Agreement and the Remarketing Agreement and no
implied covenants or obligations shall be read into this Agreement, the
Pledge Agreement or the Remarketing Agreement against the Purchase
Contract Agent; and
(ii) in the absence of bad faith or negligence on its
part, may, with respect to the Units, conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Purchase
Contract Agent and conforming to the requirements of this Agreement or
the Pledge Agreement or the Remarketing 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, the Pledge Agreement or the Remarketing
Agreement, as applicable (but need not confirm or investigate the
accuracy of the mathematical calculations or other facts stated
herein.)
(b) No provision of this Agreement, the Pledge Agreement or the
Remarketing 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:
(i) this Subsection shall not be construed to limit the
effect of subsection (a) of this Section;
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(ii) 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 conclusively determined by a court of competent
jurisdiction that the Purchase Contract Agent was negligent in
ascertaining the pertinent facts; and
(iii) no provision of this Agreement or the Pledge
Agreement or the Remarketing 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 it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Whether or not therein expressly so provided, every provision
of this Agreement, the Pledge Agreement and the Remarketing 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 and the Remarketing Agreement in its capacity as
Purchase Contract Agent. The Purchase Contract Agent shall be entitled to all
the rights, privileges, immunities and indemnities contained in this Agreement
with respect to any duties of the Purchase Contract Agent under, or actions
taken by the Purchase Contract Agent pursuant to, such Pledge Agreement.
(e) In case a default has occurred (that has not been cured or
waived), and is actually known by a Responsible Officer of the Purchase Contract
Agent, the Purchase Contract Agent shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
Section 7.02 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 Agent shall
transmit by mail to the Company and the Holders of Units, 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 7.03 Certain Rights of Purchase Contract Agent. Subject to the
provisions of Section 7.01:
(a) the Purchase Contract Agent may, in the absence of bad faith,
conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate, Issuer Order or
Issuer Request, and any resolution of the Board of Directors of the Company may
be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement or the
Pledge Agreement or the Remarketing Agreement the Purchase Contract Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting to take any action hereunder or thereunder, the Purchase
Contract Agent (unless other evidence be herein specifically prescribed in this
Agreement) may, in the absence of bad faith on its part, conclusively rely upon
an Officers' Certificate of the Company;
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(d) the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the 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 entitled to examine the relevant
books, records and premises of the Company, personally or by agent or attorney;
(f) the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees or an Affiliate of the Purchase
Contract Agent, and the Purchase Contract Agent shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee or an Affiliate of the Purchase Contract Agent, appointed with due care
by it hereunder; provided that the appointment of agents pursuant to this
paragraph (f) are subject to the prior written consent of the Company, which
consent shall not be unreasonably withheld;
(g) the Purchase Contract Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Holders pursuant to this Agreement, unless
such Holders shall have offered to the Purchase Contract Agent security or
indemnity satisfactory to the Purchase Contract Agent against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(h) the Purchase Contract Agent shall not be liable for any
action taken, suffered, or omitted to be taken by it in the absence of bad faith
or negligence by it;
(i) the Purchase Contract Agent shall not be deemed to have
notice of any adjustment to the Settlement Rate, the occurrence of a Termination
Event or any default hereunder unless a Responsible Officer of the Purchase
Contract Agent has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by a Responsible Officer at
the Corporate Trust Office of the Purchase Contract Agent, and such notice
references the Units and this Agreement;
(j) the Purchase Contract Agent may request that the Company
deliver an Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions pursuant to
this Agreement, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superseded;
(k) the rights, privileges, protections, immunities and benefits
given to the Purchase Contract Agent, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the Purchase
Contract Agent in each of its capacities hereunder or under the Remarketing
Agreement or the Pledge Agreement, and to each officer, director and employee of
the Purchase Contract Agent and each agent, custodian and other Person employed,
in any capacity whatsoever, by the Purchase Contract Agent to act hereunder and
shall survive the resignation or removal of the Purchase Contract Agent and the
termination of this Agreement; and
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(l) The Purchase Contract Agent shall not be required to initiate
or conduct any litigation or collection proceedings hereunder and shall have no
responsibilities with respect to any default hereunder except as expressly set
forth herein.
Section 7.04 Not Responsible for Recitals or Issuance of Units. The
recitals contained herein, in the Pledge Agreement, the Remarketing Agreement
and in the Certificates shall be taken as the statements of the Company, and the
Purchase Contract Agent assumes no responsibility for their accuracy or
validity. The Purchase Contract Agent makes no representations as to the
validity or sufficiency of either this Agreement or of the Units, or of the
Pledge Agreement or the Pledge or the Collateral and shall have no
responsibility for perfecting or maintaining the perfection of any security
interest in the Collateral. 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 7.05 May Hold Units. 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 Units 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 Units.
Section 7.06 Money Held in Custody. Money held by the Purchase Contract
Agent in custody hereunder need not be segregated from the Purchase Contract
Agent's 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 or
agreed in writing with the Company.
Section 7.07 Compensation and Reimbursement. The Company agrees:
(a) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder, under the Pledge Agreement and under the
Remarketing Agreement as the Company and the Purchase Contract Agent shall from
time to time agree in writing;
(b) 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, the Pledge Agreement
and the Remarketing Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) in connection with the
negotiation, preparation, execution and delivery and performance of this
Agreement, the Pledge Agreement and the Remarketing Agreement and any
modification, supplement or waiver of any of the terms thereof, except any such
expense, disbursement or advance as may be attributable to its negligence,
willful misconduct or bad faith; and
(c) to indemnify and defend the Purchase Contract Agent and any
predecessor Purchase Contract Agent (and each of its directors, officers,
agents, and employees, collectively the "Indemnitees") for, and to hold each
Indemnitee harmless against, any loss, claim, damage, fine, penalty, liability
or expense (including reasonable fees and expenses of counsel) incurred without
negligence, willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of its duties hereunder and
under the Pledge Agreement and the Remarketing Agreement, including the
Indemnitee's reasonable costs and expenses of defending themselves against any
claim (whether asserted by the Company, a Holder or any other Person) or
liability in connection with the exercise or performance of any of the Purchase
Contract Agent's powers or duties hereunder or thereunder. The provisions of
this Section shall survive the resignation and removal of the Purchase Contract
Agent and the termination of this Agreement.
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Section 7.08 Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which shall be a
Person 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 Person in the Borough of Manhattan, New York City, qualified and eligible
under this Article and willing to act on reasonable terms. If such Person
publishes or files 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 Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published or filed. 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 7.09 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 and, unless
waived by the Purchase Contract Agent, payment in full of all amounts due and
owing to such Purchase Contract Agent hereunder.
(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, at the expense
of the Company, 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 Units delivered to the
Purchase Contract Agent and the Company. 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 such Act, the
Purchase Contract Agent being removed may petition any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(d) If at any time:
(i) 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, and shall
fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Unit for at least six
months;
(ii) the Purchase Contract Agent shall cease to be
eligible under Section 7.08 and shall fail to resign after written
request therefor by the Company or by any such Holder; or
(iii) 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
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Agent, or (ii) any Holder who has been a bona fide Holder of a Unit for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the 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
Unit for at least six months, on behalf of itself and all others similarly
situated, or the Purchase Contract Agent may petition at the expense of the
Company, 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 Security Register. Each notice shall include the name of the
successor Purchase Contract Agent and the address of its Corporate Trust Office.
(g) If the Purchase Contract Agent has or shall acquire any
"conflicting interest" within the meeting of Section 310(b) of the TIA, the
Purchase Contract Agent and the Company shall in all respects comply with the
provisions of Section 310(b) of the TIA.
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 duly assign, transfer and deliver to such
successor Purchase Contract Agent all property and money held by such retiring
Purchase Contract Agent hereunder.
(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 Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person 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 that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract
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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 Units.
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 Unit for a
period of at least six months preceding the date of such application, and such
application states that the Applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Units and is
accompanied by a copy of the form of proxy or other communication which such
Applicants propose to transmit, then the 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, the Remarketing Agreement or any Purchase
Contract in respect of the obligations of the Holder of any Unit thereunder. The
Company agrees, and each Holder of a Certificate, by its 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 V hereof. Anything contained
in this Agreement to the contrary notwithstanding, in no event shall the
Purchase Contract Agent or its officers, directors, employees or agents be
liable under this Agreement, the Pledge Agreement or the Remarketing Agreement
to any third party for indirect, incidental, 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
and regardless of the form of action.
Section 7.14 Tax Compliance. (a) The Purchase Contract Agent, on its
own behalf and on behalf of the Company, will comply with the Company's written
instructions regarding the specific actions that must be taken in order to
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 Units or (ii) the issuance, delivery, holding, transfer,
redemption or exercise of rights under the Units. Such written instructions
shall include compliance, without limitation, with respect to 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 conclusively
rely on any such direction in accordance with the provisions of Section 7.01(a)
hereof.
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(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.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.01 Supplemental Agreements without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, 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:
(a) 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;
(b) evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;
(c) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company;
(d) make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.04(b); or
(e) except as provided for in Section 5.04, 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 that such action
shall not adversely affect the interests of the Holders in any material respect.
Section 8.02 Supplemental Agreements with Consent of Holders. With the
consent of the Holders of not less than a majority of the Outstanding Units
voting together as one class, including, without limitation, the consent of the
Holders obtained in connection with a tender or an exchange offer, 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 Units;
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,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract, unless
such change is not adverse to the Holders, impair the right of the Holder of any
Purchase Contract to receive distributions on the related Collateral or
otherwise adversely affect the Holder's rights in or to such Collateral or
adversely alter the rights in or to such Collateral;
(c) impair the Holder's right to institute suit for the
enforcement of any Purchase Contract or any Contract Adjustment Payments;
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(d) reduce the number of shares of Common Stock or the amount of
any other property to be purchased pursuant to any Purchase Contract, increase
the price to purchase shares of Common Stock or any other property upon
settlement of any Purchase Contract or change the Purchase Contract Settlement
Date or the right to Early Settlement or Cash Merger Early Settlement or
otherwise adversely affect the Holder's rights under the Purchase Contract;
(e) reduce any Contract Adjustment Payments or change any place
where, or the coin or currency in which, any Contract Adjustment Payment is
payable; or
(f) reduce the percentage of the outstanding Purchase Contracts
the consent of whose Holders is required for any modification or amendment to
the provisions of this Agreement, the Purchase Contracts or the Pledge
Agreement; provided that if any amendment or proposal referred to above would
adversely affect only the Corporate Units or the Treasury 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 (a) through (f) 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 8.03 Execution of Supplemental Agreements. In executing, or
accepting the additional agencies created by, any supplemental agreement
permitted by this Article or the modifications thereby of the agencies created
by this Agreement, the Purchase Contract Agent shall be provided, and (subject
to Section 7.01) shall be fully authorized and 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 and
that any and all conditions precedent to the execution and delivery of such
supplemental agreement have been satisfied. 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, privileges,
protections, indemnities, liabilities or immunities under this Agreement, the
Remarketing Agreement, the Pledge Agreement, or otherwise.
Section 8.04 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 8.05 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.
62
ARTICLE IX
MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 9.01 Covenant not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions. The Company covenants that it
will not consolidate with, convert into, or merge with and into, any other
Person or sell, assign, transfer, lease or convey all or substantially all of
its properties and assets to any Person, unless:
(a) either the Company shall be the continuing Person, or the
successor (if other than the Company) shall be a corporation, partnership, trust
or limited liability company organized and existing under the laws of the United
States of America or a State thereof or the District of Columbia and such Person
shall expressly assume all the obligations of the Company under the Purchase
Contracts, this Agreement, the Pledge Agreement, the Indenture (including any
supplement thereto) and the Remarketing 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 Person; and
(b) the Company or such successor Person, as the case may be,
shall not, immediately after such consolidation, conversion, merger, sale,
assignment, transfer, lease or conveyance, be in default of payment obligations
under the Purchase Contracts, this Agreement, the Pledge Agreement, the
Indenture (including any supplement thereto) or the Remarketing Agreement or in
material default in the performance of any other covenants under any of the
foregoing agreements.
Section 9.02 Rights and Duties of Successor Person. In case of any such
merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance and upon any such assumption by a successor Person in accordance with
Section 9.01, such successor Person 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 Person thereupon may cause to be signed, and may issue either in its
own name or in the name of PNM Resources, Inc. any or all of the Certificates
evidencing Units 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 Person, instead of the Company, and subject to all 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 Units which such successor Person
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 Units
thereafter to be issued as may be appropriate.
Section 9.03 Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent. The Purchase Contract Agent, subject to Sections 7.01
and 7.03, 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.
63
ARTICLE X
COVENANTS
Section 10.01 Performance under Purchase Contracts. The Company
covenants and agrees for the benefit of the Holders from time to time of the
Units that it will duly and punctually perform its obligations under the
Purchase Contracts in accordance with the terms of the Purchase Contracts and
this Agreement.
Section 10.02 Maintenance of Office or Agency. The Company will
maintain in the Borough of Manhattan, 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 upon Early Settlement or Cash Merger 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 recreation of Corporate Units and where notices and
demands to or upon the Company in respect of the Units and this Agreement may be
served. The Company will give prompt written notice to the Purchase Contract
Agent of the location, and any change in the location, of such office or agency.
The Company initially designates the Corporate Trust Office of the Purchase
Contract Agent as such office of the Company. 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 Units the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.
Section 10.03 Company to Reserve Common Stock. The Company shall at all
times prior to the 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 Units evidenced by
Outstanding Certificates.
Section 10.04 Covenants as to Common Stock. The Company covenants that
all shares of Common Stock which may be issued against tender of payment in
respect of any Purchase Contract constituting a part of the Outstanding Units
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable.
Section 10.05 Statements of Officers of the Company as to Default. The
Company will deliver to the Purchase Contract Agent, within 120 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, 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 Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
64
Section 10.06 ERISA. Each Holder from time to time of the Units that is
a Plan or who used assets of a Plan to purchase Units hereby represents that
either (i) no portion of the assets used by such Holder to acquire the Corporate
Units constitutes assets of the Plan or (ii) the purchase or holding of the
Corporate Units by such purchaser or transferee will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4973 of the Code or
similar violation under any applicable laws.
Section 10.07 Tax Treatment. The Company covenants and agrees, for
United States federal, state and local income and franchise tax purposes, to (i)
treat a Holder's acquisition of the Corporate Units as the acquisition of the
Debt Security and Purchase Contract constituting the Corporate Units and (ii)
treat each Holder as the owner of the applicable interest in the Collateral
Account, including the Debt Securities and Applicable Ownership Interests in the
Treasury Portfolio or the Treasury Securities.
ARTICLE XI
TRUST INDENTURE ACT
Section 11.01 Trust Indenture Act; Application. (a) This Agreement is
subject to the provisions of the TIA that are required or deemed to be part of
this Agreement and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Agreement
limits, qualifies or conflicts with the duties imposed by Section 310 to 317,
inclusive, of the TIA, such imposed duties shall control.
Section 11.02 List of Holders of Units. (a) The Company shall furnish
or cause to be furnished to the Purchase Contract Agent (b) semi-annually, not
later than _________ and ___________ in each year, commencing ________ __,
_____, a list, in such form as the Purchase Contract Agent may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (b) at such other
times as the Purchase Contract Agent may request in writing, within 30 days
after the receipt by the Company of any such request, a List of Holders as of a
date not more than 15 days prior to the time such list is furnished; provided
that, the Company shall not be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent List of Holders
given to the Purchase Contract Agent by the Company. The Purchase Contract Agent
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Purchase Contract Agent shall comply with its
obligations under Section 311(a) of the TIA, subject to the provisions of
Section 311(b) and Section 312(b) of the TIA.
Section 11.03 Reports by the Purchase Contract Agent. Not later than
___________ of each year, commencing ________ __, _____, the Purchase Contract
Agent shall provide to the Holders such reports, if any, as are required by
Section 313(a) of the TIA in the form and in the manner provided by Section
313(a) of the TIA. Such reports shall be as of the preceding ___________. The
Purchase Contract Agent shall also comply with the requirements of Sections
313(b), (c) and (d) of the TIA.
Section 11.04 Periodic Reports to the Purchase Contract Agent. The
Company shall provide to the Purchase Contract Agent such documents, reports and
information as required by Section 314(a) (if any) and the compliance
certificate required by Section 314(a) of the TIA in the form, in the manner and
at the times required by Section 314(a) of the TIA.
65
Section 11.05 Evidence of Compliance with Conditions Precedent. The
Company shall provide to the Purchase Contract Agent such evidence of compliance
with any conditions precedent provided for in this Agreement as and to the
extent required by Section 314(c) of the TIA. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the TIA may
be given in the form of a Company's Certificate. Any opinion required to be
given pursuant to Section 314(c)(2) of the TIA may be given in the form of an
Opinion of Counsel.
Section 11.06 Defaults; Waiver. The Holders of a majority of the
Outstanding Purchase Contracts voting together as one class may, by vote or
consent, on behalf of all of the Holders, waive any past Default and its
consequences, except a Default:
in the payment on any Security, or
in respect of a provision hereof which under Section 8.2
cannot be modified or amended without the consent of the Holder of each
Outstanding Unit affected.
Upon such waiver, any such Default shall cease to exist, and any
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Agreement, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 11.07 Purchase Contract Agent's Knowledge of Defaults. The
Purchase Contract Agent shall not be deemed to have knowledge of any Default
unless a Responsible Officer shall have obtained written notice of such Default.
Section 11.08 Direction of Purchase Contract Agent. Sections
316(a)(1)(A) of the TIA is hereby expressly excluded from this Agreement, as
permitted by the TIA.
[SIGNATURES ON THE FOLLOWING PAGE]
66
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PNM RESOURCES, INC.
By: _____________________________________
Name:
Title:
JPMORGAN CHASE BANK, as Purchase Contract
Agent
By: ______________________________________
Name:
Title:
67
EXHIBIT A
(FORM OF FACE OF CORPORATE UNIT CERTIFICATE)
For inclusion in Global Certificates only -
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER 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 Corporate Units:______________
PNM RESOURCES, INC.
Corporate Units
This Corporate Units Certificate certifies that [Cede & Co.][_________]
is the registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only - or such other number of Corporate Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto]. Each Corporate Unit consists of (i) either (a) the beneficial
ownership by the Holder of $______ principal amount of Debt Securities due
________ __, _____ (the "Debt Security") of PNM Resources, Inc., a New Mexico
corporation (the "Company"), subject to the Pledge of such Debt Security by such
Holder pursuant to the Pledge Agreement, or (b) upon the occurrence of a Special
Event Redemption prior to the Purchase Contract Settlement Date or a Successful
Remarketing of the Debt Securities prior to the Final Remarketing Date, the
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, subject to the pledge of such Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract with
the 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.
A-1
Pursuant to the Pledge Agreement, the Debt Securities or the
appropriate Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio, as the case may be,
constituting part of each Corporate 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 Corporate
Unit.
The Pledge Agreement provides that all payments of the principal amount
with respect to any of the Pledged Debt Securities (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio, as the
case may be, or interest or distributions on any Pledged Debt Securities or the
appropriate Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio, as the case may be,
constituting part of the Corporate Units received by the Securities Intermediary
shall be paid by wire transfer in same day funds (i) in the case of (A) interest
on Pledged Debt Securities or distributions with respect to the appropriate
Applicable Ownership Interests (as specified in clause (ii) of the definition of
such term) in the Treasury Portfolio, as the case may be, and (B) any payments
of the principal amount of any Debt Securities or with respect to the
appropriate Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in 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 with respect to
the principal amount of the Debt Securities or with respect to the appropriate
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in 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 Corporate Units of which such Pledged Debt Securities or the Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, are a part under the Purchase
Contracts forming a part of such Corporate Units. Interest on the Debt
Securities and distributions on the appropriate Applicable Ownership Interests
(as specified in clause (ii) of the definition of such term) in the Treasury
Portfolio, as the case may be, forming part of a Corporate Units evidenced
hereby, which are payable quarterly in arrears on _______ of each year,
commencing ________ __, _____ (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 Corporate Units Certificate (or a Predecessor
Corporate Units Certificate) is registered at the close of business on the
Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on ________
__, _____ (the "Purchase Contract Settlement Date"), at a price equal to $_____
(the "Stated Amount"), a number of newly issued shares of common stock, no par
value per share ("Common Stock"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract, 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 principal amount with respect to any Pledged Debt
Securities pursuant to the Remarketing or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio, as the case may be, pledged to secure the obligations under
such Purchase Contract of the Holder of the Corporate Units of which such
Purchase Contract is a part.
A-2
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Corporate Units as an acquisition of the Debt
Security and Purchase Contract constituting the Corporate Units, (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Debt Securities and the Applicable Ownership Interests in the Treasury
Portfolio, and (iii) treat each Debt Security as indebtedness of the Company.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Corporate Unit evidenced hereby, an amount
(the "Contract Adjustment Payments") equal to ____ per year of the Stated Amount
from ________ __, _____ or from the most recent Payment Date to which such
Contract Adjustment Payments have been paid or duly provided for. Such Contract
Adjustment Payments shall be payable to the Person in whose name this Corporate
Units Certificate is registered at the close of business on the Record Date for
such Payment Date.
Interest on the Debt Securities and distributions on the Applicable
Ownership Interests (as specified in clause (ii) of the definition of such term)
and the Contract Adjustment Payments will be payable at the office of the
Company in New York City or the Corporate Trust Office of the Purchase Contract
Agent. If the book-entry system for the Corporate Units has been terminated, the
Contract Adjustment Payments will be payable, 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, or by wire transfer to the
account designated by such Person by a prior written notice to the Purchase
Contract Agent.
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 Corporate 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.
A-3
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
PNM RESOURCES, INC.
By: ________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase
Contracts evidenced hereby)
By: JPMORGAN CHASE BANK, not individually
but solely as Attorney-in-Fact of
such Holder
By: ________________________________
Name:
Title:
DATED: _______________
A-4
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Corporate Unit Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: ________________________________
Name:
Title:
DATED:________________
A-5
(FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ________ __, _____ (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and
JPMorgan Chase Bank, 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 Corporate Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate 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 newly issued shares of Common Stock equal to the
Settlement Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "Settlement Rate" is equal to:
(1) if the Adjusted 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 Adjusted 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 equal to the Stated Amount divided by the Adjusted
Applicable Market Value; and
(3) if the Adjusted 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 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 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
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 subject to adjustments set forth under Section 5.04 of the Purchase
Contract Agreement.
The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (i), (ii), (iii), (iv),
(v), (vi), (vii) or (x) of Section 5.04(a) of the Purchase Contract Agreement,
the Applicable Market Value, and (ii) at the time of and after any adjustment of
the Settlement Rate pursuant to paragraph (i), (ii), (iii), (iv), (v), (vi),
(vii) or (x) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value multiplied by a fraction, the numerator of
A-6
which shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (i), (ii), (iii), (iv), (v), (vi), (vii) or (x) of Section 5.04(a) of
the Purchase Contract Agreement and the denominator of which 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 (i), (ii), (iii),
(iv), (v), (vi), (vii) or (x) of Section 5.04(a) of the Purchase Contract
Agreement during the period taken into consideration for determining the
Applicable Market Value, appropriate and customary adjustments shall be made to
the Settlement Rate.
The "Closing Price" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the close of the principal
trading session (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 (or, if no closing price is
reported, the last reported sale price) per share as reported in the
composite transactions for the principal United States national or
regional 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 last 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 market value of
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company.
A "Trading Day" means a day on which 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 Corporate 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, an Early Settlement or, if applicable, a
Cash Merger Early Settlement or from the proceeds of the Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio or a Remarketing of the related Pledged Debt Securities.
Unless the Treasury Portfolio has replaced the Debt Securities as a component of
Corporate Units, a Holder of Corporate Units who (1) does not, on or prior to
5:00 p.m. (New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, notify the Purchase Contract Agent of its
intention to effect a Cash Settlement, or who does so notify the Purchase
Contract Agent but fails to make an effective Cash Settlement prior to 5:00 p.m.
(New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, or (2) on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day prior to the Purchase Contract Settlement
Date, does not make 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 Debt Securities
held by the Collateral Agent in the Remarketing unless the Holder has previously
made a Cash Merger Early Settlement. Unless the Treasury Portfolio has replaced
the Debt Securities as a
A-7
component of Corporate Unit, such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement on the Final Remarketing
Date. If the Treasury Portfolio has replaced the Debt Securities as a component
of Corporate Units, a Holder of Corporate Units who does not notify the Purchase
Contract Agent, on or prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date of its
intention to effect a Cash Settlement shall pay the Purchase Price for the
shares of Common Stock to be delivered under the related Purchase Contract from
the proceeds at maturity of the Applicable Ownership Interests (as defined in
clause (i) of the definition of such term) in the Treasury Portfolio.
As provided in the Purchase Contract Agreement, upon the occurrence of
a Failed Final Remarketing, unless a Holder of a Pledged Debt Security has
notified the Purchase Contract Agent of his intent to effect a Cash Settlement
of the Purchase Contract and delivered the Purchase Price to the Collateral
Agent pursuant to Section 5.02(e)(ii) of the Purchase Contract Agreement, such
Holder shall be deemed to have exercised such Holder's Put Right and to have
elected to pay the Purchase Price under the Purchase Contract out of a portion
of the proceeds from the Put Right in full satisfaction of such Holder's
obligations under the Purchase Contract. In the event of the Company's failure
to pay the Put Price when due, the Company shall be deemed to have netted such
Holder's obligation to pay the Company the Purchase Price under the Purchase
Contracts against the Company's obligation to pay the Put Price, in full
satisfaction of such Holder's obligation under the Purchase Contracts.
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 set forth in
the Purchase Contract Agreement.
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 Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Debt
Securities or the appropriate Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio forming a
part of each Corporate Unit from the Pledge. A Corporate Unit shall thereafter
represent the right to receive the Debt Security or the appropriate Applicable
Ownership Interests in the Treasury Portfolio forming a part of such Corporate
Units in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement.
Under the terms of the Pledge Agreement and the Purchase Contract
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Debt Securities, but
only to the extent instructed in writing by the Holders. Upon receipt of notice
of any meeting at which holders of Debt Securities are entitled to vote or upon
any solicitation of consents, waivers or proxies of holders of Debt Securities,
the Purchase Contract Agent shall, as soon as practicable thereafter, mail,
first class, postage pre-paid, to the Corporate Units Holders a notice:
(1) containing such information as is contained in the notice
or solicitation;
(2) stating that each Corporate Units 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 Debt Securities entitled to vote) shall be entitled to
instruct the Purchase Contract Agent as to the exercise of the voting
rights pertaining to the Debt Securities constituting a part of such
Holder's Corporate Units; and
(3) stating the manner in which such instructions may be
given.
A-8
Upon the written request of the Corporate Units Holders 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 aggregate principal amount of Debt Securities, as to which
any particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Purchase Contract Agent
shall abstain from voting the Debt Security evidenced by such Corporate Unit.
The Company hereby agrees, if applicable, to solicit Holders of Corporate Units
to timely instruct the Purchase Contract Agent in order to enable the Purchase
Contract Agent to vote the Debt Securities. The Holders of Corporate Units shall
have no voting or other rights in respect of Common Stock.
Upon the occurrence of a Special Event Redemption, the Collateral Agent
shall surrender the Pledged Debt Securities against delivery of an amount equal
to the aggregate Redemption Price of the Pledged Debt Securities and shall
deposit the funds in the Collateral Account in exchange for the Pledged Debt
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent shall cause the Securities Intermediary to apply an amount
equal to the aggregate Redemption Amount of such funds to purchase on behalf of
the Holders of Corporate Units the Treasury Portfolio and promptly (a) transfer
the Applicable Ownership Interests (as specified in clause (i) of the definition
of such term) in the Treasury Portfolio to the Collateral Account to secure the
obligations of each Holder of Corporate Units to purchase shares of Common Stock
under the Purchase Contracts constituting a part of such Corporate Units, (b)
transfer the Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio to the Purchase Contract
Agent for the benefit of the Holders of such Corporate Units and (c) remit the
remaining portion of such funds to the Purchase Contract Agent for payment to
the Holders of such Corporate Units.
Upon the occurrence of a Successful Remarketing of Debt Securities
prior to the Final Remarketing Date, pursuant to the terms of the Remarketing
Agreement, the Remarketing Agent will apply an amount equal to the Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Corporate
Units, the Treasury Portfolio, and, after deducting the Remarketing Fee to the
extent permitted under the terms of the Remarketing Agreement, promptly remit
the remaining portion of such proceeds of such Successful Remarketing to the
Purchase Contract Agent for payment to the Holders of such Corporate Units.
Following the occurrence of (i) a Special Event Redemption prior to the
Purchase Contract Settlement Date, or (ii) a Successful Remarketing of the Debt
Securities prior to the Final Remarketing Date, the Holders of Corporate Units
and the Collateral Agent shall have such security interest rights and
obligations with respect to the Applicable Ownership Interests in the Treasury
Portfolio as the Holder of Corporate Units and the Collateral Agent had in
respect of the Debt Securities, as the case may be, subject to the Pledge of the
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) as provided in the Pledge Agreement and any reference herein to the
Debt Securities shall be deemed to be a reference to such Treasury Portfolio.
The Corporate Units Certificates are issuable only in registered form and only
in denominations of a single Corporate Unit and any integral multiple thereof.
The transfer of any Corporate Units Certificate will be registered and Corporate
Units Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Security 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 a Debt Security, thereby creating Treasury
Units, shall be responsible
A-9
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 Corporate Units remains in effect, such Corporate Units shall not be separable
into its constituent parts, and the rights and obligations of the Holder of such
Corporate Units in respect of the Debt Securities and Purchase Contract
constituting such Corporate Units may be transferred and exchanged only as a
Corporate Unit.
Unless the Treasury Portfolio has replaced the Debt Securities as a
component of the Corporate Units, and subject to the conditions set forth in the
Purchase Contract Agreement, the Holder of Corporate Units may substitute, at
any time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, for the Pledged
Debt Securities securing such Holder's obligations under the related Purchase
Contracts, Treasury Securities in an aggregate principal amount at maturity
equal to the aggregate principal amount of the Pledged Debt Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such Collateral Substitution, each Unit for which such
Pledged Treasury Securities secures the Holder's obligation under the Purchase
Contract shall be referred to as a "Treasury Unit". A Holder may make such
Collateral Substitution only in integral multiples of ___ Corporate Units for
___ Treasury Units.
If the Treasury Portfolio has replaced the Debt Securities as a
component of the Corporate Units, a Holder may, at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
substitute Treasury Securities for the Applicable Ownership Interests in the
Treasury Portfolio, but only in integral multiples of ________ Corporate Units.
In such an event, the Holder shall transfer Treasury Securities to the
Collateral Agent, and the Purchase Contract Agent shall instruct the Collateral
Agent to release the Pledge of and transfer to the Holder the appropriate
Applicable Ownership Interests in the Treasury Portfolio.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Corporate Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Company in New
York City or the Corporate Trust Office of the Purchase Contract Agent. If the
book-entry system for the Corporate Units has been terminated, the Contract
Adjustment Payments will be payable, 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, or by wire transfer to the account
designated by such Person by a prior written notice to the Purchase Contract
Agent.
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 Contract
Adjustment 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 Holder, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Debt Securities or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in 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 Units may be settled early at any time
prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contract evidenced by this
A-10
Certificate, the Holder of this Corporate Units Certificate shall deliver to the
Purchase Contract Agent at the Corporate Trust Office an Election to Settle
Early form set forth below 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 the sum of:
(i) the product of (A) the Stated Amount times (B) the
number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Debt Securities or Pledged Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) underlying such Units
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 Corporate Unit as to which
Early Settlement is effected equal to 1.2119 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 Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Corporate Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Corporate Units pursuant to the terms of Section 5.04(b)(ii) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Corporate Units, the Pledged Debt Securities or Pledged
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio underlying such Corporate Units shall be
released from the Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Corporate 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 Corporate 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 Corporate Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Corporate 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 debtor under the Bankruptcy
Code, or subject to other similar state or federal law providing for
reorganization or liquidation, 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 Debt Securities or the
appropriate Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio, as the case may be,
underlying this Corporate 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 with respect to the aggregate
A-11
principal amount of the Pledged Debt Securities or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in 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, without giving effect to the
conflicts of law provisions thereof.
Prior to due presentment of this Certificate for registration of
transfer, 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 Corporate Units Certificate is registered as the owner of the
Corporate Units evidenced hereby for the purpose of receiving payments of
interest payable on the Debt Securities, receiving payments of Contract
Adjustment Payments (subject to any applicable record date), 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.
A-12
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
____________________________________________
(State)
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)
A-13
the within Corporate Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
________________________________________________________________________________
attorney to transfer said Corporate Units Certificates on the books of PNM
Resources, Inc., 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
Corporate Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ______________________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-14
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 Corporate Units
evidenced by this Corporate 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
__________________________________
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other
than the Holder, please (i) print such
Person's name and address and (ii)
provide a guarantee of your signature: REGISTERED HOLDER
Please print name and address of Registered Holder:
_____________________________ __________________________________
Name Name
_____________________________ __________________________________
_____________________________ __________________________________
_____________________________ __________________________________
Address Address
________________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any
__________________________
Signature
Signature Guarantee:______________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-15
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Corporate Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement][Cash Merger Early
Settlement following a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts underlying the number
of Corporate Units evidenced by this Corporate Units Certificate specified
below. The undersigned Holder directs that a certificate for shares of Common
Stock or other securities deliverable upon such [Early Settlement][Cash Merger
Early Settlement] be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Corporate Units Certificate
representing any Corporate Units evidenced hereby as to which [Early
Settlement][Cash Merger 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 Debt Securities or
the appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, deliverable upon such [Early Settlement][Cash Merger 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:_______________________
Number of Units evidenced hereby as to which [Early Settlement][Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
Dated:_____________________ _________________________________
Signature
Signature Guarantee: _________________________________
(if assigned to another person)
If shares of Common Stock or Corporate
Units Certificates are to be registered
in the name of and delivered to and
Pledged Debt Securities or the Applicable
Ownership Interests in the Treasury
Portfolio, as the case may be, are to be REGISTERED HOLDER
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
A-16
Signature__________________________
Signature Guarantee:______________________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Transfer Instructions for Pledged Debt Securities or the Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, transferable upon
[Early Settlement][Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Corporate Units of this Global Certificate is
_________. The following increases or decreases in this Global Certificate have
been made:
PRINCIPAL
AMOUNT OF THIS
GLOBAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
NUMBER OF AMOUNT OF AMOUNT OF FOLLOWING SUCH GLOBAL CERTIFICATE
CORPORATE UNITS INCREASE DECREASE INCREASE FOLLOWING SUCH DECREASE
--------------- --------- --------- ------------------ ------------------------
A-18
EXHIBIT B
(FORM OF FACE OF TREASURY UNIT CERTIFICATE)
For inclusion in Global Certificate only -
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER 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 Units:______________
PNM RESOURCES, INC.
Treasury Units
This Treasury Units Certificate certifies that [Cede & Co.][_________]
is the registered Holder of the number of Treasury Units set forth above [For
inclusion in Global Certificates only - or such other number of Treasury Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto]. Each Treasury Unit consists of (i) a ___ 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 PNM Resources, Inc., a New Mexico
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.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury 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 Unit.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company, to sell, on ________
__, _____ (the "Purchase Contract Settlement Date"),
B-1
at a price equal to $_____ (the "Stated Amount"), a number of newly issued
shares of common stock, no par value per share ("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, an Early
Settlement or a Cash Merger Early Settlement with respect to such Purchase
Contract, 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 Units of which such Purchase Contract is a part.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Treasury Units as an acquisition of the Treasury
Securities and Purchase Contract constituting the Treasury Units, (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Treasury Securities and (iii) treat each Debt Security as indebtedness of
the Company.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Treasury Unit evidenced hereby, an amount
(the "Contract Adjustment Payments") equal to ___% per year of the Stated Amount
from ________ __, _____ or from the most recent Payment Date to which such
Contract Adjustment Payments have been paid or duly provided for. Such Contract
Adjustment Payments shall be payable to the Person in whose name this Treasury
Units Certificate is registered at the close of business on the Record Date for
such Payment Date.
Contract Adjustment Payments will be payable at the office of the
Company in New York City or the Corporate Trust Office of the Purchase Contract
Agent. If the book-entry system for the Corporate Units has been terminated, the
Contract Adjustment Payments will be payable, 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, or by wire transfer to the
account designated by such Person by a prior written notice to the Purchase
Contract Agent.
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 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
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
PNM RESOURCES, INC.
By:___________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase
Contracts evidenced hereby)
By: JPMORGAN CHASE BANK, not individually
but solely as Attorney-in-Fact of
such Holder
By:___________________________________
Authorized Officer
DATED:____________________
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Unit Certificates referred to in the
within-mentioned Purchase Contract Agreement.
Company Name
By: JPMORGAN CHASE BANK, as Purchase
Contract
Agent
By:___________________________________
Authorized Officer
DATED:____________________
B-3
(FORM OF REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ________ __, _____ (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and
JPMorgan Chase Bank, 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 Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury 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 newly issued shares of Common Stock equal to the Settlement
Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "Settlement Rate" is equal to:
(1) if the Adjusted 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 Adjusted 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 Contact having a value equal to the
Stated Amount divided by the Adjusted Applicable Market Value; and
(3) if the Adjusted 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 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 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
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 subject to adjustments set forth under Section 5.04 of the Purchase
Contract Agreement.
The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (i), (ii), (iii), (iv),
(v), (vi), (vii) or (x) of Section 5.04(a) of the Purchase Contract Agreement,
the Applicable Market Value, and (ii) at the time of and after any adjustment of
the Settlement Rate pursuant to paragraph (i), (ii), (iii), (iv), (v), (vi),
(vii) or (x) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value multiplied by a fraction, the numerator of
B-4
which shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (i), (ii), (iii), (iv), (v), (vi), (vii) or (x) of Section 5.04(a) of
the Purchase Contract Agreement and the denominator of which 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 (i), (ii), (iii),
(iv), (v), (vi), (vii) or (x) of Section 5.04(a) of the Purchase Contract
Agreement during the period taken into consideration for determining the
Applicable Market Value, appropriate and customary adjustments shall be made to
the Settlement Rate.
The "Closing Price" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the close of the principal trading
session (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 (or, if no closing price is reported, the last
reported sale price) per share as reported in the composite transactions for the
principal United States national or regional 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 last 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 market value of Common
Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which 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 Treasury 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, an Early Settlement or, if applicable, a
Cash Merger Early Settlement of each such Purchase Contract or by applying a
principal amount of the Pledged Treasury Securities underlying such Holder's
Treasury Unit equal to the Stated Amount of such Purchase Contract to the
purchase of the Common Stock. A Holder of Treasury Units who (1) does not on or
prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, notify the Purchase Contract
Agent of its intention to effect a Cash Settlement, or who does so notify the
Purchase Contract Agent but fails to make an effective Cash Settlement prior to
5:00 p.m. (New York City time) on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, (2) on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day prior to the Purchase Contract Settlement
Date, does not make an effective Early Settlement, or (3) on or prior to 5:00
p.m. (New York City time) on the fifth Business Day prior to the Purchase
Contract Settlement Date, does not make an effective Cash Merger 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-5
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 set forth in
the Purchase Contract Agreement.
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 Contract
Adjustment 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 Security
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 Unit. A Treasury Unit shall
thereafter represent the right to receive the Proceeds of the Treasury Security
forming a part of such Treasury Unit, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.
The Treasury Units Certificates are issuable only in registered form
and only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security 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 Debt Securities, for Treasury Securities, thereby recreating
Corporate 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 Unit remains in effect, such
Treasury Unit shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract constituting such Treasury Unit may be
transferred and exchanged only as a Treasury Unit.
Unless the Treasury Portfolio has replaced the Debt Securities as a
component of the Corporate Units and subject to the conditions set forth in the
Purchase Contract Agreement, a Holder of Treasury Units may recreate, at any
time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, Corporate Units by
delivering to the Securities Intermediary Debt Securities with an aggregate
principal amount, 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 Units shall
be referred to as a "Corporate Unit". Any such creation of Corporate Units may
be effected only in multiples of __ Treasury Units for __ Corporate Units.
If the Treasury Portfolio has replaced the Debt Securities as a
component of the Treasury Units, a Holder may, at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
substitute Treasury Securities for the Applicable Ownership Interests in the
Treasury Portfolio, but only in integral multiples of ______ Treasury Units. In
such an event, the Holder shall transfer Treasury Securities to the Collateral
Agent, and the Purchase Contract Agent shall instruct the Collateral Agent to
release the Pledge of and transfer to the Holder the appropriate Applicable
Ownership Interests in the Treasury Portfolio.
B-6
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Company in New
York City or the Corporate Trust Office of the Purchase Contract Agent. If the
book-entry system for the Corporate Units has been terminated, the Contract
Adjustment Payments will be payable, 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, or by wire transfer to the account
designated by such Person by a prior written notice to the Purchase Contract
Agent.
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 Contract
Adjustment 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 Security
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 Unit shall thereafter
represent the right to receive the interest in the Treasury Security forming a
part of such Treasury 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 Units 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 Contract evidenced by this Certificate,
the Holder of this Treasury Units Certificate shall deliver to the Purchase
Contract Agent at the Corporate Trust Office an Election to Settle Early form
set forth below 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 the sum of:
(i) the product of (A) the Stated Amount times (B) the
number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities underlying such Units 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 Unit as to which Early Settlement
is effected equal to 1.2119 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 Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Treasury Units pursuant to the terms of Section 5.04(b)(ii) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase
B-7
Contracts by a Holder of the related Treasury Units, the Pledged Treasury
Securities underlying such Treasury Units shall be released from the Pledge as
provided in the Pledge Agreement.
Upon registration of transfer of this Treasury 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 Treasury 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 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 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 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.
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, without giving
effect to the conflicts of law provisions thereof.
Prior to due presentment of this Certificate for registration or
transfer, 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 Units Certificate is registered as the owner of the
Treasury Units evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), 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-8
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
___________________________________________
(State)
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)
B-9
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
________________________________________________________________________________
attorney to transfer said Treasury Units Certificates on the books of PNM
Resources, Inc., 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 Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: _________________________________________
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-10
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 Treasury Units evidenced
by this Treasury 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 than
the Holder, please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature: REGISTERED HOLDER
Please print name and address of Registered Holder:
_____________________________ ____________________________________
Name Name
_____________________________ ____________________________________
_____________________________ ____________________________________
_____________________________ ____________________________________
Address Address
________________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any
_____________________________
Signature
Signature Guarantee:________________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-11
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement][Cash Merger Early
Settlement upon a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts underlying the number
of Treasury Units evidenced by this Treasury Units Certificate specified below.
The option to effect [Early Settlement][Cash Merger Early Settlement] may be
exercised only with respect to Purchase Contracts underlying Treasury Units 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 or
other securities deliverable upon such [Early Settlement][Cash Merger Early
Settlement] be registered in the name of, and delivered, together with a check
in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which Cash Merger 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][Cash Merger 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:________________________
Number of Units evidenced hereby as to which [Early Settlement][Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
Dated:_______________________ ________________________________
Signature
Signature Guarantee: ________________________________
(if assigned to another person)
If shares of Common Stock or Treasury
Units Certificates are to be registered
in the name of and delivered to and
Pledged Debt Securities or the Applicable
Ownership Interests in the Treasury
Portfolio, as the case may be, are to be REGISTERED HOLDER
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
________________________________________________________________________________
B-12
Social Security or other Taxpayer Identification Number, if any
Signature_____________________
Signature Guarantee:________________________
(if assigned to another person)
Transfer Instructions for Pledged Debt Securities or the Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, transferable upon
[Early Settlement][Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
B-13
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Treasury Units of this Global Certificate is 0.
The following increases or decreases in this Global Certificate have
been made:
PRINCIPAL
AMOUNT OF THIS
GLOBAL CERTIFICATE PRINCIPAL AMOUNT OF THIS
NUMBER OF AMOUNT OF AMOUNT OF FOLLOWING SUCH GLOBAL CERTIFICATE
TREASURY UNITS INCREASE DECREASE INCREASE FOLLOWING SUCH DECREASE
-------------- --------- --------- ------------------ ------------------------
B-14
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank
The Purchase Contract Agent
4 New York Plaza, 15th Floor
New York, New York 10004
Attention: Institutional Trust Services
Telecopy: 000-000-0000
Re: [________ Corporate Units][_______ Treasury Units] of
PNM Resources, Inc., a New Mexico corporation (the "Company")
_____________________________________________________________
The undersigned Holder hereby notifies you that it has delivered to
JPMorgan Chase Bank, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate principal amount of [Debt Securities][Treasury
Securities] in exchange for the [Pledged Debt Securities][Pledged Treasury
Securities] held in the Collateral Account, in accordance with the Pledge
Agreement, dated as of ________ __, _____ (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, the
Custodial Agent and the Securities Intermediary. The undersigned Holder has paid
all applicable fees and expenses 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 Debt Securities][Pledged
Treasury Securities] related to such [Corporate Units][Treasury Units].
Dated:__________________ ___________________________
Signature
Signature Guarantee ___________________________
Please print name and address of Registered Holder:
_____________________________ __________________________________
Name Name
_____________________________ __________________________________
_____________________________ __________________________________
_____________________________ __________________________________
Address Address
________________________________________________________________________________
Social Security or other Taxpayer Identification Number, if any
C-1
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_______________________________
_______________________________
_______________________________
Attention: _______________
Telecopy: _____________
Re: [__________ Corporate Units][______ Treasury Units] of
PNM Resources, Inc., a New Mexico corporation (the "Company")
_____________________________________________________________
Please refer to the Purchase Contract Agreement, dated as of ________
__, _____ (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,
attorney-in-fact and trustee for the holders of Corporate Units and [Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
and] Treasury Units from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Debt Securities][Applicable Ownership Interests (as specified in clause (i)
of the definition of such term) in the Treasury Portfolio][the Treasury
Securities] compromising a portion of your ownership interest in _____
[Corporate Units][Treasury Units] have been released and are being held by us
for your account pending receipt of transfer instructions with respect to such
[Debt Securities][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 [Corporate
Units][Treasury Units] effected through book-entry or by delivery to us of your
[Corporate Units Certificate][Treasury 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 [Corporate Units][Treasury Units] are transferred or your [Corporate Units
Certificate][Treasury Units Certificate] is surrendered or satisfactory evidence
is provided that such [Corporate Units Certificate][Treasury Units Certificate]
has been destroyed, lost or stolen, together with any indemnification that we or
the Company may require.
DATED: _________________ By: JPMORGAN CHASE BANK, as Purchase
Contract Agent
By:_________________________________
Title: Authorized Signatory
D-1
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
JPMorgan Chase Bank
The Purchase Contract Agent
4 New York Plaza, 15th Floor
New York, New York 10004
Attention: Institutional Trust Services
Telecopy: 000-000-0000
Re: [_______ Corporate Units][Treasury Units] of
PNM Resources, Inc., a New Mexico corporation (the "Company")
_____________________________________________________________
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Purchase Contract Agreement, dated as of ________ __,
_____ (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, Attorney-in-Fact and
Trustee for the Holders of the Purchase Contracts, that such Holder has elected
to pay to the Securities Intermediary for deposit in the Collateral Account, on
or prior to or on 11:00 a.m. (New York City time) on the [fourth] 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 with respect to _____
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 [Corporate Units][Treasury Units].
Dated:_____________________ __________________________
Signature
Signature Guarantee __________________________
Please print name and address of Registered Holder:
________________________________________________________
________________________________________________________
________________________________________________________
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
(Settlement of Purchase Contract through Remarketing)
JPMorgan Chase Bank
The Collateral Agent
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Telecopy: 000-000-0000
Re: ______ Corporate Units of PNM Resources, Inc.
a New Mexico corporation (the "Company")
_____________________________________________
Please refer to the Purchase Contract Agreement, dated as of ________
__, _____ (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,
attorney-in-fact and trustee for the Holders of Corporate Units from time to
time. In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on notices of [Early Settlements][Cash Settlements] received from Holders
of Corporate Units as of 5:00 p.m. (New York City time), on the fifth Business
Day immediately preceding the [Initial][Final] Remarketing Date, we hereby
notify you that an aggregate principal amount of $______ Debt Securities are to
be tendered for purchase in the Remarketing.
DATED:_________________________ By: JPMORGAN CHASE BANK, as Purchase
Contract Agent
By:__________________________________
Title: Authorized Signatory
F-1
