EXHIBIT 4.1
PPL CORPORATION
and
JPMORGAN CHASE BANK,
as Purchase Contract Agent, Collateral Agent
And Custodial Agent
PURCHASE CONTRACT AGREEMENT
Dated as of , 2003
TABLE OF CONTENTS
Page
RECITALS........................................................... 1
ARTICLE 1 Definitions and Other Provisions of General Applications..... 1
SECTION 1.01.Definitions............................................ 1
SECTION 1.02.Compliance Certificates and Opinions................... 13
SECTION 1.03.Form of Documents Delivered to Purchase Contract Agent. 14
SECTION 1.04.Acts of Holders; Record Dates.......................... 14
SECTION 1.05.Notices................................................ 16
SECTION 1.06.Notice to Holders; Waiver.............................. 17
SECTION 1.07.Effect of Headings and Table of Contents............... 17
SECTION 1.08.Successors and Assigns................................. 17
SECTION 1.09.Separability Clause.................................... 17
SECTION 1.10.Benefits of Agreement.................................. 18
SECTION 1.11.Governing Law.......................................... 18
SECTION 0.00.Xxxxx Holidays......................................... 18
SECTION 1.13.Counterparts........................................... 18
SECTION 1.14.Inspection of Agreement................................ 19
SECTION 1.15.Appointment of Financial Institution as Agent for the
Company................................................ 19
ARTICLE 2 Certificate Forms............................................ 19
SECTION 2.01.Forms of Certificates Generally........................ 19
SECTION 2.02.Form of Purchase Contract Agent's Certificate of
Authentication......................................... 20
ARTICLE 3 The Securities............................................... 20
SECTION 3.01.Amount; Form and Denominations......................... 20
SECTION 3.02.Rights and Obligations Evidenced by the Certificates... 21
SECTION 3.03.Execution, Authentication, Delivery and Dating......... 21
SECTION 3.04.Temporary Certificates................................. 22
SECTION 3.05.Registration; Registration of Transfer and Exchange.... 23
SECTION 3.06.Book-entry Interests................................... 24
SECTION 3.07.Notices to Holders..................................... 25
SECTION 3.08.Appointment of Successor Depositary.................... 25
SECTION 3.09.Definitive Certificates................................ 25
SECTION 3.10.Mutilated, Destroyed, Lost and Stolen Certificates..... 26
SECTION 3.11.Persons Deemed Owners.................................. 27
SECTION 3.12.Cancellation........................................... 27
SECTION 3.13.Creation of Treasury Units by Substitution of Treasury
Securities............................................. 28
SECTION 3.14.Reestablishment of New PEPS Units...................... 29
SECTION 3.15.Transfer of Collateral upon Occurrence of Termination
Event.................................................. 31
SECTION 0.00.Xx Consent to Assumption............................... 32
SECTION 3.17.CUSIP Numbers.......................................... 32
ARTICLE 4 The Notes.................................................... 32
SECTION 4.01.Interest Payments; Rights to Interest Payments
Preserved.............................................. 32
SECTION 4.02.Notice and Voting...................................... 34
ARTICLE 5 The Purchase Contracts....................................... 34
SECTION 5.01.Purchase of Shares of Common Stock..................... 34
SECTION 5.02.Remarketing Agent...................................... 37
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SECTION 5.02.A.Contract Adjustment Payments......................... 37
SECTION 5.03.Payment of Purchase Price; Remarketing................. 42
SECTION 5.03.A.Failed Final Remarketing............................. 47
SECTION 5.04.Issuance of Shares of Common Stock..................... 47
SECTION 5.05.Adjustment of Settlement Rate.......................... 48
SECTION 5.06.Notice of Adjustments and Certain Other Events......... 55
SECTION 5.07.Termination Event; Notice.............................. 55
SECTION 5.08.Early Settlement....................................... 56
SECTION 0.00.Xx Fractional Shares................................... 58
SECTION 5.10.Charges and Taxes...................................... 58
ARTICLE 6 Remedies..................................................... 58
SECTION 6.01.Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common
Stock.................................................. 58
SECTION 6.02.Restoration of Rights and Remedies..................... 59
SECTION 6.03.Rights and Remedies Cumulative......................... 59
SECTION 6.04.Delay or Omission Not Waiver........................... 59
SECTION 6.05.Undertaking for Costs.................................. 59
SECTION 6.06.Waiver of Stay or Extension Laws....................... 60
ARTICLE 7 The Purchase Contract Agent.................................. 60
SECTION 7.01.Certain Duties and Responsibilities.................... 60
SECTION 7.02.Notice of Default...................................... 61
SECTION 7.03.Certain Rights of Purchase Contract Agent.............. 61
SECTION 7.04.Not Responsible for Recitals or Issuance of Securities. 63
SECTION 7.05.May Hold Securities.................................... 63
SECTION 0.00.Xxxxx Held in Custody.................................. 63
SECTION 7.07.Compensation and Reimbursement......................... 64
SECTION 7.08.Corporate Purchase Contract Agent Required;
Eligibility............................................ 64
SECTION 7.09.Resignation and Removal; Appointment of Successor...... 65
SECTION 7.10.Acceptance of Appointment by Successor................. 66
SECTION 7.11.Merger, Conversion, Consolidation or Succession to
Business............................................... 66
SECTION 7.12.Preservation of Information; Communications to Holders. 67
SECTION 0.00.Xx Obligations of Purchase Contract Agent.............. 67
SECTION 0.00.Xxx Compliance......................................... 68
ARTICLE 8 Supplemental Agreements...................................... 68
SECTION 8.01.Supplemental Agreements Without Consent of Holders..... 68
SECTION 8.02.Supplemental Agreements with Consent of Holders........ 69
SECTION 8.03.Execution of Supplemental Agreements................... 70
SECTION 8.04.Effect of Supplemental Agreements...................... 70
SECTION 8.05.Reference to Supplemental Agreements................... 70
ARTICLE 9 Merger, Consolidation, Share Exchange, Sale or Conveyance.... 71
SECTION 9.01.Covenant Not to Merge, Consolidate, Enter into a Share
Exchange, Sell or Convey Property Except Under Certain
Conditions............................................. 71
SECTION 9.02.Rights and Duties of Successor Corporation............. 71
SECTION 9.03.Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent................................ 72
ARTICLE 10 Covenants................................................... 72
SECTION 10.01.Performance under Purchase Contracts.................. 72
SECTION 10.02.Maintenance of Office or Agency....................... 72
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SECTION 00.00.Xxxxxxx to Reserve Common Stock....................... 73
SECTION 10.04.Covenants as to Common Stock.......................... 73
SECTION 10.05.Statements of Officers of the Company as to Default... 73
SECTION 00.00.Xxx Treatment......................................... 74
SECTION 10.07.ERISA................................................. 74
SECTION 10.08.Securities Contract................................... 74
Exhibit A Face of New PEPS Units Certificate
Exhibit B Face of Treasury Certificate
Exhibit C Instruction to Purchase Contract Agent
Exhibit D Notice from Purchase Contract Agent to Holders
Exhibit E Notice to Settle by Cash
Exhibit F Notice from Purchase Contract Agent to Remarketing Agent,
Collateral Agent and Indenture Trustee and the Company
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PURCHASE CONTRACT AGREEMENT, dated as of , 2003, (the "AGREEMENT") between
PPL CORPORATION, a Pennsylvania corporation (the "COMPANY"), JPMORGAN CHASE
BANK, a New York banking corporation, acting as purchase contract agent for the
Holders of Securities (as defined herein) from time to time (the "PURCHASE
CONTRACT AGENT"), JPMORGAN CHASE BANK, a New York banking corporation, acting as
collateral agent (the "COLLATERAL AGENT") and JPMORGAN CHASE BANK, a New York
banking corporation, acting as custodial agent for the Company (the "CUSTODIAL
AGENT").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done. For and
in consideration of the premises and the purchase of the Securities by the
Holders thereof, it is mutually agreed as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
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;
(d) the following term has the meaning given to it in the Remarketing
Agreement: (a) Remarketing; and (b) Remarketing Procedures;
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(e) the following terms have the meanings given to them in this Section
1.01(e):
"3-MONTH LIBOR" means the rate determined in accordance with the following
provisions:
(a) the rate for deposits in United States dollars having a maturity
of three months, commencing on the applicable Interest Reset Date, that
appears on the Designated LIBOR Page as of 11:00 A.M., London time, on the
preceding Interest Determination Date. If no such rate so appears, 3-month
LIBOR on such Interest Determination Date will be determined in accordance
with the provisions described in clause (b) below.
(b) With respect to an Interest Determination Date on which no such
rate appears on the Designated LIBOR Page as specified in clause (a)
above, the Calculation Agent will request the principal London offices of
each of four major reference banks (which may include affiliates of the
Remarketing Agent, the Indenture Trustee or the Calculation Agent) in the
London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in United
States dollars for the period of three months, commencing on the
applicable Interest Reset Date, to prime banks in the London interbank
market at approximately 11:00 A.M., London time, on such Interest
Determination Date and in a principal amount that is representative for a
single transaction in United States dollars in such market at such time.
If at least two such quotations are so provided, then 3-month LIBOR on
such Interest Determination Date will be the arithmetic mean of such
quotations. If fewer than two such quotations are so provided, then
3-month LIBOR on such Interest Determination Date will be the arithmetic
mean of the rates quoted at approximately 11:00 A.M., New York City time,
on such Interest Determination Date by three major banks (which may
include affiliates of the Remarketing Agent, the Indenture Trustee or the
Calculation Agent) in The City of New York selected by the Calculation
Agent for loans in United States dollars to leading European banks, having
a three months maturity and in a principal amount that is representative
for a single transaction in United States dollars in such market at such
time; provided, however, that if the banks so selected by the Calculation
Agent are not quoting as mentioned in this sentence, 3-month LIBOR
determined as of such Interest Determination Date will be 3-month LIBOR in
effect on such Interest Determination Date, or if no such 3-month LIBOR is
then in effect, the interest rate on the Notes will be the rate in effect
on such Interest Determination Date.
"ACT" has the meaning, with respect to any Holder, set forth in Section
1.04.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such
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Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.01.
"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.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day on
which banking institutions in New York City are authorized or required by law or
executive order to remain closed or a day on which the Indenture Trustee is
closed for business; provided that, in connection with a Remarketing and
following a Successful Remarketing, such day for the purposes of determining
3-month LIBOR is also a London Business Day; and provided, further, that for
purposes of the second paragraph of Section 1.12 only, the term "Business Day"
shall also be deemed to exclude any day on which trading on the New York Stock
Exchange, Inc. is closed or suspended.
"CALCULATION AGENT" means JPMorgan Chase Bank, or any successor
Calculation Agent appointed by PPL Capital Funding; provided, however, that for
the initial interest rate reset on May 18, 2004, the Calculation Agent shall be
the Remarketing Agent.
"CASH" shall have the meaning set forth in Section 1.0 of the Pledge
Agreement.
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"CASH SETTLEMENT" has the meaning set forth in Section 5.03(b)(i).
"CERTIFICATE" means a New PEPS Units Certificate or a Treasury Units
Certificate.
"CLEARING AGENCY" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book-entry transfers and pledges of the Securities.
"CLOSING PRICE" has the meaning set forth in Section 5.01.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in Section 1 of the Pledge
Agreement.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 1 of the Pledge
Agreement.
"COLLATERAL AGENT" means the Person named as the "Collateral Agent" in the
first paragraph of this Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Collateral Agent" shall mean such Person.
"COLLATERAL SUBSTITUTION" has the meaning set forth in Section 3.13.
"COMMON STOCK" means the PPL Corporation common stock, par value $0.01 per
share.
"COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"CONSTITUENT PERSON" has the meaning set forth in Section 5.05(b).
"CONTRACT ADJUSTMENT PAYMENTS" means in the case of New PEPS Units and
Treasury Units the amount payable by the Company in respect of each Purchase
Contract constituting a part of a New PEPS Unit or Treasury Unit, equal to 0.46
% per annum of the Stated Amount, or $0.1150 per annum, in each case computed on
the basis of a 360-day year of twelve 30-day months, accruing from August 18,
2003 and payable quarterly in arrears on November 18, 2003, February 18, 2004
and May 18, 2004.
"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
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be administered, which office at the date hereof is located at 0 Xxx Xxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust Services.
"COUPON RATE" means (i) the rate of 7.29% per year from August 18, 2003
through and including the day immediately preceding the Purchase Contract
Settlement Date and (ii)(A) in the case of a Successful Remarketing, the Reset
Rate on and after the Purchase Contract Settlement Date and (B) in the case of a
Failed Final Remarketing, the Coupon Rate (as defined in clause (i) of this
definition) on and after the Purchase Contract Settlement Date, until the
principal thereof is paid or duly made available for payment.
"CUSTODIAL AGENT" means the Person named as the "Custodial Agent" in the
first paragraph of this 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 such Person.
"CURRENT MARKET PRICE" has the meaning set forth in Section 5.05(a)(8).
"DEALER MANAGER AGREEMENT" means, the Dealer Manager Agreement, dated as
of , 2003, between the Company, PPL Capital Funding and Xxxxxx Xxxxxxx & Co.
Incorporated as dealer manager thereto.
"DEPOSITARY" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Securities as contemplated by
Sections 3.06, 3.07, 3.08 and 3.09.
"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.
"DESIGNATED LIBOR PAGE" means the display designated as "Page 3750" on
Moneyline Telerate, Inc., or such other page as may replace Page 3750 or such
service or any successor service or services as may be nominated by the British
Bankers' Association for the purpose of displaying the London interbank rates of
major banks for United States dollars.
"DTC" means The Depository Trust Company.
"EARLY SETTLEMENT" has the meaning set forth in Section 5.08(a).
"EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.08(a).
"EARLY SETTLEMENT DATE" has the meaning set forth in Section 5.08(a).
"EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.08(b).
5
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
any statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning set forth in Section 1.04(e).
"EXPIRATION TIME" has the meaning set forth in Section 5.05(a)(6).
"FAILED FINAL REMARKETING" has the meaning set forth in Section 5.03(c).
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of the
Securities and is registered in the name of a Clearing Agency or a nominee
thereof.
"HOLDER" means, with respect to a Security, the Person in whose name the
Security evidenced by a Certificate is registered in the Security Register;
provided, however, that in determining whether the Holders of the requisite
number of Securities have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Security
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the Securities are credited on the record date, the term "Holder" shall mean
such Depositary Participant acting at the direction of the Beneficial Owners.
"INDENTURE" means the Indenture, dated as of November 1, 1997, between the
Company and the Indenture Trustee (including any provisions of the TIA that are
deemed incorporated therein), as supplemented by the Supplemental Indenture No.
5 dated as of , 2003, pursuant to which the Notes will be issued.
"INDENTURE TRUSTEE" means JPMorgan Chase Bank, a New York banking
corporation, as trustee under the Indenture, or any successor thereto in such
capacity.
"INTEREST DETERMINATION DATE" means the second London Business Day
immediately preceding the applicable Interest Reset Date; provided, however,
that for the initial interest rate reset on May 18, 2004, the Interest
Determination Date means the second London Business Day immediately preceding
each date of Remarketing if there is a Successful Remarketing on such date.
"INTEREST RESET DATE" shall have the meaning set forth in Section 1.04(e)
of the Supplemental Indenture No. 5 dated as of , 2003.
"LONDON BUSINESS DAY" means a day on which dealings in deposits in United
States dollars are transacted in the London interbank market.
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"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request signed
in the name of the Company by its Chairman of the Board, its President or one of
its Vice Presidents, and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Purchase Contract Agent.
"NEW PEPS UNIT" means the 7-3/4% Premium Equity Participating Security
Units (PEPS(SM) Units), Series B which are the collective rights and obligations
of a Holder of a New PEPS Units Certificate in respect of a 1/40, or 2.5%,
undivided beneficial ownership interest in a Note, subject to the Pledge
thereof, and the related Purchase Contract.
"NEW PEPS UNITS CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of New PEPS Units specified on
such certificate.
"NEW YORK OFFICE" shall have the meaning set forth in Section 10.02.
"NON-ELECTING SHARE" has the meaning set forth in Section 5.05(b).
"NOTES" means the series of Notes due 2006 issued by PPL Capital Funding
under the Indenture and guaranteed by the Company. For purposes of this
Agreement, references to a Note or beneficial interests in a Note shall include,
if applicable, a 1/40, or 2.5%, undivided beneficial ownership interest in a
$1,000 principal amount of a Note.
"NYSE" means the New York Stock Exchange, Inc.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the
Board, its President or one of its Vice Presidents, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Purchase Contract Agent. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Agreement shall include:
(i) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) a statement that, in the opinion of each such officer, each
such officer has made such examination or investigation as is necessary to
enable such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
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"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent or in the case of
an Opinion of Counsel delivered under the Pledge Agreement, reasonably
acceptable to the Collateral Agent, Securities Intermediary or Custodial Agent,
as the case may be. An opinion of counsel may rely on certificates as to matters
of fact.
"OUTSTANDING SECURITIES" means, with respect to any Security and as of the
date of determination, all Securities evidenced by Certificates theretofore
authenticated, executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (i) Treasury Units and (ii)
New PEPS Units for which the underlying Notes have been theretofore
deposited with the Purchase Contract Agent in trust for the Holders of
such New PEPS Units;
(ii) Securities evidenced by Certificates theretofore cancelled by
the Purchase Contract Agent or delivered to the Purchase Contract Agent
for cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Securities evidenced by Certificates in exchange for or in
lieu of which other Certificates have been authenticated, executed on
behalf of the Holder and delivered pursuant to this Agreement, other than
any such Certificate in respect of which there shall have been presented
to the Purchase Contract Agent proof satisfactory to it that such
Certificate is held by a protected purchaser in whose hands the Securities
evidenced by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding Securities, except that, in determining whether the Purchase
Contract Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Purchase Contract Agent knows to be so owned shall be
so disregarded. Securities so owned that have been pledged in good faith may be
regarded as Outstanding Securities if the pledgee establishes to the
satisfaction of the Purchase Contract Agent the pledgee's right so to act with
respect to such Securities and that the pledgee is not the Company or any
Affiliate of the Company.
"PAYMENT DATE" means November 18, 2003, February 18, 2004 and May
18, 2004.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1 of
the Pledge Agreement.
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"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"PLAN" means an employee benefit plan that is subject to ERISA, a plan
account or other arrangement that is subject to Section 4975 of the Code or any
Similar Law and any entity whose assets are considered assets of any such plan,
account or arrangement.
"PLEDGE" means the pledge under the Pledge Agreement of the Notes or the
Treasury Securities, in each case constituting a part of the Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of , 2003, among
the Company, the Collateral Agent, the Securities Intermediary and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact for the Holders from
time to time of the Securities.
"PLEDGED NOTES" has the meaning set forth in the Pledge Agreement.
"PPL CAPITAL FUNDING" means PPL Capital Funding, Inc., a Delaware
corporation and the issuer of the Subordinated Notes, and its successors.
"PREDECESSOR CERTIFICATE" means a Predecessor New PEPS Units Certificate
or a Predecessor Treasury Units Certificate.
"PREDECESSOR NEW PEPS UNITS CERTIFICATE" of any particular New PEPS Units
Certificate means every previous New PEPS Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
New PEPS Units evidenced thereby; and, for the purposes of this definition, any
New PEPS Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen New PEPS Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen New PEPS
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.
"PROCEEDS" has the meaning set forth in Section 1 of the Pledge Agreement.
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"PURCHASE CONTRACT" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and the
Holder of such Security to purchase, shares of Common Stock and (ii) pay the
Holder Contract Adjustment Payments on the terms and subject to the conditions
set forth in Article Five hereof.
"PURCHASE CONTRACT AGENT" means the Person named as the "Purchase Contract
Agent" in the first paragraph of this Agreement until a successor Purchase
Contract Agent shall have become such pursuant to the applicable provisions of
this Agreement, and thereafter "Purchase Contract Agent" shall mean such Person.
"PURCHASE CONTRACT SETTLEMENT DATE" means May 18, 2004.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in Section
5.04.
"PURCHASE PRICE" has the meaning set forth in Section 5.01.
"PURCHASED SHARES" has the meaning set forth in Section 5.05(a)(6).
"RECORD DATE" for the interest payable on any Payment Date means, as to
any Global Certificate, the Business Day next preceding such Payment Date, and
as to any other Certificate, the fifteenth day prior to such Payment Date.
"REDEMPTION PRICE" means the redemption price per Note equal to the
principal amount of such Note plus any accrued and unpaid interest on such Note
to the date of redemption.
"REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.
"REFERENCE PRICE" has the meaning set forth in Section 5.01.
"REMARKETING" has the meaning set forth in Section 5.03(c).
"REMARKETING AGENT" has the meaning set forth in Section 5.02.
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of ,
2003, among the Company, PPL Capital Funding and the Remarketing Agent.
"REMARKETING FEE" has the meaning set forth in Section 5.03(c).
"REMARKETED NOTES" means the Notes, as the Purchase Contract Agent and the
Custodial Agent shall have notified the Remarketing Agent after 11:00 a.m., New
York City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date (i) of the holders electing to have their Notes
remarketed, and (ii) of the Holders of New PEPS Units who have not settled early
the related Purchase Contracts and have failed to notify the Purchase Contract
Agent, on or prior to the seventh Business
10
Day immediately preceding the Purchase Contract Settlement Date, of their
intention to settle the related Purchase Contracts through Cash Settlement, or
have so notified the Purchase Contract Agent, but failed to deliver sufficient
cash to the Purchase Contract Agent on or prior to the sixth Business Day
preceding the Purchase Contract Settlement Date.
"REORGANIZATION EVENT" has the meaning set forth in Section 5.05(b).
"RESET AGENT" means Xxxxxx Xxxxxxx & Co. Incorporated or, if Xxxxxx
Xxxxxxx & Co. Incorporated is unwilling or unable to act, another nationally
recognized investment banking firm chosen by the Company to determine the
initial Reset Rate.
"RESET RATE" means 3-month LIBOR plus the Spread; provided, however, that
the Reset Rate shall not exceed the maximum rate 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 this Purchase Contract Agreement.
"SECURITIES INTERMEDIARY" means JPMorgan Chase Bank, as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"SECURITY" means a New PEPS Unit or a Treasury Unit, as the case may be.
"SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings set forth in Section 3.05.
"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; provided, however, that Senior Indebtedness
does not include obligations to subsidiaries, obligations to employees or trade
accounts payable.
"SETTLEMENT RATE" has the meaning set forth in Section 5.01.
"SIMILAR LAW" means any federal, state, local, non-U.S. or other law or
regulation that is similar to any of the provisions contained in Title I of
ERISA or Section 4975 of the Code.
"SPREAD" means the number of basis points (one one-hundredth of a
percentage point) to be added to 3-month LIBOR that the Remarketing Agent
determines is required for a Successful Remarketing. For the avoidance of doubt,
the Spread will be fixed once determined by the Remarketing Agent in a
Successful Remarketing.
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"STATED AMOUNT" means $25.
"SUCCESSFUL REMARKETING" has the meaning set forth in Section 5.03(c).
"SUPPLEMENTAL REMARKETING AGREEMENT" means the Supplemental Remarketing
Agreement between the Company and the Purchase Contract Agent in connection with
the remarketing.
"TERMINATION DATE" means the date, if any, on which a Termination Event
occurs.
"TERMINATION EVENT" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under the Bankruptcy Code, adjudicating the Company to be
insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of the Company or any other similar
applicable Federal or State law, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;
(ii) a judgment, decree or court order for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the termination or liquidation
of its affairs, shall have been entered, and, unless such judgment, decree
or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days; or
(iii) at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under the Bankruptcy
Code, or shall consent to the filing of a bankruptcy proceeding against
it, or shall file a petition or answer or consent seeking reorganization
or liquidation under the Bankruptcy Code or any other similar applicable
Federal or State law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee
or assignee in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"THRESHOLD APPRECIATION PRICE" has the meaning set forth in Section 5.01.
"TIA" means the Trust Indenture Act of 1939, as amended from time to time,
or any successor legislation.
"TRADING DAY" has the meaning set forth in Section 5.01.
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"TRANSFER AGENT" shall mean JPMorgan Chase Bank.
"TREASURY UNIT" means, following the substitution of Treasury
Securities for Notes as collateral to secure a Holder's obligations under the
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.
"TREASURY SECURITIES" means zero-coupon U.S. Treasury Securities (CUSIP
No. 000000XX0) which mature on May 17, 2004.
"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 in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(i) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(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
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(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 necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. 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.
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(c) The ownership of Securities shall be proved by the New PEPS Units
Register or the Treasury Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Certificate evidencing such
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Purchase Contract Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding New PEPS 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 New PEPS 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 Securities on such record date. Nothing contained in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and be of no effect), and nothing
contained in this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding Securities on the date
such action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Purchase Contract Agent in writing and to each Holder of Securities
in the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "EXPIRATION DATE" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Purchase Contract Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.06, 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.
15
SECTION 1.05. Notices.
Any notice or communication is duly given if in writing and delivered
in Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00(xx) Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Telecopier No.: (000) 000-0000
If to the Company:
PPL Corporation
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Treasurer
If to the Collateral Agent:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00(xx) Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Telecopier No.: (000) 000-0000
If to the Custodial Agent:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00(xx) Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Telecopier No.: (000) 000-0000
16
If to the Indenture Trustee:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00(xx) Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Institutional Trust Services
Telecopier No.: (000) 000-0000
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 applicable 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 Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
17
SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.
SECTION 1.11. Governing Law.
This Agreement and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York.
SECTION 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Securities)
payment of the Contract Adjustment Payments shall not be made on such date, but
such payments shall be made on the next succeeding Business Day with the same
force and effect as if made on such Payment Date, provided that no interest
shall accrue or be payable by the Company or any Holder for the period from and
after any such Payment Date unless there shall be a default in the payment due
on such next succeeding Business Day, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day with the same force and effect as if
made on such Payment Date.
In any case where any Purchase Contract Settlement Date or Early
Settlement Date shall not be a Business Day (notwithstanding any other provision
of this Agreement or the Securities), Purchase Contracts shall not be performed
and Early Settlement shall not be effected on such date, but Purchase Contracts
shall be performed or Early Settlement effected, as applicable, on the next
succeeding Business Day with the same force and effect as if made on such
Purchase Contract Settlement Date or Early Settlement Date, as applicable,
provided that no interest shall accrue or be payable by the Company or to any
Holder for the period from and after any such Purchase Contract Settlement Date
or Early Settlement Date, as applicable, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day with the same force and effect as if
made on such Purchase Contract Settlement Date or Early Settlement Date, as
applicable.
SECTION 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be
18
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.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming part
of each Security evidenced thereby) shall be in substantially the form set forth
in Exhibit A hereto (in the case of Certificates evidencing New PEPS 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 Securities are
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
The definitive Certificates shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers of the Company executing the Securities evidenced by
such Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION (THE "DEPOSITARY"), OR A NOMINEE OF THE
DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE
19
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER
THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REGISTERED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of authentication
of the Securities shall be in substantially the form set forth on the form of
the applicable Certificates.
ARTICLE 3
THE SECURITIES
SECTION 3.01. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to , except for Certificates authenticated, executed and delivered
upon registration of transfer of, in exchange for, or in lieu of, other
Certificates pursuant to Section 3.04, 3.05, 3.10, 3.13, 3.14, 5.08 or 8.05.
20
The Certificates shall be issuable only in registered form and only in
denominations of a single New PEPS Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.02. Rights and Obligations Evidenced by the Certificates.
Each New PEPS Units Certificate shall evidence the number of New PEPS
Units specified therein, with each such New PEPS Units representing (1) the
ownership by the Holder thereof of a 1/40, or 2.5%, undivided beneficial
ownership interest in a $1,000 principal amount Note, subject to the Pledge of
such ownership interest in a Note by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Purchase Contract Agent as
attorney-in-fact for, and on behalf of, the Holder of each New PEPS Unit shall
pledge, pursuant to the Pledge Agreement the ownership interest in a Note
forming a part of such New PEPS Unit, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such ownership interest in a Note, for the benefit of the Company, to
secure the obligation of the Holder under each Purchase Contract to purchase
shares of Common Stock.
Upon the formation of a Treasury Unit pursuant to Section 3.13, each
Treasury Units Certificate shall evidence the number of Treasury Units specified
therein, with each such Treasury Unit representing (1) a 1/40, or 2.5%,
undivided beneficial ownership interest in a Treasury Security with 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 (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Security to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
21
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President, one of its Vice Presidents or its
Treasurer. The signature of any of these officers on the Certificates may be
manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized signatory of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contracts evidenced by such
Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.04. 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
New PEPS 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
22
authenticate, execute on behalf of the Holder, and deliver in exchange therefor,
one or more definitive Certificates of like tenor and denominations and
evidencing a like number of Securities as the temporary Certificate or
Certificates so surrendered. Until so exchanged, the temporary Certificates
shall in all respects evidence the same benefits and the same obligations with
respect to the Securities, evidenced thereby as definitive Certificates.
SECTION 3.05. 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 New PEPS 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 New PEPS
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
New PEPS 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 New PEPS
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 New
PEPS 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
23
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 3.06 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 earlier of the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Purchase Contract Agent shall:
(i) if the Purchase Contract Settlement Date has occurred,
upon receipt of shares of Common Stock from the Company's Transfer
Agent, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
other Certificate; or
(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Notes or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
SECTION 3.06. 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 and the Purchase Contract Agent shall be
entitled to deal with the Depositary for all purposes of this Agreement
(including the payment of Contract Adjustment Payments and receiving
approvals, votes or consents hereunder) as the Holder of the Securities
and the sole holder of the Global Certificates and shall have no
obligation to the Beneficial Owners;
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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
Participants.
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
Securities registered in the name of the Depositary or the nominee of the
Depositary, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
SECTION 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.
SECTION 3.09. Definitive Certificates.
In the event that:
(i) the Depositary notifies the Company that it is unwilling
or unable to continue as a Depositary for the Global Certificates and
no successor depositary has been appointed within 90 days after such
notice pursuant to Section 3.08;
(ii) the Depositary at any time ceases to be a Clearing Agency
when the Depositary is required to be registered as such to act as the
Depositary and no successor Depositary has been appointed within 90
days after the Company learns that the Depositary has ceased to be so
registered; or
(iii) the Company, in its sole discretion, determines that it
will no longer have the New PEPS Units and the Treasury Units
represented by Global Certificates,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Securities and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Securities by the
Depositary, accompanied by
25
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Depositary. The Company shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected in relying on,
such instructions. Each definitive Certificate so delivered shall evidence
Securities of the same kind and tenor as the Global Certificate so surrendered
in respect thereof.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of New PEPS Units or Treasury Units, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Purchase Contract Agent that such Certificate
has been acquired by a "protected" purchaser (as defined in Article 8 of the
UCC), 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 New PEPS 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 earlier of the Purchase Contract Settlement Date or
the Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred,
upon receipt of shares of Common Stock from the Company's Transfer
Agent, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate; or
(2) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Notes or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
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Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Purchase Contract Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Security evidenced thereby, for the purpose of
receiving interest on the Treasury Securities or Notes (subject to Section
4.01), as applicable, receiving payments of Contract Adjustment Payments
(subject to Section 5.02.A(a)), performance of the Purchase Contracts and for
all other purposes whatsoever, whether or not any interest on the Treasury
Securities or Notes, as applicable, or the Contract Adjustment Payments payable
in respect of the Purchase Contracts, constituting a part of the Security
evidenced thereby, shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Purchase Contract Agent, nor any agent
of the Company or the Purchase Contract Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate.
SECTION 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Notes or
Treasury Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early
27
Settlement, or upon the registration of transfer or exchange of a Security, or a
Collateral Substitution or the reestablishment of New PEPS Units shall, if
surrendered to any Person other than the Purchase Contract Agent, be delivered
to the Purchase Contract Agent and, if not already cancelled, shall be promptly
cancelled by it. The Company may at any time deliver to the Purchase Contract
Agent for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Purchase Contract Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Certificates held by the
Purchase Contract Agent shall be 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 for cancellation.
SECTION 3.13. Creation of Treasury Units by Substitution of Treasury
Securities.
Subject to the conditions set forth in this Agreement, a Holder may
separate the Notes from the related Purchase Contracts in respect of such
Holder's New PEPS Units by substituting for such Notes, Treasury Securities
having an aggregate principal amount at maturity equal to the aggregate
principal amount of such Notes (a "COLLATERAL SUBSTITUTION"), at any time from
and after the date of this Agreement and prior to or on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date. To effect such
substitution, the Holder must:
(i) deposit with the Securities Intermediary Treasury
Securities having an aggregate amount at maturity equal to the
aggregate principal amount of the Notes; and
(ii) transfer the related New PEPS Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that the
Holder has deposited the relevant amount of Treasury Securities with
the Securities Intermediary and (ii) requesting that the Purchase
Contract Agent instruct the Collateral Agent to release the Notes
underlying such New PEPS Units, whereupon the Purchase Contract Agent
shall promptly provide an instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (i) above
and the instruction described in clause (ii) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Notes from the Pledge, free and clear
of the Company's security interest
28
therein, and the transfer of such Notes to the Purchase Contract Agent on behalf
of the Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly:
(i) cancel the related New PEPS Units;
(ii) transfer the Notes to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver 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 New PEPS Units.
Holders who elect to separate the Notes from the related Purchase
Contracts and to substitute Treasury Securities for such Notes, as the case may
be, shall be responsible for any fees or expenses payable to the Collateral
Agent for its services as Collateral Agent in connection with the substitution,
and the Company shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions only in integral multiples of
40 New PEPS Units.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the New PEPS Units or
fails to deliver New PEPS Units Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Collateral Agent, any interest on
the Notes constituting a part of such New PEPS Units, as the case may be, shall
be held in the name of the Purchase Contract Agent or its nominee in trust for
the benefit of such Holder, until such New PEPS Units are so transferred or the
New PEPS Units Certificate is so delivered, as the case may be, or, such Holder
provides evidence satisfactory to the Company and the Purchase Contract Agent
that such New PEPS Units Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Purchase Contract Agent
and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying a New PEPS Unit remains in effect, such New PEPS Unit shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the ownership interest in a Note, and the Purchase
Contract comprising such New PEPS Unit may be acquired, and may be transferred
and exchanged, only as a New PEPS Unit.
SECTION 3.14. Reestablishment of New PEPS Units.
Subject to the conditions set forth in this Agreement, a Holder of
Treasury Units may reestablish New PEPS Units at any time prior to or on the
seventh Business Day immediately preceding the Purchase Contract Settlement
Date, by:
29
(i) depositing with the Securities Intermediary Notes having
an aggregate principal amount equal to the aggregate principal amount
at maturity of the Treasury Securities comprising part of the Treasury
Units; and
(ii) transferring 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 Notes 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 Notes described in clause (i) above and the instruction
described in clause (ii) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will cause the Securities Intermediary to effect
the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer to the Purchase Contract Agent on
behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall
promptly:
(i) cancel the related Treasury Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a New PEPS Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of New PEPS
Units as were evidenced by the cancelled Treasury Units.
Holders who elect to reestablish New PEPS Units shall be responsible
for any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the reestablishment, and the Company shall not be
responsible for any such fees or expenses.
Holders of Treasury Units may only reestablish New PEPS Units in
integral multiples of 40 Treasury Units.
In the event a Holder re-establishing New PEPS Units pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Treasury Units or
fails to deliver a New Treasury Unit Certificate to the Purchase Contract Agent
after depositing Notes with the Collateral Agent, the Treasury Securities
constituting a part of such Treasury 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 Treasury Units are so transferred or the Treasury Unit Certificate is
so delivered, as the case may be, or, with respect to a Certificate for Treasury
Units, such Holder provides evidence satisfactory to the Company and the
30
Purchase Contract Agent that such Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a 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 1/40 undivided beneficial
ownership interest in 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 Notes or the Treasury Securities, as the case may
be, underlying the New PEPS 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 Notes or Treasury Securities,
as the case may be, from each Holder by written request, substantially in the
form of Exhibit D hereto, mailed to such Holder at its address as it appears in
the Security Register.
Upon book-entry transfer of the New PEPS Units or the Treasury Units or
delivery of a New PEPS Units Certificate or Treasury Units Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer the Notes or Treasury Securities, as the case may be,
underlying such New PEPS 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; provided, however, that, if a Holder of Treasury Units
would otherwise have been entitled to receive less than $1,000 principal amount
at maturity of any Treasury Security upon the occurrence of a Termination Event,
the Purchase Contract Agent will dispose of the security for cash and pay the
appropriate amount of such cash to such Holder in accordance with such Holder's
instructions; and provided, further, that upon release by the Collateral Agent
of Notes underlying the beneficial ownership interest in the Notes pledged to
secure the New PEPS Units holders' obligations under the related Purchase
Contracts (other than any release of the Notes in connection with the creation
of Treasury Units, an early settlement with separate cash, an early settlement
upon a cash merger, a notice to settle with cash or a remarketing, as described
in Sections 3.13, 5.08, 5.05(b)(2), 5.03(b) and 5.03(c), respectively) the Notes
will be issuable in denominations of $25 principal amount and integral multiples
thereof. In the event a Holder of New PEPS Units or Treasury Units fails to
effect such transfer or delivery, the Notes or Treasury Securities, as the case
may be, underlying such New PEPS Units or Treasury Units, as the case may be,
and any interest 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 New PEPS Units or Treasury Units or
surrender of the New PEPS Units Certificate or Treasury Units
Certificate or
31
receipt by the Company and the Purchase Contract Agent from such Holder
of satisfactory evidence that such New PEPS 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.
SECTION 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.
SECTION 3.17. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Purchase Contract Agent shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Purchase Contract Agent of any changes in the "CUSIP" numbers.
ARTICLE 4
THE NOTES
SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved.
Any interest payment on a Note 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 New PEPS Units Certificate (or one or more Predecessor New PEPS
Units Certificates) is registered at the close of business on the Record Date
for such Payment Date; provided, however, that if any such payment is received
on a day that is not a Business Day or after 11:00 a.m. (New York City time) on
a Business Day, then the Purchase Contract Agent shall use all commercially
reasonable efforts to deliver any such payment not later than 10:30 a.m. (New
York City time) on the next succeeding Business Day.
32
Each New PEPS Units Certificate evidencing the Notes delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other New PEPS Units Certificate shall carry the right to interest accrued and
unpaid, and to accrue, which were carried by the Notes underlying such other New
PEPS Units Certificate.
In the case of any New PEPS Units with respect to which Cash Settlement of
the underlying Purchase Contract is properly effected pursuant to Section 5.03
hereof, or with respect to which Early Settlement of the underlying Purchase
Contract is properly effected pursuant to Section 5.08 hereof, or with respect
to which a Collateral Substitution is effected, in each case on a date that is
after any Record Date and prior to or on the next succeeding Payment Date,
interest payments on the Note underlying such New PEPS Unit otherwise payable on
such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement or Early Settlement or Collateral Substitution, and such
interest payments shall, subject to receipt thereof by the Purchase Contract
Agent, be payable to the Person in whose name the New PEPS Units Certificate (or
one or more Predecessor New PEPS Units Certificates) was registered at the close
of business on the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any New PEPS Unit with respect to
which Cash Settlement or Early Settlement of the underlying Purchase Contract is
properly effected, or with respect to which a Collateral Substitution has been
effected, interest payments on the related Notes that would otherwise be payable
after the Purchase Contract Settlement Date or Early Settlement Date or
Collateral Substitution shall not be payable hereunder to the Holder of such New
PEPS Units; provided, however, that to the extent that such Holder continues to
hold separated Notes that formerly comprised a part of such Holder's New PEPS
Units, such Holder shall be entitled to receive interest on such separated
Notes.
The applicable Coupon Rate on the Notes on and after the Purchase Contract
Settlement Date will be reset in the case of a Successful Remarketing to the
applicable Reset Rate (such Reset Rate to be in effect on and after the Purchase
Contract Settlement Date). Following a Successful Remarketing and commencing on
August 18, 2004, the Reset Rate, as determined by the Calculation Agent on the
applicable Interest Determination Date, shall be reset quarterly on February 18,
May 18, August 18 and November 18 of each year. The Calculation Agent shall
determine each applicable Reset Rate in accordance with the definition of the
term "3-month LIBOR".
The Calculation Agent's determination of any Reset Rate will be conclusive
and binding in the absence of any manifest error. The interest rate on the Notes
in effect for the period from and including May 18, 2004 to and excluding August
18, 2004 shall be determined by the Calculation Agent on the applicable Interest
Determination Date. After a Successful Remarketing, the interest rate in effect
after May 18, 2004 or on any Interest Reset Date will be the applicable Reset
Rate as reset on May 18, 2004 or on such Interest Reset Date, as the case may
be, and the interest rate applicable to any other day is the interest rate in
effect on May 18, 2004 or the immediately preceding Interest Reset Date, as the
case may be.
33
In the event of a Failed Final Remarketing, the applicable Coupon Rate on
the Notes outstanding on and after the Purchase Contract Settlement Date will
not be reset and the Notes will continue to bear interest at the Coupon Rate (as
defined in clause (i) of the definition of such term).
SECTION 4.01. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Notes, but only to the extent instructed in writing by the Holders
as described below. Upon receipt of notice of any meeting at which holders of
Notes are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Notes, the Purchase Contract Agent shall, as soon as
practicable thereafter, mail, first class, postage pre-paid, to the Holders of
New PEPS Units a notice:
(i) containing such information as is contained in the notice or
solicitation;
(ii) stating that each Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Notes
entitled to vote) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting rights pertaining to such Notes
underlying their New PEPS Units; and
(iii) stating the manner in which such instructions may be given.
Upon the written request of the Holders of New PEPS Units on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a New PEPS Unit, the Purchase Contract Agent shall abstain from voting
the Notes underlying such New PEPS Unit. The Company hereby agrees, if
applicable, to solicit Holders of New PEPS Units to timely instruct the Purchase
Contract Agent in order to enable the Purchase Contract Agent to vote such
Notes.
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless a Cash Settlement has occurred in
accordance with Section 5.03 hereof or an Early Settlement has occurred in
accordance with Section 5.08 hereof, obligate the Holder of the related Security
to purchase, and the
34
Company to sell, on the Purchase Contract Settlement Date at a price equal to
the Stated Amount (the "PURCHASE PRICE"), a number of shares of Common Stock
(subject to Section 5.09) equal to the Settlement Rate unless, prior to or on
the Purchase Contract Settlement Date, there shall have occurred a Termination
Event with respect to the Security of which such Purchase Contract is a part.
The "SETTLEMENT RATE" is equal to:
(i) if the Applicable Market Value (as defined below) multiplied
by 1.017 is greater than or equal to $65.03 (the "THRESHOLD APPRECIATION
PRICE"), 0.3910 shares of Common Stock per Purchase Contract;
(ii) if the Applicable Market Value multiplied by 1.017 is less
than the Threshold Appreciation Price but greater than $53.30 (the
"REFERENCE PRICE"), the number of shares of Common Stock per Purchase
Contract having a value, based on the Applicable Market Value, equal to
the Stated Amount; and
(iii) if the Applicable Market Value multiplied by 1.017 is less
than or equal to the Reference Price, 0.4770 shares of Common Stock per
Purchase Contract,
in each case, as determined by the Company and subject to adjustment as provided
in Section 5.05 (and in each case rounded upward or downward to the nearest
1/10,000th of a share). The Purchase Contract Agent shall have no responsibility
for determining the Settlement Rate. The Company shall notify the Purchase
Contract Agent of the Settlement Rate promptly after its determination thereof.
The "APPLICABLE MARKET VALUE" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date.
The "CLOSING PRICE" per share of Common Stock means, on any date of
determination:
(i) the closing sale price (or, if no closing sale price is
reported, the reported last sale price) of the Common Stock on the NYSE on
such date;
(ii) if the Common Stock is not listed for trading on the NYSE on
any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by The NASDAQ Stock Market, Inc.;
35
(iv) if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or a similar organization; or
(v) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of the Common Stock on such date
from at least three nationally recognized independent investment banking
firms retained for this purpose by the Company.
A "TRADING DAY" means a day on which the Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
Each Holder of a New PEPS Unit or a Treasury Unit, by its acceptance
thereof:
(i) irrevocably authorizes the Purchase Contract Agent to enter
into and perform the related Purchase Contract on its behalf as its
attorney-in-fact (including the execution of Certificates on behalf of
such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
(iii) covenants and agrees to perform its obligations under such
Purchase Contracts;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to enter
into and perform this Agreement and the Pledge Agreement on its behalf as
its attorney-in-fact; and
(vi) consents to, and agrees to be bound by, the Pledge of the
Notes or the Treasury Securities pursuant to the Pledge Agreement,
provided that upon a Termination Event, the rights of the Holder of such
Security under the Purchase Contract may be enforced without regard to any other
rights or obligations. Each Holder of a New PEPS Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees, that to the extent and in the
manner provided in Section 5.03 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Notes or the proceeds from the
Treasury Securities at maturity on the Purchase Contract Settlement Date, as the
case may be, shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
36
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee)
by the terms of this Agreement, the Purchase Contracts underlying such
Certificate 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 Agent.
The Company shall engage a nationally recognized investment bank (the
"REMARKETING AGENT") pursuant to the Remarketing Agreement to sell the Notes of
the New PEPS Unit Holders on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, and, if necessary, on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date and, if necessary,
on the third Business Day immediately preceding the Purchase Contract Settlement
Date.
SECTION 5.02.A. Contract Adjustment Payments.
(a) 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 a Certificate (or one or more Predecessor Certificates) is registered at
the close of business on the Record Date next preceding such Payment Date in
such coin or currency of the United States as at the time of payment shall be
legal tender for payments. The Contract Adjustment Payments will be payable at
the New York Office maintained for that purpose or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
Person's address as it appears on the Securities Register or by wire transfer to
the account designated by written notice by such Person delivered to the
Purchase Contract Agent at least 15 days prior to the applicable Payment Date.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of a New PEPS Unit) any other
Certificate shall carry the rights to any Contract Adjustment Payments, accrued
and unpaid, and to accrue, which were carried by the Purchase Contracts
underlying such other Certificates.
Subject to Section 5.08, in the case of any Security with respect to which
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, or in respect of which Cash Settlement of the underlying
Purchase Contract is effected on the sixth Business Day immediately preceding
the Purchase Contract Settlement Date, or with respect to which a Collateral
Substitution or a reestablishment of New PEPS Units pursuant to Section 3.14 is
effected, in each case on a date that is after any Record Date
37
and on or prior to the next succeeding Payment Date, Contract Adjustment
Payments on the Purchase Contracts underlying such Securities otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement, Early Settlement, Collateral Substitution or establishment or
reestablishment of New PEPS Units, and such Contract Adjustment Payments shall
be paid to the Person in whose name the Certificate evidencing such Security (or
one or more Predecessor Certificates) is registered at the close of business on
such Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security with respect to which Cash
Settlement or Early Settlement of the underlying Purchase Contract is effected
on the sixth Business Day immediately preceding the Purchase Contract Settlement
Date or on an Early Settlement Date, as the case may be, or with respect to
which a Collateral Substitution or an establishment or a reestablishment of New
PEPS Units has been effected, Contract Adjustment Payments that would otherwise
be payable after the Purchase Contract Settlement Date or Early Settlement Date,
Collateral Substitution or such establishment or reestablishment with respect to
such Purchase Contract shall not be payable.
(b) The Company's obligations with respect to Contract Adjustment Payments
will be subordinated and junior in right of payment to the Company's obligations
under any Senior Indebtedness.
(c) In the event (i) 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 (ii) subject to the provisions of
Subsection 5.02.A(e) below, that (A) 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 (B) the maturity of any Senior
Indebtedness shall have been accelerated because of a default in 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:
(1) the holders of all Senior Indebtedness shall first be entitled
to receive, in the case of (i) above, payment of all amounts due or to
become due upon all Senior Indebtedness and, in the case of subclauses (A)
and (B) of clause (ii) 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
38
Securities are entitled to receive any Contract Adjustment Payments on the
Purchase Contracts underlying the Securities;
(2) 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 Securities would be entitled except for the
provisions of Subsections 5.02.A(b) through (n), 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 Securities, 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 holders of such
Senior Indebtedness or their representative or representatives 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 Securities; and
(3) 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
Securities, shall be received by the Purchase Contract Agent or the
Holders of any of the Securities when such payment or distribution is
prohibited pursuant to Subsections 5.02.A(b) through (n), such payment or
distribution shall be paid over to the holders of such Senior Indebtedness
or their representative or representatives 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.
(d) For purposes of Subsections 5.02.A(b) through (n), 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 Subsections 5.02.A(b)
through (n) with respect to such Contract Adjustment Payments on the Securities
to the payment of all Senior Indebtedness which
39
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, without the consent of each such holder adversely affected thereby, altered
by such reorganization or readjustment.
(e) 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 this subsection (e)
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 of 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.
(f) Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities 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
Securities 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
Securities 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
Subsections 5.02.A(b) through (n) 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 Subsections 5.02.A(b)
through (n) 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.
(g) Nothing contained in Subsections 5.02.A(b) through (n) or elsewhere in
this Agreement or in the Securities 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 Securities 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
40
of the Holders and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the 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 these
Subsections 5.02.A(b) through (n), of the Holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
(h) Upon payment or distribution of assets of the Company referred to in
these Subsections 5.02.A(b) through (n), 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 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, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to these Subsections 5.02.A(b) through (n).
(i) 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
Subsections 5.02.A(b) through (n), 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
Subsections 5.02.A(b) through (n), 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.
(j) Nothing contained in Subsections 5.02.A(b) through (n) 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 Subsections 5.02.A(b) through (n).
(k) Each Holder of Securities, by his acceptance thereof, authorizes and
directs the Purchase Contract Agent on his, her or its behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in Subsections 5.02.A(b) through (n) and appoints the Purchase Contract
Agent as his, her or its attorney-in-fact, as the case may be, for any and all
such purposes.
41
(l) 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
Securities pursuant to the provisions of this Section. Notwithstanding the
provisions of Subsections 5.02.A(b) through (e) 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 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
Institutional Trust Services department from the Company, any Holder, any paying
agent 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.
(m) 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.
(n) 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 covenants of this
Agreement, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
(o) Nothing in this Section 5.02.A shall apply to claims of, or payments
to, the Purchase Contract Agent under or pursuant to Section 7.7.
(p) 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 except for the performance of such duties and obligations as are
specifically set forth in this Agreement, (iii) no implied covenants or
obligations shall be read into this Agreement against the Agent and (iv) the
Purchase Contract Agent shall not be deemed to be a fiduciary as to such
holders.
SECTION 5.03. Payment of Purchase Price; Remarketing.
(a) The Company will notify, not later than seven nor more than 15
calendar days prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, Holders of New PEPS Units and Treasury Units of the
remarketing to take place on
42
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, and, if necessary, on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date and, if necessary, on the third Business Day
immediately preceding the Purchase Contract Settlement Date (and, if such New
PEPS Units or Treasury Units are held in global form by DTC, the Company will
cause DTC to notify its participants).
(b) (i) Unless a Termination Event has occurred or a Holder of a New PEPS
Unit effects an Early Settlement of the underlying Purchase Contract in the
manner described in Section 5.08, each Holder who intends to pay in cash to
satisfy such Holder's obligations under the Purchase Contract shall notify the
Purchase Contract Agent by use of a notice in substantially the form of Exhibit
E hereto of his intention to pay in cash ("CASH SETTLEMENT") the Purchase Price
for the shares of Common Stock to be purchased pursuant to the related Purchase
Contract. Such notice shall be given prior to 5:00 p.m. (New York City time) on
the seventh Business Day immediately preceding the Purchase Contract Settlement
Date. Prior to 11:00 a.m. (New York City time) on the next succeeding Business
Day, the Purchase Contract Agent shall notify the Collateral Agent and the
Indenture Trustee of the receipt of such notices from Holders intending to make
a Cash Settlement.
(ii) A Holder of a New PEPS Unit who has so notified the Purchase
Contract Agent of his intention to effect a Cash Settlement in accordance with
paragraph 5.03(b)(i) above shall pay the Purchase Price to the Securities
Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York
City time) on the sixth 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 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 New PEPS Unit fails to notify the Purchase Contract
Agent of his intention to make a Cash Settlement in accordance with paragraph
5.03(b)(i) above, or has notified the Purchase Contract Agent but fails to pay
the Purchase Price to the Securities Intermediary in accordance with paragraph
5.03(b)(ii) above, such Holder shall be deemed to have consented to the
disposition of the Pledged Notes pursuant to the Remarketing as described in
paragraph 5.03(c) below.
(c) The Notes of New PEPS Unit Holders who have not notified the Purchase
Contract Agent of their intention to effect a Cash Settlement as provided in
paragraph
43
5.03(b)(i) above or have failed to pay the Purchase Price to the Securities
Intermediary in accordance with paragraph 5.03(b)(ii) above will be sold by the
Remarketing Agent (the "REMARKETING") on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, and, if necessary, on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date
and, if necessary, on the third Business Day immediately preceding the Purchase
Contract Settlement Date. The Purchase Contract Agent shall notify, by noon, New
York City time, on the sixth Business Day immediately preceding the Purchase
Contract Settlement Date, the Remarketing Agent, the Collateral Agent, the
Indenture Trustee and the Company of the aggregate principal amount of Notes
that are part of New PEPS Units to be remarketed, such notice to be
substantially in the form of Exhibit F hereto. Concurrently, the Collateral
Agent, pursuant to the terms of the Pledge Agreement, will present for
remarketing such Notes to the Remarketing Agent. Upon receipt of such notice
from the Purchase Contract Agent and such Notes from the Collateral Agent, the
Remarketing Agent will use its reasonable efforts to remarket the Remarketed
Notes, at a price of approximately 100.5% (but not less than 100%) of the
aggregate principal amount of such Remarketed Notes, on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date and, if the
remarketing on such date fails, on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date and, if the remarketing on such date
fails, on the third Business Day immediately preceding the Purchase Contract
Settlement Date. If the Remarketing Agent is able to remarket the Remarketed
Notes at a price equal to or greater than 100% of the aggregate principal amount
of the Remarketed Notes (a "SUCCESSFUL REMARKETING"), the Remarketing Agent will
remit the entire amount of the proceeds derived from the Successful Remarketing
of the Notes that were components of New PEPS Units to the Collateral Agent;
provided, however, that the Remarketing Agent may deduct as the remarketing fee
("REMARKETING FEE"), an amount not exceeding 25 basis points (0.25%) of the
aggregate principal amount of the Remarketed Notes from any amount of the
proceeds of a Successful Remarketing in excess of the aggregate principal amount
of the Remarketed Notes. The portion of the proceeds equal to the aggregate
principal amount of the Remarketed Notes that were components of New PEPS Units
will automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement, to satisfy in full such New PEPS Units Holders' obligations to
pay the Purchase Price for the Common Stock under the related Purchase Contracts
on the Purchase Contract Settlement Date. Any proceeds in excess of those
required to pay the Purchase Price and the Remarketing Fee will be remitted to
the Purchase Contract Agent for payment to the Holders of the related New PEPS
Units. New PEPS Units Holders whose Notes are so remarketed will not otherwise
be responsible for the payment of any Remarketing Fee in connection therewith.
If, (i) in spite of using its reasonable efforts, the Remarketing Agent cannot
remarket the related Remarketed Notes (other than to the Company), of such
Holders of New PEPS Units at a price not less than 100% of the aggregate
principal amount of the Remarketed Notes on or before the third Business Day
immediately preceding the Purchase Contract Settlement Date or (ii) the
remarketing has not occurred because a condition precedent to the remarketing
has not been fulfilled, the remarketing will be deemed to have failed (a "FAILED
FINAL REMARKETING") and in accordance with the terms of the Pledge Agreement the
Collateral Agent for the benefit
44
of the Company will exercise its rights as a secured party with respect to such
Notes that were components of New PEPS Units including those actions specified
in paragraph (e) below.
(d) If there is no Successful Remarketing on May 11, 2004, the Company
will cause a notice of the failure of Remarketing of the Notes to be published
before 9:00 a.m., New York City time, on May 12, 2004 and another Remarketing
will be attempted on that day. If there has not been a Successful Remarketing on
May 12, 2004, the Company will cause a notice of the failure of Remarketing of
the Notes to be published before 9:00 a.m., New York City time, on May 13, 2004
and another Remarketing will be attempted on that day. If there has not been a
Successful Remarketing on May 13, 2004, the Company will cause a notice of the
failure of Remarketing of the Notes to be published before 9:00 a.m., New York
City time, on May 14, 2004. Notices to be published under this paragraph will be
validly published by making a timely release to any appropriate news agency,
including Bloomberg Business News and the Dow Xxxxx News Service, or by
publication 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.
(e) With respect to Notes, which are subject to a Failed Final
Remarketing, the Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject to applicable
law and paragraph (i) below, may, among other things, (i) retain the Notes or
(ii) sell the Notes in one or more public or private sales, each in full
satisfaction of the Holders' obligations under the Purchase Contracts.
(f) Unless a Termination Event or an Early Settlement has occurred, the
Purchase Contract underlying each Treasury Unit and will be settled with the
Proceeds at maturity of the Treasury Security. Upon receipt of such Proceeds,
the Collateral Agent will invest the Proceeds promptly in Permitted Investments
and pay the Proceeds to the Company on the Purchase Contract Settlement Date in
accordance with the terms of this Agreement and the Pledge Agreement. Any such
Proceeds received by the Collateral Agent in excess of the Purchase Price and
any funds received by the Collateral Agent in respect of the investment earnings
from the investment in such Permitted Investments will be distributed to the
Purchase Contract Agent when received for payment to the Holder.
(g) Any distribution to Holders of excess funds and interest described
above, shall be payable at the New York Office maintained for that purpose or,
at the option of the Holder, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Security Register or, at
the option of the Company, by wire transfer to the bank account designated by
such Holder in writing, such payments to be made to the same Persons entitled to
receive Common Stock with respect to Purchase Contracts referred to in
Subsection (f) above.
(h) (i) Unless a Holder of a Treasury Units effects an Early Settlement of
the underlying Purchase Contract
45
through the early delivery of cash to the Purchase Contract Agent in the manner
described in Section 5.08, each Holder of a Treasury Unit who intends to pay in
cash shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto of his intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant to the
related Purchase Contract. Such notice shall be given prior to 5:00 p.m. (New
York City time) on the second Business Day immediately preceding the Purchase
Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the next
succeeding Business Day, the Purchase Contract Agent shall notify the Collateral
Agent of the receipt of such notices from such Holders intending to make a Cash
Settlement. Treasury Unit holders may make Cash Settlements only in integral
multiples of 40 Treasury Units.
(ii) A Holder of a Treasury Unit who has so notified the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance with
paragraph 5.03(h)(i) above shall pay the Purchase Price to the Securities
Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York
City time) on the Business Day immediately preceding 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 and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by the
Securities Intermediary in respect of the investment earnings from the
investment in such Permitted Investments in excess of the Purchase Price for the
shares of common stock to be purchased by such Holder shall be distributed to
the Purchase Contract Agent when received for payment to the Holder.
(iii) If a Holder of a Treasury Unit fails to notify the Purchase Contract
Agent of his intention to make a Cash Settlement in accordance with paragraph
5.03(h)(i) above, or does notify the Purchase Contract Agent as provided in
paragraph 5.03(h)(i) above of his intention to pay the Purchase Price in cash,
but fails to make such payment as required by paragraph 5.03(h)(ii) above, then
upon the maturity of the Pledged Treasury Securities held by the Securities
Intermediary on the Business Day immediately preceding the Purchase Contract
Settlement Date, the principal amount of the Treasury Securities received by the
Securities Intermediary shall be invested promptly in Permitted Investments. On
the Purchase Contract Settlement Date, an amount equal to the Purchase Price
shall be remitted to the Company as payment thereof without receiving any
instructions from the Holder. In the event the sum of the proceeds from the
related Pledged Treasury Securities and the investment earnings earned from such
investments is in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall cause the Securities
Intermediary to distribute such excess to the Purchase Contract Agent for the
benefit of the Holder of the related Treasury Unit when received.
46
(iv) A holder of a Note that is no longer part of a New PEPS Unit may
elect to have such Note remarketed pursuant to Section 5.7(c) of the Pledge
Agreement.
(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 Notes or the Pledged Treasury
Securities, as the case may be, underlying the relevant Security to be
released from the Pledge, free and clear of any security interest of the
Company, and transferred to the Purchase Contract Agent for delivery to
the Holder thereof or its designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase Contract Agent
shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Notes 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 Notes 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).
(j) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early Settlement
or Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.
SECTION 5.03.A. Failed Final Remarketing.
If a Failed Final Remarketing occurs Holders of Notes that are not part of
a New PEPS Unit will retain possession of their Notes, and the Coupon Rate will
not be reset and the Notes will continue to bear interest at the Coupon Rate (as
defined in clause (i) of the definition of such term).
SECTION 5.04. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section 5.05(b), on the Purchase Contract Settlement Date upon
receipt of the aggregate Purchase Price payable on all Outstanding Securities,
the Company shall issue and deposit with the Purchase Contract Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing the shares of Common Stock registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such certificates
for shares of Common Stock, together with any dividends or distributions for
which a record date and payment date for such dividend or distribution has
occurred after the Purchase Contract Settlement Date, being hereinafter
47
referred to as the "PURCHASE CONTRACT SETTLEMENT FUND") to which the
Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the Purchase
Contract Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all Securities then held by such Holder), together with cash
in lieu of fractional shares as provided in Section 5.09 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 be cancelled. Such shares shall be registered in the name
of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Purchase Contract Agent. If any
shares of Common Stock issued in respect of a Purchase Contract are to be
registered to a Person other than the Person in whose name the Certificate
evidencing such Purchase Contract is registered, no such registration shall be
made unless the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name other than that of
the registered Holder of the Certificate evidencing such Purchase Contract or
has established to the satisfaction of the Company that such tax either has been
paid or is not payable.
SECTION 5.05. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, etc.
(1) In case the Company shall pay or make a dividend or other distribution
on Common Stock in Common Stock, the Settlement Rate in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination; and
(ii) the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
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(2) In case the Company shall issue rights, warrants or options to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of shareholders entitled to receive such
rights, warrants or options, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per share of Common
Stock on the date fixed for the determination of shareholders entitled to
receive such rights, warrants or options the Settlement Rate in effect at the
opening of business on the day following the date fixed for such determination
shall be increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price; and
(ii) the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not issue
any such rights, warrants or options in respect of shares of Common Stock held
in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights, warrants or options referred to in
paragraph (2) of this Section 5.05(a), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in paragraph
(1) of this Section 5.05(a)), the Settlement Rate shall
49
be adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the date
fixed for the determination of shareholders entitled to receive such
distribution by a fraction of which:
(i) the numerator shall be the Current Market Price per share of
Common Stock on the date fixed for such determination less the then fair
market value (as reasonably determined by the Board of Directors, whose
determination shall be conclusive and the basis for which shall be
described in a Board Resolution) of the portion of the assets or evidences
of indebtedness so distributed applicable to one share of Common Stock;
and
(ii) the denominator shall be such Current Market Price per share
of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.05(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.
(5) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock after June 30, 2003 cash (excluding:
(i) any quarterly cash dividend on Common Stock to the extent that
the aggregate cash dividend per share of Common Stock in any fiscal
quarter does not exceed $0.265 per share (the "DIVIDEND THRESHOLD"); and
(ii) any dividend or distribution in connection with the
liquidation, dissolution or termination of the Company, whether voluntary
or involuntary),
then, in such case, the Settlement Rate shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on such record date by a fraction of
which:
(i) the numerator shall be the Current Market Price of Common
Stock on the record date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock; and
(ii) the denominator shall be the Current Market Price of Common
Stock,
such increase to be effective immediately prior to the opening of business on
the day following the record date; provided, however, that in the event the
portion of cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price per share of Common Stock on the
record date, in lieu of the
50
foregoing adjustment, adequate provision shall be made so that each holder of a
Security shall have the right to receive upon settlement of the Securities the
amount of cash such Holder would have received had such Holder settled each
Security on the record date. In the event that such dividend or distribution is
not so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or distribution
had not been declared. If any adjustment is required to be made as set forth in
this Section 5.05(a)(5) as a result of a distribution that is a quarterly
dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the Dividend Threshold. If an adjustment is
required to be made as set forth in this Section 5.05(a)(5) above as a result of
a distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares as
herein defined) of an aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution)
that combined together with (I) the aggregate of the cash plus the fair market
value (as reasonably determined by the Board of Directors, whose determination
shall be conclusive and the basis for which shall be described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer, by the
Company or any subsidiary of the Company for all or any portion of Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to this paragraph
(6) has been made, and (II) the aggregate amount of any distributions to all
holders of Common Stock made exclusively in cash within the 12 months preceding
the expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (6) has been made, exceeds 15% of the product
of the Current Market Price per share of Common Stock as of the last time (the
"EXPIRATION TIME") tenders could have been made pursuant to such tender or
exchange offer (as it may be amended) times the number of shares of Common Stock
outstanding (including any tendered shares) on the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day after
the date of the Expiration Time, the Settlement Rate shall be adjusted so that
the same shall equal the rate determined by dividing the Settlement Rate
immediately prior to the close of business on the date of the Expiration Time by
a fraction:
(i) the numerator of which shall be equal to (A) the product of
(I) the Current Market Price per share of Common Stock on the date of the
Expiration Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to
51
shareholders based on the transactions described in clauses (I) and (II)
above (assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer, of
Purchased Shares); and
(ii) the denominator of which shall be equal to the product of (A)
the Current Market Price per share of Common Stock as of the Expiration
Time and (B) the number of shares of Common Stock outstanding (including
any tendered shares) as of the Expiration Time less the number of all
shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as
the "PURCHASED SHARES").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.05(b) applies) shall be deemed to
involve:
(i) a distribution of such securities other than Common Stock to
all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution" and
the "date fixed for such determination" within the meaning of paragraph
(4) of this Section); and
(ii) a subdivision, split or combination, as the case may be, of
the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision or split
becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision,
split or combination becomes effective" within the meaning of paragraph
(3) of this Section).
(8) The "CURRENT MARKET PRICE" per share of Common Stock on any day means
the average of the daily Closing Prices for the five consecutive Trading Days
selected by the Company commencing not more than 30 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when used with
respect to any issuance or distribution, shall mean the first date on which
Common Stock trades on the applicable exchange or in the applicable market
without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant
52
to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.05(a),
an adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (i), (ii) or (iii) of the definition of Settlement
Rate in Section 5.01 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.05(a) and the denominator shall be the Settlement Rate
immediately prior to such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.05(a) during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
(10) The Company may, but shall not be required to, make such increases in
the Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company
is the 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
Person);
(ii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an
entirety;
(iii) any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition); or
(iv) any liquidation, dissolution or termination of the Company
other than as a result of or after the occurrence of a Termination Event
(any such event, a "REORGANIZATION EVENT"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement Date)
by a Holder of the number of shares of Common Stock
53
issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event,
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (any such Person,
a "CONSTITUENT PERSON"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by Affiliates of the Company and non-affiliates and such Holder failed to
exercise his rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Security shall
have the rights provided by this Section 5.05(b). Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
(2) In the event of a consolidation or merger of the Company with or into
another Person, 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 which 30% or more of the
total consideration paid to the Company's shareholders consists of cash or cash
equivalents, then a Holder of a Security may settle his Purchase Contract for
cash, only in integral multiples of 40 Purchase Contracts, as described in
Section 5.03(b)(i) or 5.03(h)(i) hereof, as applicable, during the one week
period beginning on the twenty-third Trading Day following the closing date of
such merger (the "EARLY SETTLEMENT WEEK"), at the applicable Settlement Rate.
For the purposes of this Section, the twenty-third Trading Day after the closing
of the merger or consolidation shall be deemed to be the Purchase Contract
Settlement Date for the purpose of determining the Applicable Market Value and
the deadline for submitting the notice to settle early and the related cash
payment shall be 5:00 p.m. (New York City time) of the last Business Day of the
Early Settlement Week.
54
(c) All calculations and determinations pursuant to this Section 5.05
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
SECTION 5.06. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance
with Section 5.05 and prepare and transmit to the Purchase Contract Agent
an Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section
5.05 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the Securities of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the adjustment to
the Settlement Rate was determined and setting forth the adjusted
Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase Contract;
and the Purchase Contract Agent makes no representation with respect thereto.
The Purchase Contract Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
SECTION 5.07. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment
Payments, and the rights and obligations of Holders to purchase Common Stock,
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Purchase Contract Agent or the Company, if,
prior to or on the Purchase Contract Settlement Date, a Termination Event shall
have occurred.
55
Upon and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Notes or the Treasury Securities,
as the case may be, forming part of such Securities, in accordance with the
provisions of Section 5.2 and 5.3 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, the Indenture Trustee and the Holders, at their addresses
as they appear in the Security Register.
SECTION 5.08. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.08, at the option of the Holder thereof, Purchase Contracts underlying
Securities may be settled early ("EARLY SETTLEMENT") in the case of New PEPS
Units on or prior to 5:00 p.m. (New York City time) on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date, and in the case of
Treasury Units on or prior to 5:00 p.m. (New York City time) on the second
Business Day immediately preceding the Purchase Contract Settlement Date, in
each case, as provided herein. Holders of Treasury Units or New PEPS Units may
only settle the related Purchase Contracts in integral multiples of 40 Purchase
Contracts. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Securities shall deliver to the Purchase Contract Agent at the Corporate Trust
Office an Election to Settle Early form (on the reverse side of the Certificate)
and any other documents requested by the Purchase Contract Agent and accompanied
by payment (payable to the Company in immediately available funds) in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (a) the Stated
Amount times (b) the number of Purchase Contracts with respect to which the
Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable on such Payment Date with respect to such Purchase Contracts.
Except as provided in the immediately preceding sentence, and subject to
the second to last paragraph of Section 5.02.A(a), no payment or adjustment
shall be made upon Early Settlement of any Purchase Contract on account of any
Contract Adjustment Payments accrued on such Purchase Contract or on account of
dividends on the Common Stock issued upon such Early Settlement. If the
foregoing requirements are first satisfied with respect to Purchase Contracts
underlying any Securities prior to or at 5:00 p.m. (New York City time) on a
Business Day, such day shall be the "EARLY SETTLEMENT DATE" with respect to such
Securities and if such requirements are first satisfied after 5:00 p.m. (New
York City time) on a Business Day or on a day that is not a Business Day, the
"EARLY SETTLEMENT DATE" with respect to such Securities shall be the next
succeeding Business Day.
56
(b) Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to receive
0.3910 shares of Common Stock on account of each Purchase Contract as to which
Early Settlement is effected (the "EARLY SETTLEMENT RATE"); provided, however,
that upon the Early Settlement of the Purchase Contracts, the Holder of such
related Securities will forfeit the right to receive any future Contract
Adjustment Payments, except to the extent that the Early Settlement Date is
after the close of business on a Record Date and prior to the opening of
business on the corresponding Payment Date. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(i) upon receipt of the shares of Common Stock from the Company's
Transfer Agent, 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 Notes, in the case of New PEPS 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.
(c) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Notes or Treasury
Securities, as the case may be, from the Securities Intermediary, as applicable,
the Purchase Contract Agent shall, in accordance with the instructions provided
by the Holder thereof on the Election to Settle Early form (on the reverse of
the Certificate evidencing the related Securities):
(i) transfer to the Holder the Notes or Treasury Securities, as
the case may be, forming a part of such Securities; and
(ii) deliver to the Holder a certificate or certificates for the
full number of shares of Common Stock issuable upon such Early Settlement,
together with payment in lieu of any fraction of a share, as provided in
Section 5.09.
(d) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Securities as to which Early Settlement was not effected.
(e) A Holder of a Security who effects Early Settlement may elect to have
the Notes no longer a part of New PEPS Units remarketed pursuant to Section
5.7(c) of the Pledge Agreement.
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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 of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Purchase Contract Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional shares
times the Applicable Market Value. All determinations pursuant to this Section
5.09 shall be made by the Company or its agent and notified to the Purchase
Contract Agent and the Purchase Contract Agent shall have no responsibility with
respect thereto. 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 Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Purchase Contract Agent, as custodian for such Holder,
and the Company shall not be required to issue or deliver such share
certificates or Certificates unless or until the Person or Persons requesting
the transfer or issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.
ARTICLE 6
Remedies
SECTION 6.01. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock.
Each Holder of a Security shall have the right, which is absolute and
unconditional (i) to receive payment of each installment of the Contract
Adjustment Payments with respect to the Purchase Contract constituting a part of
such Security on the respective Payment Date for such Security, and (ii) to
purchase shares of Common Stock pursuant to such Purchase Contract and, in each
such case, to institute suit for the
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enforcement of such payment 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 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 Security, by its
acceptance of such Security shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Purchase Contract Agent
for any action taken, suffered or omitted by it as Purchase Contract Agent, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees 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 Securities, or to any suit instituted
by any Holder for the enforcement of interest on any Note or Contract Adjustment
Payments on any Purchase Contract on or after the respective Payment Date
therefor in respect of any Security held by such Holder,
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or for enforcement of the right to purchase shares of Common Stock under the
Purchase Contracts constituting part of any Security held by such Holder.
SECTION 6.06. 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 7
The Purchase Contract Agent
SECTION 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(i) undertakes to perform, with respect to the Securities, such
duties and only such duties as are specifically set forth in this
Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement or the Pledge Agreement
against the Purchase Contract Agent; and
(ii) in the absence of bad faith or gross negligence on its part,
may, with respect to the Securities, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Purchase Contract Agent and
conforming to the requirements of this Agreement or the Pledge Agreement,
as applicable, but in the case of any certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Purchase Contract Agent, the Purchase Contract Agent shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Agreement or the Pledge Agreement, as applicable (but
need not confirm or investigate the accuracy of the mathematical
calculations or other facts stated therein).
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
grossly negligent action, its own grossly 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 proved that the Purchase Contract Agent was grossly negligent in
ascertaining the pertinent facts;
(iii) no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
indemnity satisfactory to the Purchase Contract Agent is not provided to
it; and
(iv) the Purchase Contract Agent shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in liquidation amount or
principal amount, as the case may be, of the Outstanding Securities.
(c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Purchase Contract Agent.
SECTION 7.02. 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 Securities, as their names and addresses appear in
the Security Register, notice of such default hereunder, unless such default
shall have been cured or waived.
SECTION 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(i) the Purchase Contract Agent may 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, 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;
(ii) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officers' Certificate, Issuer Order or
Issuer Request,
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and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(iii) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Purchase Contract Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its
part, conclusively rely upon an Officers' Certificate of the Company;
(iv) the Purchase Contract Agent may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
(v) 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, and at the expense of the Company, may make reasonable
further inquiry or investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable
opportunity to examine the relevant books, records and premises of the
Company, personally or by agent or attorney and shall incur no liability
or additional liability of any kind by reason of such inquiry or
investigation;
(vi) the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the Purchase Contract Agent shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney or an Affiliate appointed with due care by it hereunder;
(vii) 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;
(viii) the Purchase Contract Agent shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
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(ix) the Purchase Contract Agent shall not be deemed to have notice
of any default or event of default 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 the
Purchase Contract Agent at the Corporate Trust Office of the Purchase
Contract Agent, and such notice references the Securities and this
Agreement;
(x) 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; and
(xi) 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, and to each
agent, custodian and other Person employed to act hereunder.
SECTION 7.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
SECTION 7.05. May Hold Securities.
Any Security Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it would
have if it were not Security Registrar or such other agent, or the Purchase
Contract Agent. The Company may become the owner or pledgee of Securities.
SECTION 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder agreed in writing with the Company.
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SECTION 7.07. Compensation and Reimbursement.
The Company agrees:
(i) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the
Company and the Purchase Contract Agent shall from time to time agree in
writing;
(ii) 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 or the Pledge Agreement
(including the reasonable compensation and the expenses and disbursements
of its agents and counsel), except any such expense, disbursement or
advance as may be attributable to its gross negligence or willful
misconduct; and
(iii) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense incurred without gross negligence or willful
misconduct on its part, arising out of or in connection with the
acceptance or administration of its duties hereunder, including the costs
and expenses of defending itself 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 its powers or duties hereunder.
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which
shall be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
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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.
(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 Securities delivered to the
Purchase Contract Agent and the Company.
(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, after written request therefor
by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months;
(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 Agent, or (ii) any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase
65
Contract Agent and shall comply with the applicable requirements of Section
7.10. If no successor Purchase Contract Agent shall have been so appointed by
the Company and accepted appointment in the manner required by Section 7.10, any
Holder who has been a bona fide Holder of a Security for at least six months, 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
Register. Each notice shall include the name of the successor Purchase Contract
Agent and the address of its Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase Contract
Agent, every such successor Purchase Contract Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Purchase Contract
Agent an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Purchase Contract Agent shall become effective and such
successor Purchase Contract Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Purchase Contract Agent; but, on the request of the Company or the
successor Purchase Contract Agent, such retiring Purchase Contract Agent shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Purchase Contract Agent all the rights, powers and trusts of the
retiring Purchase Contract Agent and shall duly assign, transfer and deliver to
such successor Purchase Contract Agent all property and money held by such
retiring Purchase Contract Agent hereunder.
(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 7.10(a).
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business
66
of the Purchase Contract Agent, shall be the successor of the Purchase Contract
Agent hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, 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 Agent may adopt
such authentication and execution and deliver the Certificates so authenticated
and executed with the same effect as if such successor Purchase Contract Agent
had itself authenticated and executed such Securities.
SECTION 7.12. Preservation of Information; Communications to Holders.
(a) The Purchase Contract Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "APPLICANTS") apply in
writing to the Purchase Contract Agent, and furnish to the Purchase Contract
Agent reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Purchase Contract Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
SECTION 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this Agreement, the
Purchase Contract Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The Company
agrees, and each Holder of a Certificate, by his acceptance thereof, shall be
deemed to have agreed, that the Purchase Contract Agent's execution of the
Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, employees or agents be liable under
this Agreement for indirect, special, punitive, or consequential loss or damage
of any kind whatsoever, including lost profits, whether or not the likelihood of
such loss or damage was known to the Purchase Contract Agent and regardless of
the form of action.
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SECTION 7.14. Tax Compliance.
(a) The Company and the Purchase Contract Agent will comply with all
applicable certification, information reporting and withholding (including
"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (1) any payments made with respect to
the Securities or (2) the issuance, delivery, holding, transfer, redemption or
exercise of rights under the Securities. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the terms
hereof with any written direction received from the Company with respect to the
execution or certification of any required documentation and the application of
such requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on any
such direction in accordance with and subject to the provisions of Section
7.01(a)(ii) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE 8
Supplemental Agreements
SECTION 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Purchase Contract
Agent, at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Purchase
Contract Agent, to:
(i) 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;
(ii) evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;
(iii) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
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(iv) make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.05(b); or
(v) except as provided for in Section 5.05, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, or make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
SECTION 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract Agent may enter into
an agreement or agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby:
(i) change any Payment Date;
(ii) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on such Collateral (except for the rights of Holders of New
PEPS Units to substitute Treasury Securities for the Pledged Notes or the
rights of Holders or Treasury Units to substitute Notes for the Pledged
Treasury Securities) or otherwise adversely affect the Holder's rights in
or to such Collateral;
(iii) reduce any Contract Adjustment Payments or change any place
where, or the coin or currency in which, any Contract Adjustment Payment
is payable;
(iv) impair the right to institute suit for the enforcement of any
Purchase Contract or any Contract Adjustment Payment;
(v) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares
of Common Stock upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect the
Holder's rights under a Purchase Contract; or
(vi) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement,
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provided that if any amendment or proposal referred to above would adversely
affect only the New PEPS Units or only 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 (1) through (6) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.03. 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 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 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 or immunities
under this 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.
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ARTICLE 9
Merger, Consolidation, Share Exchange, Sale or Conveyance
SECTION 9.01. Covenant Not to Merge, Consolidate, Enter into a Share
Exchange, Sell or Convey Property Except Under Certain Conditions.
The Company covenants that it will not merge, consolidate or enter into a
share exchange with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any Person or group of
affiliated Persons in one transaction or a series of related transactions,
unless:
(i) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly assume
all the obligations of the Company under the Purchase Contracts, this
Agreement, the Remarketing Agreement and the Pledge Agreement by one or
more supplemental agreements in form reasonably satisfactory to the
Purchase Contract Agent and the Collateral Agent, executed and delivered
to the Purchase Contract Agent and the Collateral Agent by such
corporation; and
(ii) the Company or such successor corporation, as the case may be,
shall not, immediately after such merger, consolidation or share exchange,
or such sale, assignment, transfer, lease or conveyance, be in default in
the performance of any covenant or condition hereunder, under any of the
Securities or under the Pledge Agreement.
SECTION 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of PPL Corporation, any or all of the Certificates evidencing Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Purchase Contract Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued
71
shall in all respects have the same legal rank and benefit under this Agreement
as the Certificates theretofore or thereafter issued in accordance with the
terms of this Agreement as though all of such Certificates had been issued at
the date of the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.
SECTION 9.03. 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.
ARTICLE 10
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 Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency (a "NEW YORK OFFICE") where Certificates may be presented or
surrendered for acquisition of shares of Common Stock upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or Early Settlement
and for transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or reestablishment of New PEPS Units and where notices
and demands to or upon the Company in respect of the Securities and this
Agreement may be served. The Company will give prompt written notice to the
Purchase Contract Agent of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Purchase Contract Agent
with the address thereof, such presentations, surrenders, notices and demands
may
72
be made or served at the Corporate Trust Office, and the Company hereby appoints
the Purchase Contract Agent as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, New York City for such purposes. The Company will give prompt written
notice to the Purchase Contract Agent of any such designation or rescission and
of any change in the location of any such other office or agency. The Company
hereby designates as the place of payment for the Securities the Corporate Trust
Office and appoints the Purchase Contract Agent at its Corporate Trust Office as
paying agent in such city.
SECTION 10.03. 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 Securities 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 Securities will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable. The Company shall comply, in all
material respects, with all applicable securities laws regulating the offer,
issuance and delivery of shares of Common Stock upon settlement of Purchase
Contracts and will endeavor to list such shares on each national securities
exchange or automated quotation system on which the Common Stock is then listed.
SECTION 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, not later than
April 30 in each year, an Officers' Certificate (one of the signers of which
shall be the principal executive officer, principal financial officer or
principal accounting officer of the Company), stating whether or not to the
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions hereof, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
73
SECTION 10.06. Tax Treatment.
The Company covenants and agrees and, by exchanging outstanding 7-3/4%
Premium Equity Participating Security Units for New PEPS Units, a Holder
covenants and agrees, for United States federal income tax purposes, (i) to
treat a Holder's acquisition of the New PEPS Units as the acquisition of the
Notes and Purchase Contracts constituting the New PEPS Units, (ii) to treat a
Holder's acquisition of the Treasury Units as the acquisition of the Treasury
Securities and Purchase Contracts constituting the Treasury Units, and (iii) to
treat each Holder as the owner of the related Notes or Treasury Securities, as
the case may be.
SECTION 10.07. ERISA.
Each purchaser and any subsequent transferee of the New PEPS Units (or any
component security of such units), will be deemed to have represented and
warranted on each day from and including the date of its purchase of the New
PEPS Units (or any component security of such units) through and including the
date of the satisfaction of the obligation under the Purchase Contract and/or
the disposition of any such New PEPS Unit (or any component security of such
unit) either (i) that no portion of the assets used by such purchaser or
subsequent transferee to acquire the New PEPS Units (or any component security
of such units) constitute the assets of any Plan or (ii) that the acquisition,
holding and the disposition of any New PEPS Unit (and any component security of
such unit) by such purchaser or subsequent transferee does not and will not
constitute a non-exempt prohibited transaction under ERISA or Section 4975 of
the Code or a violation of any applicable Similar Laws.
SECTION 10.08. Securities Contract.
It is the intention of the Company that this Agreement shall constitute a
"securities contract" for purposes of and subject to the provisions of Section
555 of the Bankruptcy Code. In furtherance thereof, the Company agrees that (i)
prior to an exercise by the Collateral Agent on behalf of the Company of its
rights as a secured party pursuant to the Pledge Agreement, the Company does not
have any ownership right, title or interest in and to the Pledged Notes and (ii)
the Holders of a Security shall not be deemed to have purchased, and the Company
shall not be deemed to have sold any Common Stock pursuant to a Purchase
Contract related to such Security prior to a Cash Settlement, an Early
Settlement or the occurrence of the Purchase Contract Settlement Date (provided
that no prior occurrence of a Termination Event with respect to such Security
has occurred).
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PPL CORPORATION JPMORGAN CHASE BANK as
Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By: By:
------------------------ ------------------------
Name: Name:
Title: Title:
JPMORGAN CHASE BANK, JPMORGAN CHASE BANK,
As Collateral Agent as Custodial Agent
By: By:
------------------------ ------------------------
Name: Name:
Title: Title:
75
EXHIBIT A
FACE OF NEW PEPS UNITS CERTIFICATE
[If applicable, insert Global Certificate Legend]
No. Cusip No.
Number of New PEPS Units
PPL CORPORATION
NEW PEPS UNITS
(7-3/4% Premium Equity Participating Security Units (PEPS(SM) Units), Series B)
This New PEPS Units Certificate certifies that is the registered
Holder of the number of New PEPS Units set forth [above]* [on the Schedule of
Increases or Decreases in Global Certificate attached hereto]**. Each New PEPS
Unit consists of (i) a 1/40, or 2.5%, undivided beneficial ownership interest in
a $1,000 principal amount Note due 2006 (the "NOTE") issued by PPL Capital
Funding, Inc., a Delaware corporation ("PPL CAPITAL FUNDING"), subject to the
Pledge of such ownership interest in the Note by such Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with PPL Corporation, a Pennsylvania 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 ownership interest in a Note
constituting part of each New PEPS Unit evidenced hereby has been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations of
the Holder under the Purchase Contract comprising part of such New PEPS Unit.
The Pledge Agreement provides that all payments of the principal amount
with respect to any of the Pledged Notes or interest on any of the Pledged Notes
(as defined in the Pledge Agreement) constituting part of the New PEPS Units
received by the Securities Intermediary shall be paid by wire transfer in same
day funds (i) in the case of (A) interest with respect to Pledged Notes and (B)
any payments of the principal amount with respect to any Notes that have been
released from the Pledge pursuant to the Pledge Agreement, to the Purchase
Contract Agent to the account designated by the Purchase
--------
* Insert in Certificates other than Global Certificates
** Insert in Global Certificates
A-1
Contract Agent, no later than 2:00 p.m., New York City time, on the Business Day
such payment is received by the Securities Intermediary (provided that in the
event such payment is received by the Securities Intermediary on a day that is
not a Business Day or after 12:30 p.m., New York City time, on a Business Day,
then such payment shall be made no later than 10:30 a.m., New York City time, on
the next succeeding Business Day) and (ii) in the case of payments of an amount
equal to 100% of the principal amount with respect to any of the Pledged Notes
derived from the proceeds of a Successful Remarketing, 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 New PEPS Units of which such Pledged Notes are
a part under the Purchase Contracts forming a part of such New PEPS Units.
Interest on any Note forming part of a New PEPS Unit evidenced hereby, which are
payable quarterly in arrears on November 18, 2003, February 18, 2004 and May 18,
2004, commencing November 18, 2004 (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 New PEPS Unit Certificate (or a Predecessor New
PEPS Unit 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 New
PEPS Units Certificate to purchase, and the Company to sell, on May 18, 2004
(the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25 (the "STATED
AMOUNT"), a number of shares of Common Stock, $0.01 par value ("COMMON STOCK"),
of the Company, equal to the Settlement Rate, unless on or prior to the Purchase
Contract Settlement Date there shall have such occurred a Termination Event or
an Early Settlement with respect to the New PEPS Unit of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The purchase price (the "PURCHASE PRICE")
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the Remarketing
of the Notes pledged to secure the obligations under such Purchase Contract of
the Holder of the New PEPS Unit of which such Purchase Contract is a part.
Interest on the Notes will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the New PEPS Units Register.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a New PEPS Unit evidenced hereby an amount (the
"CONTRACT ADJUSTMENT PAYMENTS") equal to 0.46% per annum of the Stated Amount,
or $0.1150 per annum, computed on the basis of a 360-day year of twelve 30 day
months. Contract adjustment payments will accrue from August 18, 2003. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
New PEPS Units Certificate (or a Predecessor New PEPS Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
A-2
Contract Adjustment Payments will be payable at the Corporate Trust Office
of the Purchase Contract Agent and at the New York Office or, at the option of
the Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Securities Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this New PEPS Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PPL CORPORATION
By:
---------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
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 New PEPS Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: JPMORGAN CHASE BANK, as
Purchase Contract Agent
By:
---------------------------
Authorized Officer
A-5
(FORM OF REVERSE OF NEW PEPS UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of , 2003 (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 New PEPS Units Certificates are, and are
to be, executed and delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each
Purchase Contract evidenced hereby obligates the Holder of this New PEPS Units
Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "PURCHASE PRICE"), a
number of shares of Common Stock equal to the Settlement Rate, unless, prior to
or on the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part or an Early Settlement shall have occurred. The "SETTLEMENT RATE" is
equal to:
(1) if the Applicable Market Value (as defined below) multiplied by
1.017 is greater than or equal to $65.03 (the "THRESHOLD APPRECIATION
PRICE"), 0.3910 shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value multiplied by 1.017 is less than
the Threshold Appreciation Price but greater than $53.30 (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contract having
a value, based on the Applicable Market Value, equal to $25; and
(3) if the Applicable Market Value multiplied by 1.017 is less than
or equal to the Reference Price, 0.4770 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 either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
New PEPS Unit to purchase at the Purchase Price, and the Company to sell, a
number of shares of Common Stock equal to the Early Settlement Rate or the
Settlement Rate, as applicable.
A-6
The "APPLICABLE MARKET VALUE" means the average of the Closing Price per
share of Common Stock on each of the 20 Trading Days ending on the third Trading
Day immediately preceding the Purchase Contract Settlement Date.
The "CLOSING PRICE" per share of Common Stock on any date of determination
means:
(1) the closing sale price (or, if no closing price is reported, the
last reported sale price) per share on the New York Stock Exchange, Inc.
(the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price per share as reported in the composite
transactions for the principal United States securities exchange on which
the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States national
or regional securities exchange, the closing sale price per share as
reported by The NASDAQ Stock Market, Inc.;
(4) if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of the Common Stock on such date from at
least three nationally recognized independent investment banking firms
retained for this purpose by the Company.
A "TRADING DAY" means a day on which the Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this New PEPS Units Certificate may pay the Purchase Price for the
shares of the Common Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement or an Early Settlement or from
the proceeds of a Remarketing of the related Pledged Notes. A Holder of New PEPS
Units who does not elect to make an effective cash settlement, on or prior to
5:00 p.m. (New York City time) on the seventh Business Day immediately preceding
the Purchase Contract Settlement Date, or fails to pay such cash on the sixth
Business Day immediately preceding the Purchase Contract Settlement Date, or
does not elect to 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 Notes held by the
A-7
Collateral Agent. Such sale will be made by the Remarketing Agent pursuant to
the terms of the Remarketing Agreement and any supplemental remarketing
agreement executed in connection therewith between the parties thereto, on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
and, if necessary, on the fourth Business Day immediately preceding the Purchase
Contract Settlement Date and, if necessary, on the third Business Day
immediately preceding the Purchase Contract Settlement Date.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Notes
forming a part of each New PEPS Unit from the Pledge. A New PEPS Unit shall
thereafter represent the right to receive the ownership interest in a Note
forming a part of the New PEPS Units in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Notes. Upon receipt of notice of any meeting at which holders of
Notes are entitled to vote or upon the solicitation of consents, waivers or
proxies of holders of Notes, the Purchase Contract Agent shall, as soon as
practicable thereafter, mail to the New PEPS Units Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each New PEPS Unit Holder on the record date set by
the Purchase Contract Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of Notes
entitled to vote) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting rights pertaining to the Notes
constituting a part of such Holder's New PEPS Unit; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the New PEPS Unit Holders on such record date,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Notes as to which any particular voting
instructions are received. In the
A-8
absence of specific instructions from the Holder of a New PEPS Unit, the
Purchase Contract Agent shall abstain from voting the Notes evidenced by such
New PEPS Unit.
The New PEPS Units Certificates are issuable only in registered form and
only in denominations of a single New PEPS Unit and any integral multiple
thereof. The transfer of any New PEPS Units Certificate will be registered and
New PEPS 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. As described below, a
Holder who elects to substitute a Treasury Security for a Note, thereby creating
Treasury Units, or a Holder who elects to substitute a Note for a Treasury
Security, thereby recreating New PEPS Units, shall be responsible for any fees
or expenses payable in connection therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract underlying a New PEPS
Unit remains in effect, such New PEPS Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such New PEPS
Unit in respect of a Note and Purchase Contract constituting such New PEPS Unit
may be transferred and exchanged only as a New PEPS Unit.
The Holder of New PEPS Units may substitute for the Pledged Notes,
securing such Holder's obligations under the related Purchase Contracts,
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of the Pledged Notes, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, each Security for which such Pledged Notes 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 40 New PEPS Units for 40 Treasury Units. Such Collateral
Substitution may cause the equivalent aggregate Stated Amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate Stated Amount outstanding under this New PEPS Units Certificate shall
not exceed $500,000,000. All such adjustments to the equivalent aggregate Stated
Amount of this New PEPS Units Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of Treasury Units may recreate New PEPS Units by delivering to
the Collateral Agent Notes, equal to the aggregate principal amount of the
Pledged Treasury Securities in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. A Holder may recreate New PEPS Units in integral multiples
of 40 Treasury Units for 40 New PEPS Units.
A-9
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 New PEPS 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 Corporate Trust Office of
the Purchase Contract Agent and the New York Office or, at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Securities Register or by wire transfer to the
account designated by such Person in writing.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment Payments
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 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 Notes from the
Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("EARLY SETTLEMENT"), only in
integral multiples of 40 Purchase Contracts, as provided in the Purchase
Contract Agreement. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this New PEPS Units
Certificate, the Holder of this New PEPS Units Certificate shall deliver to the
Purchase Contract Agent at the Corporate Trust Office an Election to Settle
Early form set forth below and any other documents requested by the Purchase
Contract Agent duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (A) $25 times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (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
Securities, the Pledged Notes underlying such Securities shall be released from
the Pledge as provided in the Pledge Agreement and the Holder shall be entitled
to receive a number of shares of Common Stock on account of each Purchase
Contract forming part of a New PEPS Unit as to which Early Settlement is
effected equal to 0.3910 shares of Common Stock per Purchase Contract (the
"EARLY SETTLEMENT RATE"); provided,
A-10
however, that upon the Early Settlement of the Purchase Contracts, the Holder of
such related Securities will forfeit the right to receive any future Contract
Adjustment Payments, except to the extent that the Early Settlement Date is
after the close of business on a Record Date and prior to the opening of
business on the corresponding Payment Date. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this New PEPS Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this New PEPS Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this New PEPS Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the New PEPS Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Note underlying this New PEPS Units Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees that,
to the extent and in the manner provided in the Purchase Contract Agreement and
the Pledge Agreement, but subject to the terms thereof, payments in respect to
the aggregate principal amount of the Pledged Notes on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the 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 New PEPS Units Certificate is registered as the owner of the New PEPS Units
evidenced hereby for the purpose of receiving payments of interest payable
quarterly on the Notes, receiving payments of Contract Adjustment Payments,
performance of the Purchase
A-11
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.
The Company covenants and agrees and, by exchanging outstanding 7-3/4%
Premium Equity Participating Security Units for New PEPS Units, a Holder
covenants and agrees, for United States federal income tax purposes, (i) to
treat a Holder's acquisition of the New PEPS Units as the acquisition of the
Notes and Purchase Contracts constituting the New PEPS Units, (ii) to treat a
Holder's acquisition of the Treasury Units as the acquisition of the Treasury
Securities and Purchase Contracts constituting the Treasury Units, and (iii) to
treat each Holder as the owner of the related Notes or Treasury Securities, as
the case may be.
Each purchaser and any subsequent transferee of the New PEPS Units (or any
component security of such units), will be deemed to have represented and
warranted on each day from and including the date of its purchase of the New
PEPS Units (or any component security of such units) through and including the
date of the satisfaction of the obligation under the Purchase Contract and/or
the disposition of any such New PEPS Unit (or any component security of such
unit) either (i) that no portion of the assets used by such purchaser or
subsequent transferee to acquire the New PEPS Units (or any component security
of such units) constitute the assets of any Plan or (ii) that the acquisition,
holding and the disposition of any New PEPS Unit (and any component security of
such unit) by such purchaser or subsequent transferee does not and will not
constitute a non-exempt prohibited transaction under ERISA or Section 4975 of
the Code or a violation of any applicable Similar Laws.
A copy of the Purchase Contract Agreement is available for inspection at
the Corporate Trust Office 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
-------------------
--------------------------------------------------------
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
-----------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D.
or other Identifying Number of Assignee)
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within New PEPS Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said New PEPS Units Certificates on the books of PPL Corporation and PPL Capital
Funding, 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 New PEPS Units Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
-----------------------------------
A-13
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 New PEPS Units evidenced
by this New PEPS Units Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
------------------------ --------------------------------
Signature
Signature Guarantee:
------------
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii) provide Please print name and address of
a guarantee of your signature: Registered Holder:
------------------------------- --------------------------------
Name Name
------------------------------- --------------------------------
Address Address
------------------------------- --------------------------------
------------------------------- --------------------------------
------------------------------- --------------------------------
Social Security or other
Taxpayer Identification
Number, if any
--------------------------------
A-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this New PEPS Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of New PEPS Units evidenced by this New PEPS
Units Certificate specified below. The option to effect Early Settlement may be
exercised only in integral multiples of 40 New PEPS Units. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such Early Settlement be registered in the name of, and delivered, together with
a check in payment for any fractional share and any New PEPS Units Certificate
representing any New PEPS Units evidenced hereby as to which Early Settlement of
the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Notes deliverable upon such Early Settlement will be transferred
in accordance with the transfer instructions set forth below. If shares or
Pledged Notes 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:
----------------------------------------
A-15
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or New PEPS
Units Certificates are to be registered in REGISTERED HOLDER
the name of and delivered to and Pledged
Notes are to be transferred to a Person
other than the Holder, please print such Please print name and address of
Person's name and address: Registered Holder:
------------------------------- --------------------------------
Name Name
------------------------------- --------------------------------
Address Address
------------------------------- --------------------------------
------------------------------- --------------------------------
------------------------------- --------------------------------
Social Security or other
Taxpayer Identification
Number, if any
--------------------------------
A-16
Transfer Instructions for Pledged Notes transferable upon 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 New PEPS Units evidenced by this Global Certificate
is ___________
The following increases or decreases in this Global Certificate have been
made:
================================================================================
Number of New
PEPS Units Signature of
Amount of Amount of evidenced by authorized
increase in decrease in this Global officer of
Number of New Number of New Certificate Purchase Contract
PEPS Units PEPS Units following such Agent or
evidenced by the evidenced by the decrease or Securities
Date Global Certificate Global Certificate increase Custodian
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
A-18
EXHIBIT B
FACE OF TREASURY CERTIFICATE
[If applicable, insert Global Certificate Legend]
No. Cusip No.
Number of Treasury Units
PPL CORPORATION
TREASURY UNITS
This Treasury Units Certificate certifies that is the registered
Holder of the number of Treasury Units set forth [above]* [on the Schedule of
Increases or Decreases in Global Certificate attached hereto]**. Each Treasury
Unit consists of (i) a 1/40, or 2.5%, undivided beneficial ownership interest in
a Treasury Security having a principal amount at maturity equal to $1,000,
subject to the Pledge of such Treasury Security by such Holder pursuant to the
Pledge Agreement, and (ii) the rights and obligations of the Holder under one
Purchase Contract with PPL Corporation, a Pennsylvania 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, at a price equal to $25 (the "STATED AMOUNT"), a number of
shares of Common Stock, $0.01 par value ("COMMON STOCK"), of the Company, equal
to the Settlement Rate, unless prior to or on the Purchase Contract Settlement
Date there shall have occurred a Termination Event or an Early Settlement with
respect to the Treasury Unit of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of
Common
--------
* Insert in Certificates other than Global Certificates
** Insert in Global Certificates
B-1
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 Unit of which such Purchase Contract is a part.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Treasury Unit evidenced hereby an amount (the
"CONTRACT ADJUSTMENT PAYMENTS") equal to 0.46% per annum of the Stated Amount,
or $0.1150 per annum, computed on the basis of a 360-day year of twelve 30 day
months. Contract adjustment payments will accrue from August 18, 2003. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
Treasury Units Certificate (or a Predecessor 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 Corporate Trust Office
of the Purchase Contract Agent and at the New York Office or, at the option of
the Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Securities Register or by wire transfer to the
account designated by such Person by prior written notice.
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 has caused this instrument to be duly
executed.
PPL CORPORATION
By: _________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase Contracts)
By: JPMORGAN CHASE BANK, not individually
but solely as Attorney-in-Fact
of such Holder
By: _________________________
Name:
Title:
DATED:
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: JPMORGAN CHASE BANK, as
Purchase Contract Agent
By: ___________________________
Authorized Officer
B-4
(REVERSE OF TREASURY UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of , 2003 (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.
Unless a Cash Settlement or an Early Settlement has occurred, 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 shares of Common Stock equal to the Settlement Rate, unless prior to
the Purchase Contract Settlement Date, there shall have occurred a Termination
Event with respect to the Security of which such Purchase Contract is a part or
an Early Settlement shall have occurred. The "SETTLEMENT RATE" is equal to:
(1) if the Applicable Market Value (as defined below) multiplied
by 1.017 is greater than or equal to $65.03 (the "THRESHOLD APPRECIATION
PRICE"), 0.3910 shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value multiplied by 1.017 is less
than the Threshold Appreciation Price but greater than $53.30 (the
"REFERENCE PRICE"), the number of shares of Common Stock per Purchase
Contract having a value, based on the Applicable Market Value, equal to
$25; and
(3) if the Applicable Market Value multiplied by 1.017 is less
than or equal to the Reference Price, 0.4770 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 either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Treasury Unit to purchase at the Purchase Price for cash, and the Company to
sell, a number of shares of Common Stock equal to the Early Settlement Rate or
the Settlement Rate, as applicable.
B-5
The "APPLICABLE MARKET VALUE" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date.
The "CLOSING PRICE" per share of Common Stock on any date of determination
means:
(1) the closing sale price (or, if no closing price is reported,
the last reported sale price) per share on the New York Stock Exchange,
Inc. (the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the NYSE on
any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities exchange
on which the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per share
as reported by The NASDAQ Stock Market, Inc.;
(4) if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of the Common Stock on such date
from at least three nationally recognized independent investment banking
firms retained for this purpose by the Company.
A "TRADING DAY" means a day on which the Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Purchase Price for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement or an Early Settlement of each such
Purchase Contract or by applying a principal amount of the Pledged Treasury
Securities underlying such Holder's Treasury Unit equal to the Stated Amount of
such Purchase Contract to the purchase of the Common Stock. A Holder of Treasury
Unit who does not effect, prior to 5:00 p.m. (New York City time) on the second
Business Day immediately preceding the Purchase Contract Settlement Date, an
Early Settlement, shall pay the Purchase Price for the shares of Common Stock to
be issued under the related Purchase Contract from the proceeds of the Pledged
Treasury Securities.
B-6
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Treasury Units Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Treasury Securities (as defined in the Pledge Agreement) forming a part
of each Treasury Unit. A Treasury Unit shall thereafter represent the right to
receive the ownership 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.
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 Certificate will be registered and
Treasury Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury 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. As described below, a
Holder who elects to substitute a Note for a Treasury Security, thereby
recreating New PEPS Units, or a Holder who elects to substitute a Treasury
Security for a Note, thereby creating Treasury 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.
A Holder of Treasury Units may recreate New PEPS Units by delivering to
the Collateral Agent, Notes with a 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 Security shall be referred to as a "NEW PEPS UNIT".
Any such creation of New PEPS Units may be effected in multiples of 40 Treasury
Units for 40 New PEPS Units. Such substitution may cause the equivalent
aggregate Stated Amount of this Certificate to be increased or decreased;
provided, however, the equivalent aggregate Stated Amount outstanding under this
Treasury Units Certificate shall not exceed $500,000,000. All such adjustments
to
B-7
the equivalent aggregate Stated Amount of this Treasury Units Certificate shall
be duly recorded by placing an appropriate notation on the Schedule attached
hereto.
A Holder of New PEPS Units may recreate Treasury Units by delivering to
the Collateral Agent Treasury Securities in an aggregate principal amount equal
to the aggregate principal amount at maturity of the Pledged Notes in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement. Any
such recreation of Treasury Units may be effected only in multiples of 40 New
PEPS Units for 40 Treasury Units.
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 Corporate Trust Office of
the Purchase Contract Agent and the New York Office or at the option of the
Company, by check mailed to the address of the Person entitled thereto at such
address as it appears on the Securities Register.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment Payments
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 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
ownership 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 Securities may be settled early ("EARLY SETTLEMENT") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Treasury
Unit, 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 and any other documents requested by the Purchase
Contract Agent duly completed and accompanied by payment in the form of
immediately available funds payable to the order of the Company in an amount
(the "EARLY SETTLEMENT AMOUNT") equal to (i) the product of (A) $25 times (B)
the number of Purchase Contracts with respect to which the Holder has elected to
effect Early
B-8
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
Securities, the Pledged Treasury Securities underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract forming part of a Treasury Unit as to which Early
Settlement is effected equal to 0.3910 shares of Common Stock per Purchase
Contract (the "EARLY SETTLEMENT RATE"); provided, however, that upon the Early
Settlement of the Purchase Contracts, the Holder of such related Securities will
forfeit the right to receive any future Contract Adjustment Payments, except to
the extent that the Early Settlement Date is after the close of business on a
Record Date and prior to the opening of business on the corresponding Payment
Date. The Early Settlement Rate shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Treasury 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
B-9
such Purchase Contract and such Holder shall acquire no right, title or interest
in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the 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,
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.
The Company covenants and agrees and, by exchanging outstanding 7-3/4%
Premium Equity Participating Security Units for New PEPS Units, a Holder
covenants and agrees, for United States federal income tax purposes, (i) to
treat a Holder's acquisition of the New PEPS Units as the acquisition of the
Notes and Purchase Contracts constituting the New PEPS Units, (ii) to treat a
Holder's acquisition of the Treasury Units as the acquisition of the Treasury
Securities and Purchase Contracts constituting the Treasury Units, and (iii) to
treat each Holder as the owner of the related Notes or Treasury Securities, as
the case may be.
Each purchaser and any subsequent transferee of the Treasury Units (or any
component security of such units), will be deemed to have represented and
warranted on each day from and including the date of its purchase of the
Treasury Units (or any component security of such units) through and including
the date of the satisfaction of the obligation under the new purchase contract
and/or the disposition of any such Treasury Unit (or any component security of
such unit) either (i) that no portion of the assets used by such purchaser or
subsequent transferee to acquire the Treasury Units (or any component security
of such units) constitute the assets of any Plan or (ii) that the acquisition,
holding and the disposition of any Treasury Unit (and any component security of
such unit) by such purchaser or subsequent transferee does not and will not
constitute a non-exempt prohibited transaction under ERISA or Section 4975 of
the Code or a violation of any applicable Similar Laws.
A copy of the Purchase Contract Agreement is available for inspection at
the Corporate Trust Office of the Purchase Contract Agent.
B-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: Custodian
--------------------- ---------------------
(cust) (minor)
Under Uniform Gifts to Minors Act of
------------------
--------------------------------------------------------
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
-----------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying
Number of Assignee)
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Treasury Units Certificates on the books of PPL Corporation and PPL Capital
Funding, 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:
-------------------------------
B-11
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 REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii) Please print name and address of
provide a guarantee of your signature: Registered Holder:
______________________________ ____________________________________
Name Name
______________________________ ____________________________________
Address Address
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Units Certificate irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Treasury Units evidenced by this Treasury Units
Certificate specified below. The option to effect Early Settlement may be
exercised only in integral multiples of 40 Treasury Units. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such Early Settlement be registered in the name of, and delivered, together with
a check in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which Early Settlement of
the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement will
be transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated:_____________________ ________________________________
Signature
Signature Guarantee:______________________
B-13
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Treasury
Units Certificates are to be registered in REGISTERED HOLDER
the name of and delivered to and Pledged
Treasury Securities are to be transferred
to a Person other than the Holder, please Please print name and address of
print such Person's name and address: Registered Holder:
______________________________ ____________________________________
Name Name
______________________________ ____________________________________
Address Address
______________________________ ____________________________________
______________________________ ____________________________________
______________________________ ____________________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________
B-14
Transfer Instructions for Pledged Treasury Securities transferable upon Early
Settlement or a Termination Event:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
B-15
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Treasury Units evidenced by this Global Certificate
is __________
The following increases or decreases in this Global Certificate have been
made:
================================================================================
Signature of
Amount of Number of Treasury authorized
Amount of increase decrease in Units evidenced by officer of
in Number of Number of this Global Purchase Contract
Treasury Units Treasury Units Certificate Agent or
evidenced by the evidenced by the following such Securities
Date Global Certificate Global Certificate decrease or increase Custodian
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B-16
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank
4 New York Plaza, 15th Floor
New York, New York 10004
Attention: [Institutional Trust Services]
Re: [_______ New PEPS Units] [_______ Treasury Units] of PPL Corporation,
a Pennsylvania corporation (the "COMPANY"), and PPL Capital Funding, Inc.
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 [Notes] [Treasury Securities] or
security entitlements with respect thereto in exchange for the [Pledged Notes]
[Pledged Treasury Securities] held in the Collateral Account, in accordance with
the Pledge Agreement, dated as of , 2003 (the "PLEDGE AGREEMENT";
unless otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein), between you, the Company, the Collateral Agent and
the Securities Intermediary. The undersigned Holder has paid all applicable fees
relating to such exchange. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Notes] [Pledged Treasury Securities] related to such [New
PEPS Units] [Treasury Units].
Dated:_____________________ ___________________________________
Signature
Signature Guarantee: ______________________________
_________________________________
TRADES Account No. of Holder
_________________________________
DTC Account No. of Holder
C-1
Please print name and address of Registered Holder:
_________________________________ _________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
_________________________________
_________________________________
_________________________________
C-2
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_____________________________
____________________________
Attention:
Telecopy:___________________
Re: [__________ New PEPS Units] [______ Treasury Units] of PPL
Corporation, a Pennsylvania corporation (the "COMPANY") and
PPL Capital Funding, Inc.
Please refer to the Purchase Contract Agreement, dated as of ,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of New PEPS Units and Treasury Units from time
to time.
We hereby notify you that a Termination Event has occurred and that [the
Notes][the Treasury Securities] underlying your ownership interest in _____ [New
PEPS Units] [Treasury Units] have been released and are being held by us for
your account pending receipt of transfer instructions with respect to such
[Notes][Treasury Securities] (the "RELEASED SECURITIES").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [New PEPS
Units][Treasury Units] effected through book-entry or by delivery to us of your
[New PEPS 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 interest thereon, shall be held in
our name, or a nominee in trust for your benefit, until such time as such [New
PEPS Units][Treasury Units] are transferred or your [New PEPS Units Certificate]
[Treasury Units Certificate] is surrendered or satisfactory evidence is provided
that such [New PEPS Units Certificate][Treasury Units Certificate] has been
destroyed, lost or stolen, together with any indemnification that we or the
Company may require.
D-1
Date: By: JPMORGAN CHASE BANK, as Purchase
Contract Agent
------------------------------
Name:
Title: Authorized Signatory
D-2
EXHIBIT E
NOTICE TO SETTLE BY CASH
JPMorgan Chase Bank
4 New York Plaza, 15th Floor
New York, New York 10004
Attention: [Institutional Trust Services]
Re: [_______ New PEPS Units] [_______ Treasury Units] of PPL Corporation, a
Pennsylvania corporation (the "COMPANY") and PPL Capital Funding, Inc.
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.03(b)(i) of the Purchase Contract Agreement, dated as of ,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the [sixth][first] Business Day
immediately preceding the Purchase Contract Settlement Date (in lawful money of
the United States by certified or cashier's check or wire transfer, in each case
in immediately available funds), $______ as the Purchase Price for the shares of
Common Stock issuable to such Holder by the Company under the related Purchase
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 [New PEPS Units] [Treasury Units].
Date:_____________________________ ______________________________________
Signature
Signature Guarantee: _________________
Please print name and address of Registered Holder:
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO REMARKETING AGENT, COLLATERAL AGENT
AND INDENTURE TRUSTEE AND THE COMPANY
(Settlement of Purchase Contract through Remarketing)
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Telecopy:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: [Institutional Trust Services]
Telecopy: (000) 000-0000
PPL Corporation
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Treasurer
Telecopy: (000) 000-0000
Re: __________ New PEPS Units of PPL Corporation, a
Pennsylvania corporation (the "COMPANY") and PPL Capital
Funding, Inc., a Delaware corporation
Please refer to the Purchase Contract Agreement, dated as of ,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the Holders of New PEPS Units from time to time.
In accordance with Section 5.03(c) of the Purchase Contract Agreement and,
based in part on instructions received from Holders of New PEPS Units as of
11:00 a.m. (New York City time), on the seventh Business Day preceding the
Purchase Contract Settlement Date, we hereby notify you that ______ Notes are to
be tendered for purchase in the Remarketing.
F-1
Date: By: JPMORGAN CHASE BANK, as
Purchase Contract Agent
____________________________________
Name:
Title: Authorized Officer
F-2
