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CONTINGENT VALUE RIGHTS AGREEMENT
by and among
ALAMOSA HOLDINGS, INC.,
ALAMOSA (DELAWARE), INC.
and
[_______________________]
Dated as of [______________], 2003
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TABLE OF CONTENTS
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Page
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RECITALS OF THE ISSUERS..................................................................................1
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions............................................................................1
Section 1.2 Compliance and Opinions................................................................7
Section 1.3 Form of Documents Delivered to Rights Agent............................................8
Section 1.4 Acts of Holders........................................................................9
Section 1.5 Notices, etc., to Rights Agent and Issuers............................................10
Section 1.6 Notice to Holders; Waiver.............................................................10
Section 1.7 Effect of Headings and Table of Contents..............................................11
Section 1.8 Successors and Assigns................................................................11
Section 1.9 Benefits of Agreement.................................................................11
Section 1.10 Governing Law.........................................................................11
Section 1.11 Legal Holidays........................................................................11
Section 1.12 Separability Clause...................................................................11
Section 1.13 No Recourse Against Others............................................................11
Section 1.14 Counterparts..........................................................................12
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally.......................................................................12
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms.......................................................................12
Section 3.2 Registrable Form......................................................................15
Section 3.3 Execution, Authentication, Delivery and Dating........................................15
Section 3.4 Temporary Securities..................................................................16
Section 3.5 Registration, Registration of Transfer and Exchange...................................17
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities......................................18
Section 3.7 Payments with respect to CVR Certificates.............................................18
Section 3.8 Persons Deemed Owners.................................................................19
Section 3.9 Cancellation..........................................................................19
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ARTICLE 4
THE RIGHTS AGENT
Section 4.1 Certain Duties and Responsibilities...................................................20
Section 4.2 Certain Rights of Rights Agent........................................................21
Section 4.3 Not Responsible for Recitals or Issuance of Securities................................22
Section 4.4 May Hold Securities...................................................................22
Section 4.5 Compensation and Reimbursement........................................................22
Section 4.6 Corporate Rights Agent Required; Eligibility..........................................22
Section 4.7 Resignation and Removal; Appointment of Successor.....................................23
Section 4.8 Acceptance of Appointment of Successor................................................24
Section 4.9 Merger, Conversion, Consolidation or Succession to Business...........................24
Section 4.10 Disqualification .....................................................................25
ARTICLE 5
HOLDERS' LISTS AND REPORTS BY RIGHTS AGENT AND COMPANY
Section 5.1 Issuers to Furnish Rights Agent Names and Addresses of Holders........................25
Section 5.2 Preservation of Information; Communications to Holders................................25
ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders.................................................26
Section 6.2 Amendments With Consent of Holders....................................................27
Section 6.3 Execution of Amendments...............................................................27
Section 6.4 Effect of Amendments; Notice to Holders...............................................27
Section 6.5 Reference in Securities to Amendments.................................................28
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders................................................28
Section 7.2 Maintenance of Office or Agency.......................................................28
Section 7.3 Money for Security Payments to Be Held in Trust.......................................29
Section 7.4 Certain Purchases and Sales...........................................................30
Section 7.5 Written Statement to Rights Agent.....................................................30
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ARTICLE 8
REMEDIES OF THE RIGHTS AGENT AND HOLDERS
ON EVENT OF DEFAULT
Section 8.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default.................31
Section 8.2 Collection of Indebtedness by Rights Agent; Rights Agent May Prove
Debt....................................................................................................32
Section 8.3 Application of Proceeds...............................................................34
Section 8.4 Rights Agent May Enforce Claim Without Possession of Securities.......................34
Section 8.5 Restoration of Rights on Abandonment of Proceedings...................................35
Section 8.6 Limitations on Suits by Holders.......................................................35
Section 8.7 Unconditional Right of Holders to Institute Certain Suits.............................35
Section 8.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver
of Default............................................................................36
Section 8.9 Control by Holders....................................................................36
Section 8.10 Waiver of Past Defaults...............................................................37
Section 8.11 Rights Agent to Give Notice of Default, But May Withhold in Certain
Circumstances.........................................................................37
Section 8.12 Right of Court to Require Filing of Undertaking to Pay Costs..........................37
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Issuers May Consolidate, Etc., Only on Certain Terms..................................38
Section 9.2 Successor Substituted.................................................................38
Annex A Certificate for Contingent Value Rights
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CONTINGENT VALUE RIGHTS AGREEMENT, dated as of [________________ ],
2003 (the "Agreement"), by and among ALAMOSA HOLDINGS, INC., a Delaware
corporation (the "Company"), ALAMOSA (DELAWARE), INC., a Delaware corporation
("Alamosa Delaware" and, together with the Company, the "Issuers") and
[_________________________ ], [a national banking association], as rights agent
(the "Rights Agent").
RECITALS OF THE ISSUERS
WHEREAS, the Issuers have duly authorized the creation of an issue of
contingent value rights (the "Securities" or "CVRs"), of substantially the tenor
and amount hereinafter set forth, and to provide therefor the Issuers have duly
authorized the execution and delivery of this Agreement;
WHEREAS, the CVRs will be issued as, and must be transferred as, a unit
together with shares of Series B Convertible Preferred Stock, par value $.01 per
share, of the Company ("Preferred Stock"), each such unit (a "Unit") to
initially consist of 1 share of Preferred Stock and 73.61 CVRs; and
WHEREAS, all things necessary have been done to make the Securities,
when executed by the Issuers and authenticated and delivered hereunder, the
valid obligations of the Issuers and to make this Agreement a valid agreement of
the Issuers, all in accordance with their and its terms;
NOW, THEREFORE, for and in consideration of the premises and the
consummation of the transactions referred to above, it is covenanted and agreed,
for the equal and proportionate benefit of all Holders (as defined herein) of
the Securities, as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
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(b) all accounting terms used herein and not expressly defined herein
shall have the meanings assigned to such terms in accordance with generally
accepted accounting principles in the United States, and the term "generally
accepted accounting principles" or "GAAP" means such accounting principles as
are generally accepted as they may change from time to time;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(d) each CVR shall be deemed to be "related" to the share of Preferred
Stock underlying the Unit under which such CVR is originally issued.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this Agreement,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this instrument as originally executed and as it may
from time to time be supplemented or amended pursuant to the applicable
provisions hereof.
"Alamosa Delaware" means the Person (as defined herein) named as
"Alamosa Delaware" in the first paragraph of this Agreement, until a successor
Person shall have become such pursuant to the applicable provisions of this
Agreement, and thereafter "Alamosa Delaware" shall mean such Person.
"Automatic Extinguishment" has the meaning set forth in Section 3.1(f).
"Board of Directors" means the board of directors of an Issuer or any
duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of an Issuer, to have been duly adopted by
the Board of Directors of such Issuer and to be in full force and effect on the
date of such certification, and delivered to the Rights Agent.
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"Business Day" means any day (other than a Saturday or a Sunday) on
which banking institutions in The City of New York, New York or in the State of
the principal office of the Rights Agent are not authorized or obligated by law
or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act.
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
"Company" means the Person (as defined herein) named as the "Company"
in the first paragraph of this Agreement, until a successor Person shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of each of the Issuers by its respective chairman of the
Board of Directors, the president, any vice president, the controller, the
treasurer, the secretary or any assistant secretary, and delivered to the Rights
Agent.
"Current Market Value" means the sum of the Weighted Average Price for
all Trading Days during the Valuation Period.
"CVR Certificate" means a certificate representing any of the CVRs.
"Default Amount" means the amount, if any, by which the Discounted
Target Price exceeds the Minimum Price.
"Default Interest Rate" means 10% per annum.
"Default Payment Date" means the date upon which the Securities become
due and payable pursuant to Section 8.1(b), (c) or (d).
"Discounted Target Price" means $3.40 discounted from the Maturity Date
back to the Disposition Payment Date or the Default Payment Date, as the case
may be, at a per annum rate of 10%. In each case, upon each occurrence of an
event specified in Section 3.1(j), such amount, as it may have been previously
adjusted, shall be adjusted pursuant to Section 3.1(j).
"Disposition" means (i) a merger, consolidation or other business
combination involving the Company as a result of which no shares of Common Stock
shall remain outstanding, or (ii) a sale, transfer or other disposition, in one
or a series of transactions,
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of all or substantially all of the assets of the Company; unless in the case of
clauses (i) and (ii) such transaction is in connection with a transaction in
which all of the shares of Common Stock are exchanged solely for other publicly
traded equity securities of the Company or another Person, the successor assumes
the obligations of the Issuers relating to the Securities, and appropriate
adjustments are made to the Target Price, the Minimum Price, the Discounted
Target Price, the Common Stock Value and other terms hereof to reflect such
transaction and the economic benefits intended to be confirmed on the Securities
under this Agreement (a "Nondisposition Event").
"Disposition Payment Date" has the meaning set forth in Section 3.1(d).
"Effective Date" means [____________], 2003.
"Event of Default" has the meaning set forth in Section 8.1
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Notes" means the 12-1/2% Senior Notes, the 12-7/8% Senior
Discount Notes and the 13-5/8% Senior Notes.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indentures" means the New Senior Notes Indenture, the New Senior
Discount Notes Indenture, the January 2001 Indenture, the February 0000
Xxxxxxxxx and the August 2001 Indenture.
"Independent Financial Expert" means an independent nationally
recognized investment banking firm.
"Intra-Day Average Price" means, for any Trading Day, the average of
the high and low sale price, regular way, or, in case no sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or as quoted by the Nasdaq National
Market with respect to securities listed or admitted to trading on another
national securities exchange or quoted by the Nasdaq National Market,
respectively, or if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the average of the high and low quoted prices or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by The Nasdaq Stock Market or such other quotation
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system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common Stock
selected by the Issuers.
"Maturity Date" means [________________], 2004.
"Maturity Payment Date" shall mean the third Business Day following the
Maturity Date.
"Minimum Price" means $2.82. Upon each occurrence of an event specified
in Section 3.1(j), such amount, as it may have been previously adjusted, shall
be adjusted pursuant to Section 3.1(j).
"New Notes" means the 11% Senior Notes and the 12% Senior Discount
Notes.
"Nondisposition Event" has the meaning as set forth in the definition
of "Disposition."
"Officers' Certificate" when used with respect to an Issuer means a
certificate signed by the principal executive officer or principal financial
officer of such Issuer in his or her capacity as such an officer, and delivered
to the Rights Agent.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Issuers, and who shall be reasonably acceptable to the Rights
Agent.
"Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Agreement, except: (a) Securities theretofore cancelled by the
Rights Agent or delivered to the Rights Agent for cancellation; (b) from and
after the earliest of a Default Payment Date, the Maturity Payment Date or the
Disposition Payment Date, Securities, or portions thereof, for the payment of
which money in the necessary amount has been theretofore deposited with the
Rights Agent or any Paying Agent (other than the Issuers) in trust, or set aside
and segregated in trust by the Issuers (if any of the Issuers shall act as
Paying Agent) for the Holders of such Securities; and (c) Securities in exchange
for or in lieu of which other Securities have been authenticated and delivered
pursuant to this Agreement, other than any such Securities in respect of which
there shall have been presented to the Rights Agent proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands the
Securities are valid obligations of the Issuers; provided, however, that in
determining whether the Holders of the requisite Outstanding Securities have
given any request, demand, direction, consent or waiver hereunder, Securities
owned by any of the Issuers or any Affiliate of the Issuers, whether held as
treasury securities or otherwise, shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Rights Agent shall be
protected in relying upon any such request, demand,
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direction, consent or waiver, only Securities which the Rights Agent knows to be
so owned shall be so disregarded.
"Paying Agent" means any Person authorized by the Issuers to pay the
amount determined pursuant to Section 3.1, if any, on any Securities on behalf
of the Issuers, which initially shall be [_____________________].
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Reporting Service" means Bloomberg L.P. or, if the trading volume of
the shares of Common Stock is not reported for any Trading Day on Bloomberg
L.P., "Reporting Service" shall mean a financial information company selected in
good faith by the Issuers.
"Responsible Officer" when used with respect to the Rights Agent means
any officer of the Rights Agent to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Rights Agent" means the Person named as the "Rights Agent" in the
first paragraph of this Agreement, until a successor Rights Agent shall have
become such pursuant to the applicable provisions of this Agreement, and
thereafter "Rights Agent" shall mean such successor Rights Agent.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Subsidiary" means each Person more than 50% of the outstanding Voting
Securities of which is owned, directly or indirectly, by any of the Issuers
and/or one or more Subsidiaries.
"Target Price" means $3.40. Upon each occurrence of an event specified
in Section 3.1(j), such amount, as it may have been previously adjusted, shall
be adjusted pursuant to Section 3.1(j).
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day.
"Valuation Period" means the six-month period immediately preceding
(and including) the Maturity Date.
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"vice president" when used with respect to any of the Issuers or the
Rights Agent, means any vice president, whether or not designated by a number or
a word or words added before or after the title of "vice president."
"Voting Securities" means securities having ordinary voting power to
elect a majority of the directors irrespective of whether or not stock of any
other class or classes shall have or might have voting power by reason of the
happening of any contingency.
The "Weighted Average Price" means, for each Trading Day, the product
of: (a) the Intra-Day Average Price for such Trading Day, and (b) the quotient
obtained by dividing (i) the trading volume of shares of Common Stock for such
Trading Day (as reported by the Reporting Service), by (ii) the aggregate
trading volume of shares of Common Stock during the Valuation Period (as
reported by the Reporting Service).
"11% Senior Notes" means the 11% Senior Notes due 2010 of Alamosa
Delaware issued pursuant to the Indenture (the "New Senior Notes Indenture"),
dated as of ______ __, 2003, between Alamosa Delaware and Xxxxx Fargo Bank
Minnesota, N.A. as Trustee, as amended or supplemented from time to time.
"12% Senior Discount Notes" means the 12% Senior Discount Notes due
2009 of Alamosa Delaware issued pursuant to the Indenture (the "New Senior
Discount Notes Indenture"), dated as of ______ __, 2003, between Alamosa
Delaware and Xxxxx Fargo Bank Minnesota, N.A. as Trustee, as amended or
supplemented from time to time.
"12-1/2% Senior Notes" means the 12-1/2% Senior Notes due 2011 of
Alamosa Delaware issued pursuant to the Indenture (the "January 2001
Indenture"), dated as of January 31, 2001, between Alamosa Delaware and Xxxxx
Fargo Bank Minnesota, N.A. as Trustee, as amended or supplemented from time to
time.
"12-7/8% Senior Discount Notes" means the 12-7/8% Senior Discount Notes
due 2010 of Alamosa Delaware issued pursuant to the Indenture (the "February
2000 Indenture"), dated as of February 8, 2000, between Alamosa Delaware and
Xxxxx Fargo Bank Minnesota, N.A. as Trustee, as amended or supplemented from
time to time.
"13-5/8% Senior Notes" means the 13-5/8% Senior Notes due 2011 of
Alamosa Delaware issued pursuant to the Indenture (the "August 2001 Indenture"),
dated as of August 15, 2001, between Alamosa Delaware and Xxxxx Fargo Bank
Minnesota, N.A. as Trustee, as amended or supplemented from time to time.
Section 1.2 Compliance and Opinions. Upon any application or request by
the Issuers to the Rights Agent to take any action under any provision of this
Agreement, each of the Issuers shall furnish to the Rights Agent an Officers'
Certificate stating that, in the opinion of the xxxxxx, all conditions
precedent, if any, provided for in this Agreement
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relating to the proposed action have been complied with and an Opinion of
Counsel stating, subject to customary exceptions, 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: (a) a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto; (b) 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; (c) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (d) a statement as to whether, in the
opinion of each such individual, such condition or covenant has been complied
with.
Section 1.3 Form of Documents Delivered to Rights 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 an Issuer 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 such Issuer stating that the
information with respect to such factual matters is in the possession of such
Issuer 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.
Any certificate, statement or opinion of an officer of an Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuers unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
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reasonable care should know that the same are erroneous. Any certificate or
opinion of any independent firm of public accountants filed with the Rights
Agent shall contain a statement that such firm is independent.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4 Acts of Holders. (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 Rights Agent and, where it is hereby expressly required, to
the Issuers. 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 4.1) conclusive in favor of
the Rights Agent and the Issuers, if made in the manner provided in this
Section.
(b) The Issuers may set a record date for purposes of determining the
identity of Holders entitled to vote or consent to any action by vote or consent
authorized or permitted under this Agreement. If not set by the Issuers prior to
the first solicitation of a Holder of Securities made by any Person in respect
of any such action, or, in the case of any such vote, prior to such vote, the
record date for such action shall be the later of ten days prior to the first
solicitation of such consent or the date of the most recent list of Holders
furnished to the Rights Agent pursuant to Section 5.1 of this Agreement prior to
such solicitation. If a record date is fixed, those Persons who were Holders of
Securities at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to take such action by vote or consent, whether
or not such Persons continue to be Holders after such record date. No such vote
or consent shall be valid or effective for more than 120 days after such record
date. Nothing in this paragraph shall be construed to prevent the Issuers from
setting a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite number of Securities on the date
such action is taken.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may be
proved in any reason able manner which the Rights Agent deems sufficient.
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(d) The ownership of Securities shall be proved by the Security
Register. Neither the Issuers nor the Rights Agent nor any agent of the Issuers
or the Rights Agent shall be affected by any notice to the contrary.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security or the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, suffered or omitted to be done by the Rights Agent,
any Paying Agent or the Issuers in reliance thereon, whether or not notation of
such action is made upon such Security.
Section 1.5 Notices, etc., to Rights Agent and Issuers. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with:
(a) the Rights Agent by any Holder or by the Issuers shall be
sufficient for every purpose hereunder if made, given, furnished or filed, in
writing, to or with the Rights Agent at its principal office; or
(b) the Issuers by the Rights Agent or by any Holder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class
postage prepaid, to the Issuers addressed to them at c/o Alamosa Holdings, Inc.,
0000 X. Xxxx 000, Xxxxxxx, Xxxxx 00000, Attention: Corporate Secretary, or at
any other address previously furnished in writing to the Rights Agent by the
Issuers.
Section 1.6 Notice to Holders; Waiver. Where this Agreement provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Rights 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 mail notice of any event
as required by any
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provision of this Agreement, then any method of giving such notice as shall be
satisfactory to the Rights Agent shall be deemed to be a sufficient giving of
such notice.
Section 1.7 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.8 Successors and Assigns. All covenants and agreements in
this Agreement by the Issuers shall bind their successors and assigns, whether
so expressed or not.
Section 1.9 Benefits of Agreement. Nothing in this Agreement or in the
Securities, express or implied, shall give to any Person (other than the parties
hereto and their successors hereunder, any Paying Agent and the Holders) any
benefit or any legal or equitable right, remedy or claim under this Agreement or
under any covenant or provision herein contained, all such covenants and
provisions being for sole benefit of the parties hereto and their successors and
of the Holders.
Section 1.10 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 1.11 Legal Holidays. In the event that the Maturity Payment
Date, the Disposition Payment Date or the Default Payment Date, as the case may
be, shall not be a Business Day, then (notwithstanding any provision of this
Agreement or the Securities to the contrary) payment on the Securities need not
be made on such date, but may be made, without the accrual of any interest
thereon, on the next succeeding Business Day with the same force and effect as
if made on the Maturity Payment Date, the Disposition Payment Date or the
Default Payment Date, as the case may be.
Section 1.12 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 shall not in
any way be affected or impaired thereby.
Section 1.13 No Recourse Against Others. A director, officer, employee
or stockholder, as such, of any of the Issuers or the Rights Agent shall not
have any liability for any obligations of such Issuer or the Rights Agent under
the Securities or the Agreement or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security each
Holder waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.
11
Section 1.14 Counterparts. This Agreement shall be signed in any number
of counterparts with the same effect as if the signatures to each counterpart
were upon a single instrument, and all such counterparts together shall be
deemed an original of this Agreement.
ARTICLE 2
SECURITY FORMS
Section 2.1 Forms Generally. The Securities and the Rights Agent's
certificate of authentication shall be in substantially the forms set forth in
Annex A, attached hereto and incorporated herein by this reference, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Agreement and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required by law or any rule or regulation pursuant thereto, all as may
be determined by the officers executing such Securities, as evidenced by their
execution of Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.
The definitive Securities shall be typewritten, printed, lithographed or
engraved on steel engraved borders or produced by any combination of these
methods or may be produced in any other manner as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
ARTICLE 3
THE SECURITIES
Section 3.1 Title and Terms. (a) The aggregate number of Securities
which may be authenticated and delivered under this Agreement is limited to a
number equal to [_________], except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6 or 6.5 of this Agreement.
(b) The Securities shall be known and designated as the "Contingent
Value Rights" of the Issuers and shall be an unsecured obligation of the
Issuers, and the Holders shall have no rights except for those rights explicitly
provided for herein and shall not, by virtue of their ownership of Securities,
have any of the rights of shareholders of either of the Issuers.
(c) Subject to adjustment pursuant to Section 3.1(j) and subject to
Section 3.1(k), the Issuers shall pay (in the manner provided in Section 3.7) to
each Holder on the
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Maturity Payment Date, for each CVR held by such Holder, an amount, if any, as
determined by the Issuers, by which the Target Price exceeds the greater of (i)
the Current Market Value and (ii) the Minimum Price (the "Maturity Payment").
Such determinations by the Issuers absent manifest error shall be final and
binding on the Issuers and the Holders. In connection with such determination,
the Issuers shall promptly prepare and deliver to the Rights Agent an Officers'
Certificate describing in reasonable detail the calculation in determining the
Maturity Payment, if any, and, if they are making payment in shares of Common
Stock and/or New Notes (as described in Section 3.7), determining the amount of
shares of Common Stock and/or New Notes to be delivered for each CVR. The
Issuers shall promptly mail a brief summary of the foregoing certificate to each
Holder.
(d) Subject to adjustment pursuant to Section 3.1(j) and subject to
Section 3.1(k), upon the consummation of a Disposition, the Issuers shall pay
(in the manner provided in Section 3.7) to each Holder for each CVR held by such
Holder an amount, if any, as determined by the Issuers, by which the Discounted
Target Price exceeds the greater of (i) the amount of cash received for each
share of Common Stock by the holders thereof as a result of the Disposition,
plus the fair market value, as determined in good faith by an Independent
Financial Expert, of the non-cash consideration, if any, received for each such
share by the holders thereof as a result of such Disposition, assuming that such
holder did not exercise any right of appraisal granted under law with respect to
such Disposition, and (ii) the Minimum Price (the "Disposition Payment"). Such
determination by the Issuers and such Independent Financial Expert absent
manifest error shall be final and binding on the Issuers and the Holders. Such
payment shall be made on the date (the "Disposition Payment Date") established
by the Issuers, which in no event shall be more than 30 days after the date on
which the Disposition was consummated.
(e) The Issuers shall promptly give the Rights Agent an Officer's
Certificate describing in reasonable detail the material terms of any
Disposition, the amount of the Disposition Payment and the Disposition Payment
Date. The Issuers shall promptly mail a brief summary of the foregoing
certificate to each Holder.
(f) If the closing prices of the Common Stock during 20 of any 30
consecutive Trading Days in the Valuation Period are greater than the Target
Price, the CVRs will automatically be extinguished without further consideration
or action by the Issuers or the Holders (the "Automatic Extinguishment");
provided that the Issuers shall (i) promptly prepare an Officers' Certificate
stating that an Automatic Extinguishment has occurred and briefly stating the
facts accounting for such Automatic Extinguishment, (ii) promptly file with the
Rights Agent a copy of such certificate and (iii) promptly mail a brief summary
thereof to each Holder. The closing price for each Trading Day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to
13
trading on the New York Stock Exchange or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system or as quoted by the Nasdaq
National Market with respect to securities listed or admitted to trading on
another national securities exchange or quoted by the Nasdaq National Market,
respectively, or if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by The Nasdaq
Stock Market or such other quotation system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Issuers.
(g) In the event the fair market value of any non-cash consideration
received in a Disposition by holders of Common Stock is determined in good faith
by an Independent Financial Expert, the Issuers shall cause the Independent
Financial Expert to deliver to the Issuers, with a copy to the Rights Agent, a
value report (the "Value Report") stating the methods of valuation considered or
used and containing a statement as to the nature and scope of the examination or
investigation upon which the determination of value was made. The Rights Agent
shall make available a copy of the Value Report to each Holder who requests such
Value Report. The determination in good faith of the Independent Financial
Expert as set forth in the Value Report absent manifest error shall be final and
binding on the Issuers and the Holders.
(h) Notwithstanding any provision of this Agreement or the CVRs to the
contrary, other than in the case of interest on the Default Amount, no interest
shall accrue on any amounts payable on the CVRs to any Holder.
(i) In the event that the Issuers determine in good faith that no
amount is payable on the CVRs to the Holders on the Maturity Payment Date or the
Disposition Payment Date, as the case may be, the Issuers shall give to the
Rights Agent and each Holder prompt notice of such determination. Upon making
such determination, absent manifest error, the Securities shall terminate and
become null and void and the Holders thereof shall have no further rights with
respect thereto. The failure to give such notice or any defect therein shall not
affect the validity of such determination.
(j) In the event that the Company shall at any time or from time to
time, (v) pay a dividend or make a distribution on the outstanding shares of
Common Stock, (w) subdivide the outstanding shares of Common Stock into a larger
number of shares, (x) combine the outstanding shares of Common Stock into a
smaller number of shares, (y) issue any shares of its capital stock in a
reclassification of its Common Stock, or (z) consummate a Nondisposition Event
then, and in each such case, the Target Price, the Minimum Price, the Common
Stock Value and the Discounted Target Price in effect
14
immediately prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Issuers) so that each Holder shall be entitled to
receive such payments that such Holder would have been entitled to receive, had
such event not occurred. Whenever an adjustment is made as provided in this
Section 3.1(j), the Issuers shall (i) promptly prepare an Officers' Certificate
setting forth such adjustment and a brief statement of the facts accounting for
such adjustment, (ii) promptly file with the Rights Agent a copy of such
certificate and (iii) promptly mail a brief summary thereof to each Holder. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained. Such adjustment absent manifest error shall be
final and binding on the Issuers and the Holders. Each outstanding CVR
Certificate shall thence forth represent that number of adjusted CVRs necessary
to reflect such dividends, distributions, subdivision, combination,
classification or consummation and reflect the adjusted Discounted Target Price,
Target Price, Common Stock Value and Minimum Price.
(k) In the event that either (i) all of the CVR Certificates shall have
become due and payable pursuant to the terms hereof, and the Issuers have paid
or caused to be paid or deposited with the Rights Agent or Paying Agent all
amounts payable to the Holders under this Agreement, or (ii) an Automatic
Extinguishment shall have occurred, then in either case this Agreement shall
cease to be of further effect and shall be deemed satisfied and discharged.
Notwithstanding the satisfaction and discharge of this Agreement, the
obligations of the Issuers under Section 4.5 shall survive.
(l) Each CVR shall automatically be extinguished without further
consideration or action by the Issuers or the Holder thereof at such time as
such CVR's related share of Preferred Stock shall be converted into shares of
Common Stock pursuant to Section 8 of the Certificate of Designations, Powers,
Preferences and Rights of the Preferred Stock, and all obligations of the
Issuers under this Agreement as they relate to such CVR shall terminate and be
of no further force or effect.
Section 3.2 Registrable Form. The Securities shall be issuable only in
registered form.
Section 3.3 Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of each of the Issuers by its chairman of
the Board of Directors or its president or any vice president or its treasurer,
under its corporate seal which may, but need not, be attested. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were, at the time of execution, the proper officers of the Issuers shall
bind the Issuers, notwithstanding that such individuals or any of them have
ceased to hold such offices
15
prior to the authentication and delivery of such Securities or did not hold such
offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Agreement, the Issuers may deliver Securities executed by the Issuers to
the Rights Agent for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Rights Agent, in
accordance with such Company Order, shall authenticate and deliver such
Securities as provided in this Agreement and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Rights Agent, by manual or facsimile signature of an
authorized officer, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and that the Holder is entitled to the benefits of this
Agreement. Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Issuers,
and the Issuers shall deliver such Security to the Rights Agent for cancellation
as provided in Section 3.9, for all purposes of this Agreement such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Agreement.
Section 3.4 Temporary Securities. Pending the preparation of definitive
Securities, the Issuers may execute, and upon Company Order, the Rights Agent
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, substantially of
the tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine with the concurrence of the
Rights Agent. Temporary Securities may contain such reference to any provisions
of this Agreement as may be appropriate. Every temporary Security shall be
executed by the Issuers and be authenticated by the Rights Agent upon the same
conditions and in substantially the same manner, and with like effect, as the
definitive Securities.
If temporary Securities are issued, the Issuers will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Issuers designated for such purpose pursuant to Section 7.2,
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Issuers shall execute and the Rights Agent shall
authenticate and deliver in exchange therefor a like amount of definitive
Securities. Until
16
so exchanged, the Temporary Securities shall in all respects be entitled to the
same benefits under this Agreement as definitive Securities.
Section 3.5 Registration, Registration of Transfer and Exchange. The
Issuers shall cause to be kept at the office of [__________] a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 7.2 being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuers shall provide for the registration of Securities and of transfers of
Securities. [___________] shall be initially appointed "Security Registrar" for
the purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at the
office or agency of the Issuers designated pursuant to Section 7.2, the Issuers
shall execute, and the Rights Agent shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new CVR Certificates
representing the same aggregate number of CVRs represented by the CVR
Certificate so surrendered that are to be transferred and the Issuers shall
execute and the Rights Agent shall authenticate and deliver, in the name of the
transferor, one or more new CVR Certificates representing the aggregate number
of CVRs represented by such CVR Certificate that are not to be transferred.
At the option of the Holder, CVR Certificates may be exchanged for
other CVR Certificates that represent in the aggregate the same number of CVRs
as the CVR Certificates surrendered at such office or agency. Whenever any CVR
Certificates are so surrendered for exchange, the Issuers shall execute, and the
Rights Agent shall authenticate and deliver, the CVR Certificates which the
Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Issuers, evidencing the same
rights, and entitled to the same benefits under this Agreement, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for ex change shall (if so required by the Issuers or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Issuers and the Security Registrar, duly executed
by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuers may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of
17
transfer or exchange of Securities, other than exchanges pursuant to Section 3.4
or 6.6 not involving any transfer.
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities. If (a)
any mutilated Security is surrendered to the Rights Agent, or (b) the Issuers
and the Rights Agent receive evidence to their satisfaction of the destruction,
loss or theft of any Security, and there is delivered to the Issuers and the
Rights Agent such security or indemnity as may be required by them to save each
of them and any agent of them harmless, then, in the absence of notice to the
Issuers or the Rights Agent that such Security has been acquired by a bona fide
purchaser, the Issuers shall execute and, upon delivery of a Company Order, the
Rights Agent shall authenticate and deliver, in ex change for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new CVR
Certificate of like tenor and amount of Securities, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is to become due and payable within fifteen days, the Issuers in their
discretion may, instead of issuing a new CVR Certificate, pay to the Holder of
such Security on the Maturity Payment Date, the Disposition Payment Date or the
Default Payment Date, as the case may be, all amounts due and payable with
respect thereto.
Upon the issuance of any new Securities under this Section, the Issuers
may require the payment 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 Rights Agent) connected
therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Issuers, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Agreement equally and proportionately with any
and all other Securities duly issued 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 Securities.
Section 3.7 Payments with respect to CVR Certificates. (a) Payment of
any amount on each CVR (the "Payment Amount") shall be made only upon
presentation by the Holder thereof at the office or agency of the Issuers
maintained for that purpose in the Borough of Manhattan, The City of New York,
and at any other office or agency maintained by the Issuers for such purpose.
Such payment on each CVR shall be made, in the Issuers' sole discretion, (i) in
such coin or currency of the United States of America as at the time is legal
tender for the payment of public and private debts ("Cash") in an
18
amount equal to the Payment Amount; provided, however, the Issuers may pay such
amounts by wire transfer or check payable in such money, or (ii) by delivering
New Notes with an aggregate Value equal to such Payment Amount, or (iii) by
delivering shares of Common Stock with an aggregate Value equal to such Payment
Amount, or (iv) by delivering a combination of Cash, New Notes and/or Common
Stock with an aggregate Value equal to the Payment Amount; provided, however,
that, subject to Section 3.7(b), the form of the Payment Amount and, if the
Issuers elect to pay the Payment Amount in a combination of forms, the relative
amount of each such form, shall be identical for each CVR. For purposes of this
Agreement, (A) the "Value" of Cash shall be the nominal value thereof, (ii) the
"Value" of each share of Common Stock shall be $2.82, subject to adjustment as
set forth in Section 3.1(j) (the "Common Stock Value"), and (iii) the "Value" of
each 11% Senior Note shall be such note's principal amount, and (iv) the "Value"
of each 12% Senior Note shall be such note's accreted value on the date of
payment. The Holder of the Securities shall furnish to the Issuers such forms,
certificates, or other information as the Issuers may reasonably request to
establish the legal entitlement of such Holder to an exemption from withholding
taxes. In the event the Issuers do not receive such forms, certificates, or
other evidence establishing a Holder's legal entitlement to exemption from
withholding tax, then all payments and disbursements to be made by the Issuers
pursuant to this Agreement or the Securities may be reduced by and subject to
withholding taxes. The Issuers shall have no obligation to reimburse, equalize
or compensate a Holder or other person for such withholding taxes.
(b) If the Issuers elect to make any payments pursuant to Section
3.7(a) by delivering New Notes, any such payment made in respect of a Security
originally issued in exchange for 13-5/8% Senior Notes or 12-1/2% Senior Notes
will be made in New Senior Notes, and any payment made in respect of a Security
originally issued in exchange for 12-7/8% Senior Discount Notes will be made in
New Senior Discount Notes.
(c) The resale of the shares of Common Stock and/or New Notes to be
issued pursuant to this Section 3.7 will not be subject to the registration
requirements of the Securities Act, except for any resale by any Person who may
be deemed an "affiliate" (as such term is used in the Securities Act) of any of
the Issuers.
Section 3.8 Persons Deemed Owners. Prior to the time of due presentment
for registration of transfer, the Issuers, the Rights Agent and any agent of the
Issuers or the Rights Agent may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment on
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Issuers, the Rights Agent nor any agent of
the Issuers or the Rights Agent shall be affected by notice to the contrary.
Section 3.9 Cancellation. All Securities surrendered for payment,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and shall be promptly
canceled by it. The Issuers may at any time deliver to the Rights Agent for
cancellation any Securities previously authenticated and delivered hereunder
which the Issuers may have acquired in any manner whatsoever, and may deliver to
the Rights Agent (or to any other Person for
19
delivery to the Rights Agent) for cancellation any Security previously
authenticated hereunder which the Issuers have not issued and sold and all
Securities so delivered shall be promptly canceled by the Rights Agent. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Agreement. All cancelled Securities held by the Rights Agent shall be disposed
of as directed by a Company Order.
ARTICLE 4
THE RIGHTS AGENT
Section 4.1 Certain Duties and Responsibilities. (a) With respect to
the Holders of Securities issued, the Rights Agent, prior to the occurrence of
an Event of Default with respect to the Securities and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this Agreement
and no implied covenants shall be read into this Agreement against the Rights
Agent. In case an Event of Default with respect to the Securities has occurred
(which has not been cured or waived), the Rights Agent shall exercise such of
the rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his own affairs.
(b) In the absence of bad faith on its part, prior to the occurrence of
an Event of Default and after the curing or waiving of all such Events of
Default which may have occurred, the Rights Agent may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Rights Agent and
conforming to the requirements of this Agreement; but in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Rights Agent, the Rights Agent shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Rights Agent from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that (i) this Subsection
(c) shall not be construed to limit the effect of Subsections (a) and (b) of
this Section; (ii) the Rights 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 Rights Agent was negligent in ascertaining the pertinent facts; and
(iii) the Rights 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 pursuant to Section 8.9 relating to the time, method and place of
conducting any proceeding for any remedy available to the Rights Agent, or
exercising any power conferred upon the Rights Agent, under this Agreement. No
provision of this Agreement shall require the Rights
20
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Rights Agent shall be subject to the provisions of
this Section.
Section 4.2 Certain Rights of Rights Agent. Subject to the provisions
of Section 4.1:
(a) the Rights Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction or order of the Issuers mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors of any Issuer may be sufficiently evidenced
by a Board Resolution of such Issuer;
(c) whenever in the administration of this Agreement the Rights Agent
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Rights Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Rights Agent may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or Opinion of
Counsel;
(e) the Rights 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 Rights Agent reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Rights Agent shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report,
21
notice, request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security, or other paper or document unless requested in writing to do
so by the Holders of not less than a majority of the Outstanding Securities;
provided that all reasonable costs, expenses or liabilities likely to be
incurred by it in the making of such investigation shall be paid by the Issuers
or, if paid by the Rights Agent or any predecessor Rights Agent, shall be repaid
by the Issuers upon demand. Notwithstanding the security afforded to it by the
terms of this Agreement, the Rights Agent may in its sole discretion require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; and
(g) the Rights Agent may execute any of the powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Rights Agent shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it hereunder.
Section 4.3 Not Responsible for Recitals or Issuance of Securities. The
Rights Agent shall not be accountable for the Issuers' use of the Securities or
the proceeds from the Securities. The recitals contained herein and in the
Securities, except the Rights Agent's certificates of authentication, shall be
taken as the statements of the Issuers, and the Rights Agent assumes no
responsibility for their correctness. The Rights Agent makes no representations
as to the validity or sufficiency of this Agreement or of the Securities.
Section 4.4 May Hold Securities. The Rights Agent, any Paying Agent,
Security Registrar or any other agent of the Issuers, in its individual or any
other capacity, may become the owner or pledgee of Securities, and, subject to
Sections 4.6, may otherwise deal with the Issuers with the same rights it would
have if it were not Rights Agent, Paying Agent, Security Registrar or such other
agent.
Section 4.5 Compensation and Reimbursement. The Issuers agree:
(a) to pay to the Rights Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(b) except as otherwise expressly provided herein, to reimburse the
Rights Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Rights Agent in accordance with any provision
of this Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to the Rights Agent's negligence or bad faith;
and
(c) to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this agency and the
22
performance of its duties hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
Section 4.6 Rights Agent Required; Eligibility. There shall at all
times be a Rights Agent hereunder which has a combined capital and surplus of at
least $150 million and, to the extent there is such a person eligible and
willing to serve, having an agency or office in the city of New York. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of a supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Rights Agent shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 4.7 Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Rights Agent and no appointment of a successor
Rights Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Rights Agent under Section 4.8.
(b) The Rights Agent, or any rights agent or rights agents hereafter
appointed, may resign at any time by giving written notice thereof to the
Issuers. If an instrument of acceptance by a successor Rights Agent shall not
have been delivered to the Rights Agent within thirty days after the giving of
such notice of resignation, the resigning Rights Agent may petition any court of
competent jurisdiction for the appointment of a successor Rights Agent.
(c) The Rights Agent may be removed at any time by an Act of the
Holders of a majority of the Outstanding Securities, delivered to the Rights
Agent and to the Issuers.
(d) If at any time:
(1) the Rights Agent shall cease to be eligible under Section
4.7 and shall fail to resign after written request therefor by the Issuers or by
any such Holder, or
(2) the Rights Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent, or a receiver of the Rights Agent or of its
property shall be appointed, or any public officer shall take charge or control
of the Rights Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Issuers, by Board Resolutions, may remove the Rights
Agent, or (ii) the Holder of any Security who has been a bona fide Holder of a
Security for at least three months may, on behalf of himself and all others
similarly situated, petition any court
23
of competent jurisdiction for the removal of the Rights Agent and the
appointment of a successor Rights Agent.
(e) If the Rights Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Rights Agent for any cause,
the Issuers, by Board Resolutions, shall promptly appoint a successor Rights
Agent. If, within one year after any removal by Holders of a majority of the
Outstanding Securities, a successor Rights Agent shall be appointed by Act of
the Holders of a majority of the Outstanding Securities delivered to the Issuers
and the retiring Rights Agent the successor Rights Agent so appointed shall,
forthwith upon its acceptance of such appointment in accordance with Section
4.8, become the successor Rights Agent and supersede the successor Rights Agent
appointed by the Issuers. If no successor Rights Agent shall have been so
appointed by the Issuers or the Holders of the Securities and accepted
appointment within sixty days after the retiring Rights Agent tenders its
resignation or is removed, the retiring Rights Agent may, or, the Holder of any
Security who has been a bona fide Holder for at least three months may on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Rights Agent.
(f) The Issuers shall give notice of each resignation and each removal
of the Rights Agent and each appointment of a successor Rights Agent by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security
Register. Each notice shall include the name and address of the successor Rights
Agent. If the Issuers fail to send such notice within ten days after acceptance
of appointment by a successor Rights Agent, it shall not be a default hereunder
but the successor Rights Agent shall cause the notice to be mailed at the
expense of the Issuers.
Section 4.8 Acceptance of Appointment of Successor. Every successor
Rights Agent appointed hereunder shall execute, acknowledge and deliver to the
Issuers and to the retiring Rights Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Rights
Agent shall become effective and such successor Rights Agent, without any
further act, deed or conveyance, shall become vested with all the rights, powers
and duties of the retiring Rights Agent; but, upon request of the Issuers or the
successor Rights Agent, such retiring Rights Agent shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor Rights
Agent all the rights and powers of the retiring Rights Agent, and shall duly
assign, transfer and deliver to such successor Rights Agent all property and
money held by such retiring Rights Agent hereunder. Upon request of any such
successor Rights Agent, the Issuers shall execute any and all instruments for
more fully and certainly vesting in and confirming to such successor Rights
Agent all such rights and powers.
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No successor Rights Agent shall accept its appointment unless at the
time of such acceptance such successor Rights Agent shall be qualified and
eligible under this Article.
Section 4.9 Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Rights 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 Rights Agent shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
business of the Rights Agent, shall be the successor of the Rights 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 Securities shall have
been authenticated, but not delivered, by the Rights Agent then in office, any
successor by merger, conversion or consolidation to such authenticating Rights
Agent may adopt such authentication and deliver the Securities so authenticated
with the same effect as if such successor Rights Agent had itself authenticated
such Securities.
Section 4.10 Disqualification. If the Rights Agent shall at any time
resign as trustee under any of the Indentures due to the requirements of Section
310(b) of the Trust Indenture Act, the Rights Agent shall resign as Rights Agent
under this Agreement. The Issuers shall take prompt steps to have a successor
appointed in the manner provided in this Agreement, provided that the Issuers
shall make reasonable efforts such that the successor trustee appointed under
the Indentures be also appointed as Rights Agent under this Agreement.
ARTICLE 5
HOLDERS' LISTS AND REPORTS BY RIGHTS AGENT AND COMPANY
Section 5.1 Issuers to Furnish Rights Agent Names and Addresses of
Holders. The Issuers will furnish or cause to be furnished to the Rights Agent
(i) not later than the Maturity Date a list, in such form as the Rights Agent
may reasonably require, of the names and addresses of the Holders as of a date
no more than 15 days prior to the time such list is furnished, and (ii) at such
times as the Rights Agent may request in writing, within fifteen days after
receipt by the Issuers of any such request, a list, in such form as the Rights
Agent may reasonably require, of the names and addresses of the Holders as of a
date not more than fifteen days prior to the time such list is furnished;
provided, however, that if and so long as the Rights Agent shall be the Security
Registrar, no such list need be furnished.
Section 5.2 Preservation of Information; Communications to Holders. The
Rights Agent shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list furnished
to the Rights Agent as provided in Section 5.1 and the names and addresses of
Holders received by the Rights Agent in its capacity as Security Registrar. The
Rights Agent may destroy any list furnished to it as provided in Section 5.1
upon receipt of a new list so furnished.
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ARTICLE 6
AMENDMENTS
Section 6.1 Amendments Without Consent of Holders. Without the consent
of any Holders, the Issuers when authorized by their respective Board of
Directors and the Rights Agent, at any time and from time to time, may enter
into one or more amendments hereto or to the Securities, for any of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Rights Agent
as security for the Securities any property or assets; or
(b) to evidence the succession of another Person to any of the Issuers,
and the assumption by any such successor of the covenants of such Issuer herein
and in the Securities; or
(c) to add to the covenants of the Issuers such further covenants,
restrictions, conditions or provisions as the Board of Directors of each of the
Issuers and the Rights Agent shall consider to be for the protection of the
Holders of Securities, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional covenants, restrictions,
conditions or provisions an Event of Default permitting the enforcement of all
or any of the several remedies provided in this Agreement as herein set forth;
provided, that in respect of any such additional covenant, restriction,
condition or provision such amendment may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provide for an immediate enforcement upon
such an Event of Default or may limit the remedies available to the Rights Agent
upon such an Event of Default or may limit the right of the Holders of a
majority of the Securities to waive such an Event of Default; or
(d) to cure any ambiguity, or to correct or supplement any provision
herein or in the Securities which may be defective or inconsistent with any
other provision herein; provided, that such provisions shall not reduce the
benefits of this Agreement or the Securities to the Holders; or
26
(e) to make any other provisions with respect to matters or questions
arising under this Agreement; provided, that such provisions shall not adversely
affect the interests of the Holders.
Promptly following any amendment of this Agreement or the Securities in
accordance with this Section 6.1, the Rights Agent shall notify the Holders of
the Securities of such amendment; provided, that any failure so to notify the
Holders shall not affect the validity of such amendment.
Section 6.2 Amendments With Consent of Holders. With the consent of the
Holders of a majority of the Outstanding Securities, by Act of said Holders
delivered to the Issuers and the Rights Agent, the Issuers (when authorized by a
Board Resolution) and the Rights Agent may enter into one or more amendments
hereto or to the Securities for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
to the Securities or of modifying in any manner the rights of the Holders under
this Agreement or to the Securities; provided, however, that no such amendment
shall, without the consent of the Holder of each Outstanding Security affected
thereby:
(a) modify the definition of Target Price, Minimum Price, Disposition
Payment, Common Stock Value, Discounted Target Price, Maturity Date, Maturity
Payment Date, Default Payment Date, Default Amount, Weighted Average Price,
Valuation Period, Current Market Price or Default Interest Rate, modify Section
3.1(j) or otherwise extend the maturity of the Securities or reduce the amounts
payable in respect of the Securities or modify any other payment term or payment
date; or
(b) reduce the number of CVRs, the consent of whose Holders is required
for (i) any such amendment or (ii) waiver of an Event of Default under Section
8.10; or
(c) modify any of the provisions of this Section 6.2, except to
increase any such percentage or to provide that certain other provisions of this
Agreement cannot be modified or waived without the consent of the Holder of each
Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such Act shall approve the substance thereof.
Section 6.3 Execution of Amendments. In executing any amendment
permitted by this Article, the Rights Agent shall be entitled to receive
indemnity reasonably satisfactory to it, and (subject to Section 4.1) shall be
fully protected in relying upon an Opinion of Counsel stating that the execution
of such amendment is authorized or permitted by this Agreement. The Rights Agent
shall execute any amendment authorized
27
pursuant to this Article VI if the amendment does not adversely affect the
Rights Agent's own rights, duties or immunities under this Agreement or
otherwise.
Section 6.4 Effect of Amendments; Notice to Holders. Upon the execution
of any amendment under this Article, this Agreement and the Securities shall be
modified in accordance therewith, and such amendment shall form a part of this
Agreement and the Securities for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby.
Promptly after the execution by the Issuers and the Rights Agent of any
amendment pursuant to the provisions of this Article, the Issuers shall mail a
notice thereof by first class mail to the Holders of Securities at their
addresses as they shall appear on the Security Register, setting forth in
general terms the substance of such amendment. Any failure of the Issuers to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such amendment.
Section 6.5 Reference in Securities to Amendments. If an amendment
changes the terms of a Security, the Rights Agent may require the Holder of the
Security to deliver it to the Rights Agent. Securities authenticated and
delivered after the execution of any amendment pursuant to this Article may, and
shall if required by the Rights Agent, bear a notation in form approved by the
Rights Agent as to any matter provided for in such amendment. If the Issuers
shall so determine, new Securities so modified as to conform, in the opinion of
the Rights Agent and the Board of Directors of the Issuers, to any such
amendment may be prepared and executed by the Issuers and authenticated and
delivered by the Rights Agent in exchange for Outstanding Securities. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
ARTICLE 7
COVENANTS
Section 7.1 Payment of Amounts, if any, to Holders. The Issuers will
duly and punctually pay the amounts, if any, in the manner provided for in
Section 3.7 on the Securities in accordance with the terms of the Securities and
this Agreement. Such amounts shall be considered paid on the date due if on such
date the Rights Agent or the Paying Agent holds in accordance with this
Agreement Cash, New Notes and/or shares of Common Stock (deposited by the
Issuers in accordance with the terms of this Agreement) sufficient to pay all
such amounts then due. Notwithstanding any other provision of this Agreement,
the Rights Agent and the Paying Agent shall comply with all U.S. federal
withholding requirements with respect to payments to Holders that the Issuers,
the Rights Agent or the Paying Agent reasonably believe are applicable under the
Internal Revenue
28
Code of 1986, as amended, and the Treasury regulations thereunder. Amounts
withheld in compliance with such withholding requirements shall, for purposes of
this Agreement, be treated as paid to the Holder such withholding was made with
respect to. The consent of Holder shall not be required for any such
withholding.
Section 7.2 Maintenance of Office or Agency. As long as any of the
Securities remain Outstanding, the Issuers will maintain in the Borough of
Manhattan, The City of New York, an office or agency (i) where Securities may be
presented or surrendered for payment, (ii) where Securities may be surrendered
for registration of transfer or exchange and (iii) where notices and demands to
or upon the Issuers in respect of the Securities and this Agreement may be
served. The office or agency of [___________] at [______________________] shall
be such office or agency of the Issuers, unless the Issuers shall designate and
maintain some other office or agency for one or more of such purposes. Any of
the Issuers or any of their Subsidiaries may act as Paying Agent, registrar or
transfer agent; provided that such Person shall take appropriate actions to
avoid the commingling of funds. The Issuers will give prompt written notice to
the Rights Agent of any change in the location of any such office or agency. If
at any time the Issuers shall fail to furnish the Rights Agent with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the office of the Rights Agent, and the Issuers hereby appoint the
Rights Agent as its agent to receive all such presentations, surrenders,
notices and demands.
The Issuers may from time to time designate one or more other offices
or agencies (in or outside of The City of New York) where the Securities may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
rescission shall in any manner relieve the Issuers of their obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York
for such purposes. The Issuers will give prompt written notice to the Rights
Agent of any such designation or rescission and any change in the location of
any such office or agency.
Section 7.3 Money for Security Payments to Be Held in Trust. If any of
the Issuers or any of their Subsidiaries shall at any time act as the Paying
Agent, it will, on or before a Maturity Payment Date, the Disposition Payment
Date or the Default Payment Date, as the case may be, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the amounts, if any, so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Rights Agent of its action or failure so to act.
Whenever the Issuers shall have one or more Paying Agents for the
Securities, they will, on or before the Maturity Payment Date, the Disposition
Payment Date or the Default Payment Date, as the case may be, deposit with a
Paying Agent Cash (in same day funds), shares of Common Stock and/or New Notes
sufficient to pay the amount, if
29
any, so becoming due; such sum to be held in trust for the benefit of the
Persons entitled to such amount, and (unless such Paying Agent is the Rights
Agent) the Issuers will promptly notify the Rights Agent of such action or any
failure so to act.
The Issuers will cause each Paying Agent other than the Rights Agent to
execute and deliver to the Rights Agent an instrument in which such Paying Agent
shall agree with the Rights Agent, subject to the provisions of this Section,
that (A) such Paying Agent will hold all sums held by it for the payment of any
amount payable on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and will notify the Rights Agent of the sums so held and (B)
that it will give the Rights Agent notice of any failure by the Issuers (or by
any other obligor on the Securities) to make any payment on the Securities when
the same shall be due and payable.
The Issuers may at any time, for the purpose of obtaining the
satisfaction and discharge of this Agreement or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Rights Agent all sums
held in trust by the Issuers or such Paying Agent, such sums to be held by the
Rights Agent upon the same trusts as those upon which such sums were held by the
Issuers or such Paying Agent; and, upon such payment by any Paying Agent to the
Rights Agent, such Paying Agent shall be released from all further liability
with respect to such money.
Any money (or securities of the Issuers) deposited with the Rights
Agent or any Paying Agent, or then held by any of the Issuers, in trust for the
payment on any Security and remaining unclaimed for one year after the Maturity
Payment Date, the Disposition Payment Date or the Default Payment Date, as the
case may be, shall be paid to the Issuers on Company Request, or (if then held
by any of the Issuers) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Issuers for payment thereof, and all liability of the Rights Agent or such
Paying Agent with respect to such trust money (or securities of the Issuers)
shall thereupon cease.
Section 7.4 Certain Purchases and Sales. (a) Nothing contained herein
shall prohibit any of the Issuers or any of their Subsidiaries or Affiliates
from acquiring in open market transactions, private transactions or otherwise,
the Securities.
(b) The Issuers will not, and will not permit any of its subsidiaries
or controlled Affiliates to, purchase any shares of Common Stock in open market
transactions, privately negotiated transactions or otherwise, on any day during
the period commencing 10 Trading Days before the Valuation Period and ending on
the Maturity Date, except with respect to employee benefit plans and other
incentive compensation arrangements in the ordinary course of business.
30
Section 7.5 Written Statement to Rights Agent. Each of the Issuers will
deliver to the Rights Agent, within 120 days after the end of each fiscal year,
a brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of such
Issuer's compliance with all conditions and covenants under this Agreement. For
purposes of this Section, such compliance shall be determined without regard to
any period of grace or requirement of notice under this Agreement.
ARTICLE 8
REMEDIES OF THE RIGHTS AGENT AND HOLDERS
ON EVENT OF DEFAULT
Section 8.1 Event of Default Defined; Acceleration of Maturity; Waiver
of Default. "Event of Default" with respect to the Securities, means any one of
the follow ing events which shall have occurred and be continuing (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of all or any part of the amounts payable in
respect of any of the Securities as and when the same shall become due and
payable either at the Maturity Payment Date or the Disposition Payment Date, in
the case of technical or administrative difficulties only if such default
persists for a period of five days; or
(b) default in the performance, or breach, of any covenant or warranty
of the Issuers in respect of the Securities (other than a covenant or warranty
in respect of the Securities, a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of thirty days after there has been given, by
registered or certified mail, to the Issuers by the Rights Agent or to the
Issuers and the Rights Agent by the Holders of at least twenty-five percent of
the Outstanding Securities, a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(c) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of any of the Issuers in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee or
sequestrator (or similar official) of an Issuer or for any substantial part of
its property or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of sixty
consecutive days; or
31
(d) any of the Issuers shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, Rights Agent or sequestrator (or
similar official) of such Issuer or for any substantial part of its property, or
make any general assignment for the benefit of creditors.
The Events of Default described in subsections (c) and (d) above are
collectively referred to as "Liquidation Events."
If an Event of Default described above (except a Liquidation Event)
occurs and is continuing, then, and in each and every such case, unless all of
the Securities shall have already become due and payable, either the Rights
Agent or the Rights Agent upon the written request of Holders of not less than
25 percent of the Securities then Outstanding hereunder by notice in writing to
the Issuers (and to the Rights Agent if given by the Holders), may declare the
Securities to be due and payable immediately, and upon any such declaration the
Default Amount shall become immediately due and payable and, thereafter, shall
bear interest at the Default Interest Rate until payment is made to the Rights
Agent or Paying Agent. If a Liquidation Event occurs, unless all of the
Securities shall have already become due and payable, the Securities shall,
automatically and without any action by the Rights Agent or any Holder, become
and be immediately due and payable, and the Default Amount shall become
immediately due and payable and, thereafter, shall bear interest at the Default
Interest Rate until payment is made to the Rights Agent or Paying Agent.
Section 8.2 Collection of Indebtedness by Rights Agent; Rights Agent
May Prove Debt. The Issuers covenant that in case default shall be made in the
payment of all or any part of the Securities when the same shall have become due
and payable, whether at the Maturity Payment Date, the Disposition Payment Date,
the Default Payment Date or upon acceleration or otherwise, then upon demand of
the Rights Agent, the Issuers will pay to the Rights Agent or Paying Agent for
the benefit of the Holders of the Securities the whole amount in Cash, New Notes
and/or shares of Common Stock (at the option of the Issuers) that then shall
have become due and payable on all Securities (with interest from the date due
and payable to the date of such payment upon the overdue amount at the Default
Interest Rate); and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including reasonable
compensation to the Rights Agent and each predecessor Rights Agent, their
respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Rights Agent and each predecessor Rights
Agent, except as a result of its negligence or bad faith; provided, however,
that on and after the occurrence of a Liquidation Event, payments on the CVRs
can only be made in Cash and/or New Notes (at the option of the Issuers).
In case the Issuers shall fail forthwith to pay such amounts upon such
demand, the Rights Agent, in its own name and as Rights Agent, shall be entitled
and empowered to institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or
proceedings to judgment or final decree, and may enforce any such judgment or
final decree against the Issuers or other obligor upon such Securities and
collect in the manner provided by law out of the
32
property of the Issuers or other obligor upon such Securities, wherever
situated, the moneys adjudged or decreed to be payable.
If an Event of Default with respect to the Securities occurs and is
continuing, the Rights Agent may in its discretion proceed to protect and
enforce its rights and the rights of the Holders by such appropriate judicial
proceedings as the Rights Agent shall deem most effectual to protect and enforce
any such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement in this
Agreement or in aid of the exercise of any power granted herein, or to enforce
any other remedy.
In case there shall be pending proceedings relative to any of the
Issuers or any other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or Rights Agent in bankruptcy
or reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of any of the Issuers or its property or such
other obligor, or in case of any other comparable judicial proceedings relative
to any of the Issuers or other obligor upon the Securities, or to the creditors
or property of the Issuers or such other obligor the Rights Agent, irrespective
of whether the principal of any Securities shall then be due and payable as
herein expressed or otherwise and irrespective of whether the Rights Agent shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered (but shall have no obligation) by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount owing and
unpaid in respect of the Securities, and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Rights Agent
(including any claim for reasonable compensation to the Rights Agent and each
predecessor Rights Agent, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all advances
made, by the Rights Agent and each predecessor Rights Agent, except as a result
of negligence or bad faith) and of the Holders allowed in any judicial
proceedings relative to any Issuer or other obligor upon the Securities, or to
their respective property;
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
proceedings or person performing similar functions in comparable proceedings;
and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Holders and of the Rights Agent on their behalf;
and any trustee, receiver, or
33
liquidator, custodian or other similar official is hereby authorized by each of
the Holders to make payments to the Rights Agent, and, in the event that the
Rights Agent shall consent to the making of payments directly to the Holders, to
pay to the Rights Agent such amounts as shall be sufficient to cover reasonable
compensation to the Rights Agent, each predecessor Rights Agent and their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Rights Agent and each
predecessor Rights Agent, except as a result of its negligence or bad faith, and
all other amounts due to the Rights Agent or any predecessor Rights Agent
pursuant to Section 4.5.
Nothing herein contained shall be deemed to authorize the Rights Agent
to authorize or consent to or vote for or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities, or the rights of any Holder thereof, or to authorize
the Rights Agent to vote in respect of the claim of any Holder in any such
proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
In any proceedings brought by the Rights Agent (and also any
proceedings involving the interpretation of any provision of this Agreement to
which the Rights Agent shall be a party) the Rights Agent shall be held to
represent all the Holders, and it shall not be necessary to make any Holders of
such Securities parties to any such proceedings.
Section 8.3 Application of Proceeds. Any monies collected by the Rights
Agent pursuant to this Article in respect of any Securities shall be applied in
the following order at the date or dates fixed by the Rights Agent upon
presentation of the several Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment in exchange for
the presented Securities if only partially paid or upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses in respect of which monies
have been collected, including reasonable compensation to the Rights Agent and
each predecessor Rights Agent and their respective agents and attorneys and of
all expenses and liabilities incurred, and all advances made, by the Rights
Agent and each predecessor Rights Agent, except as a result of its negligence or
bad faith, and all other amounts due to the Rights Agent or any predecessor
Rights Agent pursuant to Section 4.5;
SECOND: To the payment of the whole amount then owing and unpaid upon
all the Securities, with interest at the Default Interest Rate on all such
amounts, and in case such monies shall be insufficient to pay in full the whole
amount so due and unpaid upon the Securities, then to the payment of such
amounts without preference or priority of any security over any other Security,
ratably to the aggregate of such amounts due and payable; and
34
THIRD: To the payment of the remainder, if any, to the Issuers or any
other person lawfully entitled thereto.
Section 8.4 Rights Agent May Enforce Claim Without Possession of
Securities. All rights of action and of asserting claims under this Agreement,
or under any of the Securities, may be enforced by the Rights Agent without the
possession of any of the Securities or the production thereof and any trial or
other proceedings instituted by the Rights Agent shall be brought in its own
name as Rights Agent, and any recovery of judgment, subject to the payment of
the expenses, disbursements and compensation of the Rights Agent, each
predecessor Rights Agent and their respective agents and attorneys, shall be for
the ratable benefit of the Holders.
Section 8.5 Restoration of Rights on Abandonment of Proceedings. In
case the Rights Agent or any Holder shall have proceeded to enforce any right
under this Agreement and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the Rights
Agent or to such Holder, then and in every such case the Issuers and the Rights
Agent and the Holders shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Issuers, the
Rights Agent and the Holders shall continue as though no such proceedings had
been taken.
Section 8.6 Limitations on Suits by Holders. No Holder of any Security
shall have any right by virtue or by availing of any provision of this Agreement
to institute any action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Agreement, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder, unless such Holder previously shall
have given to the Rights Agent written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Holders of not less than
25 percent of the Securities then Outstanding shall have made written request
upon the Rights Agent to institute such action or proceedings in its own name as
Rights Agent hereunder and shall have offered to the Rights Agent such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Rights Agent for sixty
days after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction inconsistent
with such written request shall have been given to the Rights Agent pursuant to
Section 8.9; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Security with every other taker and Holder and the
Rights Agent, that no one or more Holders of Securities shall have any right in
any manner whatever by virtue or by availing of any provision of this Agreement
to effect, disturb or prejudice the rights of any other such Holder of
Securities, or to obtain or seek to obtain priority over or preference to any
other such Holder or to enforce any right under this Agreement, except in the
manner herein provided and for the equal, ratable and common benefit of all
Holders of Securities. For the protection and enforcement of the provisions of
this
35
Section, each and every Holder and the Rights Agent shall be entitled to such
relief as can be given either at law or in equity.
Section 8.7 Unconditional Right of Holders to Institute Certain Suits.
Notwithstanding any other provision in this Agreement and any provision of any
Security, the right of any Holder of any Security to receive payment of the
amounts payable in respect of such Security on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 8.8 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 8.6 and with respect to the
replacement or payment of mutilated, destroyed, lost or stolen securities in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Rights Agent or 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.
No delay or omission of the Rights Agent or of any Holder to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and, subject to
Section 8.6, every power and remedy given by this Agreement or by law to the
Rights Agent or to the Holders may be exercised from time to time, and as often
as shall be deemed expedient, by the Rights Agent or by the Holders.
Section 8.9 Control by Holders. The Holders of a majority of the
Securities at the time Outstanding shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Rights Agent, or exercising any power conferred on the Rights Agent with respect
to the Securities by this Agreement; provided that such direction shall not be
otherwise than in accordance with law and the provisions of this Agreement; and
provided further that (subject to the provisions of Section 4.1) the Rights
Agent shall have the right to decline to follow any such direction if the Rights
Agent, being advised by counsel, shall determine that the action or proceeding
so directed may not lawfully be taken or if the Rights Agent in good faith by
its board of directors, the executive committee, or a committee of directors or
responsible officers of the Rights Agent shall determine that the action or
proceedings so directed would involve the Rights Agent in personal liability or
if the Rights Agent in good faith shall so determine that the actions or
forebearances specified in or pursuant to such direction would be unduly
prejudicial to the interests of Holders of the Securities not
36
joining in the giving of said direction, it being understood that (subject to
Section 4.1) the Rights Agent shall have no duty to ascertain whether or not
such actions or forebearances are unduly prejudicial to such Holders.
Nothing in this Agreement shall impair the right of the Rights Agent in
its discretion to take any action deemed proper by the Rights Agent and which is
not inconsistent with such direction or directions by Holders.
Section 8.10 Waiver of Past Defaults. In the case of a default or an
Event of Default specified in clause (b), (c) or (d) of Section 8.1, the Holders
of a majority of all the Securities then Outstanding may waive any such default
or Event of Default, and its consequences except a default in respect of a
covenant or provisions hereof which cannot be modified or amended without the
consent of the Holder of each Security affected.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Agreement; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 8.11 Rights Agent to Give Notice of Default, But May Withhold
in Certain Circumstances. The Rights Agent shall transmit to the Holders, as the
names and addresses of such Holders appear on the Security Register, notice by
mail of all defaults which have occurred and are known to the Rights Agent, such
notice to be transmitted within ninety days after the occurrence thereof, unless
such defaults shall have been cured before the giving of such notice (the term
"default" or "Defaults" for the purposes of this Section being hereby defined to
mean any event or condition which is, or with notice or lapse of time or both
would become, an Event of Default); provided that, except in the case of default
in the payment of the amounts payable in respect of any of the Securities, the
Rights Agent shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a committee of directors or
Rights Agents and/or Responsible Officers of the Rights Agent in good faith
determines that the withholding of such notice is in the interests of the
Holders.
Section 8.12 Right of Court to Require Filing of Undertaking to Pay
Costs. In any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Rights Agent for any action taken,
suffered or omitted by it as Rights Agent, a court may require any party
litigant in such suit to file an undertaking to pay the costs of such suit, and
may in its discretion assess reasonable costs against any such party litigant
having due regard for the merits of such litigation; provided, however, that
this Section shall not apply to any suit instituted by a Rights Agent or a group
of Holders holding in the aggregate more than 10% of the Outstanding Securities;
provided, further, however that this Section shall not be deemed to authorize
any court to require such an undertaking or to make such an assessment in any
suit instituted by any of the Issuers.
37
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Issuers May Consolidate, Etc., Only on Certain Terms. Each
of the Issuers shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and each of the Issuers shall not permit any Person to
consolidate with or merge into such Issuer or convey, transfer or lease its
properties and assets substantially as an entirety to such Issuer, unless:
(1) in case such Issuer shall consolidate with or
merge into another Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, the Person
formed by such consolidation or into which such Issuer is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of such Issuer substantially as an entirety shall
be a corporation, partnership or trust, organized and validly existing
under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Rights Agent, in
form satisfactory to the Rights Agent, the due and punctual payment of
the amounts on all the Securities and the performance or observance of
every covenant of this Agreement on the part of such Issuer to be
performed or observed;
(2) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation
of such surviving entity or any of its Subsidiaries as a result of such
transaction as having been incurred by such surviving entity or such
Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and
(3) such Issuer has delivered to the Rights Agent an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental agreement is required in connection with such transaction,
such supplemental agreement comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with.
38
Section 9.2 Successor Substituted. Upon any consolidation of an Issuer
with, or merger of an Issuer into, any other Person or any conveyance, transfer
or lease of the properties and assets of an Issuer substantially as an entirety
in accordance with Section 9.1, the successor Person formed by such
consolidation or into which such Issuer is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, such Issuer under this Agreement with the
same effect as if such successor Person had been named as such Issuer herein,
and thereafter, except in the case of a lease, the predecessor Person shall be
relieved of all obligations and covenants under this Agreement and the
Securities.
39
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
ALAMOSA HOLDINGS, INC.
By: ________________________________
Name:
Title:
ALAMOSA (DELAWARE), INC.
By: ________________________________
Name:
Title:
[----------------------------------],
as Rights Agent
By: ________________________________
Name:
Title:
ANNEX A
ALAMOSA HOLDINGS INC.
ALAMOSA (DELAWARE), INC.
No. Certificate for Contingent Value Rights
This certifies that ____________ or registered assigns (the "Holder")
is the registered holder of the number of Contingent Value Rights ("CVRs") set
forth above. Each CVR entitles the Holder, subject to the provisions contained
herein and in the Agreement referred to on the reverse hereof, to a payment from
Alamosa Holdings, Inc., a Delaware corporation (the "Company"), and Alamosa
(Delaware), Inc., a Delaware corporation ("Alamosa Delaware" and, together with
the Company, the "Issuers") in an amount and in the form determined pursuant to
the provisions set forth on the reverse hereof and as more fully described in
the Agreement. Such payment shall be made on the Maturity Payment Date, or on
the Default Payment Date or the Disposition Payment Date upon the occurrence of
an Event of Default or a Disposition, as the case may be, each as defined in the
Agreement referred to on the reverse hereof.
Payment of any amounts pursuant to this CVR Certificate shall be made
only upon presentation of this CVR Certificate by the Holder hereof, at the
office or agency of the Issuers maintained for that purpose.
[_____________________] has been appointed as Paying Agent in the Borough of
Manhattan, The City of New York.
Reference is hereby made to the further provisions of this CVR
Certificate 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 duly executed
by the Rights Agent referred to on the reverse hereof by manual signature, this
CVR Certificate shall not be entitled to any benefit under the Agreement, or be
valid or obligatory for any purpose.
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IN WITNESS WHEREOF, each of the Issuers has caused this instrument to
be duly executed under its respective corporate seal.
Dated: ALAMOSA HOLDINGS, INC.
By: ________________________________
Name:
Title:
Attest: [SEAL]
ALAMOSA (DELAWARE), INC.
By: ________________________________
Name:
Title:
Attest: [SEAL]
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[Form of Reverse of CVR Certificate]
This CVR Certificate is issued under and in accordance with the
Contingent Value Rights Agreement, dated as of _____________, 2003 (the
"Agreement"), among the Company, Alamosa Delaware and [___________] (the "Rights
Agent", which term includes any successor Rights Agent under the Agreement), and
is subject to the terms and provisions contained in the Agreement, to all of
which terms and provisions the Holder of this CVR Certificate consents by
acceptance hereof. The Agreement is hereby incorporated herein by reference and
made a part hereof. Reference is hereby made to the Agreement for a full
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Issuers, the Rights Agent and the Holders of
the CVRs. Copies of the Agreement can be obtained by contacting the Rights
Agent.
Subject to adjustment pursuant to Section 3.1(j) of the Agreement, and
subject to Section 3.1(k) of the Agreement, the Issuers shall pay to the Holder
hereof on the third Business Day following the Maturity Date (the "Maturity
Payment Date") an amount, if any, as determined by the Issuers, by which the
Target Price, as defined below, exceeds the greater of (i) the Current Market
Value, as defined below, and (ii) the Minimum Price, as defined below. Such
determination by the Issuers absent manifest error shall be final and binding on
the Issuers and the Holder. Maturity Date means [_______], 2004. In connection
with such determination, the Issuers shall promptly prepare and deliver to the
Rights Agent an Officers' Certificate describing in reasonable detail the
calculation in determining the amount of payment, and, if they are making
payment in shares of Common Stock and/or New Notes, determining the amount of
shares of Common Stock and/or New Notes to be delivered for each CVR. The
Issuers shall promptly mail a brief summary of the foregoing certificate to the
Holder.
Subject to adjustment pursuant to Section 3.1(j) of the Agreement and
subject to Section 3.1(k) of the Agreement, upon the consummation of a
Disposition, as defined below, the Issuers shall pay to the Holder hereof (in
Cash, shares of Common Stock and/or New Notes, at the Issuers' sole option) for
each CVR represented hereby an amount, if any, as determined by the Issuers, by
which the Discounted Target Price, as defined below, exceeds the greater of (i)
the amount of cash received for each share of Common Stock by the holders
thereof as a result of such Disposition, plus the fair market value, as
determined in good faith by an Independent Financial Expert, of the non-cash
consideration, if any, received for each share of the Common Stock by the holder
thereof as a result of such Disposition, assuming that such holder did not
exercise any right of appraisal granted under law with respect to such
Disposition, and (ii) the Minimum Price. Such determinations by the Issuers and
such Independent Financial Expert absent manifest error shall be final and
binding on the Issuers and the Holder. Such payment shall be made on the date
(the "Disposition Payment Date") established by the Issuers, which in no event
shall be more than 30 days after the date on which the Disposition was
consummated. The Issuers shall promptly give the Rights Agent an Officer's
Certificate
A-3
describing in reasonable detail the material terms of such disposition, the
amount of the disposition payment and the Disposition Payment Date. The Issuers
shall promptly mail a brief summary of the foregoing certificate to each Holder.
If an Event of Default (except a Liquidation Event (as defined in the
Agreement)) occurs and is continuing, then, and in each and every such case,
unless all of the Securities shall have already become due and payable, either
the Rights Agent or the Rights Agent upon the written request of Holders of not
less than 25 percent of the Securities then Outstanding hereunder by notice in
writing to the Issuers (and to the Rights Agent if given by the Holders), may
declare the Securities to be due and payable immediately, and upon any such
declaration the Default Amount shall become immediately due and payable and,
thereafter, shall bear interest at the Default Interest Rate until payment is
made to the Rights Agent or Paying Agent. If a Liquidation Event occurs, unless
all of the Securities shall have already become due and payable, the Securities
shall, automatically and without any action by the Rights Agent or any Holder,
become and be immediately due and payable, and the Default Amount shall become
immediately due and payable and, thereafter, shall bear interest at the Default
Interest Rate until payment is made to the Rights Agent or Paying Agent.
In the event that the Issuers determine in good faith that no amount is
payable on the CVRs to the Holder on the Maturity Payment Date or the
Disposition Payment Date, as the case may be, the Issuers shall give to the
Holder and the Rights Agent notice of such determination. Upon making such
determination, absent manifest error, the CVR Certificates shall terminate and
become null and void and the Holder hereof shall have no further rights with
respect hereto. The failure to give such notice or any defect therein shall not
affect the validity of such determination.
Payment of any amount on each CVR (the "Payment Amount") shall be made
only upon presentation by the Holder at the office or agency of the Issuers
maintained for that purpose in the Borough of Manhattan, The City of New York,
and at any other office or agency maintained by the Issuers for such purpose.
Such payment on each CVR shall be made, in the Issuers' sole discretion, (i) in
such coin or currency of the United States of America as at the time is legal
tender for the payment of public and private debts ("Cash") in an amount equal
to the Payment Amount; provided, however, the Issuers may pay such amounts by
wire transfer or check payable in such money, or (ii) by delivering New Notes
with an aggregate Value equal to such Payment Amount, or (iii) by delivering
shares of Common Stock with an aggregate Value equal to such Payment Amount, or
(iv) by delivering a combination of Cash, New Notes and/or Common Stock with an
aggregate Value equal to the Payment Amount; provided, however, that, subject to
the next paragraph, the form of the Payment Amount and, if the Issuers elect to
pay the Payment Amount in a combination of forms, the relative amount of each
such form, shall be identical for each CVR. For purposes of this CVR
Certificate, (A) the "Value" of Cash shall be the nominal value thereof, (ii)
the "Value" of each share of Common Stock shall be $2.82, subject to adjustment
as set forth in Section 3.1(j) (the "Common Stock Value"), and (iii) the "Value"
of each 11% Senior Note shall be such note's principal amount, and (iv) the
"Value" of each 12% Senior Note shall be such note's accreted value on the date
of payment.
A-4
If the Issuers elect to make any payments pursuant to the preceding
paragraph by delivering New Notes, any such payment made in respect of a
Security originally issued in exchange for 13-5/8% Senior Notes or 12-1/2%
Senior Notes will be made in New Senior Notes, and any payment made in respect
of a Security originally issued in exchange for 12-7/8% Senior Discount Notes
will be made in New Senior Discount Notes.
If the closing prices of the Common Stock during 20 of any 30
consecutive Trading Days in the Valuation Period are greater than the Target
Price, the CVRs will automatically be extinguished without further consideration
or action by the Issuers or the Holders (the "Automatic Extinguishment");
provided that the Issuers shall (i) promptly prepare an Officers' Certificate
stating that an Automatic Extinguishment has occurred and briefly stating the
facts accounting for such Automatic Extinguishment, (ii) promptly file with the
Rights Agent a copy of such certificate and (iii) promptly mail a brief summary
thereof to the Holder. The closing price for each Trading Day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system or as quoted by the Nasdaq National Market with respect to
securities listed or admitted to trading on another national securities exchange
or quoted by the Nasdaq National Market, respectively, or if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange or quoted by the Nasdaq National Market, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market or such other
quotation system then in use, or, if on any such date the shares of Common Stock
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Common Stock selected by the Issuers.
Each CVR shall automatically be extinguished without further
consideration or action by the Issuers or the Holder at such time as such CVR's
related share of Preferred Stock shall be converted into shares of Common Stock
pursuant to Section 8 of the Certificate of Designations, Powers, Preferences
and Rights of the Preferred Stock, and all obligations of the Issuers under the
Agreement as they relate to such CVR shall terminate and be of no further force
or effect.
Notwithstanding any provision of the Agreement or of this CVR
Certificate to the contrary, other than in the case of interest on the Default
Amount, no interest shall accrue on any amounts payable on the CVRs to the
Holder.
A-5
"Current Market Value" means the sum of the Weighted Average Price for
all Trading Days during the Valuation Period.
"Default Amount" means the amount, if any, by which the Discounted
Target Price exceeds the Minimum Price.
"Discounted Target Price" means $3.40 discounted from the Maturity Date
back to the Disposition Payment Date or the Default Payment Date, as the case
may be, at a per annum rate of 10%. In each case, upon each occurrence of an
event specified in Section 3.1(j) of the Agreement, such amount, as it may have
been previously adjusted, shall be adjusted pursuant to such Section 3.1(j).
"Disposition" means (i) a merger, consolidation or other business
combination involving the Company as a result of which no shares of Common Stock
shall remain outstanding, or (ii) a sale, transfer or other disposition, in one
or a series of transactions, of all or substantially all of the assets of the
Company; unless in the case of clauses (i) and (ii) such transaction is in
connection with a transaction in which all of the shares of Common Stock are
exchanged solely for other publicly traded equity securities of the Company or
another Person, the successor assumes the obligations of the Issuers relating to
the Securities, and appropriate adjustments are made to the Target Price, the
Minimum Price, the Discounted Target Price, the Common Stock Value and other
terms hereof to reflect such transaction and the economic benefits intended to
be confirmed on the Securities under the Agreement.
"Independent Financial Expert" means an independent nationally
recognized investment banking firm.
"Intra-Day Average Price" means, for any Trading Day, the average of
the high and low sale price, regular way, or, in case no sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system or as quoted by the Nasdaq National
Market with respect to securities listed or admitted to trading on another
national securities exchange or quoted by the Nasdaq National Market,
respectively, or if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or quoted by the Nasdaq National
Market, the average of the high and low quoted prices or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by The Nasdaq Stock Market or such other quotation system then in use,
or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Issuers.
A-6
The "Minimum Price" means $2.82. Upon each occurrence of an event
specified in Section 3.1(j) of the Agreement, such amount, as it may have been
previously adjusted, shall be adjusted pursuant to Section 3.1(j) of the
Agreement.
"Reporting Service" means Bloomberg L.P. or, if the trading volume of
the shares of Common Stock is not reported for any Trading Day on Bloomberg
L.P., "Reporting Service" shall mean a financial information company selected in
good faith by the Issuers.
The "Target Price" means $3.40. Upon each occurrence of an event
specified in Section 3.1(j) of the Agreement, such amount, as it may have been
previously adjusted, shall be adjusted pursuant to Section 3.1(j) of the
Agreement.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of Common
Stock are not listed or admitted to trading on any national securities exchange,
a Business Day.
"Valuation Period" means the six-month period immediately preceding
(and including) the Maturity Date.
The "Weighted Average Price" means, for each Trading Day, the product
of: (a) the Intra-Day Average Price for such Trading Day, and (b) the quotient
obtained by dividing (i) the trading volume of shares of Common Stock for such
Trading Day (as reported by the Reporting Service), by (ii) the aggregate
trading volume of shares of Common Stock during the Valuation Period (as
reported by the Reporting Service).
The Agreement permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuers and the rights of the holders of CVRs under the Agreement at any time by
the Issuers and the Rights Agent with the consent of the holders of a majority
of the CVRs at the time outstanding.
No reference herein to the Agreement and no provision of this CVR
Certificate or of the Agreement shall alter or impair the obligation of the
Issuers, which is absolute and unconditional, to pay any amounts determined
pursuant to the terms hereof and of the Agreement at the times, place, and
amount, and in the cash or securities of the Issuers, herein prescribed.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of the CVRs represented by this CVR Certificate is
registrable on the Security Register of the Issuers, upon surrender of this CVR
Certificate for registration of transfer at the office or agency of the Issuers
maintained for such purpose in The City of New York, duly endorsed by, or
accompanied by a written instrument of transfer in form
A-7
reasonably satisfactory to the Issuers and the Security Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing, and thereupon
one or more new CVR Certificates, for the same amount of CVRs, will be issued to
the designated transferee or transferees. The Issuers hereby initially designate
the office of [______________] the office for registration of transfer of this
CVR Certificate.
As provided in the Agreement and subject to certain limitations therein
set forth, this CVR Certificate is exchangeable for one or more CVR Certificates
representing the same number of CVRs as represented by this CVR Certificate as
requested by the Holder surrendering the same.
No service charge will be made for any registration of transfer or
exchange of CVRs, but the Issuers may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to the time of due presentment of this CVR Certificate for
registration of transfer, the Issuers, the Rights Agent and any agent of the
Issuers or the Rights Agent may treat the Person in whose name this CVR
Certificate is registered as the owner hereof for all purposes, and neither the
Issuers, the Rights Agent nor any agent shall be affected by notice to the
contrary.
All capitalized terms used in this CVR Certificate without definition
shall have the meanings assigned to them in the Agreement.
Neither any of the Issuers nor the Rights Agent has any duty or
obligation to the holder of this CVR Certificate, except as expressly set forth
herein or in the Agreement.
RIGHTS AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the CVR Certificates referred to in the within-mentioned
Agreement.
______________________, as Rights Agent
Dated: ____________________ By _____________________________________
Authorized Signatory
A-8
