Exhibit 4.11
TOYS "R" US, INC.
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
PURCHASE CONTRACT AGREEMENT
Dated as of [______], 2002
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.......................1
SECTION 1.1 Definitions....................................................1
SECTION 1.2 Compliance Certificates and Opinions..........................16
SECTION 1.3 Form of Documents Delivered to Agent..........................17
SECTION 1.4 Acts of Holders; Record Dates.................................17
SECTION 1.5 Notices.......................................................19
SECTION 1.6 Notice to Holders; Waiver.....................................20
SECTION 1.7 Effect of Headings and Table of Contents......................20
SECTION 1.8 Successors and Assigns........................................20
SECTION 1.9 Separability Clause...........................................21
SECTION 1.10 Benefits of Agreement.........................................21
SECTION 1.11 Governing Law.................................................21
SECTION 1.12 Legal Holidays................................................21
SECTION 1.13 Counterparts..................................................21
SECTION 1.14 Inspection of Agreement.......................................22
ARTICLE II. CERTIFICATE FORMS...........................................................22
SECTION 2.1 Forms of Certificates Generally...............................22
SECTION 2.2 Form of Agent's Certificate of Authentication.................23
ARTICLE III. THE UNITS..................................................................24
SECTION 3.1 Title and Terms; Denominations................................24
SECTION 3.2 Rights and Obligations Evidenced by the Certificates..........24
SECTION 3.3 Execution, Authentication, Delivery and Dating................25
SECTION 3.4 Temporary Certificates........................................26
SECTION 3.5 Registration; Registration of Transfer and Exchange...........26
SECTION 3.6 Book-Entry Interests..........................................28
SECTION 3.7 Notices to Holders............................................29
SECTION 3.8 Appointment of Successor Clearing Agency......................29
SECTION 3.9 Definitive Certificates.......................................29
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates............30
SECTION 3.11 Persons Deemed Owners.........................................31
SECTION 3.12 Cancellation..................................................32
SECTION 3.13 Establishment of Stripped Units...............................32
SECTION 3.14 Reestablishment of Normal Units...............................34
SECTION 3.15 Transfer of Collateral Upon Occurrence of Termination Event...36
SECTION 3.16 No Consent to Assumption......................................37
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ARTICLE IV. THE NOTES...................................................................37
SECTION 4.1 Payment of Interest; Rights to Interest Payments Preserved;
Notice........................................................37
SECTION 4.2 Notice and Voting.............................................38
SECTION 4.3 Tax Event Redemption..........................................39
ARTICLE V. THE PURCHASE CONTRACTS; THE REMARKETING......................................40
SECTION 5.1 Purchase of Shares of Common Stock............................40
SECTION 5.2 Reserved......................................................42
SECTION 5.3 Reserved......................................................42
SECTION 5.4 Payment of Purchase Price; Remarketing........................42
SECTION 5.5 Issuance of Shares of Common Stock............................50
SECTION 5.6 Adjustment of Settlement Rate.................................50
SECTION 5.7 Notice of Adjustments and Certain Other Events................58
SECTION 5.8 Termination Event; Notice.....................................59
SECTION 5.9 Early Settlement..............................................59
SECTION 5.10 Early Settlement Upon Merger..................................61
SECTION 5.11 Charges and Taxes.............................................63
SECTION 5.12 No Fractional Shares..........................................63
ARTICLE VI. REMEDIES....................................................................64
SECTION 6.1 Unconditional Right of Holders to Purchase Common Stock.......64
SECTION 6.2 Restoration of Rights and Remedies............................64
SECTION 6.3 Rights and Remedies Cumulative................................64
SECTION 6.4 Delay or Omission Not Waiver..................................64
SECTION 6.5 Undertaking for Costs.........................................65
SECTION 6.6 Waiver of Stay or Extension Laws..............................65
ARTICLE VII. THE AGENT..................................................................65
SECTION 7.1 Certain Duties, Rights and Immunities.........................65
SECTION 7.2 Notice of Default.............................................68
SECTION 7.3 Certain Rights of Agent.......................................68
SECTION 7.4 Not Responsible for Recitals, Etc.............................69
SECTION 7.5 May Hold Units and Other Dealings.............................69
SECTION 7.6 Money Held In Custody.........................................69
SECTION 7.7 Compensation and Reimbursement................................69
SECTION 7.8 Corporate Agent Required; Eligibility.........................70
SECTION 7.9 Resignation and Removal; Appointment of Successor.............71
SECTION 7.10 Acceptance of Appointment By Successor........................72
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business...73
SECTION 7.12 Preservation of Information; Communications to Holders........73
SECTION 7.13 Failure to Act................................................74
SECTION 7.14 No Obligations of Agent.......................................74
SECTION 7.15 Tax Compliance................................................74
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ARTICLE VIII. SUPPLEMENTAL AGREEMENTS...................................................75
SECTION 8.1 Supplemental Agreements Without Consent of Holders............75
SECTION 8.2 Supplemental Agreements With Consent of Holders...............75
SECTION 8.3 Execution of Supplemental Agreements..........................77
SECTION 8.4 Effect of Supplemental Agreements.............................77
SECTION 8.5 Reference to Supplemental Agreements..........................77
ARTICLE IX. CONSOLIDATION, MERGER, SALE OR CONVEYANCE...................................78
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Assets
Except Under Certain Conditions...............................78
SECTION 9.2 Rights and Duties of Successor Corporation....................78
ARTICLE X. COVENANTS....................................................................79
SECTION 10.1 Performance Under Purchase Contracts..........................79
SECTION 10.2 Maintenance of office or Agency...............................79
SECTION 10.3 Company to Reserve Common Stock...............................80
SECTION 10.4 Covenants as to Common Stock..................................80
SECTION 10.5 Statements of Officer of The Company as to Default............80
SECTION 10.6 Tax Treatment.................................................80
iii
PURCHASE CONTRACT AGREEMENT, dated as of [______], 2002, between Toys
"R" Us, Inc., a Delaware corporation (the "Company"), and The Bank of New York,
a New York banking corporation, acting as purchase contract agent for the
Holders of Units from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute this Agreement a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the Units
by the Holders thereof, it is mutually agreed as follows:
ARTICLE I.
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, and nouns and pronouns of the masculine gender
include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally
accepted accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not
to any particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.1(d):
"Act" when used with respect to any Holder, has the meaning
specified in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall have become
such pursuant to the applicable provisions of this Agreement, and
thereafter "Agent" shall mean such Person.
"Agent-purchased Treasury Consideration" has the meaning
specified in Section 5.4(b)(i).
"Agreement" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more
agreements supplemental hereto entered into pursuant to the applicable
provisions hereof.
"Applicable Market Value" has the meaning specified in Section
5.1.
"Applicable Ownership Interest" means, with respect to a
Normal Unit and the U.S. Treasury securities in the Treasury Portfolio,
(A) a 1/20, or 5.0%, undivided beneficial ownership interest in a
$1,000 principal or interest amount of a principal or interest strip in
a U.S. Treasury security included in such Treasury Portfolio which
matures on or prior to the Stock Purchase Date and (B) for the
scheduled interest Payment Date on the Notes that occurs on the Stock
Purchase Date, in the case of a successful remarketing that occurs
prior to the third Business Day immediately preceding the Stock
Purchase Date, or for each scheduled interest Payment Date on the Notes
that occurs after the Tax Event Redemption Date and on or before the
Stock Purchase Date, in the case of a Tax Event Redemption, a 5.0%
undivided beneficial ownership interest in a $1,000 principal or
interest amount of a principal or interest strip in a U.S. Treasury
security included in the Treasury Portfolio that matures on or prior to
that interest Payment Date or Dates.
"Applicable Principal Amount" means the aggregate principal
amount of the Notes that are components of Normal Units on the Initial
Remarketing Date or any Subsequent Remarketing Date that occurs prior
to the third Business Day preceding the Stock Purchase Date and that
are to be included in any remarketing.
"Applicants" has the meaning specified in Section 7.12(b).
2
"Bankruptcy Code" means Title 11 of the United States Code, or
any other law of the United States that from time to time provides a
uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry
Interest as reflected on the books of the Clearing Agency or on the
books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Board of Directors" means either the Board of Directors of
the Company or the Executive Committee of such Board or any other
committee of such Board duly authorized to act generally or in any
particular respect for such Board hereunder.
"Board Resolution" means (i) a copy of a resolution certified
by the Secretary or the Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and
effect on the date of such certification, (ii) a copy of a unanimous
written consent of the Board of Directors or (iii) a certificate signed
by the authorized officer or officers to whom the Board of Directors
has delegated its authority, and in each case, delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and
made through book entries by a Clearing Agency as described in Section
3.6.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions and trust companies in The
State of New York or at a place of payment are authorized or required
by law, regulation or executive order to be closed.
"Capital Stock" means any and all shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or
interests in (however designated, whether voting or non-voting)
corporate stock or similar interests in other types of entities.
"Cash" means any coin or currency of the United States as at
the time shall be legal for payment of public and private debts.
"Cash Merger" has the meaning set forth in Section 5.10.
"Cash Settlement" has the meaning set forth in Section 5.4(a).
"Certificate" means a Normal Units Certificate or a Stripped
Units Certificate.
3
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is
acting as a depositary for the Units and in whose name, or in the name
of a nominee of that organization, shall be registered a Global
Certificate and which shall undertake to effect book-entry transfers
and pledges of the Units.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time
the Clearing Agency effects book-entry transfers and pledges of
securities deposited with the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Agent" means JPMorgan Chase Bank, a New York
banking corporation, as Collateral Agent under the Pledge Agreement
until a successor Collateral Agent shall have become such pursuant to
the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section
3.13.
"Common Stock" means the Common Stock, par value $.10 per
share, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"Constituent Person" has the meaning specified in Section
5.6(b).
"Corporate Trust Office" means the office of the Agent at
which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at
000 Xxxxxxx Xxxxxx, Xxxxx 21 West, New York, New York, 10286,
Attention: Corporate Trust Administration, or such other address as the
Trustee may designate from time to time by notice to the Holders and
the Company, or the principal corporate trust office of any successor
Trustee (or such other address is such successor Trustee may designate
from time to time by notice to the Holders and the Company).
"Coupon Rate" means the percentage rate per annum at which
each Note will bear interest initially.
4
"Current Market Price" has the meaning specified in Section
5.6(a)(8).
"Custodial Agent" means JPMorgan Chase Bank, a New York
banking corporation, as Custodial Agent under the Pledge Agreement
until a successor Custodial Agent shall have become such pursuant to
the applicable provisions of the Pledge Agreement, and thereafter
"Custodial Agent" shall mean the Person who is then the Custodial Agent
thereunder.
"Depositary" means, initially, DTC, until another Clearing
Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"Early Settlement" has the meaning specified in Section
5.9(a).
"Early Settlement Amount" has the meaning specified in Section
5.9(a).
"Early Settlement Date" has the meaning specified in Section
5.9(a).
"Early Settlement Rate" has the meaning specified in Section
5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and
any statute successor thereto, in each case as amended from time to
time, and the rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section
5.6(a)(6).
"Fair Market Value" with respect to securities distributed in
a Spin-Off means (a) in the case of any Spin-Off that is effected
simultaneously with an initial public offering of such securities, the
initial public offering price of those securities, and (b) in the case
of any other Spin-Off, the average of the Sale Prices of those
securities over the first 10 Trading Days after the effective date of
such Spin-Off.
"Global Certificate" means a Certificate that evidences all or
part of the Units and is registered in the name of a Depositary or a
nominee thereof.
"Holder" means the Person in whose name the Units evidenced by
a Normal Units Certificate and/or a Stripped Units Certificate is
registered in the related Normal Units Register and/or the Stripped
Units Register, as the case may be.
"Indenture" means the Indenture, as supplemented by the First
Supplemental Indenture, in each case, dated as of May , 2002, between
the Company and the Trustee relating to the Notes.
5
"Indenture Trustee" means The Bank of New York, as trustee
under the Indenture, or any successor thereto.
"Initial Remarketing Date" means the date of the initial
remarketing, which shall occur on the third Business Day immediately
preceding May 16, 2005.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by the Chief Executive
Officer, the Chief Financial Officer, the President, any
Vice-President, the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary (or other officer performing similar
functions) of the Company and delivered to the Agent.
"Last Failed Remarketing" has the meaning specified in Section
5.4(b)(ii).
"Merger Early Settlement" has the meaning specified in Section
5.10.
"Merger Early Settlement Amount" has the meaning specified in
Section 5.10.
"Merger Early Settlement Date" has the meaning specified in
Section 5.10.
"Non-electing Share" has the meaning specified in Section
5.6(b).
"Normal Unit" means the collective rights and obligations of a
Holder of a Normal Units Certificate in respect of a Note or the
Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, subject in each case to the Pledge thereof, and the related
Purchase Contract.
"Normal Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Normal
Units specified on such certificate, substantially in the form of
Exhibit A hereto.
"Normal Units Register" and "Normal Units Registrar" have the
respective meanings specified in Section 3.5.
"Notes" means the series of senior debt securities of the
Company designated the Senior Notes due 2007, to be issued under the
Indenture.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the
Chief Executive Officer, the Chief Financial Officer, the President,
any Vice- President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary (or other officer performing
similar functions) of the Company and delivered to the Agent.
6
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company and
who shall be reasonably acceptable to the Agent.
"Opt-out Treasury Consideration" has the meaning specified in
Section 5.4(b)(v).
"Outstanding Units" means, as of the date of determination,
all Normal Units or Stripped Units evidenced by Certificates
theretofore authenticated, executed and delivered under this Agreement,
except:
(i) If a Termination Event has occurred, (A) Stripped
Units for which the related Treasury Securities have
been theretofore deposited with the Collateral Agent
in trust for the Holders of such Stripped Units and
(B) Normal Units for which the related Note or the
Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, has been theretofore
deposited with the Agent in trust for the Holders of
such Normal Units;
(ii) Normal Units and Stripped Units evidenced by
Certificates theretofore cancelled by the Agent or
delivered to the Agent for cancellation or deemed
cancelled pursuant to the provisions of this
Agreement; and
(iii) Normal Units or Stripped Units evidenced by
Certificates in exchange for or in lieu of which
other Certificates have been authenticated, executed
on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in
respect of which there shall have been presented to
the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose
hands the Normal Units or Stripped Units evidenced by
such Certificate are valid obligations of the
Company;
provided, that in determining whether the Holders of the requisite
number of the Normal Units or Stripped Units have given any request,
demand, authorization, direction, notice, consent or waiver hereunder,
Normal Units or Stripped Units owned by the Company or any Affiliate of
the Company shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Normal Units or Stripped Units which a
Responsible Officer of the Agent knows to be so owned shall be so
disregarded. Normal Units or Stripped Units so owned which have been
pledged in good faith may be regarded as Outstanding Units if the
pledgee establishes to the satisfaction of the Agent the pledgee's
right so to act with respect to such Normal Units or Stripped Units and
that the pledgee is not the Company or any Affiliate of the Company.
7
"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing August 16, 2002. The amount of the first
interest payment will be prorated to reflect the interest accrued
between the initial issuance date of the Units and August 16, 2002.
"Permitted Investments" means any one of the following which
shall mature not later than three Business Days prior to the Stock
Purchase Date (i) any evidence of indebtedness with an original
maturity of 365 days or less issued, or directly and fully guaranteed
or insured, by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such
indebtedness constitutes a general obligation of it); (ii) deposits,
certificates of deposit or acceptances with an original maturity of 365
days or less of any institution which is a member of the Federal
Reserve System having combined capital and surplus and undivided
profits of not less than US $200.0 million at the time of deposit;
(iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred
to in clause (ii); (iv) investments in commercial paper, other than
commercial paper issued by the Company or its affiliates, of any
corporation incorporated under the laws of the United States or any
State thereof, which commercial paper has a rating at the time of
purchase at least equal to "A-1" by Standard & Poor's Ratings Services
("S&P") or at least equal to "P-1" by Xxxxx'x Investors Service, Inc.
("Moody's"); and (v) investments in money market funds registered under
the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Pledge" means the pledge under the Pledge Agreement of the
Notes, the Treasury Securities or the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, in each case, constituting
a part of the Units, property, cash, securities, financial assets and
security entitlements of the Collateral Account (as defined in the
Pledge Agreement) and any Proceeds of any of the foregoing pursuant to
the Pledge Agreement.
"Pledge Agreement" means the Pledge Agreement, dated as of the
date hereof, by and among the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Units.
8
"Pledged Applicable Ownership Interest in the Treasury
Portfolio" has the meaning set forth in Section 2.1(d) of the Pledge
Agreement.
"Pledged Notes" has the meaning set forth in Section 2.1(d) of
the Pledge Agreement.
"Pledged Treasury Securities" has the meaning set forth in
Section 2.1(d) of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Normal Units
Certificate or a Predecessor Stripped Units Certificate.
"Predecessor Normal Units Certificate" of any particular
Normal Units Certificate means every previous Normal Units Certificate
evidencing all or a portion of the rights and obligations of the
Company and the Holder under the Normal Units evidenced thereby; and,
for the purposes of this definition, any Normal Units Certificate
authenticated and delivered under Section 3.10 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Normal Units Certificate
shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen
Normal Units Certificate.
"Predecessor Stripped Units Certificate" of any particular
Stripped Units Certificate means every previous Stripped Units
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Stripped Units evidenced
thereby; and, for the purposes of this definition, any Stripped Units
Certificate authenticated and delivered under Section 3.10 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units
Certificate shall be deemed to evidence the same rights and obligations
of the Company and the Holder as the mutilated, destroyed, lost or
stolen Stripped Units Certificate.
"Principal Amount" means as to any one Note, $50.00
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in ss. 8-102(a)(9) of the
Uniform Commercial Code (or any successor thereto) in effect in the
State of New York from time to time) and other property from time to
time received, receivable or otherwise distributed upon the sale,
exchange, maturity, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract," when used with respect to any Unit, means
the contract forming a part of such Unit and obligating the Company to
sell and the Holder of such Unit to purchase Common Stock on the terms
and subject to the conditions set forth in Article V.
9
"Purchase Contract Settlement Fund" has the meaning specified
in Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section
5.6(a)(6).
"Quotation Agent" means Credit Suisse First Boston or Xxxxxxx
Xxxxx Xxxxxx Inc., or a successor of either or any other primary U.S.
government securities dealer in New York City selected by the Company.
"Record Date" for the distribution payable on any Payment Date
means the 15th day preceding such Payment Date.
"Redemption Amount" means, in the case of a Tax Event
Redemption occurring prior to a successful remarketing of the Notes,
for each Note the product of (i) the Principal Amount of such Note and
(ii) a fraction whose numerator is the applicable Treasury Portfolio
Purchase Price and whose denominator is the aggregate principal amount
of Notes outstanding on the Tax Event Redemption Date, and in the case
of a Tax Event Redemption occurring after a successful remarketing of
the Notes, for each Note the Principal Amount of the Note.
"Redemption Price" means the redemption price per Note equal
to the Redemption Amount plus any accrued and unpaid interest on such
Note to the date of redemption.
"Register" means the Normal Units Register and the Stripped
Units Register, as applicable.
"Registrar" means the Normal Units Registrar and the Stripped
Units Registrar, as applicable.
"Remarketing Agent" has the meaning specified in Section
5.4(b)(i).
"Remarketing Agreement" means the Remarketing Agreement to be
entered into by and among the Company, the Remarketing Agent and the
Agent.
"Remarketing Date" means the Initial Remarketing Date and any
Subsequent Remarketing Date.
"Remarketing Fee" has the meaning specified in Section
5.4(b)(i).
"Remarketing Notice" has the meaning specified in Section
5.4(b).
"Remarketing Period" means the Initial Remarketing Date and
any Subsequent Remarketing Period.
10
"Remarketing Value" means, except when the remarketing occurs
on the third Business Day prior to the Stock Purchase Date, the sum of
(i) the value at the Remarketing Date of such amount of
U.S. Treasury securities that will pay, on or prior
to the quarterly Payment Date falling on the Stock
Purchase Date, an amount of Cash equal to the
aggregate interest payments that are scheduled to be
payable on that quarterly Payment Date on (a) all
Notes which are included in Normal Units and which
are participating in the remarketing, assuming for
this purpose, even if not true, that the interest
rate on the Notes remains the initial rate; and
(ii) either (a) the value at the Remarketing Date of U.S.
Treasury securities that will pay, on or prior to the
Stock Purchase Date, an amount of cash equal to the
Principal Amount of (1) each Note which is included
in a Normal Unit and is participating in the
remarketing; or (b) in the case of a remarketing on
the third Business Day before the Stock Purchase
Date, an amount of cash equal to $50 for each Note,
which is included in a Normal Unit and each Separate
Note that is participating in the remarketing,
provided that for purposes of clauses (i) and (ii) above, the
Remarketing Value shall be calculated on the assumptions that (x) the
U.S. Treasury securities are highly liquid and mature on or within 35
days prior to the Stock Purchase Date, as determined in good faith by
the Remarketing Agent in a manner intended to minimize the cash value
of the U.S. Treasury securities, and (y) the U.S. Treasury securities
are valued based on the ask-side price of the U.S. Treasury securities
at a time between 9:00 a.m. and 11:00 a.m. (New York City time)
selected by the Remarketing Agent, on the Initial Remarketing Date or
any Subsequent Remarketing Date, as the case may be, as determined on a
third-day settlement basis by a reasonable and customary means selected
in good faith by the Remarketing Agent, plus accrued interest to that
date. "Reorganization Event" has the meaning specified in Section
5.6(b).
"Reset Rate" has the meaning specified in Section 5.4(b)(i).
"Responsible Officer" means, when used with respect to the
Agent, any officer within the corporate trust department of the Agent
(or any successor of the Agent), including any Vice President, any
assistant Vice President, any assistant secretary, any assistant
treasurer, any trust officer, any senior trust officer or any other
officer of the Agent who customarily performs functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because
of such Person's knowledge of and familiarity with the particular
subject and who, in each of the above cases, shall have direct
responsibility for the administration of this Agreement.
11
"Sale Price" of the Common Stock or any securities distributed
in a Spin-Off, as the case may be, on any Trading Day means the closing
sale price per share (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case,
the average of the average bid and the average asked prices) on such
Trading Day as reported in composite transactions for the principal
U.S. securities exchange on which the Common Stock or such securities
are traded or, if the Common Stock or such securities are not listed on
a U.S. national or regional securities exchange, as reported by Nasdaq.
"Securities Act" means the Securities Act of 1933 and any
statute successor thereto, in each case as amended from time to time,
and the rules and regulations promulgated thereunder.
"Securities Intermediary" means JPMorgan Chase Bank, a New
York banking corporation, in its capacity as Securities Intermediary
under the Pledge Agreement, together with its successors in such
capacity.
"Separate Notes" has the meaning set forth in the Pledge
Agreement.
"Settlement Date" means any Early Settlement Date or Merger
Early Settlement Date or the Stock Purchase Date.
"Settlement Rate" has the meaning specified in Section 5.1.
"Spin-Off" means a dividend or other distribution of shares of
Capital Stock of any class or series, or similar equity interests, of
or relating to a subsidiary or other business unit of the Company.
"Stated Amount" means, with respect to any one Normal Unit or
Stripped Unit, $50.
"Stock Purchase Date" means August 16, 2005.
"Stripped Unit" means the collective rights and obligations of
a holder of a Stripped Units Certificate in respect of a 1/20 undivided
beneficial interest in a Treasury Security, subject in each case to the
Pledge thereof, and the related Purchase Contract.
"Stripped Units Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Stripped Units specified on such certificate, substantially in the form
of Exhibit B hereto.
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"Stripped Units Register" and "Stripped Units Registrar" have
the respective meanings specified in Section 3.5.
"Subsequent Remarketing Date" means, provided the Initial
Remarketing Date has been terminated, the date on which the remarketing
agent establishes the reset rate during a Subsequent Remarketing
Period.
"Subsequent Remarketing Period" means each of the Remarketing
Periods beginning on each of the three Business Days immediately
preceding each June 16, 2005, July 14, 2005 and August 11, 2005.
"Tax Event" means the receipt by the Company of an opinion of
a nationally recognized tax counsel experienced in such matters, to the
effect that there is more than an insubstantial risk that interest
payable by the Company on the Notes would not be deductible, in whole
or in part, by the Company for United States Federal income tax
purposes, as a result of (a) any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, (b) any amendment to or change
in an official interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or
regulatory authority or (c) any official interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on
[_______], 2002, which amendment, change or proposed change is
effective or which interpretation or pronouncement is announced on or
after [_______], 2002.
"Tax Event Redemption" means, if a Tax Event shall occur, the
redemption of the Notes, at the option of the Company, in whole but not
in part, on not less than 30 days nor more than 60 days' written
notice.
"Tax Event Redemption Date" means the date upon which a Tax
Event Redemption is to occur.
"Tax Event Redemption Principal Amount" means in the case of a
Tax Event Redemption occurring prior to a successful remarketing of the
Notes, for each Note the product of the Principal Amount of the Note
and a fraction whose numerator is the Treasury Portfolio Purchase Price
and whose denominator is the aggregate Principal Amount of Notes
outstanding on such Tax Event Redemption Date, and in the case of a Tax
Event Redemption Date occurring after a successful remarketing of the
Notes, the Principal Amount of the Notes.
"Terminated Remarketing Period" has the meaning specified in
Section 5.4(b)(ii).
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"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of the
following events:
(i) at any time on or prior to the Stock Purchase Date, a
judgment, decree or court order shall have been
entered granting relief under the Bankruptcy Code or
any other similar Federal or state law, adjudicating
the Company to be insolvent, or approving as properly
filed a petition seeking reorganization or
liquidation of the Company, and, unless such
judgment, decree or order shall have been entered
within 60 days prior to the Stock Purchase Date, such
decree or order shall have continued undischarged and
unstayed for a period of 60 days;
(ii) at any time on or prior to the Stock Purchase Date, a
judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Company or of its
property, or for the winding up or liquidation of its
affairs, shall have been entered, and, unless such
judgment, decree or order shall have been entered
within 60 days prior to the Stock Purchase Date, such
judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or
(iii) at any time on or prior to the Stock Purchase Date
the Company shall file a petition for relief under
the Bankruptcy Code or any other similar Federal or
state law, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization
or liquidation under the Bankruptcy Code or any other
similar Federal or state law, or shall consent to the
filing of any such petition, or shall consent to the
appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit
of creditors, or shall admit in writing its inability
to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in
Section 5.1.
"TIA" means the Trust Indenture Act of 1939 and any statute
successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Trading Day" has the meaning specified in Section 5.1.
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"Transaction Documents" has the meaning specified in Section
7.1(a).
"Treasury Portfolio" means in connection with the Initial
Remarketing or any Subsequent Remarketing that occurs prior to the
third Business Day preceding the Stock Purchase Date, a portfolio of
U.S. Treasury securities consisting of principal or interest strips of
U.S. Treasury securities that mature prior to the Stock Purchase Date
in an aggregate amount equal to the Applicable Principal Amount, with
respect to the scheduled interest payment date on the Notes that occurs
on the Stock Purchase Date, principal or interest strips of U.S.
Treasury securities that mature prior to such date in an aggregate
amount equal to the aggregate interest payment that would be due on the
Applicable Principal Amount of the Notes on such date if the applicable
Coupon Rate on the Notes were not reset to the Reset Rate pursuant to
the Indenture hereof and Opt-out Treasury Consideration and in
connection with a Tax Event Redemption that occurs prior to the Stock
Purchase Date, a portfolio of U.S. Treasury securities consisting of
principal or interest strips of U.S. Treasury securities that mature on
or prior to the Stock Purchase Date in an aggregate amount equal to the
applicable Tax Event Redemption Principal Amount and (b) with respect
to each scheduled interest payment date on the Notes that occurs after
the Tax Event Redemption Date and on or before the Stock Purchase Date,
principal or interest strips of U.S. Treasury securities that mature on
or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the applicable Tax Event
Redemption Principal Amount of the Notes on such date, and (b) if the
Tax Event Redemption Date occurs or after May 16, 2005 or, in the event
of a Last Failed Remarketing, on or after the Stock Purchase Date, a
portfolio of zero coupon U.S. Treasury securities consisting of (i)
principal or interest strips of U.S. Treasury securities which mature
on or prior to August 16, 2007 in an aggregate amount equal to the
applicable Tax Event Redemption Principal Amount and (ii) with respect
to each scheduled interest payment date on the Notes that occurs after
the Tax Even Redemption Date, principal or interest strips of such U.S.
Treasury securities that mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that would be
due on the applicable Tax Event Redemption Principal Amount of the
Notes on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by the Primary Treasury Dealer to the Quotation Agent (a)
in the case of a Tax Event Redemption, on the third Business Day
immediately preceding the Tax Event Redemption Date for the purchase of
the applicable Treasury Portfolio for settlement on the Tax Event
Redemption Date and (b) in the case of a successful remarketing on a
Remarketing Date that occurs prior to the third Business Day
immediately preceding the Stock Purchase Date, a Remarketing Date that
occurs prior to the third Business Day immediately preceding the Stock
Purchase Date for the purchase of the applicable Treasury Portfolio
(excluding the Opt-out Treasury Consideration) for settlement on the
applicable Remarketing Settlement Date.
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"Treasury Security" means a zero-coupon U.S. Treasury security
(CUSIP Number 000000XX0) maturing before the Stock Purchase Date that
will pay $1,000 on such maturity date.
"Trustee" means The Bank of New York, a New York banking
corporation, as trustee under the Indenture, or any successor thereto.
"Underwriting Agreement" means the Underwriting Agreement
relating to the Units dated May , 2002 among the Company and the
underwriters named therein relating to the Units.
"Unit" means a Normal Unit or a Stripped Unit.
"Vice-President" means any vice-president, whether or not
designated by a number or a word or words added before or after the
title "vice- president."
SECTION 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
requested by the Agent, an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than the Officer's
Certificate provided for in Section 10.5) shall include:
(a) a statement that the 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 such individual, he or she
has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to
whether or not such covenant or condition has been complied
with; and
16
(d) a statement as to whether, in the opinion of such individual,
such condition or covenant has been complied with.
SECTION 1.3 Form of Documents Delivered to Agent.
(a) 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.
(b) Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable
care should know, that the certificate or opinion or
representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such
certificate or Opinion of Counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of,
or representations by, an officer or officers of the Company
stating that the information with respect to such factual
matters is in the possession of the Company unless such
counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to
be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor
signed by such Holders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby
expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of
the Agent and the Company, if made in the manner provided in
this Section.
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(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the
Agent deems sufficient.
(c) The ownership of Units shall be proved by the Normal Units
Register or the Stripped Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate
shall bind every future Holder of the same Certificate and the
Holder of every Certificate issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Units entitled to
give, make or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or
permitted by this Agreement to be given, made or taken by
Holders of Units. If any record date is set pursuant to this
paragraph, the Holders of the Outstanding Normal Units and the
Outstanding Stripped Units, as the case may be, on such record
date, and no other Holders, shall be entitled to take the
relevant action with respect to the Normal Units or the
Stripped Units, as the case may be, whether or not such
Holders remain Holders after such record date; provided that
no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the
requisite number of Outstanding Units on such record date.
Nothing in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for
which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of
the requisite number of Outstanding Units on the date such
action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the
Agent in writing and to each Holder of Units in the manner set
forth in Section 1.6.
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(f) With respect to any record date set pursuant to this Section,
the Company may designate any date as the "Expiration Date"
and from time to time may change the Expiration Date to any
earlier or later day; provided that no such change shall be
effective unless notice of the proposed new Expiration Date is
given to the Agent in writing, and to each Holder of Units in
the manner set forth in Section 1.6, on or prior to the
existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to
this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the
Expiration Date with respect thereto, subject to its right to
change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
SECTION 1.5 Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with:
(a) the Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered, mailed, first-class postage prepaid,
telecopied or delivered by overnight air courier guaranteeing
next day delivery, to the Agent at 000 Xxxxxxx Xxxxxx, Xxxxx
00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust
Administration, telecopy: 000-000-0000, or at any other
address furnished in writing by the Agent to the Holders and
the Company; or
(b) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered, mailed, first-class postage prepaid,
telecopied or delivered by overnight air courier guaranteeing
next day delivery, to the Company at Toys "R" Us, Inc., 000
Xxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000, Attention: Treasurer, or
at any other address furnished in writing to the Agent by the
Company; or
(c) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished
or filed in writing and personally delivered, mailed,
first-class postage prepaid, telecopied or delivered by
overnight air courier guaranteeing next day delivery,
addressed to the Collateral Agent at JPMorgan Chase Bank, 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Institutional Trust Services, telecopy: 212-946-[8158][8160],
or at any other address furnished in writing by the Collateral
Agent to the Agent, the Company and the Holders; or
19
(d) the Trustee by the Company shall be sufficient for every
purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally
delivered, mailed, first-class postage prepaid, telecopied or
delivered by overnight air courier guaranteeing next day
delivery, addressed to the Trustee at 000 Xxxxxxx Xxxxxx,
Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Trust Administration], telecopy: 000-000-0000 or at any other
address furnished in writing by the Trustee to the Company.
SECTION 1.6 Notice to Holders; Waiver.
(a) Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such
event, at its address as it appears in the applicable
Register, not later than the latest date, and not earlier than
the earliest date, prescribed for the giving of such notice.
In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice
so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders.
Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Agent, but such
filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
(b) In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification as shall be made
with the approval of the Agent shall constitute a sufficient
notification for every purpose hereunder.
SECTION 1.7 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.8 Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
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SECTION 1.9 Separability Clause.
In case any provision in this Agreement or in the Units shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10 Benefits of Agreement.
Nothing in this Agreement or in the Units, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and, to the extent provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Units evidenced by their Certificates by
their acceptance of delivery of such Certificates.
SECTION 1.11 Governing Law.
This Agreement and the Units shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 1.12 Legal Holidays.
(a) In any case where any Payment Date shall not be a Business
Day, then (notwithstanding any other provision of this
Agreement or the Normal Units Certificates) payments on the
Notes shall not be made on such date, but such payments shall
be made on the next succeeding Business Day with the same
force and effect as if made on such Payment Date, provided
that no interest shall accrue or be payable by the Company for
the period from and after any such Payment Date, except that
if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if
made on such Payment Date.
(b) In any case where the Purchase Contract Date shall not be a
Business Day, then (notwithstanding any other provision of
this Agreement or the Certificates), the Purchase Contracts
shall not be performed on such date, but the Purchase
Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on
the Stock Purchase Date.
SECTION 1.13 Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto, each of which, when so executed and delivered, shall be deemed
an original, but all such counterparts shall together constitute one and the
same instrument.
21
SECTION 1.14 Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II.
CERTIFICATE FORMS
SECTION 2.1 Forms of Certificates Generally.
(a) The Normal Units Certificates (including the form of Purchase
Contract forming part of the Normal Units evidenced thereby)
shall be in substantially the form set forth in Exhibit A
hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required
by the rules of any securities exchange or quotation system on
which the Normal Units are listed or quoted for trading or any
depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such
Normal Units Certificates, as evidenced by their execution of
the Normal Units Certificates.
(b) The definitive Normal Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the
officers of the Company executing such Normal Units
Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
(c) The Stripped Units Certificates (including the form of
Purchase Contracts forming part of the Stripped Units
evidenced thereby) shall be in substantially the form set
forth in Exhibit B hereto, with such letters, numbers or other
marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may
be required by the rules of any securities exchange or the
quotation system on which the Stripped Units may be listed or
quoted for trading or any depositary therefor, or as may,
consistently herewith, be determined by the officers of the
Company executing such Stripped Units Certificates, as
evidenced by their execution of the Stripped Units
Certificates.
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(d) The definitive Stripped Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be
produced in any other manner, all as determined by the
officers of the Company executing such Stripped Units
Certificates, consistent with the provisions of this
Agreement, as evidenced by their execution thereof.
(e) Every Global Certificate authenticated, executed on behalf of
the Holders and delivered hereunder shall bear a legend in
substantially the following form:
"For inclusion in Global CertificateS only -- THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the
Company or its agent for registration of transfer, exchange or payment, and any
Certificate issued is registered in the name of Cede & Co., or such other name
as requested by an authorized representative of The Depository Trust Company,
and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein."
SECTION 2.2 Form of Agent's Certificate of Authentication.
(a) The form of the Agent's certificate of authentication of the
Normal Units shall be in substantially the form set forth on
the form of the Normal Units Certificates.
(b) The form of the Agent's certificate of authentication of the
Stripped Units shall be in substantially the form set forth on
the form of the Stripped Units Certificates.
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ARTICLE III.
THE UNITS
SECTION 3.1 Title and Terms; Denominations.
(a) The aggregate number of Normal Units initially evidenced by
Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to 7,000,000 (or 8,050,000
if the underwriters' over-allotment option granted pursuant to
the Underwriting Agreement is exercised in full), except for
Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13,
3.14, 5.9, 5.10 or 8.5.
(b) The Certificates shall be issuable only in registered form and
only in denominations of a single Unit and any integral
multiple thereof.
SECTION 3.2 Rights and Obligations Evidenced by the Certificates.
(a) Each Normal Units Certificate shall evidence the number of
Normal Units specified therein, with each such Normal Unit
representing the ownership by the Holder thereof of a
beneficial interest in a Note or Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, subject to the
Pledge of such Note or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, by such Holder
pursuant to the Pledge Agreement and the Indenture, and the
rights and obligations of the Holder thereof and the Company
under one Purchase Contract. The Agent as attorney-in-fact
for, and on behalf of, the Holder of each Normal Unit shall
pledge, pursuant to the Pledge Agreement and the Indenture,
the Note or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, forming a part of such Normal
Unit, to the Collateral Agent and grant to the Collateral
Agent a security interest in the right, title, and interest of
such Holder in such Note or such Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, for the benefit
of the Company, to secure the obligation of the Holder under
each Purchase Contract to purchase the Common Stock of the
Company. Prior to the purchase of shares of Common Stock under
each Purchase Contract, such Purchase Contracts shall not
entitle the Holders of Normal Units Certificates to any of the
rights of a holder of shares of Common Stock, including,
without limitation, the right to vote or receive any dividends
or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for
the election of directors of the Company or for any other
matter, or any other rights whatsoever as stockholders of the
Company.
24
(b) Each Stripped Units Certificate shall evidence the number of
Stripped Units specified therein, with each such Stripped Unit
representing the ownership by the Holder thereof of a 1/20 or
5.0% undivided beneficial interest in a Treasury Security with
a principal amount at maturity equal to $1,000, subject to the
Pledge of such interest in such Treasury Security by such
Holder pursuant to the Pledge Agreement, and the rights and
obligations of the Holder thereof and the Company under one
Purchase Contract. Prior to the purchase of shares of Common
Stock under each Purchase Contract, such Purchase Contracts
shall not entitle the Holders of Stripped Units Certificates
to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive
any dividends or other payments or to consent or to receive
notice as stockholders in respect of the meetings of
stockholders or for the election of directors of the Company
or for any other matter, or any other rights whatsoever as
stockholders of the Company.
SECTION 3.3 Execution, Authentication, Delivery and Dating.
(a) Subject to the provisions of Sections 3.13 and 3.14, upon the
execution and delivery of this Agreement, and at any time and
from time to time thereafter, the Company may deliver
Certificates executed by the Company to the Agent for
authentication, execution on behalf of the Holders and
delivery, together with its Issuer Order for authentication of
such Certificates, and the Agent in accordance with such
Issuer Order shall authenticate, execute on behalf of the
Holders and deliver such Certificates.
(b) The Certificates shall be executed on behalf of the Company by
the Chief Executive Officer, the Chief Financial Officer, the
President, any Vice-President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary (or other
officer performing similar functions) of the Company and
delivered to the Agent. The signature of any of these officers
on the Certificates may be manual or facsimile.
(c) Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices
prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates.
(d) No Purchase Contract evidenced by a Certificate shall be valid
until such Certificate has been executed on behalf of the
Holder by the manual signature of an authorized officer of the
Agent, as such Holder's attorney-in-fact. Such signature by an
authorized officer of the Agent shall be conclusive evidence
that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
(e) Each Certificate shall be dated the date of its
authentication.
25
(f) No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless
there appears on such Certificate a certificate of
authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual
signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4 Temporary Certificates.
(a) Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or
designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the
rules of any securities exchange on which the Normal Units or
Stripped Units, as the case may be, are listed, or as may,
consistent herewith, be determined by the officers of the
Company executing such Certificates, as evidenced by their
execution of the Certificates.
(b) If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable
delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at
the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, one or more definitive Certificates of like
tenor and denominations and evidencing a like number of Normal
Units or Stripped Units, as the case may be, as the temporary
Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects
evidence the same benefits and the same obligations with
respect to the Normal Units or Stripped Units, as the case may
be, evidenced thereby as definitive Certificates.
SECTION 3.5 Registration; Registration of Transfer and Exchange.
(a) The Agent shall keep at the Corporate Trust Office a register
(the "Normal Units Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall
provide for the registration of Normal Units Certificates and
of transfers of Normal Units Certificates (the Agent, in such
capacity, the "Normal Units Registrar") and a register (the
"Stripped Units Register") in which, subject to such
reasonable regulations as it may prescribe, the Agent shall
provide for the registration of the Stripped Units
Certificates and transfers of Stripped Units Certificates (the
Agent, in such capacity, the "Stripped Units Registrar").
26
(b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the designated transferee or transferees,
and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of like tenor and
denominations, and evidencing a like number of Normal Units or
Stripped Units, as the case may be.
(c) At the option of the Holder, Certificates may be exchanged for
other Certificates, of like tenor and denominations and
evidencing a like number of Normal Units or Stripped Units, as
the case may be, upon surrender of the Certificates to be
exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled
to receive.
(d) All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the
same number of Normal Units or Stripped Units, as the case may
be, and be entitled to the same benefits and subject to the
same obligations, under this Agreement as the Normal Units or
Stripped Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or
exchange.
(e) Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Agent
duly executed, by the Holder thereof or its attorney duly
authorized in writing.
(f) No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the
Agent may require payment from the Holder of a sum sufficient
to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to
Sections 3.4, 3.6, 3.9 and 8.5 not involving any transfer.
27
(g) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of
the Holder and deliver any Certificate presented or
surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of
the Stock Purchase Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall,
(i) if the Stock Purchase Date has occurred, deliver the
shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Units
evidenced by such Certificate,
(ii) in the case of Normal Units, if a Termination Event
shall have occurred prior to the Stock Purchase Date,
transfer the Notes or the Applicable Ownership
Interest in the Treasury Portfolio, as applicable,
relating to such Normal Units, or
(iii) in the case of Stripped Units, if a Termination Event
shall have occurred prior to the Stock Purchase Date,
transfer the Treasury Securities relating to such
Stripped Units, in each case subject to the
applicable conditions and in accordance with the
applicable provisions of Article V.
SECTION 3.6 Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more, fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. Such Global
Certificate shall initially be registered in the applicable Register in the name
of Cede & Co., the nominee of the Depositary, and no Beneficial Owner will
receive a definitive Certificate representing such Beneficial Owner's interest
in such Global Certificate, except as provided in Section 3.9. The Agent shall
enter into an agreement with the Depositary if so requested by the Company.
Unless and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including receiving
approvals, votes or consents hereunder) as the Holder of the
Units and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
28
(c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of
this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Beneficial
Owners and the Clearing Agency and/or the Clearing Agency
Participants. The Clearing Agency will make book-entry
transfers among Clearing Agency Participants.
SECTION 3.7 Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any Units
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
SECTION 3.8 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Units, the Company may, in its sole discretion,
appoint a successor Clearing Agency with respect to the Units.
SECTION 3.9 Definitive Certificates.
If
(i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Units and a
successor Clearing Agency is not appointed within 90 days
after such discontinuance pursuant to Section 3.8,
(ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Units, or
(iii) there shall have occurred and be continuing a default by the
Company in respect of its obligations under one or more
Purchase Contracts,
then upon surrender of the Global Certificates representing the Book- Entry
Interests with respect to the Units by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company and the Agent shall not be liable for any delay in
delivery of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions.
29
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.
(a) If any mutilated Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, a new Certificate at the cost of
the Holder, evidencing the same number of Normal Units or
Stripped Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or
theft of any Certificate, and (ii) such security or indemnity
at the cost of the Holder as may be required by them to hold
each of them and any agent of any of them harmless, then, in
the absence of notice to the Company or the Agent that such
Certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or
stolen Certificate, a new Certificate, evidencing the same
number of Normal Units or Stripped Units, as the case may be,
and bearing a Certificate number not contemporaneously
outstanding.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of
the Holder, and deliver to the Holder, a Certificate on or
after the Business Day immediately preceding the earlier of
the Stock Purchase Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Stock Purchase
Date has occurred, deliver the shares of Common Stock issuable
in respect of the Purchase Contracts forming a part of the
Units evidenced by such Certificate, or (ii) if a Termination
Event shall have occurred prior to the Stock Purchase Date,
transfer the Notes, the Applicable Ownership Interest in the
Treasury Portfolio or the Treasury Securities, as the case may
be, evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article V.
(d) Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the
Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Agent) connected therewith.
30
(e) Every new Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Certificate shall constitute
an original additional contractual obligation of the Company
and of the Holder in respect of the Unit evidenced thereby,
whether or not the destroyed, lost or stolen Certificate (and
the Units evidenced thereby) shall be at any time enforceable
by anyone, and shall be entitled to all the benefits and be
subject to all the obligations of this Agreement equally and
proportionately with any and all other Certificates delivered
hereunder.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
SECTION 3.11 Persons Deemed Owners.
(a) Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Units evidenced
thereby, for the purpose of receiving interest payments on the
Notes, performance of the Purchase Contracts and for all other
purposes whatsoever (subject to Section 4.1(a)), whether or
not any such payments shall be overdue and notwithstanding any
notice to the contrary, and neither the Company nor the Agent,
nor any agent of the Company or the Agent, shall be affected
by notice to the contrary.
(b) Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the
Agent or any agent of the Company or the Agent, from giving
effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its
nominee), as a Holder, with respect to such Global Certificate
or impair, as between such Clearing Agency and owners of
beneficial interests in such Global Certificate, the operation
of customary practices governing the exercise of rights of
such Clearing Agency (or its nominee) as Holder of such Global
Certificate. None of the Company, the Agent, or any agent of
the Company or the Agent, will have any responsibility or
liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of
a Global Certificate or maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
31
SECTION 3.12 Cancellation.
(a) All Certificates surrendered (i) for delivery of shares of
Common Stock on or after any Settlement Date; (ii) upon the
transfer of Notes, Applicable Ownership Interest in the
Treasury Portfolio or Treasury Securities, as the case may be,
after the occurrence of a Termination Event; or (iii) upon the
registration of a transfer or exchange of a Unit shall, if
surrendered to any Person other than the Agent, be delivered
to the Agent and, if not already cancelled, shall be promptly
cancelled by it. The Company may at any time deliver to the
Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered
in lieu of or in exchange for any Certificates cancelled as
provided in this Section, except as expressly permitted by
this Agreement. All cancelled Certificates held by the Agent
shall be disposed of by the Agent in accordance with its
customary procedures.
(b) If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such
Certificate is delivered to the Agent cancelled or for
cancellation.
SECTION 3.13 Establishment of Stripped Units.
(a) Except as otherwise provided in this Section 3.13, so long as
a Tax Event Redemption has not occurred, at any time on or
prior to 10:00 a.m. (New York City time) on the seventh
Business Day immediately preceding the Stock Purchase Date, a
Holder of Normal Units shall have the right to substitute
Treasury Securities for the Pledged Notes or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, securing such Holder's obligations under the
Purchase Contracts comprising a part of such Normal Units (a
"Collateral Substitution"), by (a) transferring to the
Collateral Agent Treasury Securities having an aggregate
principal amount equal to the aggregate Stated Amount of such
Normal Units and (b) delivering such Normal Units to the
Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit D hereto, to the Agent
stating that such Holder has Transferred Treasury Securities
to the Collateral Agent pursuant to this Section 3.13 (stating
the principal amount and the CUSIP numbers of the Treasury
Securities Transferred by such Holder) and requesting that the
Purchase Contract Agent instruct the Collateral Agent to
release from the Pledge the Pledged Notes or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, related to such Normal Units, whereupon the
32
Purchase Contract Agent shall promptly give such instruction
in writing to the Collateral Agent substantially in the form
provided in Exhibit C. Notwithstanding the foregoing, a Holder
may not substitute Treasury Securities for Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury
Portfolio pursuant to this Section 3.13 on or after 10:00 a.m.
(New York City time) (i) on the fourth Business Day
immediately preceding the Initial Remarketing Date until the
Business Day immediately following such Initial Remarketing
Date; (ii) during any subsequent Remarketing Period until the
Business Day immediately following such Remarketing Period;
and (iii) on or after 10:00 a.m. (New York City time) on the
seventh Business Day immediately preceding the Stock Purchase
Date. Upon receipt of Treasury Securities from a Holder of
Normal Units and the related written instruction from the
Purchase Contract Agent, in accordance with the terms of the
Pledge Agreement, the Collateral Agent shall release the
Pledged Notes or Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, and shall promptly
Transfer such Pledged Notes, or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, free
and clear of any lien, pledge or security interest created
under the Pledge Agreement, to the Purchase Contract Agent,
and upon receipt thereof the Agent shall promptly:
(i) cancel the related Normal Units;
(ii) transfer the Pledged Notes, or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the
case may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver to such Holder a Stripped Units Certificate
executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts
as were evidenced by the cancelled Normal Units.
(b) Holders who elect to separate the Pledged Notes or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, from the related Purchase Contract and to
substitute Treasury Securities for such Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, shall be responsible for any
fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution,
and the Company shall not be responsible for any such fees or
expenses.
33
(c) Holders may make Collateral Substitutions (i) if Treasury
Securities are being substituted for Pledged Notes, only in
integral multiples of 20 Normal Units, or (ii) if the
Collateral Substitutions occur after the Initial Remarketing
Date (if such remarketing is successful), or any Subsequent
Remarketing Date (if such remarketing is successful), or a Tax
Event Redemption, as the case may be, only in integral
multiples of Normal Units such that the Treasury Securities to
be deposited and the Applicable Ownership Interest in the
Treasury Portfolio to be released are in integral multiples of
$1,000.
(d) In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the Normal Units or fails to deliver a Normal
Units Certificate to the Agent after depositing Treasury
Securities with the Collateral Agent, the Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, constituting a part of such
Normal Units, and any distributions on such Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, shall be held in the name of
the Agent or its nominee in trust for the benefit of such
Holder, until such Normal Units are so transferred or the
Normal Units Certificate is so delivered, as the case may be,
or, with respect to a Normal Units Certificate, such Holder
provides evidence satisfactory to the Company and the Agent
that such Normal Units Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by
the Agent and the Company.
(e) Except as provided in this Section 3.13, for so long as the
Purchase Contract underlying a Normal Unit remains in effect,
such Normal Unit shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such
Normal Unit in respect of the Note or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, and
the Purchase Contract comprising such Normal Unit may be
acquired, and may be transferred and exchanged, only as a
Normal Unit.
(f) The Holders' right to create Stripped Units as set forth in
this Section and the limit of the preceding sentence shall in
no way limit the ability of the Purchase Contract Agent, the
Collateral Agent, the Securities Intermediary or the
Remarketing Agent to substitute the Treasury Portfolio for the
Notes then comprising a part of Normal Units upon a successful
remarketing.
34
SECTION 3.14 Reestablishment of Normal Units.
(a) Except as otherwise provided in this Section 3.14 at any time
on or prior to 10:00 a.m. (New York City time) on the seventh
Business Day immediately preceding the Stock Purchase Date, a
Holder of Stripped Units shall have the right to reestablish
Normal Units by (x) transferring to the Collateral Agent Notes
or Applicable Ownership Interest (as defined in clause (A) of
the definition of such term) in the Treasury Portfolio, as the
case may be, then comprising such number of Normal Units as is
equal to such Stripped Units and (y) delivering such Stripped
Units, accompanied by a notice, substantially in the form of
Exhibit D hereto, to the Agent stating that such Holder has
transferred Notes or Applicable Ownership Interests in the
Treasury Portfolio to the Collateral Agent pursuant to this
Section 3.14 and requesting that the Purchase Contract Agent
instruct the Collateral Agent to release from the Pledge the
Pledged Treasury Securities related to such Stripped Units,
whereupon the Purchase Contract Agent shall give such
instruction to the Collateral Agent substantially in the form
provided in Exhibit C; provided, however, that if a Tax Event
Redemption or a successful Remarketing has occurred and the
Treasury Portfolio has become a component of the Normal Units,
Holders of Stripped Units may make such substitution only in
integral multiples of _________, at any time on or prior to
the Business Day immediately preceding the Stock Purchase
Date; provided further, however, that such a Holder of
Stripped Units shall not have the right to reestablish Normal
Units pursuant to this Section 3.14 on or after 10:00 a.m.
(New York City time) (i) on the fourth Business Day
immediately preceding the Initial Remarketing Date until the
Business Day immediately following such Initial Remarketing
Date; (ii) during any subsequent Remarketing Period until the
Business Day immediately following such Remarketing Period;
and (iii) on or after 10:00 a.m. (New York City time) on the
seventh Business Day immediately preceding the Stock Purchase
Date. Upon receipt of the Notes or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, from
such Holder and the instruction from the Purchase Contract
Agent, the Collateral Agent, in accordance with the terms of
the Pledge Agreement, shall release the Pledged Treasury
Securities and shall promptly Transfer such Pledged Treasury
Securities, free and clear of any lien, pledge or security
interest created under the Pledge Agreement to the Purchase
Contract Agent, and upon receipt thereof, the Purchase
Contract Agent shall promptly:
(i) cancel the related Stripped Units;
(ii) transfer the Pledged Treasury Securities to the
Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Normal Units Certificate executed by the
Company in accordance with Section 3.3 evidencing the
same number of Purchase Contracts as were evidenced
by the cancelled Stripped Units.
35
(b) Holders of Stripped Units may reestablish Normal Units (i)
only in integral multiples of 20 Stripped Units for 20 Normal
Units or (ii) if the reestablishment occurs after the Initial
Remarketing Date (if such remarketing is successful) or any
Subsequent Remarketing Date (if such remarketing is
successful), or after a Tax Event Redemption, only in integral
multiples of Stripped Units such that the Applicable Ownership
Interest in the Treasury Portfolio to be deposited and the
Treasury Securities to be released are in integral multiples
of $1,000.
(c) Except as provided in this Section 3.14, for so long as the
Purchase Contract underlying a Stripped Unit remains in
effect, such Stripped Unit shall not be separable into its
constituent parts, and the rights and obligations of the
Holder of such Stripped Unit in respect of the Treasury
Securities and Purchase Contract comprising such Stripped Unit
may be acquired, and may be transferred and exchanged, only as
a Stripped Unit. The Holders' right to reestablish Normal
Units as set forth in this Section and the limit of the
preceding sentence shall in no way limit the ability of the
Purchase Contract Agent, the Collateral Agent, the Securities
Intermediary or the Remarketing Agent to substitute the
Treasury Portfolio for the Notes then comprising a part of
Normal Units upon a successful remarketing (other than the
Notes of Holders of Normal Units that have elected not to
participate in the remarketing).
(d) Holders of Stripped Units who reestablish Normal Units shall
be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be
responsible for any such fees or expenses.
(e) In the event a Holder who reestablishes Normal Units pursuant
to this Section 3.14 fails to effect a book-entry transfer of
the Stripped Units or fails to deliver a Stripped Units
Certificate to the Agent after depositing Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, with the Collateral Agent, the
Treasury Securities constituting a part of such Stripped
Units, and any distributions on such Treasury Securities shall
be held in the name of the Agent or its nominee in trust for
the benefit of such Holder, until such Stripped Units are so
transferred or the Stripped Units Certificate is so delivered,
as the case may be, or, with respect to a Stripped Units
Certificate, such Holder provides evidence satisfactory to the
Company and the Agent that such Stripped Units Certificate has
been destroyed, lost or stolen, together with any indemnity
that may be required by the Agent and the Company.
36
SECTION 3.15 Transfer of Collateral Upon Occurrence of Termination
Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Notes, the Applicable Ownership Interest in the Treasury Portfolio
or the Treasury Securities, as the case may be, underlying the Normal Units and
the Stripped Units, respectively, pursuant to the terms of the Pledge Agreement,
the Agent shall request transfer instructions with respect to such Notes, the
Applicable Ownership Interest in the Treasury Portfolio or Treasury Securities,
as the case may be, from each Holder by written request mailed to such Holder at
its address as it appears in the Normal Units Register or the Stripped Units
Register, as the case may be. Upon book-entry transfer of the Normal Units or
Stripped Units or delivery of a Normal Units Certificate or Stripped Units
Certificate to the Agent with such transfer instructions, the Agent shall
Transfer the Notes, Applicable Ownership Interest in the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Normal Units or
Stripped Units, respectively, to such Holder by book-entry transfer, or other
appropriate procedures, in accordance with such instructions. In the event a
Holder of Normal Units or Stripped Units fails to effect such transfer or
delivery, the Notes, Applicable Ownership Interest in the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Normal Units or
Stripped Units, respectively, and any distributions thereon, shall be held in
the name of the Agent or its nominee in trust for the benefit of such Holder,
until the earlier of (1) such Normal Units or Stripped Units are transferred or
the Normal Units Certificate or Stripped Units Certificate is surrendered or
such Holder provides satisfactory evidence that such Normal Units Certificate or
Stripped Units Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company and (2) the
expiration of the time specified in applicable abandoned property laws.
SECTION 3.16 No Consent to Assumption.
Each Holder of a Unit, by acceptance thereof, shall be deemed expressly
to have withheld any consent to the assumption under Section 365 of the
Bankruptcy Code or otherwise, of the Purchase Contract by the Company, any
receiver, liquidator or person or entity performing similar functions or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization or liquidation.
ARTICLE IV.
THE NOTES
SECTION 4.1 Payment of Interest; Rights to Interest Payments Preserved;
Notice.
(a) A payment on any Note or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, which is paid on any
Payment Date other than a Payment Date with respect to the
stated amount due on the Applicable Ownership Interest in the
Treasury Portfolio shall, subject to receipt thereof by the
Agent from the Collateral Agent (if the Collateral Agent is
the registered owner thereof) as provided by the terms of the
Pledge Agreement, be paid to the Person in whose name the
Normal Units Certificate (or one or more Predecessor Normal
Units Certificates) of which such Note or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may
be, is a part is registered at the close of business on the
Record Date for such Payment Date.
37
(b) Each Normal Units Certificate evidencing Notes delivered under
this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Normal Units Certificate shall
carry the rights to interest accrued and unpaid, which were
carried by the Notes or Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, underlying such other
Normal Units Certificate.
(c) In the case of any Normal Unit with respect to which Early
Settlement of the underlying Purchase Contract is effected on
an Early Settlement Date, Merger Early Settlement of the
underlying Purchase Contract is effected on a Merger Early
Settlement Date, Cash Settlement is effected on the seventh
Business Day preceding the Stock Purchase Date, or a
Collateral Substitution is effected, in each case on a date
that is after any Record Date and on or prior to the next
succeeding Payment Date, payments on the Note or the
Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, underlying such Normal Unit otherwise payable
on such Payment Date shall be payable on such Payment Date
notwithstanding such Early Settlement, Merger Early
Settlement, Cash Settlement or Collateral Substitution, as the
case may be, and such payments shall, subject to receipt
thereof by the Agent, be payable to the Person in whose name
the Normal Units Certificate (or one or more Predecessor
Normal Unit Certificates) was registered at the close of
business on the Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of
any Normal Unit with respect to which Early Settlement, Merger
Early Settlement or Cash Settlement of the underlying Purchase
Contract is effected, or with respect to which a Collateral
Substitution has been effected, payments on the related Notes
or payments on the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, that would otherwise
be payable after the applicable Settlement Date or after such
Collateral Substitution, as the case may be, shall not be
payable hereunder to the Holder of such Normal Unit; provided,
that to the extent that such Holder continues to hold the
Separate Notes that formerly comprised a part of such Holder's
Normal Units, such Holder shall be entitled to receive the
payments on such Separate Notes.
38
SECTION 4.2 Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes but only to the extent instructed by the Holders as described below. Upon
receipt of notice of any meeting at which holders of Notes are entitled to vote
or upon any solicitation of consents, waivers or proxies of holders of Notes,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Normal Units a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Notes entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Pledged Notes underlying their Normal Units and (c) stating
the manner in which such instructions may be given. Upon the written request of
the Holders of Normal Units on such record date, the Agent shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with the
instructions set forth in such requests, the maximum number of Pledged Notes as
to which any particular voting instructions are received. In the absence of
specific instructions from the Holder of a Normal Unit, the Agent shall abstain
from voting the Pledged Note underlying such Normal Unit. The Company hereby
agrees, if applicable, to solicit Holders of Normal Units to timely instruct the
Agent in order to enable the Agent to vote such Pledged Notes.
SECTION 4.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the successful
remarketing of Notes, the Company may elect to instruct in writing the
Collateral Agent to apply, and upon such written instruction, the Collateral
Agent, pursuant to the Pledge Agreement, shall apply, out of the aggregate
Redemption Price for all outstanding Notes, an amount equal to the aggregate Tax
Event Redemption Principal Amount for such Notes that are components of Normal
Units to purchase on behalf of the Holders of Normal Units the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price to
the Agent for payment to the Holders of such Normal Units. The Treasury
Portfolio will be substituted for the Pledged Notes, and will be pledged to the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of a Normal Unit to purchase the Common Stock
under the Purchase Contract constituting a part of such Normal Unit. Following
the occurrence of a Tax Event Redemption prior to a successful remarketing of
the Notes, the Holders of Normal Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Treasury
Portfolio as the Holder of Normal Units and the Collateral Agent had in respect
of the Notes, as the case may be, subject to the Pledge thereof as provided in
Articles II, III, IV, V and VI of the Pledge Agreement, and any reference herein
or in the Certificates to the Note shall be deemed to be a reference to such
Treasury Portfolio and any reference herein or in the Certificates to interest
on the Notes shall be deemed to be a reference to corresponding distributions on
the Treasury Portfolio. The Company may cause to be made in any Normal Unit
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Treasury Portfolio for Notes as collateral.
39
The Company shall cause notice of any Tax Event Redemption to be
mailed, at least 30 calendar days but not more than 60 calendar days before such
Tax Event Redemption Date, to each Holder of Notes to be redeemed at its
registered address.
Upon the occurrence of a Tax Event Redemption after the successful
remarketing of the Notes, the Redemption Price will be payable in cash to the
holders of the Notes.
ARTICLE V.
THE PURCHASE CONTRACTS; THE REMARKETING
SECTION 5.1 Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall, unless an Early Settlement has
occurred in accordance with Section 5.9, or a Merger Early
Settlement has occurred in accordance with Section 5.10,
obligate the Holder of the related Unit to purchase, and the
Company to sell, on the Stock Purchase Date at a price equal
to $50 (the "Purchase Price"), a number of issued shares of
Common Stock equal to the Settlement Rate unless, on or prior
to the Stock Purchase Date, there shall have occurred a
Termination Event with respect to the Unit of which such
Purchase Contract is a part. The "Settlement Rate" is equal
to,
(i) if the Applicable Market Value is greater than or
equal to $[_____] (the "Threshold Appreciation
Price"), [_____] shares of Common Stock per Purchase
Contract,
(ii) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than
$[_____], the number of shares of Common Stock per
Purchase Contract equal to the Stated Amount of the
related Unit divided by the Applicable Market Value,
and
(iii) if the Applicable Market Value is equal to or less
than $[_____], [_____] shares of Common Stock per
Purchase Contract,
in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/20,000th of a share). As provided in
Section 5.12, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.
(b) No fractional shares of Common Stock will be issued by the
Company on the Stock Purchase Date. In lieu of fractional
shares, the Holder will be entitled to receive an amount in
cash as provided in Section 5.12.
40
(c) The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive
Trading Days ending on the third Trading Day immediately
preceding the Stock Purchase Date. The "Closing Price" of the
Common Stock on any date of determination means the closing
sale price (or, if no closing price is reported, the last
reported sale price per share) of the Common Stock on the New
York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the
principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so
listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for
the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for
this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
(d) Each Holder of a Unit, by its acceptance thereof, irrevocably
authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact
(including the execution of Certificates on behalf of such
Holder), agrees to be bound by the terms and provisions hereof
and thereof, covenants and agrees to perform its obligations
under such Purchase Contracts, and consents to the provisions
hereof, irrevocably authorizes the Agent as its
attorney-in-fact to enter into and perform the Pledge
Agreement on its behalf as its attorney-in-fact, and consents
to and agrees to be bound by the Pledge of the Notes, or
Applicable Ownership Interest in the Treasury Portfolio, or
the Treasury Securities, as the case may be, pursuant to the
Pledge Agreement; provided that upon a Termination Event, the
rights of the Holder of such Unit under the Purchase Contract
may be enforced without regard to any other rights or
obligations. Each Holder of a Unit, by its acceptance thereof,
further covenants and agrees, to the remarketing of the Note
included in its Normal Unit, if applicable, pursuant to the
remarketing provisions set forth herein and in the Remarketing
Agreement that, to the extent and in the manner provided in
Section 5.4 and the Pledge Agreement, but subject to the terms
thereof, payments in respect of the Notes or Applicable
Ownership Interest in the Treasury Portfolio, or the Treasury
Securities, as the case may be, to be paid upon settlement of
such Holder's obligations to purchase Common Stock under the
Purchase Contract, shall be paid on the Stock Purchase Date by
the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and agrees
to (i) treat its acquisition of each Normal Unit as the
acquisition of the Note and Purchase Contract constituting the
Normal Unit and (ii) treat itself as the owner for all tax
purposes of the related Notes, Applicable Ownership Interest
in the Treasury Portfolio or Treasury Securities, as the case
may be.
41
(e) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on
the part of such transferee) under the terms of this
Agreement, the Purchase Contracts underlying such Certificate
and the Pledge Agreement, and the transferor shall be released
from the obligations under this Agreement, the Purchase
Contracts underlying the Certificates so transferred and the
Pledge Agreement. The Company covenants and agrees, and each
Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this
paragraph.
SECTION 5.2 Reserved.
SECTION 5.3 Reserved.
SECTION 5.4 Payment of Purchase Price; Remarketing.
(a) Unless a Tax Event Redemption, successful remarketing,
Termination Event, Merger Early Settlement or Early Settlement
has occurred, each Holder of a Normal Unit may pay in Cash
("Cash Settlement") the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract
if such Holder notifies the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to
make a Cash Settlement. Such notice must be made on or prior
to 10:00 a.m. (New York City time) on the tenth Business Day
immediately preceding the Stock Purchase Date. The Agent shall
promptly notify the Collateral Agent of the receipt of such a
notice from a Holder intending to make a Cash Settlement.
(i) A Holder of a Normal Unit who has so notified the
Agent of its intention to make a Cash Settlement is
required to pay the Purchase Price to the Collateral
Agent prior to 10:00 a.m. (New York City time) on the
seventh Business Day immediately preceding the Stock
Purchase Date in cash by certified or cashiers' check
or wire transfer, in each case, in immediately
available funds payable to or upon the order of the
Collateral Agent for deposit into the Collateral
Account. Any such cash received by the Collateral
Agent will be invested promptly by the Collateral
Agent in Permitted Investments and such cash paid to
the Company on the Stock Purchase Date in settlement
of the Purchase Contract in accordance with the terms
of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the
investment earnings from the investment in such
Permitted Investments, will be distributed to the
Agent when received for payment to the Holder. If
such Holder fails to deliver the required cash, the
Holder shall be deemed to have consented to the
disposition of the Pledged Notes pursuant to the
remarketing as described in paragraph (b) below.
42
(ii) If a Holder of a Normal Units fails to notify the
Agent of its intention to make a Cash Settlement in
accordance with paragraph (a)(i) above, the Holder
shall be deemed to have consented to the disposition
of the Pledged Notes pursuant to the remarketing as
described in paragraph (b) below.
(iii) If a Holder of a Normal Unit does notify the Agent as
provided in paragraph (a)(i) above of its intention
to pay the Purchase Price in cash, but fails to make
such payment as required by paragraph (a)(i) above,
the Notes of such a Holder will not be remarketed but
instead the Collateral Agent, for the benefit of the
Company, will exercise its rights as a secured party
with respect to such Notes, including but not limited
to those rights specified in subsection (b)(iii)
below.
(b) (i) The Company shall engage a nationally recognized
investment bank (the "Remarketing Agent") pursuant to
a Remarketing Agreement to be mutually agreed upon by
the Company and the Remarketing Agent to sell the
Notes of Holders of Normal Units, other than Holders
that have elected not to participate in the
remarketing pursuant to the procedures set forth in
clause (v) below, and holders of Separate Notes that
have elected to participate in the remarketing
pursuant to the procedures set forth in clause (vi)
below and in Section 4.5(d) of the Pledge Agreement.
On or before the tenth Business Day prior to any
Remarketing Date, the Remarketing Agent shall give
the Agent and the Company written notice of its
intent to remarket the Notes. After receiving such
notice and on or before the seventh Business Day
prior to any Remarketing Date, the Company shall give
Holders of Normal Units and holders of Separate Notes
notice of the remarketing (the "Remarketing Notice")
(the form of which notice to be provided by the
Company and to designate an individual at the Company
whom Holders may contact for information regarding
the remarketing) in a daily newspaper in the English
language of general circulation in The City of New
York, which is expected to be The Wall Street
43
Journal, including the specific U.S. Treasury
security or securities (including the CUSIP number
and/or the principal terms of such Treasury security
or securities) described in clause (v) below, that
must be delivered by Holders of Normal Units that
elect not to participate in the remarketing pursuant
to clause (v) below, no later than 10:00 a.m. (New
York City time) on the fourth Business Day preceding
such Remarketing Date. Not later than 15 nor more
than 30 calendar days prior, the Company shall
request the Clearing Agency (or any successor
Clearing Agency), to notify its Beneficial Owners or
Depositary Participants holding Normal Units or
Separate Notes of the impending remarketing. The
Agent shall notify, by 10:00 a.m. (New York City
time) on the third Business Day preceding the
Remarketing Date, the Remarketing Agent and the
Collateral Agent of the aggregate number of Notes of
Normal Unit Holders to be remarketed. On the third
Business Day immediately preceding the Remarketing
Date, no later than by 10:00 a.m. (New York City
time), pursuant to the terms of the Pledge Agreement,
the Agent will notify the Remarketing Agent of the
aggregate number of Separate Notes to be remarketed.
Upon receipt of such notice from the Agent, the
Remarketing Agent will on the Initial Remarketing
Date or a Subsequent Remarketing Date, as the case
may be, use its reasonable best efforts to (i)
establish a rate of interest that, in the opinion of
the Remarketing Agent, will, when applied to the
Notes (assuming, even if not true, that all of the
Notes are included in the remarketing), enable the
then current aggregate market value of the Notes to
have a value equal to 100.25% of the Remarketing
Value as of the Remarketing Date, provided that in no
event shall the Reset Rate be less than the initial
rate borne by the Notes and will not exceed the
maximum rate permitted by state usury laws and other
applicable laws (such rate and the rate specified in
Section 5.4(b)(iii), the "Reset Rate"), and (ii) sell
such Notes on such date at a price equal to at least
100.25% of the Remarketing Value. In the case of a
successful remarketing prior to the third Business
Day prior to the Stock Purchase Date, the Remarketing
Agent will use the proceeds from a successful
remarketing to purchase in open market transactions
or at Treasury auction the appropriate U.S. Treasury
securities (the "Agent-purchased Treasury
Consideration") with the CUSIP numbers, if any,
selected by the Remarketing Agent, described in
clauses (i) and (ii) of the definition of Remarketing
Value related to the Notes of Holders of Normal Units
that were remarketed. On or prior to the third
Business Day following the Initial Remarketing Date
or a Subsequent Remarketing Date, as the case may be,
the Remarketing Agent shall deliver such
Agent-purchased Treasury Consideration to the Agent,
which shall thereupon deliver such Agent-purchased
44
Treasury Consideration to the Collateral Agent. The
Collateral Agent, for the benefit of the Company,
will thereupon apply such Agent-purchased Treasury
Consideration, in accordance with the Pledge
Agreement, to secure such Holders' obligations under
the Purchase Contracts. In the case of a successful
remarketing on the third Business Day prior to the
Stock Purchase Date, the Remarketing Agent will cause
the proceeds from such successful remarketing to be
remitted, along with notification thereof, to the
Agent for the benefit of the Holders of such
remarketed Notes, which shall thereupon deliver such
Cash Proceeds to the Collateral Agent. The Collateral
Agent, for the benefit of the Company, will thereupon
apply such cash proceeds, in accordance with the
Pledge Agreement, to secure such Holders' obligations
under the Purchase Contracts. In connection with any
successful remarketing, the Remarketing Agent will
deduct as a remarketing fee an amount not exceeding
25 basis points (.25%) of the total proceeds from the
remarketing (the "Remarketing Fee"). The Remarketing
Agent will remit (1) the portion of the proceeds from
the remarketing attributable to the Separate Notes to
the holders of Separate Notes that were remarketed
and (2) the remaining portion of the proceeds, in
each case, less those proceeds used to purchase the
Agent-purchased Treasury Consideration (in the case
of a remarketing prior to the third Business Day
prior to the Stock Purchase Date), to the Holders of
the Normal Units that were remarketed, all determined
on a pro rata basis, in each case, on or prior to the
third Business Day following the Initial Remarketing
Date or a Subsequent Remarketing Date, as the case
may be. Holders whose Notes are so remarketed will
not otherwise be responsible for the payment of any
Remarketing Fee in connection therewith. If such
successful remarketing is consummated after 4:30 p.m.
(New York City time) on such Remarketing Date and,
despite using its commercially reasonable efforts,
the Remarketing Agent cannot cause the applications
of the proceeds specified above to occur on such
Remarketing Date, then the Remarketing Agent may make
such applications and remittances on the next
succeeding Business Day.
45
(ii) If, despite its reasonable best efforts, the
Remarketing Agent cannot establish a Reset Rate on
the Initial Remarketing Date so as to allow the
Remarketing Agent to remarket the Notes offered for
remarketing on such date at a price equal to 100.25%
of the Remarketing Value, the Remarketing Agent will
attempt to establish a Reset Rate meeting these
requirements on each of the three Business Days
immediately preceding each of June 16, 2005, July 14,
2005 and the third Business Day preceding August 16,
2005 (each a "Subsequent Remarketing Period"). If the
Remarketing Agent cannot remarket the Notes included
in the remarketing on the Initial Remarketing Date or
during any Subsequent Remarketing Period at a price
equal to at least 100.25% of the Remarketing Value or
the Remarketing Agent has determined that the
remarketing may not be commenced or consummated
pursuant to applicable law, the remarketing will be
deemed to have failed (each, a "Terminated
Remarketing Period"). If, in spite of using its
reasonable best efforts, the Remarketing Agent fails
to remarket the Notes underlying the Normal Units at
least 100.25% of the Remarketing Value in accordance
with the terms of the Pledge Agreement by 4:00 p.m.
(New York City time) on the third Business Day
immediately preceding the Stock Purchase Date or the
Remarketing Agent has determined that the remarketing
may not be commenced or consummated pursuant to
applicable law, the remarketing will be deemed to
have failed, the "Last Failed Remarketing" will be
deemed to have occurred. The Collateral Agent, for
the benefit of the Company, may exercise its rights
as a secured party with respect to such Notes,
including those actions specified in subsection
(b)(iii) below and at the direction of the Company
retain or dispose of the Pledged Notes in accordance
with applicable law and satisfy in full from any such
disposition or retention, such Holders' obligations
to pay the Purchase Price for the Common Stock;
provided, that if upon the Last Failed Remarketing,
the Collateral Agent delivers the Notes to the
Company in full satisfaction of the Holder's
obligation under the Purchase Contract, any
accumulated and unpaid interest on such Notes will
become payable by the Company to the Agent for
payment to the Holder of the Normal Units to which
such Notes relate. Such payment will be made by the
Company on or prior to 5:00 p.m. (New York City time)
on the Stock Purchase Date in lawful money of the
United States by certified or cashier's check or wire
transfer in immediately available funds payable to or
upon the order of the Agent.
46
(iii) In the event of a Last Failed Remarketing or the
Notes have not been earlier redeemed pursuant to a
Tax Event Redemption, the Remarketing Agent shall
determine the Reset Rate that shall apply to the
Notes held by the Holders of Separated Notes
according to the following method, provided that in
no event shall the Reset Rate be less than the
initial rate borne by the Notes. After the Last
Failed Remarketing, the Remarketing Agent will take
the average of the interest rates quoted to it by
three nationally recognized investment banks selected
by the Company, which are underwriters or dealers in
debt securities similar to the Notes, that in their
judgment reflects an accurate market rate of interest
applicable to the Notes at that time. Following
receipt of these quotes, the Remarketing Agent will
have the right, in its sole judgment, to either
recalculate the average based on only two of the
quoted interest rates if one of the three quotes, in
the Remarketing Agent's sole discretion, did not
reflect market conditions or, alternatively,
determine a consensus among the investment banks
rather than a strict mathematical average by taking
into account all relevant qualitative and
quantitative factors. These factors may include, but
shall not limited to, maturity of the Notes, the
credit rating and credit risk of the Company and
companies of similar industries, the then yield to
maturity of the Notes and the state of the markets
for primary and secondary sales of similar debt
securities.
If a Terminated Remarketing Period occurs, the
Remarketing Agent will, pursuant to the Remarketing
Agreement, promptly advise the Trustee, the Purchase
Contract Agent, the Collateral Agent, the Company and
the Depositary that a Terminated Remarketing Period
has occurred. The Company will cause a notice of any
Terminated Remarketing Period, the Last Failed
Remarketing and the Reset Rate to be published not
later than the fourth Business Day following the
Initial Remarketing Date or a Subsequent Remarketing
Date and the date of the Last Failed Remarketing, as
the case may be, in a daily newspaper in the English
language of general circulation in The City of New
York, which is expected to be The Wall Street
Journal. The Company will also release this
information by means of Bloomberg and Reuters
newswire or, if not available, by similar means.
(iv) With respect to any Notes which constitute part of
Normal Units which are subject to the Last Failed
Remarketing, the Collateral Agent for the benefit of
the Company reserves all of its rights as a secured
party with respect thereto and, subject to applicable
law and Section 5.4(e) below, may, among other
things, foreclose on and retain such Notes for the
benefit of the Company and permit the Company to
cause the Notes to be sold or to retain and cancel
such Notes, in either case, in full satisfaction of
such Holders' obligations under the Purchase
Contracts.
47
(v) A Holder of Normal Units may elect not to participate
in the remarketing and retain the Notes underlying
such Units by notifying the Agent (by delivering
written notice to the Agent, substantially in the
form of Exhibit D hereto (including the CUSIP number
and/or the principal terms of such security or
securities), stating that the Holder has Transferred
the specific U.S. Treasury security or securities
identified by the Agent that constitute the U.S.
Treasury securities described in clauses (i) and (ii)
of the definition of Remarketing Value relating to
the retained Notes (the "Opt-out Treasury
Consideration") to the Agent not later than 10:00
a.m. (New York City time) on the fourth Business Day
immediately preceding (i) the Initial Remarketing
Date until the Business Day immediately following
such Initial Remarketing Date (ii) Subsequent
Remarketing Periods beginning on the third Business
Day preceding June 16, 2005 and July 14, 2005 until
the Business Day immediately following such
Remarketing Period and (iii) the tenth Business Day
preceding the Stock Purchase Date. Upon receipt
thereof by the Agent, the Agent shall deliver such
Opt-out Treasury Consideration to the Collateral
Agent. The Collateral Agent will hold Opt-out
Treasury Consideration in an account separate from
the Collateral Account. On the Remarketing Settlement
Date, the Collateral Agent, for the benefit of the
Company shall thereupon transfer to the Collateral
Account such Opt-out Treasury Consideration to secure
such Normal Units Holder's obligations under their
applicable Purchase Contract constituting a part of
the Holder's Normal Units, in substitution for the
Pledged Notes and to fund the quarterly interest
payment due to such Holders on the Stock Purchase
Date and deliver the applicable Notes to these
Holders. On the first Business Day, immediately
following a Terminated Remarketing Period, the
Collateral Agent will Transfer the Opt-out Treasury
Consideration to the Agent and the Agent will
transfer promptly such Opt-out Treasury Consideration
to the appropriate Holders. A Holder that does not so
deliver the Opt-out Treasury Consideration pursuant
to this clause (iv) shall be deemed to have elected
to participate in the remarketing.
(vi) Pursuant to the Indenture, a Holder of Separate
Note(s) may elect to participate in the remarketing
by delivering its Separate Notes along with notice of
its election, substantially in the form of Exhibit C,
to the Collateral Agent not later than 10:00 a.m.
(New York City time) on the fourth Business Day (i)
immediately preceding the Initial Remarketing Date
until the Business Day immediately following such
Initial Remarketing Date and (ii) immediately
preceding any Subsequent Remarketing Period until the
Business Day immediately following such Remarketing
Period. The Collateral Agent will hold these Notes in
an account separate from the Collateral Account.
Holders of Separate Notes that have elected
previously to have their Separate Notes remarketed
will have the right to withdraw that election on or
prior to 10:00 a.m. (New York City time), on the
applicable dates specified in the preceding sentence.
Within three Business Days following the applicable
Remarketing Date, (A) if the remarketing was
successful, the Remarketing Agent will notify the
Collateral Agent of the successful remarketing and
request that the Separate Notes be delivered to the
purchasers thereof, and (B) if there was a Terminated
Remarketing Period on such date, the Collateral Agent
will return the Separate Notes to their Holders.
48
(c) Upon the maturity of the Pledged Treasury Securities
underlying the Stripped Units and the Pledged Applicable
Ownership Interest in the Treasury Portfolio, underlying the
Normal Units, the Collateral Agent shall invest the Proceeds
promptly in Permitted Investments and pay to the Company, on
the Stock Purchase Date, an amount equal to the aggregate
Purchase Price applicable to such Units, as payment for the
Common Stock issuable upon settlement thereof without
receiving any instructions from the Holders of such Units. Any
such Proceeds received by the Collateral Agent in excess of
the Purchase Price and any funds received by the Collateral
Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed
to the Agent when received for payment to the Holders and the
Agent shall promptly cause such excess proceeds to be
distributed on a pro rata basis to such Holders.
(d) Any distribution to Holders of excess funds and interest
described in Section 5.4(b) and (c) above shall be payable at
the office of the Agent in The City of New York maintained for
that purpose or, at the option of the Holder or the holder of
Separate Notes, as applicable, by check mailed to the address
of the Person entitled thereto at such address as it appears
on the Register or by wire transfer to an account specified by
the Holder or the holder of Separate Notes, as applicable.
(e) The obligations of each Holder to pay the Purchase Price are
non-recourse obligations and except to the extent paid by
Early Settlement, Merger Early Settlement or Cash Settlement,
are payable solely out of the Proceeds of any Collateral
pledged to secure the obligations of the Holders and in no
event will Holders be liable for any deficiency between such
payments and the Purchase Price.
(f) Notwithstanding anything to the contrary herein, the Company
shall not be obligated to issue any Common Stock in respect of
a Purchase Contract or deliver any certificates therefor to
the Holder of the related Unit unless the Company shall have
received payment in full for the shares of Common Stock to be
purchased thereunder by such Holder in the manner herein set
forth.
(g) Pursuant to the Indenture and this Article, in the event of a
successful remarketing, the interest rate on all of the
outstanding Notes (whether or not included in the remarketing)
shall be adjusted to the Reset Rate and, in the event of a
Last Failed Remarketing, the interest rate on all Separate
Notes shall be adjusted to the Reset Rate as set forth in
Section 5.4(b)(iii).
49
SECTION 5.5 Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior to the Stock
Purchase Date or an Early Settlement or a Merger Early Settlement shall have
occurred, on the Stock Purchase Date, upon its receipt of payment for the shares
of Common Stock purchased by the Holders pursuant to the foregoing provisions of
this Article and subject to Section 5.6, the Company shall issue and deposit
with the Agent, for the benefit of the Holders of the Outstanding Units, one or
more certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions for which a record date and payment date for such
dividend or distribution has occurred after the Stock Purchase Date, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which the
Holders are entitled hereunder. Subject to the foregoing, upon surrender of a
Certificate to the Agent on or after the Stock Purchase Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article V together with
cash in lieu of fractional shares as provided in Section 5.12 and any dividends
or distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of such
Certificate or has established to the satisfaction of the Company that such tax
either has been paid or is not payable.
SECTION 5.6 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) Stock Dividends. In case the Company shall pay or
make a dividend or other distribution on the Common
Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day
following the date fixed for the determination of
stockholders entitled to receive such dividend or
other distribution shall be increased by dividing
such Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common
Stock outstanding at the close of business on the
date fixed for such determination and the denominator
shall be the sum of such number of shares and the
total number of shares constituting such dividend or
other distribution, such increase to become effective
immediately after the opening of business on the day
following the date fixed for such determination. For
the purposes of this paragraph (1), the number of
shares of Common Stock at the time outstanding shall
not include shares held in the treasury of the
Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will
not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the
Company.
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(2) Stock Purchase Rights. In case the Company shall
issue rights, options or warrants, other than
pursuant to any dividend reinvestment plan or share
purchase plan, to all holders of its Common Stock
(not being available on an equivalent basis to
Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities)
entitling them, for a period expiring within 45 days
after the record date for the determination of
stockholders entitled to receive such rights, options
or warrants, to subscribe for or purchase shares of
Common Stock at a price per share less than the
Current Market Price per share of the Common Stock on
the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants
(other than pursuant to a dividend reinvestment plan
or share purchase plan), the Settlement Rate in
effect at the opening of business on the day
following the date fixed for such determination shall
be increased by dividing such Settlement Rate by a
fraction of which (i) the numerator shall be the
number of shares of Common Stock outstanding at the
close of business on the date fixed for such
determination plus the number of shares of Common
Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for
subscription or purchase would purchase at such
Current Market Price and (ii) the denominator shall
be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such
determination plus the number of shares of Common
Stock so offered for subscription or purchase, such
increase to become effective immediately after the
opening of business on the day following the date
fixed for such determination. For purposes of this
paragraph (2), the number of shares of Common Stock
at any time outstanding shall not include shares held
in the treasury of the Company but shall include any
shares issuable in respect of any share certificates
issued in lieu of fractions of shares of Common
Stock. The Company shall not issue any such rights,
options or warrants in respect of shares of Common
Stock held in the treasury of the Company.
51
(3) Stock Splits; Reverse Splits. In case outstanding
shares of Common Stock shall be subdivided or split
into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business
on the day following the day upon which such
subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common
Stock, the Settlement Rate in effect at the opening
of business on the day following the day upon which
such combination becomes effective shall be
proportionately reduced, such increase or reduction,
as the case may be, to become effective immediately
after the opening of business on the day following
the day upon which such subdivision, split or
combination becomes effective.
(4) Debt or Asset Distributions. (i) In case the Company
shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its
indebtedness or assets (including securities, but
excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and any
dividend, shares of capital stock of any class or
series, or similar equity interests, of or relating
to a subsidiary or other business unit in the case of
a Spin-Off referred to in the next paragraph, or
distribution referred to in paragraph (1) of this
Section), the Settlement Rate shall be adjusted so
that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately
prior to the close of business on the date fixed for
the determination of stockholders entitled to receive
such distribution by a fraction, the numerator of
which shall be the Current Market Price per share of
the Common Stock on the date fixed for such
determination less the then fair market value (as
reasonably determined by the Board of Directors,
whose determination shall be conclusive and the basis
for which shall be described in a Board Resolution
filed with the Agent) of the portion of the assets or
evidences of indebtedness so distributed applicable
to one share of Common Stock and the denominator of
which shall be such Current Market Price per share of
the Common Stock, such adjustment to become effective
immediately prior to the opening of business on the
day following the date fixed for the determination of
stockholders entitled to receive such distribution.
In any case in which this paragraph (4) is
applicable, paragraph (2) of this Section shall not
be applicable.
(ii) In the case of a Spin-Off, the Settlement
Rate in effect immediately before the close
of business on the record date fixed for
determination of stockholders entitled to
receive that distribution will be increased
by multiplying the Settlement Rate by a
fraction, the numerator of which is the
Current Market Price per share of the Common
Stock plus the Fair Market Value of the
portion of those shares of Capital Stock or
similar equity interests so distributed
applicable to one share of Common Stock and
the denominator of which is the Current
Market Price per share of the Common Stock.
Any adjustment to the settlement rate under
this paragraph 4(ii) will occur at the
earlier of (1) the tenth Trading Day from,
and including, the effective date of the
Spin-Off and (2) the date of the securities
being offered in the Initial Public Offering
of the Spin-Off, if that Initial Public
Offering is effected simultaneously with the
Spin-Off.
52
(5) Cash Distributions. In case the Company shall, (i) by
dividend or otherwise, distribute to all holders of
its Common Stock cash (excluding any cash that is
distributed in a Reorganization Event to which
Section 5.6(b) applies or as part of a distribution
referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with (ii)
the aggregate amount of any other distributions to
all holders of its Common Stock made exclusively in
cash within the 12 months preceding the date of
payment of such distribution and in respect of which
no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made and (iii)
the aggregate of any cash plus the fair market value
as of the date of the expiration of the tender or
exchange offer referred to below (as reasonably
determined by the Board of Directors, whose
determination shall be conclusive and the basis for
which shall be described in a Board Resolution) of
consideration payable in respect of any tender or
exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common
Stock concluded within the 12 months preceding the
date of payment of the distribution described in
clause (i) above and in respect of which no
adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds
15% of the product of the Current Market Price per
share of the Common Stock on the date for the
determination of holders of shares of Common Stock
entitled to receive such distribution times the
number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after
the close of business on such date for determination,
the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the
close of business on the date fixed for determination
of the stockholders entitled to receive such
distribution by a fraction (A) the numerator of which
shall be equal to the Current Market Price per share
of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of
(x) the combined amount distributed or payable in the
transactions described in clauses (i), (ii) and (iii)
above and (y) the number of shares of Common Stock
outstanding on such date for determination and (B)
the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on
such date for determination.
(6) Tender Offers. In case (i) a tender or exchange
offer made by the Company or any subsidiary of the Company for
all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of Purchased Shares) of an
aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose
determination shall be conclusive and the basis for which
shall be described in a Board Resolution) that combined
together with (ii) the aggregate of the cash plus the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange
offer, of consideration payable in respect of any other tender
or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring
within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section or this paragraph
(6) has been made and (iii) the aggregate amount of any
distributions to all holders of the Company's Common Stock
made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section
or this paragraph (6) has been made, exceeds 15% of the
product of the Current Market Price per share of the Common
Stock as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender or exchange offer
(as it may be amended) times the number of shares of Common
Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately
prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so
that the same shall equal the rate determined by dividing the
Settlement Rate immediately prior to the close of business on
the date of the Expiration Time by a fraction (A) the
numerator of which shall be equal to (x) the product of (I)
the Current Market Price per share of the Common Stock on the
date of the Expiration Time and (II) the number of shares of
Common Stock outstanding (including any tendered shares) on
the Expiration Time less (y) the amount of cash plus the fair
market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the
transactions described in clauses (i), (ii) and (iii) above
(assuming in the case of clause (i) the acceptance, up to any
maximum specified in the terms of the tender or exchange
offer, of Purchased Shares), and (B) the denominator of which
shall be equal to the product of (x) the Current Market Price
per share of the Common Stock as of the Expiration Time and
(y) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less
the number of all shares validly tendered and not withdrawn as
of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased
Shares").
54
(7) Reclassification. The reclassification of Common
Stock into securities including securities other than Common
Stock (other than any reclassification upon a Reorganization
Event to which Section 5.6(b) applies) shall be deemed to
involve (i) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the effective
date of such reclassification shall be deemed to be "the date
fixed for the determination of stockholders entitled to
receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this
Section), and (ii) a subdivision, split or combination, as the
case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into
the number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision or
split becomes effective" or "the day upon which such
combination becomes effective," as the case may be, and "the
day upon which such subdivision, split or combination becomes
effective" within the meaning of paragraph (3) of this
Section).
(8) "Current Market Price" The "Current Market Price"
of the Common Stock means (a) on any day the average of the
Sales Prices for the 5 consecutive Trading Day preceding the
earlier of the day preceding the day in question and the day
before the "ex date" with respect to the issuance or
distribution requiring computation, (b) in the case of any
Spin-Off that is effected simultaneously with and Initial
Public Offering of the securities being distributed in the
Spin-Off, the Sale Price of the Common Stock on the Trading
Day on which the initial public offering price of the
securities being distributed in the Spin-Off is determined,
and (c) in the case of any other Spin-Off, the average of the
Sale Prices of the Common Stock over the first 10 Trading Days
after the effective date of such Spin-Off. For purposes of
this paragraph, the term "ex date," when used with respect to
any issuance or distribution, shall mean the first date on
which the Common Stock trades regular way on such exchange or
in such market without the right to receive such issuance or
distribution.
55
(9) Calculation of Adjustments. All adjustments to
the Settlement Rate shall be calculated to the nearest
1/20,000th of a share of Common Stock (or if there is not a
nearest 1/20,000th of a share to the next lower 1/20,000th of
a share). No adjustment in the Settlement Rate shall be
required unless such adjustment would require an increase or
decrease of at least one percent therein; provided, that any
adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. If an adjustment is made
to the Settlement Rate pursuant to paragraph (1), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market Value
solely to determine which of clauses (i), (ii) or (iii) of the
definition of Settlement Rate in Section 5.1(a) will apply on
the Stock Purchase Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction, the
numerator of which shall be the Settlement Rate immediately
after such adjustment pursuant to paragraph (1), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a) and the
denominator of which shall be the Settlement Rate immediately
before such adjustment; provided, that if such adjustment to
the Settlement Rate is required to be made pursuant to the
occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during
the period taken into consideration for determining the
Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
(10) Increase of Settlement Rate. The Company may
make such increases in the Settlement Rate, in addition to
those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend
or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as
such for income tax purposes or for any other reasons.
56
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of
(1) any consolidation or merger of the Company with
or into another Person (other than a merger or consolidation
in which the Company is the continuing corporation and in
which the Common Stock outstanding immediately prior to the
merger or consolidation is not exchanged for cash, securities
or other property of the Company or another corporation),
(2) any sale, transfer, lease or conveyance to
another Person of the property of the Company as an entirety
or substantially as an entirety,
(3) any statutory exchange of securities of the
Company with another Person (other than in connection with a
merger or acquisition), or
(4) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a
Termination Event
(any such event, a "Reorganization Event"),
each share of Common Stock covered by each Purchase Contract forming a part of a
Unit immediately prior to such Reorganization Event shall, after such
Reorganization Event, be converted for purposes of the Purchase Contract into
the kind and amount of securities, cash and other property receivable in such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Stock Purchase Date) per share of Common Stock by a holder of Common Stock that
(i) is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "Constituent Person"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-Affiliates, and (ii) failed to exercise his rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such Reorganization Event (provided that if the kind or amount
of securities, cash and other property receivable upon such Reorganization Event
is not the same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares). On the Stock
Purchase Date, the Settlement Rate then in effect will be applied to the value
on the Stock Purchase Date of such securities, cash or other property.
57
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the Company, the
Company or a liquidating trust created in connection therewith, shall execute
and deliver to the Agent an agreement supplemental hereto providing that the
Holder of each Outstanding Unit shall have the rights provided by this Section
5.6. Such supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
SECTION 5.7 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate and the
Applicable Market Value in accordance with Section 5.6 and
prepare and transmit to the Agent an Officer's Certificate
setting forth the Settlement Rate and the Applicable Market
Value, the method of calculation thereof in reasonable detail,
and the facts requiring such adjustment and upon which such
adjustment is based; and
(ii) as soon as practicable following the occurrence
of an event that requires an adjustment to the Settlement Rate
pursuant to Section 5.6 (or if the Company is not aware of
such occurrence, as soon as practicable after becoming so
aware), provide a written notice to the Holders of the Units
of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the
Settlement Rate and the Applicable Market Value was determined
and setting forth the adjusted Settlement Rate and the
Applicable Market Value.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Units to determine whether any facts
exist which may require any adjustment of the Settlement Rate and the
Applicable Market Value, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the
method employed in making the same. The Agent shall not be accountable
with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at
the time be issued or delivered with respect to any Purchase Contract;
and the Agent makes no representation with respect thereto. The Agent
shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a Purchase
Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
58
SECTION 5.8 Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including the rights and obligations of Holders to
purchase Common Stock, shall immediately and automatically terminate, without
the necessity of any notice or action by any Holder, the Agent or the Company,
if, on or prior to the Stock Purchase Date, a Termination Event shall have
occurred. Upon and after the occurrence of a Termination Event, the Normal Units
shall thereafter represent the right to receive the Pledged Notes or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
forming a part of such Normal Units, and the Stripped Units shall thereafter
represent the right to receive the Pledged Treasury Securities forming a part of
such Stripped Units, in each case in accordance with the provisions of Section
4.3 of the Pledge Agreement. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the Register.
SECTION 5.9 Early Settlement.
(a) Unless a Holder has effected a Merger Early Settlement or
a Termination Event shall have occurred, subject to and upon compliance
with the provisions of this Section 5.9, Purchase Contracts underlying
Units having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof, may, at the option of the Holder thereof, be settled
early ("Early Settlement") at any time, provided that Holders may not
settle early after 10:00 a.m. (New York City time) (i) on or after the
fourth Business Day immediately preceding the Initial Remarketing Date
until the next Business Day immediately following such Initial
Remarketing Date; (ii) on or after the fourth Business Day immediately
preceding any Subsequent Remarketing Period until the next Business Day
immediately following a Terminated Remarketing or (iii)on or after the
seventh Business Day immediately preceding the Stock Purchase Date. In
order to exercise the right to effect Early Settlement with respect to
any Purchase Contract, the Holder of the Certificate evidencing the
related Unit shall deliver such Certificate to the Agent at the
Corporate Trust Office an "Election to Settle Early" form on the
reverse side of the Certificate and any other documents requested by
the Agent and accompanied by payment payable to the Company in
immediately available funds in an amount (the "Early Settlement
Amount") equal to the product of (i) the Stated Amount of such Units
multiplied by (ii) the number of Purchase Contracts with respect to
which the Holder has elected to effect Early Settlement within the time
frames specified in the preceding sentence. If the foregoing
requirements are first satisfied with respect to Purchase Contracts
underlying any Unit at or prior to 5:00 p.m. (New York City time) on a
Business Day, such day shall be the "Early Settlement Date" with
respect to such Unit and if such requirements are first satisfied after
5:00 p.m. (New York City time) on a Business Day or on a day that is
not a Business Day, the "Early Settlement Date" with respect to such
Units shall be the next succeeding Business Day.
59
(b) Upon payment of the Early Settlement Amount by the Holder
of the related Normal Units or Stripped Units, as the case may be, the
Company shall issue, and the Holder shall be entitled to receive,
[____] shares of Common Stock on account of such Purchase Contract (the
"Early Settlement Rate"). The Early Settlement Rate shall be adjusted
in the same manner and at the same time as the Settlement Rate is
adjusted pursuant to Section 5.6.
(c) No later than the third Business Day after the applicable
Early Settlement Date, the Company shall cause:
(1) the shares of Common Stock issuable upon Early
Settlement of Purchase Contracts to be issued and delivered;
and
(2) the related Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury Portfolio, in the case of
Normal Units, or the related Pledged Treasury Securities, in
the case of Stripped Units, to be released from the Pledge by
the Collateral Agent and transferred, in each case, to the
Agent for delivery to the Holder thereof or the Holder's
designee, pursuant to the Pledge Agreement.
(d) Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and the
Pledged Notes, Pledged Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) in the Treasury Portfolio,
or Pledged Treasury Securities, as the case may be, from the Collateral
Agent, as applicable, the Agent shall, in accordance with the
instructions provided by the Holder thereof on the applicable form of
Election to Settle Early on the reverse of the Certificate evidencing
the related Units;
(1) transfer to the Holder the Pledged Notes, Pledged
Applicable Ownership Interest in the Treasury Portfolio, or
Pledged Treasury Securities, as the case may be, forming a
part of such Units pursuant to the Pledge Agreement; and
60
(2) deliver to the Holder a certificate or
certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in
lieu of any fraction of a share, as provided in Section 5.12.
(e) In the event that Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Units
evidenced by a Certificate, upon such Early Settlement, the Company
shall execute and the Agent shall authenticate, execute and deliver to
the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(f) The Company agrees that, if required under U.S. Federal
securities laws, it will use commercially reasonable efforts to (1)
have in effect a registration statement covering the shares of our
Common Stock to be delivered in respect of the Purchase Contracts being
settled and (2) provide a prospectus in connection therewith, in each
case in a form that may be used in connection with the Early Settlement
pursuant to this Section 5.9.
SECTION 5.10 Early Settlement Upon Merger.
(a) In the event of a merger or consolidation of the Company
of the type described in clause (1) of Section 5.6(b) in which the
Common Stock outstanding immediately prior to such merger or
consolidation is exchanged for consideration consisting of at least 30%
cash or cash equivalents (any such event, a "Cash Merger"), then the
Company (or the successor to the Company hereunder) shall be required
to offer the Holder of each Unit the right to settle the Purchase
Contract underlying such Unit prior to the Stock Purchase Date ("Merger
Early Settlement") as provided herein. On or before the fifth Business
Day after the consummation of a Cash Merger, the Company or, at the
request and expense of the Company, the Agent, shall give all Holders
notice of the occurrence of the Cash Merger and of the right of Merger
Early Settlement arising as a result thereof. The Company shall also
deliver a copy of such notice to the Agent and the Collateral Agent.
Each such notice shall contain:
(i) the date, which shall be 10 Business Days after
the date of such notice, on which the Merger Early Settlement
may be effected (the "Merger Early Settlement Date");
(ii) the date, which shall be on or by the third
Business Day prior to the Merger Early Settlement Date, by
which the Merger Early Settlement right must be exercised;
61
(iii) the Settlement Rate that will be in effect on
the Merger Early Settlement Date after giving effect to such
Cash Merger and the kind and amount of securities, cash and
other property receivable by the Holder upon settlement of
each Purchase Contract pursuant to Section 5.6(b);
(iv) a statement to the effect that all or a portion
of the Purchase Price payable by the Holder to settle the
Purchase Contract will be offset against the amount of cash so
receivable upon exercise of Merger Early Settlement, as
applicable; and
(v) the instructions a Holder must follow to exercise
the Merger Early Settlement right.
(b) To exercise a Merger Early Settlement right, a Holder
shall deliver to the Agent at the Corporate Trust Office on or before
5:00 p.m. (New York City time) on the third Business Day before the
Merger Early Settlement Date the Certificate(s) evidencing the Units
with respect to which the Merger Early Settlement right is being
exercised and, if the Holder holds physical Certificates, such Holder
shall deliver the Certificate(s) duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early on the
reverse thereof duly completed and, in each instance, accompanied by
payment payable to the Company in immediately available funds in an
amount equal to the Early Settlement Amount less the amount of cash
that otherwise would be deliverable by the Company or its successor
upon settlement of the Purchase Contract in lieu of Common Stock
pursuant to Section 5.6(b) and as described in the notice to Holders
(the "Merger Early Settlement Amount").
(c) On the Merger Early Settlement Date, if the Company has
received the Merger Early Settlement Amount for the applicable number
of Purchase Contracts being settled by Merger Early Settlement, the
Company shall deliver or cause to be delivered (i) the net cash,
securities and other property to be received by such exercising Holder,
equal to the Settlement Rate as adjusted pursuant to Section 5.6, in
respect of the number of Purchase Contracts for which such Merger Early
Settlement right was exercised, and (ii) the related Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury Portfolio, in the
case of Normal Units, or Pledged Treasury Securities, in the case of
Stripped Units, to be released from the Pledge by the Collateral Agent
and transferred, in each case, to the Agent for delivery to the Holder
thereof or its designee pursuant to the Pledge Agreement. In the event
a Merger Early Settlement right shall be exercised by a Holder in
accordance with the terms hereof, all references herein to Stock
Purchase Date shall be deemed to refer to such Merger Early Settlement
Date.
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(d) Upon Merger Early Settlement of any Purchase Contracts,
and subject to receipt of such net cash, securities or other property
from the Company and the Pledged Notes, Pledged Applicable Ownership
Interest in the Treasury Portfolio or Pledged Treasury Securities, as
the case may be, from the Collateral Agent, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Units, (i) transfer
to the Holder the Pledged Notes, Pledged Treasury Consideration,
Pledged Applicable Ownership Interest in the Treasury Portfolio, or
Pledged Treasury Securities, as the case may be, forming a part of such
Units, pursuant to the Pledge Agreement, and (ii) deliver to the Holder
such net cash, securities or other property issuable upon such Merger
Early Settlement together with payment in lieu of any fraction of a
share, as provided in Section 5.12.
(e) In the event that Merger Early Settlement is effected with
respect to Purchase Contracts underlying less than all the Units
evidenced by a Certificate, upon such Merger Early Settlement, the
Company (or the successor to the Company hereunder) shall execute and
the Agent shall authenticate, execute and deliver to the Holder
thereof, at the expense of the Company, a Certificate evidencing the
Units as to which Merger Early Settlement was not effected.
SECTION 5.11 Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts provided, that the Company shall not be required to pay
any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Unit or any issuance of a share of
Common Stock in a name other than that of the registered Holder of a Certificate
surrendered in respect of the Units evidenced thereby, other than in the name of
the Agent, as custodian for such Holder, and the Company shall not be required
to issue or deliver such share certificates or Certificates unless and until the
Person or Persons requesting the transfer or issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.
SECTION 5.12 No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Stock Purchase Date or
upon Early Settlement or Merger Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
applicable Settlement Date or upon Early Settlement or Merger Early Settlement,
the Company, through the Agent, shall make a cash payment in respect of such
fractional shares in an amount equal to the value of such fractional shares
times the Applicable Market Value. The Company shall provide the Agent from time
to time with sufficient funds to permit the Agent to make all cash payments
required by this Section 5.12 in a timely manner.
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ARTICLE VI.
REMEDIES
SECTION 6.1 Unconditional Right of Holders to Purchase Common Stock.
The Holder of any Unit shall have the right, which is absolute and
unconditional, to purchase Common Stock pursuant to the Purchase Contract
constituting a part of such Unit and to institute suit for the enforcement of
any such right to purchase Common Stock, and such rights shall not be impaired
without the consent of such Holder.
SECTION 6.2 Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
SECTION 6.3 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.4 Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
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SECTION 6.5 Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a Unit, by its
acceptance of such Unit shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Agent for any action taken,
suffered or omitted by it as Agent, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Units, or to any suit instituted by any Holder for
the enforcement of distributions on any Notes on any Purchase Contract on or
after the respective Payment Date therefor in respect of any Unit held by such
Holder, or for enforcement of the right to purchase shares of Common Stock under
the Purchase Contract constituting part of any Unit held by such Holder.
SECTION 6.6 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, but will suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE VII.
THE AGENT
SECTION 7.1 Certain Duties, Rights and Immunities.
(a) The Agent shall act as agent for the Holders of the Units
hereunder with such powers as are specifically vested in the Agent by
the terms of this Agreement, the Pledge Agreement, the Remarketing
Agreement, the Notes and the Units, and any documents evidencing
thereof or related thereto (the "Transaction Documents"), together with
such other powers as are reasonably incidental thereto. The Agent:
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(1) shall have no duties or responsibilities except
those expressly set forth in the Transaction Documents and no
implied covenants or obligations shall be inferred from any
Transaction Documents against the Agent, nor shall the Agent
be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof;
(2) In the absence of bad faith on its part, shall be
entitled conclusively to rely upon (x) any certification,
order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone or
facsimile) furnished to the Agent and conforming to the
requirement of the Transaction Document and reasonably
believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons
(without being required to determine the correctness of any
fact stated therein), (y) the truth of the statements and the
correctness of the opinions expressed therein and (z) advice
and statements of legal counsel and other experts selected by
the Agent; but in the case of any such certificates or
opinions which by any provisions hereof are specifically
required to be furnished to such Agent, such Agent shall be
under a duty to examine the same to determine whether or not
they conform to the requirements of this Agreement.
(3) as to any matters not expressly provided for by
any Transaction Document, shall in all cases be fully
protected in acting, or in refraining from acting, hereunder
or thereunder in accordance with instructions given by the
Company or the Holders in accordance with the Transaction
Documents;
(4) shall not be responsible for any recitals
contained in any Transaction Document, or in any certificate
or other document referred to or provided for in, or received
by it under, any Transaction Document or the Units, or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of any Transaction Document (other than as against
the Agent) or the Units or any other document referred to or
provided for herein or therein or for any failure by the
Company, any Holder or any other Person (except the Agent) to
perform any of its obligations hereunder or thereunder or for
the perfection, priority or, except as expressly required
hereby, existence, validity, perfection or maintenance of any
security interest created under the Pledge Agreement, or for
the use or application by the Company of the proceeds in
respect of the Purchase Contracts;
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(5) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder;
(6) shall not be responsible for any action taken or
omitted to be taken by it in good faith hereunder or under any
other document or instrument referred to or provided for
herein or in connection herewith or therewith, except for its
own gross negligence or willful misconduct; and
(7) shall not be required to advise any party as to
selling or retaining, or taking or refraining from taking any
action with respect to, the Units or other rights under any
Transaction Document.
(b) No provision of any Transaction Document shall be
construed to relieve the Agent from liability for its own grossly
negligent action, its own grossly negligent failure to act, its own bad
faith, or its own willful misconduct, except that:
(1) this paragraph (b) shall not be construed to
limit the effect of paragraph (a) of this Section;
(2) the Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Agent was grossly negligent in
ascertaining the pertinent facts; and
(3) in no event shall the Agent be required 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 its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not
reasonably assured to it.
(c) In no event shall the Agent or its officers, employees or
agents be liable for any special, indirect, individual, punitive or
consequential loss or damages, lost profits or loss of business,
arising in connection with any Transaction Document, whether or not the
likelihood of such loss or damage was known to the Agent, and
regardless of the form of action.
(d) Whether or not therein expressly so provided, every
provision of every Transaction Document relating to the conduct or
affecting the liability of or affording protection to the Agent shall
be subject to the provisions of this Section.
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(e) The Agent is authorized to execute and deliver this
Agreement and the Pledge Agreement and any supplement thereto in its
capacity as Agent.
(f) The Agent shall have no liability whatsoever for the
action or inaction of any Clearing Agency or any book-entry system
thereof. In no event shall any Clearing Agency or any book-entry system
thereof be deemed an agent or subcustodian of the Agent.
SECTION 7.2 Notice of Default.
Within 60 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Units, as their
names and addresses appear in the Register, notice of such default hereunder,
unless such default shall have been cured or waived; provided, however, the
Agent shall be protected in withholding such notice if and so long as the board
of directors, the executive committee and/or the Responsible Officers of the
Agent in good faith determines that the withholding of such notice is in the
interest of the Holders of the Units.
SECTION 7.3 Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officer's Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Directors
of the Company may be sufficiently evidenced by a Board Resolution;
(b) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless
other evidence be herein specifically prescribed) may, in the absence
of negligence, willful misconduct or bad faith on its part, rely upon
an Officer's Certificate of the Company;
(c) the Agent may consult with counsel of its choice and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(d) the Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Agent, in its discretion, may make
reasonable further inquiry or investigation into such facts or matters
as it may see fit, and, if the Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and
shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation; and
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(e) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate of the Agent and the Agent shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney or an Affiliate appointed with due care by it hereunder.
SECTION 7.4 Not Responsible for Recitals, Etc.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company.
SECTION 7.5 May Hold Units and Other Dealings.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Units and may otherwise deal with the Company, the Collateral Agent
or any other Person with the same rights it would have if it were not Registrar
or such other agent, or the Agent. The Agent and its Affiliates may (without
having to account therefor to the Company or any Holder of Units or holder of
Separate Notes) accept deposits from, lend money to, make their investments in
and generally engage in any kind of banking, trust or other business with the
Company, any Holder of Units and any holder of Separate Notes (and any of their
respective subsidiaries or Affiliates) as if it were not acting as the Agent and
the Agent and their Affiliates may accept fees and other consideration from the
Company, any Holder of Units or any holder of Separate Notes without having to
account for the same to any such Person.
SECTION 7.6 Money Held In Custody.
Money held by the Agent in custody hereunder need not be segregated
from the Agent's other funds except to the extent required by law or provided
herein. The Agent shall be under no obligation to invest or pay interest on any
money received by it hereunder except as otherwise agreed in writing with the
Company.
SECTION 7.7 Compensation and Reimbursement.
The Company agrees:
(a) to pay all fees and expenses related to the retention of
the Collateral Agent under the Pledge Agreement;
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(b) to pay all fees and expenses related to the; enforcement
by the Agent of the rights of the Holders hereunder or under the
Transaction Documents;
(c) to pay to the Agent from time to time compensation for all
services rendered by it hereunder or under the Transaction Documents as
shall be agreed in writing between the Company and the Agent;
(d) to reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Agent in
accordance with any provision of this Agreement or the Transaction
Documents (including the reasonable compensation and the reasonable
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, willful misconduct or bad faith; and
(e) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, damage, claim, liability or
expense including taxes (other than taxes based upon, measured by or
determined by the income of the Agent), incurred without gross
negligence, willful misconduct or bad faith on their part, arising out
of or in connection with the acceptance or administration of its duties
under the Transaction Documents, including the costs and expenses
(including reasonable fees and expenses of counsel) of defending
themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties under the
Transaction Documents. The Agent shall promptly notify the Company of
any third party claim which may give rise to the indemnity hereunder
and give the Company the opportunity to participate in the defense of
such claim with counsel reasonably satisfactory to the indemnified
party, and no such claim shall be settled without the written consent
of the Company, which consent shall not be unreasonably withheld,
provided that any failure to give any such notice shall not affect the
obligation of the Company under this Section.
The provisions of this Section 7.7 shall survive the termination of
this Agreement or the resignation or removal of the Agent.
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SECTION 7.8 Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or state authority and having a
Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation, qualified and eligible under this Article and
willing to act on reasonable terms. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment
of a successor Agent pursuant to this Article shall become effective
until the acceptance of appointment by the successor Agent in
accordance with the applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Agent
required by Section 7.10 shall not have been delivered to the Agent
within 30 days after the giving of such notice of resignation, the
resigning Agent may petition any court of competent jurisdiction at the
expense of the Company for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders
of a majority in number of the Outstanding Units delivered to the Agent
and the Company.
(d) If at any time:
(1) the Agent fails to comply with Section 310(b) of
the TIA, as if the Agent were an Trustee under an indenture
qualified under the TIA, after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Unit for at least six months; or
(2) the Agent shall cease to be eligible under
Section 7.8 and shall fail to resign after written request
therefor by the Company or by any such Holder; or
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(3) the Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Agent or of its property shall be appointed or any public
officer shall take charge or control of the Agent or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, (x) the Company by a Board Resolution
may remove the Agent, or (y) any Holder who has been a bona fide Holder
of a Unit for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the removal of the Agent and the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Agent for any
cause, the Company, by a Board Resolution, shall promptly appoint a
successor Agent and shall comply with the applicable requirements of
Section 7.10. If no successor Agent shall have been so appointed by the
Company and accepted appointment in the manner required by Section
7.10, any Holder who has been a bona fide Holder of a Unit for at least
six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the Agent
and each appointment of a successor Agent by mailing written notice of
such event by first-class mail, postage prepaid, to all Holders as
their names and addresses appear in the applicable Register. Each
notice shall include the name of the successor Agent and the address of
its Corporate Trust Office.
SECTION 7.10 Acceptance of Appointment By Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Agent an instrument
accepting such appointment, and thereupon the resignation or removal of
the retiring Agent shall become effective and such successor Agent,
without any further act, deed or conveyance, shall become vested with
all the rights, powers, agencies and duties of the retiring Agent; but,
on the request of the Company or the successor Agent, such retiring
Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers
and trusts of the retiring Agent and duly assign, transfer and deliver
to such successor Agent all property and money held by such retiring
Agent hereunder.
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(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Agent all such rights,
powers and agencies referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at
the time of such acceptance such successor Agent shall be qualified and
eligible under this Article.
SECTION 7.11 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent shall adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Units.
SECTION 7.12 Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by
the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"Applicants") apply in writing to the Agent, and furnish to the Agent
reasonable proof that each such applicant has owned a Unit for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Units and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Agent
shall mail to all the Holders copies of the form of proxy or other
communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed
and of payment, or provision, in the absence of bad faith, satisfactory
to the Agent for the payment, of the reasonable expenses of such
mailing.
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SECTION 7.13 Failure to Act.
In the event of any dispute between or conflicting claims by or among
the parties hereto or any other Person, the Agent shall be entitled, after
prompt notice to the Company and the Holders of Units, at its sole option, to
refuse to comply with any and all such claims, demands or instructions so long
as such dispute or conflict shall continue, and the Agent shall not be or become
liable in any way to any of the parties hereto for its failure or refusal to
comply with such conflicting claims, demands or instructions. The Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims or
demands shall have been finally determined by a court of competent jurisdiction
or settled by agreement between the conflicting parties as evidenced in a
writing, reasonably satisfactory to the Agent, or (ii) the Agent shall have
received security or an indemnity reasonably satisfactory to the Agent
sufficient to save the Agent harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which the Agent may incur by
reason of its acting without bad faith, willful misconduct or gross negligence.
The Agent may in addition elect to commence an interpleader action or seek other
judicial relief or orders as the Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Agent shall not be required to
take any action that is in its opinion contrary to law or to the terms of any
Transaction Document, or which would in its opinion subject it or any of its
officers, employees or directors to liability.
SECTION 7.14 No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligation and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Unit thereunder. The Company agrees, and each
Holder of a Certificate, by such Holder's acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Purchase Contracts on behalf
of the Holders, except to the extent expressly provided in Article V.
SECTION 7.15 Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting
and withholding (including "backup" withholding) requirements imposed
on it as a paying agent by applicable tax laws, regulations or
administrative practice with respect to any payments made with respect
to the Units. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate
taxing authority or its designated agent.
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(b) The Agent shall comply with any reasonable written
direction timely received from the Company with respect to the
application of such requirements to particular payments or Holders or
in other particular circumstances, and may for purposes of this
Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2).
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such
request.
ARTICLE VIII.
SUPPLEMENTAL AGREEMENTS
SECTION 8.1 Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(a) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(b) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b) or 5.10; or
(e) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders.
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SECTION 8.2 Supplemental Agreements With Consent of Holders.
(a) With the consent of the Holders of not less than a
majority of the outstanding Purchase Contracts voting together as one
class, by Act of said Holders delivered to the Company and the Agent,
the Company, when authorized by a Board Resolution, and the Agent may
enter into an agreement or agreements supplemental hereto, in form
satisfactory to the Company and the Agent, for the purpose of modifying
in any manner the terms of the Purchase Contracts, or the provisions of
this Agreement or the rights of the Holders in respect of the Units;
provided, that, except as contemplated herein, no such supplemental
agreement shall, without the consent of the Holder of each Outstanding
Unit affected thereby:
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's Obligations under
the Purchase Contract, impair the right of the Holder of any
Purchase Contract to receive distributions on the related
Collateral (except for the rights of Holders of Normal Units
to substitute the Treasury Securities for the Pledged Notes,
Pledged Treasury Consideration or Pledged Applicable Ownership
Interest in the Treasury Portfolio, or the rights of holders
of Stripped Units to substitute Notes or Applicable Ownership
Interest in the Treasury Portfolio for the Pledged Treasury
Securities) or otherwise adversely affect the Holder's
beneficial rights in or to such Collateral or materially
adversely alter the rights in or to such Collateral subject to
the Pledge Agreement;
(3) impair the right to institute suit for the
enforcement of any Purchase Contract;
(4) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the
price to purchase shares of Common Stock upon settlement of
any Purchase Contract, change the Stock Purchase Date or
otherwise materially adversely affect the Holder's rights
under any Purchase Contract;
(5) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any
such supplemental agreement; or
(6) Change the place or currency of payment for any
amounts payable in respect of the Units, increase any amounts
payable by Holders in respect of the Units or decrease any
other amounts receivable by Holders in respect of the Units.
76
provided, that if any amendment or proposal referred to above would
adversely affect only the Normal Units or the Stripped Units, then only
the affected class of Holder as of the record date for the Holders
entitled to vote thereon will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be effective except
with the consent of Holders of not less than a majority or 100% of such
class, as the case may be.
(b) It shall not be necessary for any Act of Holders under
this Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act shall
approve the substance thereof.
SECTION 8.3 Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be provided and (subject
to Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental agreement is authorized or
permitted by this Agreement. The Agent may, but shall not be obligated to, enter
into any such supplemental agreement which affects the Agent's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 8.4 Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
SECTION 8.5 Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
77
ARTICLE IX.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Assets
Except Under Certain Conditions.
The Company covenants that it shall not consolidate with or merge into
any other entity or convey or transfer its properties and assets substantially
as an entirety to any Person unless:
(i) the Person formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer the properties
and assets of the Company substantially as an entirety shall be a corporation,
limited liability company or trust (if not the Company) organized and validly
existing under the laws of the United States of America or any State thereof or
the District of Columbia, and shall expressly assume all the obligations of the
Company under the Purchase Contracts, this Agreement, the Remarketing Agreement
and the Pledge Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such successor entity, the
due and punctual performance of every obligation and covenant of this Agreement
on the part of the Company to be performed or observed;
(ii) immediately after giving effect to such transaction, no default
and no event which, after notice or lapse of time, or both, would become a
default under this Agreement, the Purchase Contracts, the Pledge Agreement or
the Remarketing Agreement, shall have occurred and be continuing; and
(iii) the Company has delivered to the to the Agent and the Collateral
Agent an Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental agreement
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
In the event the Company is not the successor of any such
consolidation, merger or sale of the assets substantially as an entirety and the
successor is a limited liability company or trust, then the Company or such
trust or limited liability company, in connection with such transaction, shall
create a corporation to act as a co-obligor of the Purchase Contracts, Notes and
Units.
78
SECTION 9.2 Rights and Duties of Successor Corporation.
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Company substantially as an entirety in accordance
with Section 9.1, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance or transfer is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Agreement, the Pledge Agreement and the Purchase
Contracts with the same effect as if such successor Person had been named as the
Company herein, and thereafter the predecessor Person shall be relieved of all
obligations and covenants under this Agreement, the Pledge Agreement and the
Purchase Contracts. In the event of any such conveyance or transfer, the Company
as the predecessor Person may thereupon or at any time thereafter be dissolved,
wound up, or liquidated.
ARTICLE X.
COVENANTS
SECTION 10.1 Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Units that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2 Maintenance of office or Agency.
(a) The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common Stock upon
settlement of the Purchase Contracts on any Settlement Date and for
transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or reestablishment of Normal
Units and where notices and demands to or upon the Company in respect
of the Units and this Agreement may be served. The Company will give
prompt written notice to the Agent of the location, and any change in
the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail
to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Company hereby appoints the Agent as its agent to
receive all such presentations, surrenders, notices and demands.
79
(b) The Company may also from time to time designate one or
more other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; provided, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of
New York for such purposes. The Company will give prompt written notice
to the Agent of any such designation or rescission and of any change in
the location of any such other office or agency. The Company hereby
designates as the place of payment for the Units the Corporate Trust
Office and appoints the Agent at its Corporate Trust Office as paying
agent in such city.
SECTION 10.3 Company to Reserve Common Stock.
The Company shall at all times prior to the Stock Purchase Date reserve
and keep available, free from preemptive rights, out of its authorized but
unissued Common Stock the full number of shares of Common Stock issuable against
tender of payment in respect of all Purchase Contracts constituting a part of
the Units evidenced by Outstanding Certificates without giving effect to any
changes in the number of such shares due to Sections 5.6 and 5.7.
SECTION 10.4 Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
SECTION 10.5 Statements of Officer of The Company as to Default.
The Company will deliver to the Agent, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officer's
Certificate, stating whether or not to the best knowledge of the signer thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which such
Officer may have knowledge.
SECTION 10.6 Tax Treatment
The Company and the Holders by purchasing a Normal Unit, covenant and
agree, for U.S. federal, state and local income tax and franchise tax purposes,
to (i) treat a Holder's acquisition of the Normal Units as the acquisition of
the Note and Purchase Contract constituting the Normal Unit and (ii) treat each
Holder as the owner of the related Notes, Applicable Ownership Interest in the
Treasury Portfolio or Treasury Securities, as the case may be.
[SIGNATURE PAGES FOLLOW]
80
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
TOYS "R" US, INC.
By: ________________________________
Name:
Title:
THE BANK OF NEW YORK
as Purchase Contract Agent
By: ________________________________
Name:
Title:
81
EXHIBIT A
FORM OF NORMAL UNITS CERTIFICATE
[For inclusion in Global CertificateS only -- THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
10041-0099) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate issued is registered in the name of Cede & Co.,
or such other name as requested by an authorized representative of The
Depository Trust Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
(Form of Face of Normal Units Certificate)
No. ______________ CUSIP No. ____________
Number of Normal Units___
This Normal Units Certificate certifies that [For inclusion in Global
Certificates only -- Cede & Co.] is the registered Holder of the number of
Normal Units set forth above [For inclusion in Global Certificates only - or
such other number of Normal Units reflected in the Schedule of Increases or
Decreases in Global Certificates attached hereto]. Each Normal Unit represents
(i) either (a) beneficial ownership by the Holder of one Senior Note due 2007
(the "Note") of Toys "R" Us, Inc., a Delaware corporation (the "Company") having
a principal amount of $50, subject to the Pledge of such Note by such Holder
pursuant to the Pledge Agreement, or (b) if the Note has been remarketed by the
Remarketing Agent (or if the Holder has elected not to have the Note remarketed)
by the Applicable Ownership Interest in such Treasury Portfolio by such Holder
pursuant to the Pledge Agreement, or (c) if a Tax Event Redemption has occurred,
the Applicable Ownership Interest in the Treasury Portfolio subject to the
Pledge pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with the Company. All capitalized terms
used but not defined herein which are defined have the meaning set forth in the
Purchase Contract Agreement.
A-1
Pursuant to the Pledge Agreement, the Notes or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, constituting part of
each Normal Units evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising a part of such Normal Units.
The Pledge Agreement provides that all payments of principal on the
Pledged Notes or if applicable, the Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) in the Treasury Portfolio, as the
case may be, or interest payments on the Pledged Notes (as defined in the Pledge
Agreement) or on the Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) in the Treasury Portfolio, as the case may be,
constituting part of the Normal Units received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds (i) in the case
of (A) interest payments with respect to Pledged Notes or Pledged Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
in the Treasury Portfolio, as the case may be, and (B) any payments of principal
with respect to any Notes on the Applicable Ownership Interest (as specified in
clause (A) of the definition of such terms) in the Treasury Portfolio, as the
case may be, that have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent to the account designated by the Agent, no later than
2:00 p.m. (New York City time) on the Business Day such payment is received by
the Collateral Agent (provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or after 12:30 p.m. (New
York City time) on a Business Day, then such payment shall be made no later than
10:30 a.m. (New York City time) on the next succeeding Business Day) and (ii) in
the case of payments of principal on any Pledged Notes or Pledged Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio, as the case may be, that has not been released from
the Pledge pursuant to the Pledge Agreement to the Company on the Stock Purchase
Date (as defined herein) in accordance with the terms of the Pledge Agreement,
in full satisfaction of the respective obligations of the Holders of the Normal
Units of which such Pledged Notes or Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, are a part under the Purchase
Contracts forming a part of such Normal Units. Interest on any Notes or
distributions on the Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio, as the case may be,
forming part of a Normal Unit evidenced hereby which are payable quarterly in
arrears on February 16, May 16, August 16, and November 16, each year,
commencing on August 16, 2002 (each a "Payment Date"), shall, subject to receipt
thereof from the Collateral Agent, be paid to the Person in whose name this
Normal Units Certificate (or a Predecessor Normal Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
A-2
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on August 16,
2005 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"),
a number of newly issued shares of Common Stock, $.10 par value per share
("Common Stock"), of the Company, equal to the Settlement Rate, then in effect,
unless on or prior to the Stock Purchase Date there shall have occurred a
Termination Event, Cash Settlement, Early Settlement or Merger Early Settlement
with respect to the Normal Units of which such Purchase Contract is a part, all
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The Purchase Price (as defined herein) for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Stock Purchase Date by application of payments
received in respect of the Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, pledged to secure the
obligations of the Holder under such Purchase Contract in accordance with the
terms of the Pledge Agreement.
Payments on the Notes or Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, will be payable at the office of the Agent in The
City of New York or, at the option of the Company, by check mailed to the
address of the Person entitled thereto as such address appears on the Normal
Units Register or by wire transfer to an account specified by such Person at
least five Business Days prior to the applicable Payment Date.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been authenticated
by the Agent by manual signature, this Normal Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TOYS "R" US, INC.
By: ________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced
hereby)
By: THE BANK OF NEW YORK, not individually
but solely as Attorney-in-Fact of such Holder
By:__________________________________
Authorized Signatory
AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Normal Units
Certificates referred to in the within mentioned Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
Dated: _______________________ By:___________________________
Authorized Signatory
A-4
(Form of Reverse of Normal Units Certificate)
Each Purchase Contract evidenced hereby is governed by the Purchase
Contract Agreement, dated as of May , 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company, and the Holders and of the terms upon
which the Normal Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, then in effect,
unless, on or prior to the Stock Purchase Date, there shall have occurred a
Termination Event or an Early Settlement, Merger Early Settlement or Cash
Settlement with respect to the Units of which such Purchase Contract is a part.
The "Settlement Rate" is equal to (a) if the Applicable Market Value is greater
than or equal to $[____] (the "Threshold Appreciation Price"), [____] shares of
Common Stock per Purchase Contract, (b) if the Applicable Market Value is less
than the Threshold Appreciation Price but is greater than $[____], the number of
shares of Common Stock per Purchase Contract equal to the Stated Amount of the
related Unit divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $[____], [____] shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement. The number of shares of Common Stock per Purchase Contract will be
subject to adjustment as provided by Sections 5.6 and 5.7 of the Purchase
Contract Agreement.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price per share (or, if no closing price is reported, the
last reported sale price per share) of the Common Stock on the New York Stock
Exchange (the "NYSE") on such date or, if the Common Stock is not listed for
trading on the NYSE on any such date, as reported in the composite transactions
for the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed on a United States national
or regional securities exchange, as reported by The Nasdaq Stock Market, or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.
A-5
A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the- counter market that is the primary market for the
trading of the Common Stock.
Each Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Cash Settlement, Early Settlement or Merger Early
Settlement, in accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Normal Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby (i) by effecting a Cash Settlement, Early Settlement or Merger Early
Settlement, (ii) by application of payments received in respect of the Pledged
Applicable Ownership Interest in the Treasury Portfolio acquired from the
proceeds of a remarketing of the related Pledged Notes underlying the Normal
Units represented by this Normal Units Certificate, (iii) if the Holder has
elected not to participate in the remarketing, by application of payments
received in respect of the Opt-out Treasury Consideration deposited by such
Holder in respect of such Purchase Contract or (iv) if a Tax Event Redemption
has occurred prior to the successful remarketing of the Notes by application of
payments received in respect of the Pledged Applicable Ownership Interest in the
Treasury Portfolio by the Collateral Agent on behalf of the Holder of this
Normal Units Certificate. If, as provided in the Purchase Contract Agreement,
upon the occurrence of a Last Failed Remarketing the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured creditor with respect
to the Pledged Notes related to this Normal Units Certificate, any accrued and
unpaid interest on such Pledged Notes will become payable by the Company to the
Holder of this Normal Units Certificate in the manner provided for in the
Purchase Contract Agreement and the Indenture.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
A-6
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Notes. Upon receipt of notice of any meeting at which holders of Notes are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Notes, the Agent shall, as soon as practicable thereafter, mail to
the Holders of Normal Units a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each such Holder on
the record date set by the Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of Notes
entitled to vote) shall be entitled to instruct the Agent as to the exercise of
the voting rights pertaining to the Pledged Notes constituting a part of such
Holder's Normal Units and (c) stating the manner in which such instructions may
be given. Upon the written request of the Holders of Normal Units on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Pledged Notes as to which any particular voting instructions
are received. In the absence of specific instructions from the Holder of a
Normal Unit, the Agent shall abstain from voting the Pledged Note evidenced by
such Normal Unit.
The Normal Units Certificates are issuable only in registered form and
only in denominations of a single Normal Unit and any integral multiple thereof.
The transfer of any Normal Units Certificate will be registered and Normal Units
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Normal Units Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. The Holder of a Normal Unit may substitute
Treasury Securities for the Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, securing its obligations
under the related Purchase Contract in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such Collateral
Substitution, the Unit for which such Pledged Treasury Securities secures the
Holder's obligation under the Purchase Contract shall be referred to as a
"Stripped Unit" evidenced by a Stripped Units Certificate. A Holder that elects
to substitute a Treasury Security for Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, thereby
creating Stripped Units, shall be responsible for any fees or expenses payable
in connection therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract underlying a Normal Unit remains in effect,
such Normal Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Normal Units in respect of the
Pledged Note or Pledged Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, and Purchase Contract constituting such Normal Unit may be
transferred and exchanged only as a Normal Unit.
A-7
A Holder of Stripped Units may reestablish Normal Units by delivering
to the Collateral Agent Notes or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, in exchange for the release of the
Pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to purchase Common Stock, shall immediately and automatically terminate,
without the necessity of any notice or action by any Holder, the Agent or the
Company, if, on or prior to the Stock Purchase Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Normal Units Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Pledged Notes or
Pledged Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts may
be settled early ("Early Settlement") as provided in the Purchase Contract
Agreement. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Normal Units Certificate,
the Holder of this Normal Units Certificate shall deliver to the Agent at the
Corporate Trust Office an Election to Settle Early form set forth below and any
other documents requested by the Agent duly completed and accompanied by payment
in the form of immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to the product of (A) $50
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Notes or Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) in the Treasury Portfolio, as the case may be,
underlying such Units shall be released from the Pledge as provided in the
Pledge Agreement and the Holder of each Purchase Contract forming part of a
Normal Unit as to which Early Settlement is effected equal to ___ share of
Common Stock per Purchase Contract (the "Early Settlement Rate"). The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Normal Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Normal Units
Certificate. The Company covenants and agrees, and the Holder, by its acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
A-8
The Holder of this Normal Units Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Normal Units evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on such Holder's behalf as
attorney-in-fact, and consents to the Pledge of the Notes or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, underlying
this Normal Units Certificate pursuant to the Pledge Agreement. The Holder
further covenants and agrees, that, to the extent and in the manner provided in
the Purchase Contract Agreement and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, to be paid
upon settlement of such Holder's obligations to purchase Common Stock under the
Purchase Contract, shall be paid on the Stock Purchase Date by the Collateral
Agent to the Company in satisfaction of such Holder's obligations under such
Purchase Contract and such Holder shall acquire no right, title or interest in
such payments.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for U.S. federal, state and local income and franchise tax purposes, to (i)
treat an acquisition of the Normal Unit as an acquisition of the Note and
Purchase Contract constituting the Normal Unit and (ii) treat itself as owner of
the related Notes, Applicable Ownership Interest in the Treasury Portfolio or
Treasury Securities, as the case may be.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
A-9
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Normal Units Certificate is
registered as the owner of the Normal Units evidenced hereby for the purpose of
receiving quarterly payments on the Notes, or the Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, performance of the Purchase
Contracts and for all other purposes whatsoever (subject to the Record Date
provisions hereof), whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent, such Affiliates nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
------------------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
------------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
A-11
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Normal Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Normal Units Certificates on the books of Toys "R" Us, Inc. with
full power of substitution in the premises.
Dated: _______________________ Signature: ___________________________
NOTICE: The signature to this assignment must correspond with the name
as it appears upon the face of the within Normal Units Certificates in every
particular, without alteration or enlargement or any change whatsoever.
Signature Guarantee: ______________________________________________________
A-12
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this
Normal Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional shares, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated: ___________________ Signature: ___________________________
Signature Guarantee: _________________
(if assigned to another person)
If shares are to be registered in the name REGISTERED HOLDER
of and delivered to a Person other than
the Holder, please (i) print such Person's Please print name and address
name and address and (ii) provide a guarantee of Registered Holder:
of your signature:
---------------------------------- ---------------------------------
Name Name
---------------------------------- ---------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
A-13
ELECTION TO SETTLE EARLY
The undersigned Holder of this Normal Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
Section 5.9 of the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Normal Units evidenced by this
Normal Units Certificate specified below. The option to effect Early Settlement
may be exercised only with respect to Purchase Contracts underlying Normal Units
with an aggregate Stated Amount equal to $50 or an integral multiple thereof,
provided, however, that such option may only be exercised with respect to
Purchase Contracts underlying Normal Units secured by Pledged Applicable
Ownership Interest in the Treasury Portfolio with an aggregate Stated Amount
equal to $1,000 or an integral multiple thereof. The undersigned Holder directs
that a certificate for shares of Common Stock deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a check in
payment for any fractional shares and any Normal Units Certificate representing
any Normal Units evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address indicated
below unless a different name and address have been indicated below. Pledged
Notes or Pledged Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated: ____________________ Signature: _____________________________
Signature Guarantee: ___________________
Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock are to be REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Notes or Pledged Applicable
Ownership Interest in the Treasury Please print name and address of
Portfolio, as the case may be, are to be Registered Holder:
transferred to a Person other than the Holder, please print such Person's name
and address:
---------------------------------- ---------------------------------
Name Name
---------------------------------- ---------------------------------
Address Address
A-14
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, transferable upon Early
Settlement or a Termination Event:
A-15
(TO BE ATTACHED TO GLOBAL CERTIFICATES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Stated Amount
Amount of Amount of of the Global
Decrease in Increase in Certificate
Stated Amount Stated Amount of Following Such
of the Global the Global Decrease or Signature of
Date Certificate Certificate Increase Authorized Signatory
A-16
EXHIBIT B
FORM OF STRIPPED UNITS CERTIFICATE
[FOR INCLUSION IN GLOBAL CERTIFICATES ONLY -- THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS
HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR
A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized representative of
The Depository Trust Company (55 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
10041-0099) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate issued is registered in the name of Cede & Co.,
or such other name as requested by an authorized representative of The
Depository Trust Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Form of Face of Stripped Units Certificate
No. CUSIP No. ____________
Number of Stripped Units
This Stripped Units Certificate certifies that [For inclusion in Global
Certificates only -- Cede & Co.] is the registered Holder of the number of
Stripped Units set forth above [For inclusion in Global Certificates only - or
such other number of Stripped Units reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto]. Each Stripped Unit represents
(i) a 1/20 undivided beneficial ownership interest in a Treasury Security,
subject to the Pledge of such interest in such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Toys "R" Us, Inc., a Delaware
corporation (the "Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Security constituting
part of each Stripped Units evidenced hereby has been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a part of such Stripped Units.
B-1
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on August 16,
2005 (the "Stock Purchase Date"), at a price equal to $50 (the "Stated Amount"),
a number of shares of Common Stock, $.10 par value per share ("Common Stock"),
of the Company, equal to the Settlement Rate, then in effect, unless on or prior
to the Stock Purchase Date there shall have occurred a Termination Event, Cash
Settlement, Early Settlement or Merger Early Settlement with respect to the
Stripped Units of which such Purchase Contract is a part, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. The
Purchase Price (as defined herein) for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall
be paid on the Stock Purchase Date by application of payments received in
respect of the Pledged Treasury Securities pledged to secure the obligations
under such Purchase Contract in accordance with the terms of the Pledge
Agreement.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Stripped Units Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
TOYS "R" US, INC.
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts)
By: THE BANK OF NEW YORK, not individually but
solely as Attorney-in-Fact of such Holder
By: ____________________________________
Authorized Signatory
B-2
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped Units referred to in the within-mentioned
Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Purchase Contract Agent
Dated:________________________ By:____________________________
Authorized Signatory
(Reverse of Stripped Units Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of May , 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Stripped Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on the Stock
Purchase Date at a price equal to $50 (the "Purchase Price"), a number of shares
of Common Stock of the Company equal to the Settlement Rate, then in effect,
unless, on or prior to the Stock Purchase Date, there shall have occurred a
Termination Event or an Early Settlement, Merger Early Settlement or Cash
Settlement with respect to the Units of which such Purchase Contract is a part.
The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is greater than or equal to $[____] (the "Threshold Appreciation Price"),
[____] shares of Common Stock per Purchase Contract, (b) if the Applicable
Market Value is less than the Threshold Appreciation Price but is greater than
$[____], the number of shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $[____], [____] shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement. The number of shares of Common Stock per Purchase Contract will be
subject to adjustment as provided by Sections 5.6 and 5.7 of the Purchase
Contract Agreement.
B-3
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Stock Purchase Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is reported, the last
reported sale price) of the Common Stock on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Purchase Contract evidenced hereby may be settled prior to the
Stock Purchase Date through Early Settlement, Merger Early Settlement or Cash
Settlement, in accordance with the terms of the Purchase Contract Agreement.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Stripped Units Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby (i) by effecting an Early Settlement, Merger Early Settlement or Cash
Settlement or (ii) by application of payments received in respect of the Pledged
Treasury Securities underlying the Stripped Units represented by this Stripped
Units Certificate.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
The Stripped Units Certificates are issuable only in registered form
and only in denominations of a single Stripped Unit and any integral multiple
thereof. The transfer of any Stripped Units Certificate will be registered and
Stripped Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Stripped Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. The Holder of a Stripped
Units may substitute for the Pledged Treasury Securities securing its
obligations under the related Purchase Contract Notes or Applicable Ownership
Interest in the Treasury Portfolio in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Units for which such Pledged Notes or Pledged Applicable Ownership Interest
in the Treasury Portfolio secures the Holder's obligation under the Purchase
Contract shall be referred to as a "Normal Units" evidenced by a Normal Units
Certificate. A Holder that elects to substitute Notes or Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, for Pledged Treasury
Securities, thereby reestablishing Normal Units, shall be responsible for any
fees or expenses payable in connection therewith. Except as provided in the
Purchase Contract Agreement, for so long as the Purchase Contract underlying a
Stripped Unit remains in effect, such Stripped Unit shall not be separable into
its constituent parts, and the rights and obligations of the Holder of such
Stripped Unit in respect of the Pledged Treasury Security and the Purchase
Contract constituting such Stripped Unit may be transferred and exchanged only
as a Stripped Units.
B-4
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Stock Purchase Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Stripped Units Register. Upon
and after the occurrence of a Termination Event, the Collateral Agent shall
release the Pledged Treasury Securities from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts may
be settled early ("Early Settlement") as provided in the Purchase Contract
Agreement. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Stripped Units Certificate,
the Holder of this Stripped Units Certificate shall deliver to the Agent at the
Corporate Trust Office an Election to Settle Early form set forth below and any
other documents requested by the Agent duly completed and accompanied by payment
in the form of immediately available funds payable to the order of the Company
in an amount (the "Early Settlement Amount") equal to the product of (A) $50
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement.
B-5
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities underlying such Units shall be released
from the Pledge as provided in the Pledge Agreement and the Holder of each
Purchase Contract forming part of Pledged Treasury Securities Units as to which
Early Settlement is effected equal to ___ share of Common Stock per Purchase
Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Stripped Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Stripped
Units Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Stripped Units Certificate, by his acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Stripped Units evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
such Holder's obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on such Holder's behalf as
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Stripped Units Certificate pursuant to the Pledge Agreement. The
Holder further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the Pledged Treasury
Securities, to be paid upon settlement of such Holder's obligations to purchase
Common Stock under the Purchase Contract, shall be paid on the Stock Purchase
Date by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for U.S. federal, state and local income and franchise tax purposes, to (i)
treat an acquisition of the Stripped Units as an acquisition of the Treasury
Security and Purchase Contract constituting the Stripped Units and (ii) treat
itself as owner of the Treasury Securities.
B-6
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Stripped Units Certificate
is registered as the owner of the Stripped Units evidenced hereby for the
purpose of, performance of the Purchase Contracts and for all other purposes
whatsoever (subject to the Record Date provisions hereof), whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent, such Affiliate, nor any such agent
shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - Custodian
-----------------------------------------
(cust) (minor)
Under Uniform Gifts to Minors Act
-----------------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
B-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Stripped Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________________ attorney to
transfer said Stripped Units Certificates on the books of Toys "R" Us, Inc. with
full power of substitution in the premises.
Dated: ______________________ Signature: ___________________________
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Stripped Units
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: ___________________________________________________________
B-9
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Stripped Units evidenced by this
Stripped Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated: ___________________ Signature: ___________________________
Signature Guarantee: _________________
(if assigned to another person)
If shares are to be registered in the name of REGISTERED HOLDER
and delivered to a Person other than the
Holder, please (i) print such Person's name Please print name and address
and address and (ii) provide a guarantee of of Registered Holder:
your signature:
---------------------------------- -------------------------------
Name Name
---------------------------------- -------------------------------
Address Address
Social Security or other Taxpayer
Identification Number, if any
B-10
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stripped Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Stripped Units evidenced by this Stripped
Units Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Stripped Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Stripped Units Certificate representing any Stripped Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ____________________ Signature: _____________________________
Signature Guarantee: ___________________
Number of Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock are to be REGISTERED HOLDER
registered in the name of and delivered to
and Pledged Treasury Securities are to be Please print name and address of
transferred to a Person other than the Registered Holder:
Holder, please print such Person's name
and address:
---------------------------------- -------------------------------
Name Name
---------------------------------- -------------------------------
Address Address
B-11
Social Security or other Taxpayer
Identification Number, if any
Transfer instructions for Pledged Treasury Securities transferable upon
Early Settlement or a Termination Event:
B-12
(TO BE ATTACHED TO GLOBAL CERTIFICATES)
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Stated Amount
Amount of Amount of of the Global
Decrease in Increase in Certificate
Stated Amount Stated Amount of Following Such
of the Global the Global Decrease or Signature of
Date Certificate Certificate Increase Authorized Signatory
B-13
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
JPMorgan Chase Bank,
as Collateral Agent
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Institutional Trust Services
Re: Equity Security Units of Toys "R" Us, Inc. (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of May , 2002, (the "Pledge Agreement") among the
Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary
and us, as Purchase Contract Agent and as attorney-in-fact for the holders of
[Normal Units] [Stripped Units] from time to time, that the holder of Units
listed below (the "Holder") has elected to substitute [$_____ aggregate
principal amount of Treasury Securities (CUSIP No. 000000XX0)] [$_______
aggregate principal amount of Notes $_____ or $_____ Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] in exchange for the
related [Pledged Notes or the Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Notes or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,] to
you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged
Treasury Securities] [Pledged Notes or the Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be,], and upon the payment by such
Holder of any applicable fees, to release the [Notes or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] [Treasury Securities]
related to such [Normal Units] [Stripped Units] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not defined shall have
the meaning set forth in the Pledge Agreement.
C-1
Date: _____________________
THE BANK OF NEW YORK,
as Purchase Contract Agent
By:_______________________________
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the Applicable Ownership Interest in the
Treasury Portfolio] for the [Pledged Notes or the Pledged Applicable Ownership
Interest in the Treasury Portfolio] [Pledged Treasury Securities]:
Name:
Social Security or other Taxpayer Identification
Number, if any:
Address:
C-2
EXHIBIT D
INSTRUCTION FROM HOLDER TO PURCHASE CONTRACT AGENT
The Bank of New York,
as Purchase Contract Agent
000 Xxxxxxx Xxxxxx
Xxxxx 00 X
Xxx Xxxx, XX 00000
Attn: Corporate Trust Administration
Telecopy: [000-000-0000]
Re: Equity Security Units of Toys "R" Us, Inc. (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
JPMorgan Chase Bank, as Collateral Agent, Custodial Agent and Securities
Intermediary [$_______ aggregate principal amount of Treasury Securities (CUSIP
No. 000000XX0)] [$_______ aggregate principal amount of Notes or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be] in exchange
for the related [Pledged Notes or the Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be] [Pledged Treasury Securities] held
by the Collateral Agent, in accordance with Section [4.1] [4.2] of the Pledge
Agreement, dated May , 2002 (the "Pledge Agreement"), among you, the Company and
the Collateral Agent. The undersigned Holder has paid the Collateral Agent all
applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Notes or Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be] [Pledged Treasury
Securities] related to such [Normal Units] [Stripped Units]. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date: ___________________ Signature:____________________________________
Signature Guarantee: ________________________
Please print name and address of Registered Holder:
Name:
Social Security or other Taxpayer Identification Number, if any:
Address:
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EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The Bank of New York,
as Purchase Contract Agent
000 Xxxxxxx Xxxxxx
Xxxxx 00 X
Xxx Xxxx, XX 00000
Attn: Corporate Trust Administration
Telecopy: [000-000-0000]
Re: Equity Security Units of Toys "R" Us, Inc. (the" Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.5 of the Purchase Contract Agreement dated as of May , 2002 among
the Company and you, as Purchase Contract Agent and as Attorney-in-Fact for the
Holders of the Purchase Contracts, that such Holder has elected to pay to the
Collateral Agent, on or prior to 10:00 a.m. (New York City time) on the fourth
Business Day immediately preceding the Stock Purchase Date (in lawful money of
the United States by [certified or cashiers check or] wire transfer, in each
case in immediately available funds), $_________ as the Purchase Price for the
shares of Common Stock issuable to such Holder by the Company under the related
Purchase Contract on the Stock Purchase Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holder's election to make such cash settlement with respect to the Purchase
Contracts related to such Holder's Normal Units.
Dated:_____________ __________________________________
Signature
Signature Guarantee:______________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
Social Security or other Taxpayer Identification Number, if any:
___________________
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