1
Exhibit 2.k.(iii)
PURCHASE AGREEMENT
THIS AGREEMENT is made as of this ___ day of ______, 1997 between
[Selling Shareholder] ("Seller") and Second Automatic Common Exchange Security
Trust (such trust and the trustees thereof acting in their capacity as such
being referred to herein as "Purchaser").
WHEREAS, Seller owns shares of common stock, no par value (the "Common
Stock"), of ________________________, a ______ corporation (the "Company");
WHEREAS, Purchaser has filed with the Securities and Exchange
commission a registration statement contemplating the offering of up to
_________ Second Automatic Common Exchange Securities (the "Securities"), the
terms of which contemplate delivery by Purchaser to the holders thereof of a
number of shares of Common Stock on the Exchange Date referred to herein;
WHEREAS, Seller has agreed, pursuant to the Collateral Agreement (the
"Collateral Agreement") dated as of ________, 1997, among Purchaser, Seller and
[____________________], as collateral agent (the "Collateral Agent"), to grant
Purchaser a security interest in the Common Stock and in certain other
circumstances certain other collateral to secure the obligations of Seller
hereunder;
WHEREAS, Purchaser has agreed, pursuant to an underwriting agreement,
dated ________, 1997 (the "Underwriting Agreement"), among Purchaser, Seller,
the Company and Xxxxxxx Xxxxx & Co. as representatives of the several
underwriters named therein (the "Underwriters"), to issue and sell to the
Underwriters an aggregate of _________ Securities (the "Firm Securities") and,
at the Underwriters' option, up to _______ additional Securities (the "Optional
Securities") to cover overallotments;
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
2
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"Acceleration Amount" has the meaning provided in Article VII.
"Acceleration Amount Notice" has the meaning provided in Article VII.
"Acceleration Value" has the meaning provided in Article VII.
"Additional Purchase Price" has the meaning provided in Section 1.2(b).
"Additional Share Base Amount" means a number equal to the number of
Optional Securities that the Underwriters elect to purchase under the
Underwriting Agreement.
"Additional Shares" has the meaning provided in Section 1.1(b).
"Additional STRIPS" means the U.S. Treasury obligations purchased by
Purchaser for settlement at the Second Time of Delivery.
"Administrator" means [____________________], administrator for
Purchaser under the Administration Agreement dated as of ________, 1997, or any
successor thereto.
"Aggregate Acceleration Value" has the meaning provided in Article VII.
"Appreciation Threshold Price" has the meaning provided in Section
1.1(c).
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to this Agreement.
"Closing Price" of the Common Stock on any date of determination means
the daily closing sale price (or, if no closing sale price is reported, the last
reported sale price) of the Common Stock as reported on the NYSE Consolidated
Tape on such date of determination or, if the Common Stock is not listed
3
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
National 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, provided that if any event
that results in an adjustment to the number of shares of Common Stock
deliverable hereunder pursuant to Section 6.1(e), occurs prior to the Exchange
Date, the Closing Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect the occurrence of such event.
"Contract Shares" has the meaning provided in Section 1.1(b).
"Current Market Price" per share of Common Stock means the average
Closing Price of a share of Common Stock on the 20 Trading Days immediately
prior to but not including the Exchange Date.
"Custodian" means [____________________], custodian for Purchaser under
the Custodian Agreement dated as of ________, 1997, or any successor thereto.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 6.1(a), (b), (c) or (d).
"Event of Default" has the meaning provided in Article VII.
"Excess Purchase Payment" has the meaning provided in Section 6.1(d).
"Exchange Date" means _______________, 2000; provided, that at the
option of the Seller, the Exchange Rate may be extended to _________, 2001, upon
(i) not less than 30 days' notice of such extension to the Purchaser and to the
Holders of the Securities in the manner contemplated in the Trust Agreement and
(ii) delivery to the Purchaser of the Extension Strips.
"Exchange Rate" has the meaning provided in Section 1.1(c).
"Extension Strips" means the U.S. Treasury obligations pledged by the
Seller at the First Time of Delivery, and at the Second Time of Delivery, as
appropriate, having the terms set forth on Schedule I hereto.
-3-
4
"Firm Purchase Price" has the meaning provided in Section 1.2(a).
"Firm Share Base Amount" has the meaning provided in Section 1.1(a).
"Firm Shares" has the meaning provided in Section 1.1(a).
"First Time of Delivery" has the meaning provided in Section 1.3(a).
"Independent Dealers" has the meaning provided in Article VII.
"Initial Price" has the meaning provided in Section 1.1(c).
"Marketable Securities" has the meaning provided in Section 6.2.
"Permitted Dividend" has the meaning provided in Section 6.1(d).
"Reorganization Event" has the meaning provided in Section 6.2.
"Second Time of Delivery" has the meaning provided in Section 1.1(b).
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 6.1, means the average Closing Price
per share of the Common Stock for the Calculation Period of 5 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 6.1(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 5 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to the "Closing Price" definition. The
"ex-date" with respect to any dividend, distribution or issuance shall mean the
first date on which the shares of Common Stock trade regular way
-4-
5
on their principal market without the right to receive such dividend,
distribution or issuance.
"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 such security.
"Transaction Value" has the meaning provided in Section 6.2.
"Trust Agreement" means the Amended and Restated Trust Agreement
constituting Second Automatic Common Exchange Security Trust dated as of
________, 1997.
I.
SALE AND PURCHASE
1.1 Sale and Purchase. (a) Firm Shares. Upon the terms and subject to
the conditions of this Agreement, Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase and acquire from Seller, the number of shares of
Common Stock (the "Firm Shares") equal to the product of _____________ (the
"Firm Share Base Amount") and the Exchange Rate.
(b) Additional Shares. Upon the terms and subject to the conditions of
this Agreement, Seller agrees to sell to Purchaser, and Purchaser shall have a
right to purchase, a number of additional shares of Common Stock (the
"Additional Shares") equal to the product of the Exchange Rate and the
Additional Share Base Amount. If the Underwriters exercise their option to
purchase Optional Securities pursuant to the Underwriting Agreement, Purchaser
shall notify Seller in writing that Purchaser will purchase the Additional
Shares, which notice shall specify the Additional Share Base Amount and the date
on which Purchaser shall deliver the purchase price for the Additional Shares,
which shall be the Second Time of Delivery specified pursuant to Section 2 of
the Underwriting Agreement (the "Second Time of Delivery"). The Firm Shares and
the Additional Shares (if any) are collectively referred to herein as the
"Contract Shares".
(c) Exchange Rate. The "Exchange Rate" shall be determined in
accordance with the following formula, subject to adjustment as a result of
certain events relating to the Common
-5-
6
Stock as provided in Article VI: (i) if the Current Market Price is less than
$______ (the "Appreciation Threshold Price") but equal to or greater than $_____
(the "Initial Price"), a fraction (rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th) equal to the Initial Price divided by the Current Market Price; (ii)
if the Current Market Price is equal to or greater than the Appreciation
Threshold Price, _________ and (iii) if the Current Market Price is less than
the Initial Price, 1.
1.2 Purchase Price. (a) Firm Purchase Price. The purchase price for the
Firm Shares (the "Firm Purchase Price") shall be $__________ in cash.
(b) Additional Purchase Price. The purchase price for the Additional
Shares (the "Additional Purchase Price") shall be the difference between: (i)
the aggregate proceeds to Purchaser from the sale of the Optional Securities;
and (ii) the aggregate cost to Purchaser, as notified by Purchaser to Seller at
the Second Time of Delivery, of the Additional STRIPS.
1.3 Payment for and Delivery of Contract Shares. (a) First Time of
Delivery. Upon the terms and subject to the conditions of this Agreement,
Purchaser shall deliver to Seller the Firm Purchase Price on _________, 1997
(the "First Time of Delivery") at the offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as shall be agreed upon
by Purchaser and Seller, paid by wire transfer to an account designated by
Seller, in Federal (immediately available) funds.
(b) Second Time of Delivery. Upon the terms and subject to the
conditions of this Agreement, Purchaser shall deliver to Seller the Additional
Purchase Price at the Second Time of Delivery at the offices of Xxxxxxxx &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place as
shall be agreed upon by Purchaser and Seller, paid by wire transfer to an
account designated by Seller, in Federal (immediately available) funds.
(c) Delivery of Contract Shares. On the Exchange Date, Seller agrees to
deliver the Contract Shares to Purchaser. Delivery shall be effected by delivery
by the Collateral Agent to the Custodian, for the account of Purchaser, of
shares of Common Stock then held by the Collateral Agent as collateral under the
Collateral Agreement, in an amount equal to the number of Contract Shares,
rounded down to the nearest whole number. Instead of any fractional shares of
Common Stock that would otherwise be deliverable to Purchaser at the Exchange
Date, Seller agrees to make a cash payment in respect of such fractional shares
of Common Stock in an amount equal to the value
-6-
7
thereof at the Current Market Price. Notwithstanding the foregoing, if a
Reorganization Event shall have occurred prior to the Exchange Date then, in
lieu of the foregoing, delivery shall be effected as follows: (i) in the case of
any cash required to be delivered on the Exchange Date as provided in Section
6.2, by wire transfer of immediately available funds to an account designated by
Purchaser; or (ii) in the case of any Marketable Securities elected by Seller to
be delivered in lieu of cash as provided in Section 6.2, at Seller's election,
by instruction to the Collateral Agent to deliver to the Custodian, for the
account of Purchaser, a specified number of Marketable Securities then held as
collateral under the Collateral Agreement, as provided in Section 6(g) of the
Collateral Agreement.
II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each representation
and warranty made by Seller pursuant to Section 1(b) of the Underwriting
Agreement is true and correct on the date hereof.
III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that each representation
and warranty made by Purchaser pursuant to Section 1(a) of the Underwriting
Agreement is true and correct on the date hereof.
IV.
CONDITIONS TO PURCHASER'S OBLIGATIONS
(a) The obligation of Purchaser to deliver the Firm Purchase Price at
the First Time of Delivery is subject to the condition that the purchase by the
Underwriters of the Firm Securities pursuant to the Underwriting Agreement shall
have been consummated as contemplated under the Underwriting Agreement.
(b) The obligation of Purchaser to deliver the Additional Purchase
Price at the Second Time of Delivery is subject to the condition that the
purchase by the Underwriters of the Optional Securities shall have been
consummated as contemplated under the Underwriting Agreement.
-7-
8
V.
COVENANTS
5.1 Taxes. Seller shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Agreement and the transfer and delivery of the Contract Shares pursuant hereto.
5.2 Forward Contract. Seller hereby agrees that: (i) he will not treat
this Agreement, any portion of this Agreement, or any obligation hereunder as
giving rise to any interest income or other inclusions of ordinary income; (ii)
he will not treat the delivery of any portion of the Contract Shares, cash or
Marketable Securities to be delivered pursuant to this Agreement as the payment
of interest or ordinary income; (iii) he will treat this Agreement in its
entirety as a forward contract for the delivery of such Contract Shares, cash or
Marketable Securities; and (iv) he will not take any action (including filing
any tax return or form or taking any position in any tax proceeding) that is
inconsistent with the obligations contained in clause (i) through (iii).
Notwithstanding the preceding sentence, Seller may take any action or position
required by law, provided that Seller delivers to Purchaser an unqualified
opinion of counsel, nationally recognized as expert in Federal tax matters, to
the effect that such action or position is required by a statutory change,
Treasury regulation, or applicable court decision published after the date of
this Agreement.
5.3 Limitations on Trading During Certain Days. Seller hereby agrees
that he will not buy shares of Common Stock for his own account during the 60
days prior to the Exchange Date.
5.4 Notices. Seller will cause to be delivered to Purchaser:
(a) Immediately upon the occurrence of any Event of Default hereunder
or under the Collateral Agreement, or upon Seller's obtaining knowledge that any
of the conditions or events described in paragraph (a) or (b) of Article VII
shall have occurred with respect to the Company, notice of such occurrence; and
(b) In case at any time prior to the Exchange Date Seller receives
notice, or otherwise obtains knowledge, that any event requiring that an
adjustment be effected pursuant to Article VI hereof shall have occurred or be
pending, then Seller shall promptly cause to be delivered to Purchaser a notice
-8-
9
identifying such event and stating, if known to Seller, the date on which such
event is to occur and, if applicable, the record date relating to such event.
Seller shall cause further notices to be delivered to Purchaser if Seller shall
subsequently receive notice, or otherwise obtain knowledge, of any further or
revised information regarding the terms or timing of such event or any record
date relating thereto.
5.5 Further Assurances. From time to time on and after the date
hereof through the Exchange Date, each of the parties hereto shall use its or
his reasonable best efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary, proper and advisable to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof, including (i)
using reasonable best efforts to remove any legal impediment to the consummation
of such transactions and (ii) the execution and delivery of all such deeds,
agreements, assignments and further instruments of transfer and conveyance
necessary, proper or advisable to consummate and make effective the transactions
contemplated by the Agreement in accordance with the terms and conditions
hereof.
VI.
ADJUSTMENT OF EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE
6.1 Dilution Adjustments. The Exchange Rate, Appreciation Threshold
Price and Initial Price shall be subject to adjustment from time to time as
follows:
(a) Stock Dividends, Splits, Reclassifications, Etc. If the Company
shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect to
Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock into a
greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares; or
(iv) issue by reclassification of shares of its Common Stock any
shares of other common stock of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common
-9-
10
Stock (or in the case of a reclassification referred to in clause (iv) above,
the number of shares of other common stock of the Company issued pursuant
thereto), or the fraction thereof, that a holder who held one share of Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Threshold Price and
Initial Price shall also be adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Company shall, after the date
hereof, issue, or declare a record date in respect of an issuance of, rights or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Then-Current
Market Price of the Common Stock (other than rights to purchase Common Stock
pursuant to a plan for the reinvestment of dividends or interest), then, in each
such case, the Exchange Rate shall be multiplied by a Dilution Adjustment equal
to a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately prior to the time the adjustment is effected by
reason of the issuance of such rights or warrants, plus the number of additional
shares of Common Stock offered for subscription or purchase pursuant to such
rights or warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding immediately prior to the time the adjustment is
effected, plus the number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase pursuant to such rights or warrants would
purchase at the Then-Current Market Price of the Common Stock, which shall be
determined by multiplying the total number of shares so offered for subscription
or purchase by the exercise price of such rights or warrants and dividing the
product so obtained by such Then-Current Market Price. To the extent that,
after the expiration of such rights or warrants, the shares of Common Stock
offered thereby shall not have been delivered, the Exchange Rate shall be
further adjusted to equal the Exchange Rate which would have been in effect had
such adjustment for the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Common Stock actually
delivered. The Appreciation Threshold Price and Initial Price shall also be
adjusted in the manner described in paragraph (e).
(c) Distributions of Other Assets. If the Company shall, after the date
hereof, declare or pay a dividend or make a distribution to all holders of
Common Stock, in either case, of evidences of its indebtedness or other non-cash
assets (excluding any dividends or distributions referred to in paragraph (a)
above) or shall issue to all holders of Common Stock rights or warrants to
subscribe for or purchase any of its securities (other than rights or warrants
referred to in paragraph (b)
-10-
11
above), then, in each such case, the Exchange Rate shall be multiplied by a
Dilution Adjustment equal to a fraction, of which the numerator shall be the
Then-Current Market Price per share of the Common Stock, and of which the
denominator shall be such Then-Current Market Price per share less the fair
market value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator) as of the time the
adjustment is effected of the portion of the assets or evidences of indebtedness
so distributed or of such subscription rights or warrants applicable to one
share of Common Stock. The Appreciation Threshold Price and Initial Price shall
also be adjusted in the manner described in subparagraph (e).
(d) Cash Dividends; Excess Purchase Payments. If, after the date
hereof, the Company declares a record date in respect of a distribution of cash
(other than any Permitted Dividend, any cash distributed in consideration of
fractional shares of Common Stock and any cash distributed in a Reorganization
Event), by dividend or otherwise, to all holders of Common Stock, or makes an
Excess Purchase Payment, then the Exchange Rate will be multiplied by a Dilution
Adjustment equal to a fraction, of which the numerator shall be the Then-Current
Market Price of the Common Stock on such record date, and of which the
denominator shall be such Then-Current Market Price less the amount of such
distribution applicable to one share of Common Stock which would not be a
Permitted Dividend (or in the case of an Excess Purchase Payment, less the
aggregate amount of such Excess Purchase Payment for which adjustment is being
made at such time divided by the number of shares of Common Stock outstanding on
such record date). For purposes of these adjustments, (A) "Permitted Dividend"
means any quarterly cash dividend in respect of the Common Stock, other than a
quarterly cash dividend that exceeds the immediately preceding quarterly cash
dividend, and then only to the extent that the per share amount of such dividend
results in an annualized dividend yield on the Common Stock in excess of ____%
and (B) "Excess Purchase Payment" means the excess, if any, of (x) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator, whose determination
shall be final) of all other consideration paid by the Company with respect to
one share of Common Stock acquired in a tender offer or exchange offer by the
Company, over (y) the Then-Current Market Price of the Common Stock. The
Appreciation Threshold Price and Initial Price shall also be adjusted in the
manner described in subparagraph (e).
(e) Corresponding Adjustments to Initial Price, Appreciation Threshold
Price and Closing Price; Change in Principal Market. (i) If any adjustment is
made to the Exchange Rate pursuant to paragraph (a), (b), (c) or (d) of this
Section 6.1, an adjustment shall also be made to the Appreciation
-11-
12
Threshold Price and the Initial Price. The required adjustment shall be made by
dividing each of the Appreciation Threshold Price and the Initial Price by the
relevant Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the Current
Market Price, the Then-Current Market Price or the Transaction Value, there
shall occur any event requiring an adjustment to be effected pursuant to this
Section 6.1, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall be
effected:
(i) in the case of any dividend, distribution or issuance, at the
opening of business on the Business Day next following the record date for
determination of holders of Common Stock entitled to receive such dividend,
distribution or issuance or, if the announcement of any such dividend,
distribution or issuance is after such record date, at the time such
dividend, distribution or issuance shall be announced by the Company;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the Company
shall announce, at or prior to the time it commences the relevant share
repurchase, the repurchase price per share for shares proposed to be
repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment, on the date
that the holders of the repurchased shares become entitled to payment in
respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
Section 6.1 shall subsequently be cancelled by
-12-
13
the Company, or such dividend, distribution, issuance or repurchase shall fail
to receive requisite approvals or shall fail to occur for any other reason,
then, upon such cancellation, failure of approval or failure to occur, the
Exchange Rate shall be further adjusted to the Exchange Rate which would then
have been in effect had adjustment for such event not been made. If a
Reorganization Event shall occur after the occurrence of one or more events
requiring an adjustment pursuant to this Section 6.1, the Dilution Adjustments
previously applied to the Exchange Rate in respect of such events shall not be
rescinded but shall be applied to the new Exchange Rate provided for under
Section 6.2.
6.2 Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company, or any surviving
entity or subsequent surviving entity of the Company (a "Company Successor"),
with or into another entity (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), (ii) any
sale, transfer, lease or conveyance to another corporation of the property of
the Company or any Company Successor as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the Company or any
Company Successor with another corporation (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company or any Company Successor (any such event described in clause (i), (ii),
(iii) or (iv), a "Reorganization Event"), the Exchange Rate shall be adjusted so
that on the Exchange Date Purchaser shall receive, in lieu of the Contract
Shares, cash in an amount equal to the product of (x) the Firm Share Base Amount
plus the Additional Share Base Amount (if any) and (y)(i) if the Transaction
Value is less than the Appreciation Threshold Price but equal to or greater than
the Initial Price, the Initial Price, (ii) if the Transaction Value is equal to
or greater than the Appreciation Threshold Price, _________ multiplied by the
Transaction Value, and (iii) if the Transaction Value is less than the Initial
Price, the Transaction Value. Notwithstanding the foregoing, if any Marketable
Securities are received by holders of Common Stock in such Reorganization Event,
Seller may, at its option, in lieu of delivering cash as described above,
deliver an equivalent amount (based on the value determined in accordance with
clause (z) of the following paragraph) of Marketable Securities, but not
exceeding, as a percentage of the total consideration required to be delivered,
the percentage of the total Transaction Value attributable to such Marketable
Securities.
"Transaction Value" means the sum of: (x) for any cash received in any
such Reorganization Event, the amount of cash
-13-
14
received per share of Common Stock; (y) for any property other than cash or
Marketable Securities received in any such Reorganization Event, an amount equal
to the market value on the date the Reorganization Event is consummated of such
property received per share of Common Stock, as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Administrator; and (z) for any Marketable Securities received in any such
Reorganization Event, an amount equal to the average Closing Price per share of
such Marketable Securities for the Calculation Period of 20 Trading Days
immediately prior to the Exchange Date multiplied by the number of such
Marketable Securities received for each share of Common Stock; provided that if
no Closing Price for such Marketable Securities may be determined for one or
more (but not all) of such Trading Days such Trading Day shall be disregarded in
the calculation of such average Closing Price (but no additional trading days
shall be added to the Calculation Period). If no Closing Price for the
Marketable Securities may be determined for all such Trading Days, the
calculation in the preceding clause (z) shall be based on the most recently
available Closing Price for the Marketable Securities prior to such 20 Trading
Days.
"Marketable Securities" means any common equity securities listed on a
U.S. national securities exchange or reported by The Nasdaq National Market. The
number of shares of any Marketable Securities included in the calculation of
Transaction Value pursuant to the preceding clause (z) shall be subject to
adjustment if any event that would, had it occurred with respect to the Common
Stock or the Company, have required an adjustment pursuant to Section 6.1, shall
occur with respect to such Marketable Securities or the issuer thereof
subsequent to the date the Reorganization Event is consummated. Adjustment for
such subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1.
VII.
ACCELERATION
If one or more of the following events (each an "Event of Default")
shall occur:
(a) Seller shall commence a voluntary case or other proceeding seeking
a liquidation, reorganization or other relief with respect to himself or his
debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of him or any substantial part of his property, or
shall consent to any such relief or to the appointment of or taking possession
by any such official in
-14-
15
an involuntary case or other proceeding commenced against him, or shall take any
action to authorize any of the foregoing;
(b) an involuntary case or other proceeding shall be commenced against
the Seller seeking liquidation, reorganization or other relief with respect to
him or his debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of him or any substantial part
of his property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall
be entered against the Seller under the federal bankruptcy laws as now or
hereafter in effect; or
(c) a Collateral Event of Default within the meaning of the Collateral
Agreement;
then, upon the occurrence of any such event, an Acceleration Date shall occur,
and Seller shall become obligated to deliver, immediately upon receipt of the
Acceleration Amount Notice (as defined below), the Acceleration Amount of Common
Stock. The "Acceleration Amount" means the quotient obtained by dividing: (i)
the Aggregate Acceleration Value, as defined below, by (ii) the Current Market
Price on the Acceleration Date. If a Reorganization Event shall have occurred on
or before the Acceleration Date, then in lieu of the Acceleration Amount of
Common Stock, Seller shall deliver cash, Marketable Securities or a combination
thereof having an aggregate value, based on the Closing Price per share of the
Marketable Securities on the Acceleration Date, equal to the Aggregate
Acceleration Value; provided that the percentage of such aggregate value that
may be delivered in the form of Marketable Securities shall not exceed the
percentage of the Transaction Value that would be attributable to Marketable
Securities if the Exchange Date were the Acceleration Date.
The "Aggregate Acceleration Value" means the product obtained by
multiplying: (i) the quotient obtained by dividing (A) the Acceleration Value by
(B) 1,000 by (ii) the sum of the Firm Share Base Amount and the Additional Share
Base Amount (if any); except that, if no quotations for the determination of the
Acceleration Value are obtained as described below, the Aggregate Acceleration
Value shall be (A) the Current Market Price on the Acceleration Date times the
number of shares of Common Stock that would be required to be delivered by
Seller on such date under this Agreement if the Exchange Date were the
Acceleration Date or (B) after a Reorganization Event, the value of the
alternative consideration that would be required to be delivered by Seller on
such date under this Agreement if the Exchange Date were the Acceleration Date.
-15-
16
The "Acceleration Value" means an amount determined on the basis of
quotations from Independent Dealers, determined as follows. Each quotation will
be for the amount that would be paid to the relevant Independent Dealer in
consideration of an agreement between Purchaser and such Independent Dealer that
would have the effect of preserving Purchaser's right to receive the payments
and deliveries that Purchaser would, but for the occurrence of the Acceleration
Date, have been entitled to receive after the Acceleration Date under Article I
hereof (taking into account any adjustments to the Exchange Rate that may have
been effected on or prior to the Acceleration Date), provided that, for purposes
of determining the payments and deliveries to which Purchaser is entitled under
Article I hereof, the Additional Share Base Amount shall be redefined to be zero
and the Firm Share Base Amount shall be redefined to be 1,000. On or as soon as
reasonably practicable following the Acceleration Date, Purchaser will request
each Independent Dealer to provide its quotation as soon as reasonably
practicable, but in any event within two Business Days. Purchaser shall compute
the Acceleration Value upon receipt of each Independent Dealer's quotation,
provided that if, at the close of business on the fourth Business Day following
the Acceleration Date, Purchaser shall have received quotations from fewer than
four of the Independent Dealers, Purchaser shall compute the Acceleration Value
using the quotations, if any, it shall have received at or prior to such time.
If four quotations are provided, the Acceleration Value will be the arithmetic
mean of the two quotations remaining after disregarding the highest and lowest
quotations. (For this purpose, if more than one quotation has the same highest
or lowest value, then one of such quotations shall be disregarded.) If two or
three quotations are provided, the Acceleration Value will be the arithmetic
mean of such quotations. If one quotation is provided, the Acceleration Value
will be equal to such quotation. If no quotations are provided, the Acceleration
Value will not be determined and the Aggregate Acceleration Value will be
determined as provided above.
"Independent Dealers" means four nationally recognized independent
investment banking firms selected by the Administrator.
As promptly as reasonably practicable after receipt of the quotations
on which the Acceleration Value is based (or, as the case may be, after failure
to receive any such quotations within the time period prescribed above)
Purchaser shall deliver to Seller a notice (the "Acceleration Amount Notice")
specifying the Acceleration Amount of Common Stock (or, after a Reorganization
Event, the amount of cash and marketable Securities) required to be delivered by
Seller. Purchaser and Seller agree that the Aggregate Acceleration Value is a
reasonable pre-estimate of loss and not a penalty. Such amount
-16-
17
is payable for the loss of bargain and Purchaser will not be entitled to recover
additional damage as a consequence of loss resulting from an Event of Default.
VIII.
MISCELLANEOUS
8.1 Adjustments of Exchange Rate; Selection of Independent Investment
Banking Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI hereof and shall furnish
Seller notice of any such adjustment and shall provide Seller reasonable
opportunity to review the calculations pertaining to any such adjustment. If,
pursuant to the terms and conditions hereof, the Administrator shall be required
to retain a nationally recognized independent investment banking firm for any
purpose provided herein, such nationally recognized independent investment
banking firm shall be selected and retained by the Administrator only after
consultation with Seller.
8.2 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard forms of telecommunication. Notices to Purchaser shall be directed
to it in care of the Administrator for Purchaser,
__________________________, _____________________________________ __________,
Telecopy No: (_____) _____-________, attention __________________]; notices to
Seller shall be directed to him at ___________________________________,
Attention: ___________.
8.3 Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. To the
extent permitted by law, the unenforceability or invalidity of any provision or
provisions of this Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
8.4 Entire Agreement. Except as expressly set forth herein, this
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, among the parties with respect to the
subject matter of this Agreement.
8.5 Amendments; Waivers. Any provision of this Agreement may be amended
or waived if, and only if, such amendment or waiver is in writing and signed, in
the case of an amendment, by Purchaser and Seller or, in the case of a waiver,
by the party against whom the waiver is to be effective. No
-17-
18
failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
8.6 No Third Party Rights; Successors and Assigns. This Agreement is
not intended and shall not be construed to create any rights in any person other
than Seller and Purchaser and their respective successors and assigns and no
person shall assert any rights as third party beneficiary hereunder. Whenever
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party. All the covenants and
agreements herein contained by or on behalf of the Seller and Purchaser shall
bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of Purchaser and its successors and assigns.
8.7 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
-18-
19
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
_________________________________________
_________________________________________
_________________________________________
____________________
_________________________________________
PURCHASER:
[_________________________________, as
trustee,
__________________________________, as
trustee, and
__________________________________, as
trustee,
each as trustee of Second Automatic
Common Exchange Security Trust
-19-
20
SCHEDULE I
EXTENSION STRIPS
All terms specified are for stripped principal or interest components
of U.S. Treasury debt obligations.
First Time of Delivery
Second Time of Delivery
-20-
