EXHIBIT 3
EXECUTION COPY
FORWARD PURCHASE AGREEMENT
Between
i-STT Investments (Bermuda) Ltd.
As Seller,
and
Credit Suisse First Boston Capital LLC
As Purchaser
Dated as of
November 9, 2005
FORWARD PURCHASE AGREEMENT
THIS AGREEMENT is made as of this November 9, 2005 among i-STT
Investments (Bermuda) Ltd., an exempted company incorporated under the law of
Bermuda ("Seller") and Credit Suisse First Boston Capital LLC, a limited
liability company organized under the law of Delaware ("Purchaser").
WHEREAS, Seller owns shares of Common Stock, $.001 par value (the
"Common Stock") of Equinix, Inc., a Delaware corporation (including its
successors) (the "Company");
WHEREAS, Purchaser's affiliate Credit Suisse First Boston (USA),
Inc. (the "SAILS Issuer") has publicly offered up to 4,300,000 SAILS (Shared
Appreciation Income Linked Securities) (the "SAILS"), the terms of which
contemplate delivery by the SAILS Issuer to the holders thereof of a number of
shares of Common Stock (or cash in lieu thereof), on November 15, 2008 (as
further defined herein, the "Exchange Date");
WHEREAS, in exchange for certain consideration to be paid by
Purchaser hereunder, Purchaser and Seller desire to provide for the future
acquisition, sale and delivery to Purchaser of the aggregate number of shares of
Common Stock contemplated to be delivered by the SAILS Issuer in respect of the
SAILS on the Settlement Dates, at a price to be established under this
Agreement;
WHEREAS, Seller has agreed to enter into a Collateral Agreement (the
"Collateral Agreement") to be dated as of the date hereof, among Purchaser,
Seller and Credit Suisse First Boston LLC, as collateral agent (the "Collateral
Agent"), to grant Purchaser a security interest in the shares of Common Stock
specified therein and in certain other circumstances certain other collateral to
secure the obligations of Seller hereunder;
WHEREAS, the SAILS Issuer has agreed, pursuant to an agreement,
dated as of the date hereof, consisting of a Part A, a Part B, an Underwriting
Agreement -- Debt Terms attached thereto and the other exhibits and schedules
attached thereto (the "Terms Agreement"), among the SAILS Issuer, Seller, the
Company and Credit Suisse First Boston LLC, as representative of the several
underwriters named therein (the "Underwriters"), to issue and sell the SAILS to
the Underwriters.
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:
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"Acceleration Date" has the meaning provided in Article VII.
"Acceleration Value" has the meaning provided in Section 7.1.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a partner in, or a trustee, settlor, beneficiary, member, manager,
director or officer of, such Person and, with respect to any Person that is a
natural person, further includes such Person's immediate family members,
including his father, mother, spouse and children, the spouses of his children,
his siblings and their spouses and children. For purposes of this definition,
"control" (including the terms "controlled by" or "under common control with")
means, as to any Person, the possession, direct or indirect, of the power to
vote ten percent or more of the corporate or beneficial interests of such Person
(or of the securities having ordinary voting power for the election of directors
of such Person), or the power to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting securities or
by contract or otherwise.
"Anti-Takeover Rights" has the meaning provided in Section 6.5.
"Averaged Value" means, for any item of Reference Property as of any
date: (i) if the item consists of cash, the amount of cash; (ii) if the item
consists of a Transferable Exchangeable Security, its Current Value as of such
date; and (iii) if the item consists of a Reference Security, the average of the
Volume Weighted Average Price of the Reference Security on each of the 20
Trading Days immediately prior to, but not including, the second Trading Day
preceding that date.
"Bankruptcy Code" has the meaning provided in Section 8.7.
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which the Exchange for the Common Stock (or for any other Reference
Security), banking institutions or trust companies in the City of New York or
banking institutions in the Republic of Singapore are authorized or obligated by
law or executive order to close.
"Calculation Agent" means Credit Suisse First Boston Capital LLC,
acting in its capacity as such hereunder.
"Cash Consideration Percentage" has the meaning specified in Section
7.2(a)(ii).
"Cash Delivery Option" has the meaning provided in Section 1.3(d).
"Cash Merger" has the meaning specified in Section 7.2(a)(ii).
"Cash Merger Acceleration Date" has the meaning provided in Section
7.2(b).
"Cash Settlement Notice Date" has the meaning provided in Section
1.3(d).
"Closing Price" means, for any Reference Security on any date of
determination, (i) the closing sale price of the Reference Security on the
Exchange for that Reference Security at the close of regular session trading on
that Exchange (without regard to extended trading hours on that Exchange, if
any) on that date; (ii) if the Closing Price of the Reference Security
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cannot be determined in the manner specified above, the last reported sale price
of the Reference Security on the Exchange for that Reference Security on that
date (without regard to extended trading hours on that Exchange, if any); (iii)
if the Closing Price for that Reference Security cannot be determined in the
manner specified above, the last quoted bid price of the Reference Security in
the over-the-counter market on that date as reported by Pink Sheets LLC; and
(iv) if the Closing Price of the Reference Security cannot be determined in the
manner specified above, the average, as determined by the Calculation Agent, of
the bid prices for the Reference Security obtained from as many recognized
dealers of such Reference Security, but not exceeding three, as will make such
bid prices available to the Calculation Agent.
"Collateral" has the meaning provided in the Collateral Agreement.
"Collateral Agent" has the meaning provided in the recitals of this
Agreement.
"Collateral Agreement" has the meaning provided in the recitals of
this Agreement.
"Collateral Event of Default" has the meaning provided in the
Collateral Agreement.
"Commission" means the Securities and Exchange Commission.
"Common Stock" has the meaning provided in the recitals of this
Agreement.
"Company" has the meaning provided in the recitals of this
Agreement.
"Contract Property" has the meaning provided in Section 1.1(a).
"Current Value" means, for any item of Reference Property as of any
date of determination: (i) if the item consists of cash, the amount of cash;
(ii) if the item consists of a Transferable Exchangeable Security, the greater
of zero and the amount obtained by subtracting (A) the exercise price of such
Transferable Exchangeable Security from (B) the sum of (x) the Current Value of
the Marketable Equity Securities that a holder of such Transferable Exchangeable
Security is entitled to receive as a result of its conversion, exercise or
exchange and (y) the amount of any cash such holder is entitled to receive as a
result of such conversion, exercise or exchange; (iii) if the item consists of a
Reference Security, the Closing Price of such Reference Security on the first
Trading Day preceding that date; and (iv) if the item consists of property other
than cash, Transferable Exchangeable Securities or Reference Securities, the
fair market value of that property as of 10:00 A.M., New York City time, on the
first Business Day preceding that date. The fair market value will be determined
by a nationally recognized independent investment banking firm the Calculation
Agent retains for this purpose.
"Dilution Event" means an event in which the issuer of a Reference
Security (i) subdivides or splits the outstanding units of such Reference
Security into a greater number of units, (ii) combines the outstanding units of
such Reference Security into a smaller number of units, or (iii) reclassifies
(other than a reclassification pursuant to a Reorganization Event) all of the
outstanding units of such Reference Security into units of another of such
issuer's Marketable Equity Securities.
"Distribution Event" means a distribution to all holders of Common
Stock or any other Reference Security of evidences of indebtedness, shares of
capital stock, securities, cash or
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other property (excluding any distribution that is a Dilution Event or a
Reorganization Event), the record date of which occurs (i) on or after the
Payment Date, and (ii) prior to, but excluding, the first Trading Day preceding
the Exchange Date.
"Early Termination Event" has the meaning provided in Section 7.3.
"Event of Default" has the meaning provided in Section 7.1.
"Exchange" means, for any Reference Security, the principal national
securities exchange or automated quotation system on which that Reference
Security is listed or quoted at that time.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Exchange Date" means November 15, 2008, subject to acceleration
pursuant to the terms of this Agreement.
"Exchange Rate" has the meaning provided in Section 1.1(b).
"Exchangeable Securities" means any convertible, exercisable or
exchangeable securities, including rights and warrants.
"First Settlement Date" means the Exchange Date or, if the Exchange
Date is not a Business Day, the first Business Day following the Exchange Date.
"Forward Purchase Contract Characterization" has the meaning
provided in Section 5.2(a).
"Independent Dealers" has the meaning provided in Section 7.1.
"Initial Price" has the meaning provided in Section 1.1(b).
"Lien" means any lien, mortgage, security interest, pledge, charge
or encumbrance of any kind.
"Marketable Equity Securities" means shares of common equity
securities listed on a U.S. national securities exchange or quoted on the Nasdaq
National Market.
"Merger" means any consolidation, amalgamation or merger of the
Company with or into another entity that is consummated prior to the Exchange
Date (other than (i) a consolidation, amalgamation or merger in which the
Company is the continuing corporation and in which the Common Stock outstanding
immediately prior to the consolidation, amalgamation or merger is not exchanged
for cash, securities or other property of the Company or another corporation or
(ii) a Reorganization Event to which Section 6.2(b) applies).
"Merger Consideration" has the meaning provided in Section 7.2(a).
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"Non-Transferable Exchangeable Securities" means all Exchangeable
Securities other than Transferable Exchangeable Securities.
"Parent" means i-STT Investments Pte. Ltd.
"Payment Date" has the meaning provided in Section 1.3(a).
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"Process Agent" has the meaning provided in Section 8.8.
"Purchase Price" has the meaning provided in Section 1.2.
"Purchaser" has the meaning provided in the introductory paragraph
of this Agreement.
"Reference Property" means any combination of Common Stock,
securities, cash and/or other property that will be deliverable in the aggregate
upon the exchange of the SAILS, and shall initially mean 4,300,000 shares of
Common Stock, subject to change, adjustment or reduction pursuant to the terms
of this Agreement. For the avoidance of doubt, the Reference Property
deliverable on the Settlement Dates shall not include any cash delivered by
Seller prior to the Exchange Date pursuant to Sections 6.4(a) and 7.2.
"Reference Property Per SAILS" means the number or amount of each
type of Reference Property relating to one SAILS, and shall initially mean one
share of Common Stock, subject to change, adjustment or reduction pursuant to
the terms of this Agreement. If the Reference Property includes securities, cash
or other property other than Common Stock, each type of Reference Property shall
be deemed for all purposes hereof allocated on a pro rata basis among the SAILS.
"Reference Property Value Per SAILS" means, for any date, the
aggregate Averaged Value of the Reference Property Per SAILS as of that date.
"Reference Security" means any security that is part of the
Reference Property (other than a Transferable Exchangeable Security).
"Reorganization Event" means (a) any consolidation, merger or
amalgamation of an issuer of Reference Securities with or into another entity
(other than a consolidation, merger or amalgamation in which such issuer of
Reference Securities is the continuing corporation and in which the Reference
Securities outstanding immediately prior to the consolidation, merger or
amalgamation are not exchanged for cash, securities or other property), (b) any
sale, transfer, lease or conveyance to another entity of the property of an
issuer of Reference Securities as an entirety or substantially as an entirety,
(c) (i) any statutory exchange of Reference Securities of an issuer with another
corporation, or (ii) a public offer for Reference Securities that results in a
transfer of, or an irrevocable commitment to transfer, 95% or more of the
then-outstanding Reference Securities of an issuer (excluding those Reference
Securities owned by the offeror) (in
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each case other than a reorganization event referred to in clause (a) above),
(d) any liquidation, dissolution, winding up, bankruptcy or insolvency of an
issuer of Reference Securities, or (e) any event in which the issuer of a
Reference Security reclassifies (other than a reclassification pursuant to a
Reorganization Event under another clause of this definition) all of the
outstanding units of such Reference Security into property other than another of
such issuer's Marketable Equity Securities.
"SAILS" has the meaning provided in the recitals of this Agreement.
"SAILS Issuer" has the meaning provided in the recitals of this
Agreement.
"SAILS Base Amount" means 4,300,000.
"Seller" has the meaning provided in the introductory paragraph of
this Agreement.
"Settlement Date" and "Settlement Dates" have the meaning provided
in Section 1.3(b).
"Terms Agreement" has the meaning provided in the recitals of this
Agreement.
"Threshold Appreciation Price" has the meaning provided in Section
1.1(b).
"Trading Day" means, with respect to any Reference Security or
Exchangeable Security, a day on which such Reference Security (A) is not
suspended from trading on the Exchange for that Reference Security at the close
of regular session trading on that Exchange (without regard to extended trading
hours on that Exchange, if any) and (B) has traded at least once on that
Exchange; provided that, in respect of any Exchangeable Security to which the
preceding sentence does not apply, "Trading Day" means, as applicable, a day on
which such Exchangeable Security may be exercised, exchanged or converted, or a
day on which such exchangeable security may be traded in the principal market in
which such exchangeable security is listed, quoted or traded at such time.
"Transferable Exchangeable Securities" means Exchangeable Securities
that (i) in the case of Exchangeable Securities that expire prior to the
Exchange Date and require payment as a condition to their conversion, exercise
or exchange, may, in accordance with their terms and applicable law, be
liquidated for cash by the Collateral Agent as provided in Section 6.4(b)(i)(D)
on commercially reasonable terms (as determined by the Collateral Agent in its
reasonable discretion), or (ii) in cases where clause (i) does not apply, (A)
may, in accordance with their terms and applicable law, be transferred by Seller
to Purchaser and distributed by Purchaser to holders of the SAILS, either
independently of or concurrently with any Reference Securities to be so
transferred and distributed (as determined by the Calculation Agent in its
reasonable discretion), and (B) may be delivered to the Collateral Agent in
accordance with the terms of the Collateral Agreement and in respect of which,
upon such delivery, the Purchaser will obtain a valid, first priority perfected
security interest in, and a first lien upon, such Transferable Exchangeable
Securities subject to no other Lien (as determined by the Collateral Agent in
its reasonable discretion).
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"Underwriters" has the meaning provided in the recitals of this
Agreement.
"U.S. Government Securities" means direct obligations of the United
States of America that mature on a date that is one year or less from the date
such obligations are pledged hereunder, but in any event prior to the Exchange
Date.
"Volume Weighted Average Price" means, on any date of determination
for any Reference Security, the Volume Weighted Average Price per share of such
Reference Security on the Exchange for such Reference Security as reported on
the Bloomberg terminal screen (or any successor or replacement terminal screen)
upon input into such terminal screen of the key strokes assigned to such
Reference Security; provided that, if the Bloomberg Financial Markets page does
not report such information, such price that is the Closing Price of such
Reference Security; and provided, further, that if the Volume Weighted Average
Price of the Reference Security cannot be determined in the manner specified
above, the market value of the Reference Security on that date as determined by
a nationally recognized independent investment banking firm the Calculation
Agent retains for this purpose.
ARTICLE I
SALE AND PURCHASE
1.1 Sale and Purchase.
(a) Contract Property. Upon the terms and subject to the conditions
of this Agreement, on the Exchange Date, a proportion of the Reference Property
equal to the product of the Reference Property Per SAILS, the Exchange Rate and
the SAILS Base Amount (in each case, as determined by the Calculation Agent in
accordance with the terms of this Agreement as of the Exchange Date), allocated
on a pro rata basis among the Common Stock, securities, cash and/or other
property constituting the Reference Property (such proportion of the Reference
Property, the "Contract Property"), shall be due for delivery by Seller to
Purchaser.
(b) Exchange Rate. The "Exchange Rate" shall be determined in
accordance with the following formula, subject to adjustment as a result of
certain events as provided in Article VI:
(i) if the Reference Property Value Per SAILS is greater than
$42.06 (the "Threshold Appreciation Price"), 0.8474;
(ii) if the Reference Property Value Per SAILS is less than or
equal to the Threshold Appreciation Price but is greater than $35.64 (the
"Initial Price"), a fraction equal to the Initial Price divided by the
Reference Property Value Per SAILS; and
(iii) if the Reference Property Value Per SAILS is less than
or equal to the Initial Price, 1.
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1.2 Purchase Price. The purchase price for the Contract Property
(the "Purchase Price") shall be $129,877,962.79.
1.3 Payment for and Delivery of Contract Property.
(a) Time of Delivery. Upon the terms and subject to the conditions
of this Agreement, Purchaser shall deliver to Seller the Purchase Price at
10:30AM (New York City time) on November 16, 2005 (the "Payment Date") at the
offices of Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxxxx & Xxxxxxxxx, 000
Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000, or at such other place as
shall be agreed upon by Purchaser and Seller, paid by wire transfer of Federal
(immediately available same-day) funds to an account designated by Seller,
against delivery by Seller to the Collateral Agent of the number of shares of
Common Stock and/or cash, securities and other property necessary to comply with
Seller's obligations under the Collateral Agreement.
(b) Delivery of Contract Property.
(i) Seller agrees to deliver the Contract Property to
Purchaser on the First Settlement Date and on the Business Day immediately
following the First Settlement Date (such Business Day together with the
First Settlement Date, the "Settlement Dates"), in the manner provided
below. On the first Business Day preceding the First Settlement Date, the
Calculation Agent shall notify Seller and the Collateral Agent of the type
and amount of the Contract Property to be delivered pursuant hereto. On
each Settlement Date, Seller shall deliver to Purchaser a proportion equal
to one-half of the Contract Property, allocated on a pro rata basis among
the Common Stock, securities, cash and/or other property constituting the
Contract Property; provided, however, that on the First Settlement Date,
Seller shall not deliver any fractional shares of any Reference Securities
that would otherwise be required to be delivered pursuant hereto;
provided, further, that on the second Settlement Date, Seller shall
deliver to Purchaser, in addition to any other Contract Property required
to be delivered on such Settlement Date, Reference Securities in a number
equal to the fractional shares of such Reference Securities previously
withheld pursuant to this Section 1.3(b)(i). Unless Seller elects the Cash
Delivery Option as provided in Section 1.3(d), delivery shall be effected
by: (A) delivery by the Collateral Agent to, or as directed by, Purchaser
of the shares of Common Stock, other Marketable Equity Securities and/or
Transferable Exchangeable Securities then included in the Contract
Property and held by Collateral Agent as Collateral under the Collateral
Agreement, as provided in Section 6(g) of the Collateral Agreement; and
(B) delivery by the Collateral Agent to an account designated by Purchaser
of any cash included in the Contract Property by wire transfer of Federal
(immediately available same-day) funds. The Reference Securities shall be
rounded down to the nearest whole number.
(ii) In the event that by the First Settlement Date any
collateral pledged under the Collateral Agreement in substitution for
cash, Common Stock or any other Marketable Equity Securities or
Transferable Exchangeable Securities then included in the Contract
Property has not been replaced by such number or amount of the applicable
Reference Property required to be delivered hereunder, delivery shall be
effected by delivery by the Collateral Agent to Purchaser of the market
value of the
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Contract Property required to be delivered hereunder, in the form of any
shares of such Common Stock, Marketable Equity Securities or Transferable
Exchangeable Securities then pledged by Seller, plus any cash then
included in the Contract Property, plus cash generated from the
liquidation of any U.S. Government Securities then pledged by Seller. In
such event, Seller shall be deemed to have instructed the Collateral Agent
to liquidate and turn into cash any U.S. Government Securities then
pledged by Seller under the Collateral Agreement to the extent necessary
to satisfy Seller's obligations hereunder.
(iii) On each Settlement Date, certificates representing
Common Stock, Marketable Equity Securities or Transferable Exchangeable
Securities that are part of the Contract Property to be delivered on such
Settlement Date shall be registered in Purchaser's name or in the name of
a depositary or a nominee of a depositary as requested by Purchaser,
unless such Common Stock, Marketable Equity Securities or Transferable
Exchangeable Securities are represented by one or more global certificates
registered in the name of a depositary or a nominee of a depositary or are
book entry securities, in which event Purchaser's interest in such
securities shall be noted in a manner satisfactory to Purchaser and its
counsel.
(iv) Seller's right to deliver (or cause to be delivered) to
Purchaser hereunder Common Stock, Marketable Equity Securities and/or
Transferable Exchangeable Securities shall be conditioned upon such Common
Stock, Marketable Equity Securities and Transferable Exchangeable
Securities to be so delivered being transferable (i) by Seller to
Purchaser in accordance with the provisions hereof and in accordance with
the terms of any agreement among shareholders applicable to such Common
Stock, Marketable Equity Securities or Transferable Exchangeable
Securities, and (ii) by Purchaser, following receipt from Seller, without
any restrictions not generally applicable to all holders of such Common
Stock, Marketable Equity Securities or Transferable Exchangeable
Securities, as the case may be. If the conditions set forth in the
preceding sentence shall not be satisfied with respect to any Common
Stock, Marketable Equity Securities or Transferable Exchangeable
Securities to be delivered by Seller, then, notwithstanding the provisions
hereof, Seller shall exercise the Cash Delivery Option.
(c) Beneficial Ownership. Notwithstanding anything to the contrary
in this Agreement, in no event shall Purchaser be entitled to receive, or shall
be deemed to receive, any shares of Common Stock, Marketable Equity Securities
or Transferable Exchangeable Securities if, upon such receipt of such shares of
Common Stock, Marketable Equity Securities or Transferable Exchangeable
Securities by Purchaser, its direct or indirect "beneficial ownership" (within
the meaning of Section 16 of the Exchange Act and the rules promulgated
thereunder) would be equal to or greater than 9.9% of any class of any "equity
security" (within the meaning of the Exchange Act) which is registered pursuant
to Section 12 of the Exchange Act, provided that (i) Seller shall have no
responsibility under this Section 1.3(c) for determining the number of shares of
any class of any equity security beneficially owned by Purchaser, and (ii) if
Seller complies with its obligations hereunder, Seller shall not be responsible
if Purchaser obtains direct or indirect beneficial ownership in excess of 9.9%
of any class of any equity security which is registered pursuant to Section 12
of the Exchange Act. If any delivery owed to Purchaser hereunder is not made, in
whole or in part, as a result of this provision, Seller's obligation to
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make such delivery shall not be extinguished and Seller shall make such delivery
as promptly as practicable after (but in no event later than one Business Day
after) and to the extent that Purchaser gives notice to Seller that such
delivery would not result in Purchaser directly or indirectly so beneficially
owning in excess of 9.9% of any class of any equity security which is registered
pursuant to Section 12 of the Exchange Act.
(d) Cash Delivery Option. At its option and subject to the notice
requirement in this Section 1(d), Seller may deliver to Purchaser, no later than
11:00AM (New York City time) on the First Settlement Date, in lieu of delivering
the Contract Property, an amount in cash equal to the product of the Reference
Property Value Per SAILS, the Exchange Rate and the SAILS Base Amount (in each
case, determined by the Calculation Agent in accordance with the terms of this
Agreement as of the Exchange Date, based on the composition of the Reference
Property on the Exchange Date), paid by wire transfer to an account designated
by Purchaser, in Federal (immediately available) same-day funds (the "Cash
Delivery Option"). Seller may elect the Cash Delivery Option in respect of all,
but not less than all, of the Contract Property, by written notice to Purchaser
and the Collateral Agent no later than 30 Business Days prior to the Exchange
Date (the "Cash Settlement Notice Date"). If Seller elects the Cash Delivery
Option and so notifies Purchaser, Seller shall pledge to Purchaser and deliver
to the Collateral Agent, no later than the second Business Day following the
Cash Settlement Notice Date, additional Collateral consisting of cash in an
amount equal to 20% of the product of (i) the Reference Property Value Per
SAILS, determined by the Calculation Agent as of the Cash Settlement Notice
Date, and (ii) the SAILS Base Amount. Seller shall make such pledge and delivery
of additional Collateral in accordance with the terms of the Collateral
Agreement. Seller represents and warrants to Purchaser that Seller and Parent
have entered into a preliminary understanding pursuant to which, if Seller
elects the Cash Delivery Option and Seller does not have sufficient cash to
satisfy its payment obligation under Section 1.3(d) of this Agreement, Parent
will provide cash to Seller in an amount at least sufficient to allow Seller to
satisfy its payment obligation under Section 1.3(d) of this Agreement. Seller
agrees that, if Seller elects the Cash Delivery Option, the terms of such
preliminary understanding shall be finalized and memorialized prior to the Cash
Settlement Notice Date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each representation
and warranty made by Seller or Parent in the Terms Agreement is true and correct
on the date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1. Purchaser represents and warrants to Seller that:
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(a) each representation and warranty made by the SAILS Issuer in the
Terms Agreement is true and correct on the date hereof; and
(b) the Purchaser is not a party to any material agreement or
instrument other than this Agreement, the Collateral Agreement, the Terms
Agreement, and any instruments, documents or agreements ancillary to or in
furtherance thereof and the transactions contemplated thereby.
ARTICLE IV
CONDITIONS TO PURCHASER'S AND SELLER'S OBLIGATIONS
4.1 Conditions to Purchaser's Obligations. The obligation of
Purchaser to deliver the Purchase Price on the Payment Date is subject to the
satisfaction of the following conditions:
(a) the purchase by the Underwriters of the SAILS pursuant to the
Terms Agreement shall have been consummated as contemplated under the Terms
Agreement;
(b) the representations and warranties of Seller contained in
Article II hereof shall be true and correct as of the Payment Date; and
(c) the Collateral Agreement shall have been executed by Seller and
Seller shall have delivered to the Collateral Agent the Collateral required to
be delivered thereunder.
4.2 Conditions to Seller's Obligations. The obligation of Seller to
deliver the Collateral required to be delivered on the Payment Date pursuant to
this Agreement and the Collateral Agreement is subject to the satisfaction of
the following conditions:
(a) the purchase by the Underwriters of the SAILS pursuant to the
Terms Agreement shall have been consummated as contemplated under the Terms
Agreement;
(b) the representations and warranties of Purchaser contained in
Article III hereof shall be true and correct as of the Payment Date; and
(c) the Collateral Agreement shall have been executed by Purchaser
and the Collateral Agent.
ARTICLE V
COVENANTS
5.1 Taxes. Seller shall pay or cause to be paid all transfer and
other similar taxes, if any, imposed on the transfer and sale of the shares of
Common Stock being sold or pledged by Seller, and 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 any
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other Contract Property, cash, securities or other property pursuant hereto, it
being understood that Purchaser or the SAILS Issuer will pay any stock transfer
taxes payable on the delivery of any Common Stock, Marketable Equity Securities
or Transferable Exchangeable Securities by Purchaser to the SAILS Issuer or by
the SAILS Issuer to the holders of the SAILS.
5.2 Forward Purchase Contract. Each of Purchaser and Seller hereby
agrees, to the extent relevant for all U.S. federal income tax purposes, except
as required by law, that:
(a) it will treat this Agreement in its entirety as a forward
purchase contract for the delivery of the Contract Property on the Exchange Date
(including as a result of acceleration or otherwise) (the "Forward Purchase
Contract Characterization"), under the terms of which contract (i) at the time
of issuance of the SAILS Purchaser deposits irrevocably with Seller a fixed
amount of cash equal to the Purchase Price to assure the fulfillment of
Purchaser's purchase obligation described in clause (ii) below, which deposit
will unconditionally and irrevocably be applied at the Exchange Date to satisfy
such obligation and (ii) at the Exchange Date such cash deposit unconditionally
and irrevocably will be applied by Seller in full satisfaction of Purchaser's
obligation under the forward purchase contract, and Seller will deliver to
Purchaser the Contract Property that Purchaser is entitled to receive at that
time pursuant to the terms of this Agreement (subject to Seller's right to
deliver cash and/or other property as provided in this Agreement in lieu of the
Contract Property);
(b) it will treat, consistent with the above characterization,
amounts paid to Seller in respect of this Agreement as allocable in their
entirety to the amount of the cash deposit attributable to such Agreement;
(c) it 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 (in the case of Purchaser) or as giving rise to
any interest expense or other deductions of ordinary expense (in the case of
Seller);
(d) it will not treat the delivery of any portion of the Contract
Property, cash or securities to be delivered pursuant to this Agreement as the
payment of interest or ordinary income; and
(e) it 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 clauses (a) through (d), unless such action or position
is required by an applicable taxing authority or unless such action or position
is required by a change in statutory law or regulation or by a judicial or other
authoritative interpretation of the law enacted, promulgated or published after
the date of this Agreement.
5.3 Limitations on Trading During Certain Days. Seller hereby agrees
to cause Parent and each of Parent's Affiliates of which Parent owns, directly
or indirectly, fifty percent or more of the equity interests, not to buy or sell
shares of Common Stock of the Company for its own account during the 60 days
prior to November 15, 2008, except for (i) sales or purchases of Common Stock
pursuant to the exercise of any stock options or awards or upon the exercise or
conversion of any security convertible into Common Stock, provided that Parent
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and any such Affiliate do not resell any shares acquired upon exercise or
conversion during such 60-day period, and (ii) sales or purchases of Common
Stock that occur or that are deemed to occur in connection with any dividend,
distribution or other event pursuant to Articles VI and VII hereof. For the
avoidance of doubt, this provision shall not apply upon any acceleration of this
Agreement pursuant to Section VII.
5.4 Notices.
(a) Promptly upon, and in any case within two Business Days of, the
occurrence of any Event of Default hereunder or under the Collateral Agreement,
Seller shall cause to be delivered to the Calculation Agent a notice identifying
such Event of Default and stating, if known to Seller, the date on which such
Event of Default occurred.
(b) In case at any time prior to the Exchange Date Seller or Parent
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, and in any case within two Business
Days, cause to be delivered to the Calculation Agent a notice identifying such
event and stating, if known to Seller or Parent, the date on which such event
has occurred or is to occur and, if applicable, the record date relating to such
event. Seller or Parent shall cause further notices to be delivered to the
Calculation Agent if Seller or Parent shall subsequently receive notice, or
shall otherwise obtain knowledge, of any further or revised information
regarding the terms or timing of such event or any record date relating thereto.
For purposes of this Agreement, "knowledge" as it relates to Seller or Parent
means any director of Parent obtaining actual knowledge of any event or
circumstance.
(c) Seller shall furnish to the Calculation Agent as soon as
practicable and in any event within twenty calendar days after Seller or Parent
shall become aware of the occurrence of any material failure by Seller to comply
with or perform any agreement or obligation contained in this Agreement or the
Collateral Agreement (other than a failure with respect to which notice has
already been given under (a) or (b) above), a statement of Seller describing
such failure and setting forth details of such failure and the action which
Seller has taken and proposes to take with respect thereto.
5.5. Affirmative Covenant. During the term of this Agreement, Seller
covenants and agrees that it will comply in all material respects with all
applicable laws, rules, regulations and orders to the extent noncompliance would
have a material adverse effect on the ability of the Seller to perform its
obligations hereunder or under the Collateral Agreement.
5.6 Further Assurances. From time to time on and after the date
hereof through the Exchange Date (or, if later, the date on which this Agreement
has been fully performed by Purchaser and Seller), each of the parties hereto
shall use its commercially reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things reasonably necessary, proper
and advisable to consummate and make effective as promptly as practicable the
transactions contemplated by this Agreement and the Collateral Agreement in
accordance with the terms and conditions hereof and thereof, including (i) using
commercially reasonable 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
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further instruments of transfer and conveyance reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement and the Collateral Agreement in accordance with the terms and
conditions hereof and thereof.
5.7. Corporate Covenants. Seller covenants and agrees that, so long
as any of its obligations under this Agreement remain outstanding:
(a) it will continue to be validly existing as an exempted company
in good standing under the law of Bermuda and to be a wholly owned subsidiary of
Parent;
(b) it will not engage in any activities other than (i) to own
Common Stock, Marketable Equity Securities and/or other Collateral pledged
pursuant to the Collateral Agreement, and, subject to the limitations under this
Agreement and the Collateral Agreement, to exercise any rights available to it
as a holder of such shares of Common Stock, Marketable Equity Securities and/or
other Collateral, (ii) to enter into and perform all of its obligations under,
and exercise any rights or remedies with respect to, this Agreement, the
Collateral Agreement, the Terms Agreement and any other agreements or
arrangements incidental thereto, or contemplated thereby, (iii) to transfer,
remit or pay out to any of its Affiliates, by way of dividend or redemption of
capital (or, subject to Section 5(f) of the Collateral Agreement, by way of
loan), the Purchase Price received from Purchaser pursuant to Section 1.3(a) of
this Agreement, or any other amounts that may be received in connection with the
transactions contemplated by the agreements or arrangements referred to in
clause (ii) above, (iv) to execute, deliver and perform its obligations under
any instruments, documents or agreements ancillary to or in furtherance of any
of the foregoing, (v) to engage in any lawful act or activity and to exercise
any powers permitted to exempted companies organized under the laws of Bermuda
that are related or incidental to and necessary, convenient or advisable for the
accomplishment of the foregoing, including without limitation, (1) maintaining
its corporate existence and (2) engaging and transacting with legal, taxing and
other regulatory authorities in any applicable jurisdictions, (vi) to pay, and
incur indebtedness in connection with, any of the foregoing, and in connection
with any ordinary fees and expenses of operation, including ordinary fees and
expenses of directors, accountants and counsel, and ordinary fees and expenses
associated with any required filings and registrations and (vii) any other
activities consented to by the Purchaser, such consent not to be unreasonably
withheld;
(c) as promptly as reasonably practicable following the execution of
this Agreement, it will amend its memorandum of association to incorporate
therein limitations of its corporate powers and objects substantially identical
to the limitations in clause (b) above, and it will comply in all material
respects with the requirements and limitations of its corporate powers and
objects set forth in its memorandum of association and, except as provided in
this clause (c), will not amend such requirements without the prior written
consent of Purchaser;
(d) it will at all times maintain its registered office separate and
apart from that of Parent;
(e) it will at all times hold itself out, and Parent will at all
times hold Seller out, to the public (including any creditors) as a separate and
distinct entity operating under
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Seller's own name and Seller will act solely under its own corporate name and
through its authorized officers and agents;
(f) all customary corporate formalities regarding the corporate
existence of Seller will be observed; and
(g) except as provided in Section 1.3(d), neither Seller, on the one
hand, nor STT Communications Ltd. or any of STT Communications Ltd.'s Affiliates
of which STT Communications Ltd. owns, directly or indirectly, fifty percent or
more of the equity interests, on the other hand, will guarantee the debts or
obligations of the other, will pledge, will grant a security interest in or lien
upon its assets for the benefit of the other, or will be or will hold itself out
to be responsible for the debts or obligations of the other or the decisions or
actions respecting the daily business and affairs of the other.
ARTICLE VI
ADJUSTMENTS
6.1 Anti-Dilution Adjustments. If a Dilution Event shall occur prior
to the first Trading Day preceding the Exchange Date, the Reference Property Per
SAILS shall be adjusted on the effective date of the Dilution Event to include,
in lieu of the units of the Reference Security affected by such Dilution Event
that were part of the Reference Property Per SAILS immediately before the
effective date of the Dilution Event, the number of units of the Reference
Security or other security of the issuer that a holder of the Reference Security
would have been entitled to receive as a result of the Dilution Event had the
holder held, immediately prior to that Dilution Event, the number of units of
the Reference Security that were part of the Reference Property Per SAILS
immediately before the effective date of the Dilution Event.
6.2. Adjustment for Reorganization Event. If a Reorganization Event
shall occur prior to the first Trading Day preceding the Exchange Date, then:
(a) If U.S. tax counsel retained by Seller and reasonably acceptable
to the Collateral Agent shall have delivered, no later than five Trading Days
prior to the effective date of the Reorganization Event, a legal opinion in form
and substance satisfactory to the Collateral Agent to the effect that
withholding under the Internal Revenue Code of 1986, as amended, is not required
in respect of any cash, securities or other property to be received by the
Collateral Agent in respect of any Reference Security as a result of such
Reorganization Event,
(i) the Reference Property shall be adjusted on the effective
date of the Reorganization Event to include, in lieu of (or in addition
to, as the case may be) the units of the Reference Security affected by
such Reorganization Event that were part of the Reference Property
immediately before the effective date of the Reorganization Event, a
number or amount of cash and/or Marketable Equity Securities equal to the
product of (x) the number or amount of any cash (other than any cash
required to be delivered to Purchaser pursuant to Section 7.2 following a
Cash Merger) and/or Marketable Equity Securities that a holder of the
Reference Security affected by such
15
Reorganization Event would have been entitled to receive as a result of
the Reorganization Event had the holder held, immediately prior to that
Reorganization Event, the number of units of the Reference Security that
were part of the Reference Property Per SAILS immediately before the
effective date of the Reorganization Event, and (y) the SAILS Base Amount;
and
(ii) where applicable, the Collateral Agent shall liquidate
and turn into cash, as soon as practicable following the effective date of
the Reorganization Event, all securities or other property other than cash
or Marketable Equity Securities received by the Collateral Agent in
respect of the Reference Securities affected by the Reorganization Event,
and notify the Calculation Agent of such liquidation; and the Reference
Property shall be adjusted on the date such liquidation is completed to
include, in lieu of (or in addition, as the case may be) to any units of
the Reference Security affected by such Reorganization Event that were
part of the Reference Property immediately prior to such effective date,
the amount of such cash proceeds.
(b) If no opinion of counsel conforming to the requirements of
Section 6.2(a) is delivered by the date prescribed therein, Section 7.3(a) shall
apply.
(c) Seller shall be responsible for the fees and expenses of U.S.
tax counsel retained to provide any opinion pursuant to Section 6.2(a).
6.3. Miscellaneous Provisions Related to Dilution Events and
Reorganization Events. If a Dilution Event or a Reorganization Event permits
holders of Reference Securities to make an election with regard to the
consideration they receive as a result of such Dilution Event or Reorganization
Event, Section 6.1 or 6.2, as the case may be, will apply to such consideration
as Seller elects to receive in such Dilution Event or Reorganization Event.
6.4. Adjustment for Distribution Event. In the event of a
Distribution Event:
(a) If (i) the distribution is composed entirely of cash or (ii) the
distribution includes both cash and property other than cash and Section
6.4(b)(ii) does not apply, Seller shall deliver to Purchaser on the payment date
in respect of such Distribution Event, by wire transfer of Federal (immediately
available same-day) funds to an account designated by Purchaser, cash in an
amount equal to 70% of the product of (x) the amount of any cash distribution
that a holder of the relevant Reference Security would have been entitled to
receive as a result of the Distribution Event had the holder held, on the record
date in respect of the Distribution Event, the number of units of such Reference
Security that were part of the Reference Property Per SAILS on such record date,
as determined by the Calculation Agent as of such payment date, and (y) the
SAILS Base Amount. Seller's obligation to deliver cash to Purchaser pursuant to
this Section 6.4(a) in respect of a Distribution Event shall be deemed satisfied
to the extent of the amount of any cash distribution received directly by the
Collateral Agent from the issuer of the applicable Reference Security (or such
issuer's paying agent, as applicable) in respect of such Distribution Event.
Where applicable, promptly following the payment date in respect of the
Distribution Event, the Collateral Agent shall deliver to Seller by wire
transfer of Federal (immediately available same-day) funds to an account
designated by Seller, cash in an amount equal to the excess of any cash
distribution received directly by the Collateral Agent as described
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in the preceding sentence in respect of such Distribution Event over the amount
of cash required to be delivered to Purchaser by Seller in respect of such
Distribution Event pursuant to this Section 6.4(a).
(b) If the distribution includes property other than cash, then:
(i) If the distribution does not include any Non-Transferable
Exchangeable Securities that require payment as a condition to their
conversion, exercise or exchange, and U.S. tax counsel retained by Seller
and reasonably acceptable to the Collateral Agent shall have delivered, no
later than five Trading Days prior to the ex-dividend date in respect of
the Distribution Event, a legal opinion in form and substance satisfactory
to the Collateral Agent to the effect that withholding under the Internal
Revenue Code of 1986, as amended, is not required in respect of any
securities or other property to be received by the Collateral Agent in
respect of the relevant Reference Security as a result of such
Distribution Event,
(A) if the distribution includes Marketable Equity
Securities, the Reference Property shall be adjusted on
the payment date in respect of the Distribution Event to
include, in addition to any units of the relevant
Reference Security that were part of the Reference
Property immediately prior to such payment date, the
product of (x) the amount or number of any Marketable
Equity Securities that a holder of the relevant
Reference Security would have been entitled to receive
as a result of the Distribution Event had the holder
held, on the record date in respect of the Distribution
Event, the number of units of the Reference Security
that were part of the Reference Property Per SAILS on
such record date and (y) the SAILS Base Amount;
(B) if the distribution includes (x) Exchangeable Securities
that expire prior to the Exchange Date and that do not
require payment as a condition to their conversion,
exercise or exchange, or (y) Non-Transferable
Exchangeable Securities that expire on or after the
Exchange Date and that do not require payment as a
condition to their conversion, exercise or exchange, the
Collateral Agent shall convert, exercise or exchange all
such Exchangeable Securities on the Trading Day
immediately preceding their expiration date (in the case
of Exchangeable Securities that expire prior to the
Exchange Date) or on the tenth Trading Day preceding the
Exchange Date (in the case of Non-Transferable
Exchangeable Securities that expire on or after the
Exchange Date) and notify Seller and Purchaser of such
conversion, exercise or exchange, and (a) the Reference
Property shall be adjusted to include, in lieu of such
Exchangeable Securities, all cash and Marketable Equity
Securities received in connection with such conversion,
exercise or exchange on the date on which such cash
and/or Marketable Equity Securities are received by the
Collateral Agent, and (b) the
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Collateral Agent shall liquidate and turn into cash all
securities or other property other than cash or
Marketable Equity Securities received in connection with
such conversion, exercise or exchange as soon as
practicable following the date on which such securities
or other property are received by the Collateral Agent,
and shall notify the Purchaser of such liquidation; and
the Reference Property shall be adjusted on the date
such liquidation is completed to include, in lieu of the
relevant Exchangeable Securities, the amount of such
cash proceeds.
(C) if the distribution includes Transferable Exchangeable
Securities that expire on or after the Exchange Date and
whose holders are entitled to receive, as a result of
conversion, exercise or exchange, property consisting
exclusively of cash and/or Marketable Equity Securities,
the Reference Property shall be adjusted on the payment
date in respect of the Distribution Event to include, in
addition to any units of the relevant Reference Security
that were part of the Reference Property immediately
prior to such payment date, the amount of such
Transferable Exchangeable Securities received by the
Collateral Agent in respect of the Distribution Event;
and
(D) if the distribution includes securities or other
property other than Marketable Equity Securities or
Exchangeable Securities, or includes (x) Transferable
Exchangeable Securities that expire on or after the
Exchange Date and whose holders are entitled to receive,
as a result of conversion, exercise or exchange,
property other than cash and Marketable Equity
Securities, or (y) Transferable Exchangeable Securities
that expire prior to the Exchange Date and that require
payment as a condition to their conversion, exercise or
exchange, the Collateral Agent shall liquidate and turn
into cash, as soon as practicable following the payment
date in respect of the Distribution Event, all such
Transferable Exchangeable Securities, securities and
other property received by the Collateral Agent in
respect of the Distribution Event, and shall notify the
Purchaser of such liquidation; and the Reference
Property shall be adjusted on the date such liquidation
is completed to include, in lieu of (or in addition to,
as the case may be) any units of the relevant Reference
Security that were part of the Reference Property
immediately prior to such payment date, the amount of
such cash proceeds; or
(ii) If the distribution includes any Non-Transferable Exchangeable
Securities that require payment as a condition to their conversion, exercise or
exchange, or no opinion of counsel conforming to the requirements of Section
6.4(b)(i) is delivered by the date prescribed therein, Section 7.3(b) shall
apply.
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(c) Seller shall be responsible for the fees and expenses of U.S.
tax counsel retained to provide any opinion pursuant to Section 6.4(b).
6.5. Rights Plans. The Reference Property shall include all rights
issued to all holders of a Reference Security pursuant to a rights agreement or
shareholder rights plan adopted by the issuer of such Reference Security for the
purpose of deterring coercive takeover activities ("Anti-Takeover Rights"),
regardless of whether such Anti-Takeover Rights are exercisable or have
separated from such Reference Security prior to the Exchange Date.
6.6. Miscellaneous.
(a) Unless otherwise expressly provided therein, no adjustment,
addition or substitution of Reference Property pursuant to this Article VI shall
result in any adjustment to the Initial Price or the Threshold Appreciation
Price.
(b) In the event that this Article VI and/or Article VII require
adjustments, additions or substitutions of Reference Property or adjustments to
the Initial Price or the Threshold Appreciation Price under more than one
provision in respect of the same event, the Calculation Agent shall determine
the appropriate provisions and apply such provisions in good faith so as to
avoid any duplicative adjustments, additions or substitutions.
(c) Adjustments pursuant to this Article VI to the number of units
of any Reference Security included in the Reference Property Per SAILS shall be
calculated to the nearest 1/10,000th of the applicable unit. No adjustment to
such number of units shall be required unless such adjustment would require an
increase or decrease of at least one percent in the number of units of such
Reference Security included in the Reference Property Per SAILS; provided,
however, that any adjustments that are not required to be made because they
would have required an increase or decrease of less than one percent shall be
carried forward and taken into account in any subsequent adjustment pursuant to
this Article VI, and such carried-forward adjustment shall be made, regardless
of whether the aggregated adjustment is less than one percent, upon the Exchange
Date or upon acceleration of this Agreement pursuant to Article VII.
(d) Unless expressly provided for herein, Purchaser shall assume all
customary and ordinary costs and expenses of the administration of the
Collateral or incurred in connection with the liquidation, exercise or
conversion of Reference Property pursuant to this Article VI, including
brokerage costs, whether incurred by Purchaser, Seller or the Collateral Agent,
but not including costs of enforcement or other extraordinary expenses, which
shall be reimbursed by the Seller to the Purchaser or the Collateral Agent, as
the case may be.
ARTICLE VII
ACCELERATION
7.1. Mandatory Acceleration Upon an Event of Default. If one or more
of the following events (each, an "Event of Default") shall occur:
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(a) Seller shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to Seller or
Seller's 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 Seller or over any
substantial part of Seller's property, or shall consent to any such relief or to
the appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against Seller, or shall make a general
assignment for the benefit of creditors;
(b) an involuntary case or other proceeding shall be commenced
against Seller seeking liquidation, reorganization or other relief with respect
to Seller or Seller's 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 Seller or over any
substantial part of Seller's property; or an order for relief shall be entered
against Seller under any bankruptcy, insolvency or other similar law now or
hereafter in effect; or
(c) a Collateral Event of Default shall occur;
then an "Acceleration Date" shall immediately occur and Seller shall become
obligated to the extent permitted by law to deliver to Purchaser an amount of
Reference Property with an aggregate Current Value (as of the Acceleration Date)
equal to the Acceleration Value (as defined below), allocated on a pro rata
basis among the Common Stock, securities, cash and/or other property
constituting the Reference Property.
"Acceleration Value" means an amount determined by the Calculation
Agent on the basis of quotations from Independent Dealers (as defined below).
Each quotation will be for an 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 for Purchaser the
economic equivalent of the payments and deliveries that Purchaser would, but for
the occurrence of the Acceleration Date, have been entitled to receive after the
Acceleration Date hereunder (taking into account any adjustments to the Exchange
Rate that may have been effected on or prior to the Acceleration Date). On or as
soon as reasonably practicable following the Acceleration Date, the Calculation
Agent will request each Independent Dealer to provide its quotation as soon as
reasonably practicable, but in any event within two Business Days. The
Calculation Agent 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, the Calculation Agent
shall have received quotations from fewer than five of the Independent Dealers,
the Calculation Agent shall compute the Acceleration Value using the quotations,
if any, it shall have received at or prior to such time. If at least four
quotations are provided, the Acceleration Value will be the arithmetic mean of
the quotations remaining after disregarding the highest and lowest quotations
received. (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 be the Current Value (as of the Acceleration Date) of the Reference
Property.
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"Independent Dealers" means five nationally recognized independent
investment banking firms selected in good faith by the Calculation Agent;
provided, however, that one of the five quotes may be requested from an
affiliate of the Calculation Agent.
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), the Calculation Agent shall deliver to Seller and the Collateral Agent a
notice specifying the amount of Reference Property required to be delivered by
Seller, and (i) in the case of an Event of Default described in Section 7.1(a)
or (b), such Reference Property shall be due and payable by Seller immediately
upon delivery of such notice, or (ii) in the case of an Event of Default
described in Section 7.1(c), Seller shall deliver such Reference Property within
two Business Days after receipt of such notice. Purchaser and Seller agree that
the obligations contained in this Section 7.1 are a reasonable pre-estimate of
loss and not a penalty. Such amount 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.
7.2. Mandatory Acceleration Upon Cash Merger.
(a) Notice of Merger, Determination of Cash Consideration
Percentage; Related Adjustments
(i) Seller shall forward or cause to be forwarded to the
Calculation Agent and the Collateral Agent any written notice of a Merger
received by Seller or Parent no later than the Business Day following
receipt thereof.
(ii) If the Calculation Agent receives notice or otherwise
acquires knowledge of a Merger, the Calculation Agent will determine
whether the percentage of the consideration offered per share of Common
Stock (the "Merger Consideration") consisting of cash (the "Cash
Consideration Percentage") is 30% or higher (a "Cash Merger"). For
purposes of determining whether the Cash Consideration Percentage is 30%
or higher, the cash offered shall be equal to the maximum amount of cash
offered per share of Common Stock in the Merger, and the Merger
Consideration shall be equal to the aggregate Current Value of the cash
and non-cash consideration offered per share of Common Stock in the Merger
(in each case, determined as of the effective date of the Merger).
(iii) Any Merger Consideration other than cash shall be
treated pursuant to Section 6.2(a).
(b) Acceleration Upon Cash Merger. If the Calculation Agent
reasonably determines as a result of the calculation described in clause (a)(ii)
above that the Merger is a Cash Merger:
(i) on a Trading Day determined by the Calculation Agent,
which shall be no earlier than two Trading Days and no later than five
Trading Days following the receipt by holders of Common Stock of the
consideration from such Cash Merger (the "Cash Merger Acceleration Date")
and which shall also be a Business Day, Seller shall deliver to Purchaser
an amount of cash equal to the product of (w) the Cash
21
Consideration Percentage, (x) the Early Termination Rate determined
pursuant to Section 7.4 as of the effective date of the Merger, (y) the
Merger Consideration (determined in accordance with clause (a)(ii) above)
times the number of shares of Common Stock included in the Reference
Property Per SAILS at the end of the first Trading Day preceding the
effective date of the Merger, and (z) the SAILS Base Amount;
(ii) if the Cash Consideration Percentage in respect of the
Cash Merger is equal to 100%, then, upon the delivery required under
clause (b)(i), Seller shall cease to have any further obligations to
Purchaser under this Agreement, which shall thereupon terminate; and
(iii) if clause (ii) does not apply, the Initial Price and the
Threshold Appreciation Price shall be adjusted by multiplying each by a
percentage equal to 100% minus the Cash Consideration Percentage. The
adjustments required by this clause (b)(iii) shall be in addition to any
other adjustments to the Initial Price or the Threshold Appreciation Price
hereunder.
7.3. Early Termination Events. If one or more of the following
events (each, a "Early Termination Event") shall occur:
(a) a Reorganization Event shall occur and no opinion of tax counsel
shall have been delivered in accordance with Section 6.2(a) prior to the date
prescribed therein (in which case, an Early Termination Event shall occur on the
first Trading Day preceding the effective date of such Reorganization Event);
(b) a Distribution Event shall occur in respect of which the
distribution to be made to holders of the Common Stock (or the affected
Reference Securities, as the case may be) includes property other than cash, and
(i) the distribution includes any Non-Transferable Exchangeable Securities that
require payment as a condition to their conversion, exercise or exchange, or
(ii) no opinion of tax counsel shall have been delivered in accordance with
Section 6.4(b)(i) prior to the date prescribed therein (in which case, an Early
Termination Event shall occur on the first Trading Day preceding the ex-dividend
date in respect of such Distribution Event); or
(c) an adjustment to the composition of the Reference Property is to
occur pursuant to the terms of this agreement, and the Calculation Agent
determines that immediately after giving effect to such adjustment, the
Reference Property would no longer include any Marketable Equity Security (in
which case, if the adjustment results from a Distribution Event, an Early
Termination Event shall occur on the first Trading Day preceding the ex-dividend
date in respect of such Distribution Event, and if the adjustment results from a
Reorganization Event, an Early Termination Event shall occur on the first
Trading Day preceding the effective date of such Reorganization Event);
provided, however, that this Section 7.3(c) shall not apply to a Cash Merger in
respect of which the Cash Consideration Percentage is 100%.
then an "Acceleration Date" shall occur on the day on which such Early
Termination Event occurs, and Seller shall become obligated to deliver to
Purchaser an amount of Reference Property with an aggregate Current Value (as of
the Acceleration Date) equal to the product of
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(i) the Early Termination Rate determined pursuant to Section 7.4 as of the
Acceleration Date, (ii) the Current Value of the Reference Property Per SAILS as
of the Acceleration Date, and (iii) the SAILS Base Amount. The Reference
Property to be delivered pursuant to this Section 7.3 shall be allocated on a
pro rata basis among the Common Stock, securities, cash and/or other property
constituting the Reference Property.
As promptly as reasonably practicable following an Early Termination
Event, the Calculation Agent shall deliver to Seller and the Collateral Agent a
notice specifying the amount of Reference Property required to be delivered by
Seller, and Seller shall deliver such Reference Property within two Business
Days after receipt of such notice.
Section 7.4. Early Termination Rate. The Early Termination Rate
shall mean the rate determined by the Calculation Agent in accordance with the
table below on the basis of (i) the date of determination, and (ii) the Current
Value of one share of Common Stock (or of such amount of the relevant Reference
Security as shall be included in the Reference Property Per SAILS at the time of
determination) as of the date of determination. For purposes of determining the
Early Termination Rate in accordance with the table below, in cases where the
exact Current Value and/or the exact date of determination is not set forth on
the table, the Early Termination Rate shall be determined: (i) first, if the
exact Current Value is between two Current Values on the table, by straight-line
interpolation between the Early Termination Rates set forth in the rows that
correspond to the Current Values immediately above and below the exact Current
Value, and (ii) second, if the exact determination date is between two
determination dates on the table, by straight-line interpolation between the
Early Termination Rates set forth in the columns that correspond to the
determination dates immediately to the right and left of the exact determination
date (or, if applicable, between the Early Termination Rates interpolated
pursuant to clause (i) in respect of the exact Current Value for the
determination dates immediately to the right and left of the exact determination
date). All numbers resulting from any of the calculations hereunder will be
rounded, if necessary, to the nearest one hundred-thousandth (fifth decimal
place), with five one-millionths being rounded upwards.
15-MAY-06 15-NOV-06 15-MAY-07 15-NOV-07 15-MAY-08 16-NOV-08
--------- --------- --------- --------- --------- ---------
$15.00 0.99109 0.99570 0.99926 1.00000 1.00000 1.00000
$17.50 0.98273 0.98929 0.99533 0.99970 1.00000 1.00000
$20.00 0.97253 0.98049 0.98883 0.99639 1.00000 1.00000
$22.50 0.96119 0.96983 0.97972 0.99031 0.99895 1.00000
$25.00 0.94942 0.95801 0.96849 0.98111 0.99512 1.00000
$27.50 0.93780 0.94577 0.95589 0.96910 0.98731 1.00000
$30.00 0.92672 0.93371 0.94276 0.95512 0.97478 1.00000
$32.50 0.91647 0.92228 0.92980 0.94025 0.95813 1.00000
$35.00 0.90716 0.91175 0.91758 0.92553 0.93910 1.00000
$37.50 0.89886 0.90228 0.90644 0.91175 0.91984 0.95093
$40.00 0.89154 0.89392 0.89655 0.89942 0.90217 0.89150
$42.50 0.88516 0.88663 0.88796 0.88879 0.88721 0.84783
$45.00 0.87963 0.88036 0.88064 0.87988 0.87534 0.84781
$47.50 0.87488 0.87500 0.87449 0.87261 0.86643 0.84779
$50.00 0.87080 0.87047 0.86938 0.86678 0.86004 0.84777
$52.50 0.86732 0.86665 0.86517 0.86220 0.85563 0.84775
23
$55.00 0.86436 0.86345 0.86173 0.85864 0.85268 0.84773
$57.50 0.86184 0.86077 0.85893 0.85590 0.85075 0.84772
$60.00 0.85970 0.85854 0.85668 0.85382 0.84953 0.84771
$62.50 0.85788 0.85669 0.85486 0.85224 0.84876 0.84769
$65.00 0.85635 0.85515 0.85340 0.85106 0.84828 0.84768
$67.50 0.85504 0.85387 0.85224 0.85018 0.84799 0.84767
$70.00 0.85394 0.85281 0.85130 0.84952 0.84782 0.84766
$72.50 0.85300 0.85193 0.85056 0.84903 0.84771 0.84765
$75.00 0.85221 0.85121 0.84997 0.84867 0.84765 0.84764
$77.50 0.85154 0.85060 0.84949 0.84840 0.84761 0.84764
$80.00 0.85096 0.85010 0.84911 0.84820 0.84758 0.84763
$82.50 0.85048 0.84969 0.84881 0.84805 0.84757 0.84762
$85.00 0.85006 0.84934 0.84857 0.84794 0.84756 0.84762
$87.50 0.84971 0.84905 0.84838 0.84786 0.84755 0.84761
$90.00 0.84941 0.84881 0.84822 0.84779 0.84754 0.84760
ARTICLE VIII
MISCELLANEOUS
8.1 Adjustments. The Calculation Agent shall be responsible for the
effectuation and calculation of any amounts or adjustments pursuant to this
Agreement (other than amounts and adjustments expressly required to be
effectuated or calculated by the Collateral Agent). The Calculation Agent shall
effectuate and calculate such amounts or adjustments in good faith, shall
furnish Seller notice of any such amounts and adjustments, and shall provide
Seller an opportunity to review the calculations pertaining to any such amounts
or adjustments, to the extent reasonable under the circumstances. Seller
acknowledges and agrees that, in the case of calculations or adjustments to be
made pursuant to Section 7.1, the Calculation Agent shall not be obligated to
provide Seller such opportunity to review if, in its reasonable judgment, such
review is not practicable prior to the Calculation Agent taking action pursuant
to Section 7.1.
8.2 Notices. Notices to Purchaser or the Calculation Agent shall be
directed to: Credit Suisse First Boston Capital LLC, c/o Credit Suisse, New York
Branch, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, facsimile number: (212)
325-4585, Attention: Senior Legal Officer; notices to Seller shall be directed
to: i-STT Investments (Bermuda) Ltd., Canon's Court, 00 Xxxxxxxx Xxxxxx,
Xxxxxxxx XX00 Xxxxxxx, facsimile number x0 (000) 000 0000, Attention: Directors,
with a copy to Parent at: i-STT Investments Pte. Ltd., 00 Xxxxxxx Xxxx, #00 -
00/00 XxxxXxx Xxxxxx, Xxxxxxxxx 000000, facsimile number x00 0000 0000,
Attention: General Counsel. Notwithstanding the foregoing, notices to a party
shall be directed to such other address or facsimile number for such party as
shall be specified by such party in a like notice given pursuant to this Section
8.2. All notices and other communications hereunder shall be in writing
(including facsimile transmission) and shall be deemed to have been duly given
if either (i) personally delivered (including delivery by courier service or by
Federal Express or any other nationally recognized overnight delivery service
for next day delivery) to the offices specified in the preceding sentence (in
which case they shall be deemed received on
24
the first Business Day by which delivery shall have been made to said offices);
or (ii) sent by facsimile in legible form (in which case delivery shall be
deemed to have been received on the date appearing on the facsimile transmission
confirmation). Any notice, demand or other communication to be provided by or on
behalf of a party to this Agreement shall be sent to the address of such party
provided in this Section 8.2. Any failure by Seller or Purchaser or any
guardian, conservator, executor, administrator or other similarly appointed
person to receive any such notice, demand or communication shall in no way
abrogate, invalidate or otherwise affect the validity or enforceability of the
notice, demand or communication or the matters set forth therein.
8.3 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.
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 or parties against whom the waiver is to be effective. No
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. Except as
otherwise agreed in writing, 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
permitted assigns of such party.
8.7. Application of Bankruptcy Code. The parties hereto acknowledge
and agree that: (i) the Collateral Agent is a "stockbroker" as defined in the
United States Bankruptcy Code (the "Bankruptcy Code") and is acting as agent and
custodian for Purchaser in connection with this Agreement, and Purchaser is a
"customer" of the Collateral Agent within the meaning of the Bankruptcy Code;
(ii) each of Purchaser and the Collateral Agent is a "financial participant"
within the meaning of the Bankruptcy Code, (iii) this Agreement is a "securities
contract" within the meaning of the Bankruptcy Code, (iv) the remedies provided
herein and in the Collateral Agreement are the remedies referred to in Sections
362(b)(6) and 555 of the Bankruptcy Code, and (v) all transfers of cash,
securities or other property under or in connection with this Agreement and the
Collateral Agreement are "margin payments", "settlement payments" and
"transfers" under Section 546(e) of the Bankruptcy Code.
25
8.8 Governing Law; Jurisdiction; Process Agent; Severability; Waiver
of Jury Trial. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. For the purpose of any suit, action or
proceeding arising out of or relating to this Agreement, the parties hereto
hereby expressly and irrevocably consent and submit to the non-exclusive
jurisdiction of any United States Federal or New York State court sitting in the
Borough of Manhattan, City and State of New York, and expressly and irrevocably
waive, to the extent permitted under applicable law, any immunity from the
jurisdiction thereof and any claim or defense in such suit, action or proceeding
based on a claim of improper venue, forum non conveniens or any similar basis to
which it might otherwise be entitled. Seller hereby agrees that service of
process in any such action or proceeding brought in any such New York State
court or in such federal court may be made upon CT Corporation System at its
offices at 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Process Agent") and
Seller hereby irrevocably appoints the Process Agent its authorized agent to
accept such service of process, and agrees that the failure of the Process Agent
to give any notice of any such service shall not impair or affect the validity
of such service or of any judgment rendered in any action or proceeding based
thereon. 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. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND COVENANT THAT
THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER
IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS
BEEN INFORMED BY THE OTHER PARTY HERETO THAT THE PROVISIONS OF THIS SECTION
CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTY HERETO HAS RELIED,
IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY DOCUMENT
RELATED THERETO. EACH PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY
HERETO TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
26
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
PURCHASER: SELLER:
CREDIT SUISSE FIRST BOSTON CAPITAL i-STT INVESTMENTS (BERMUDA) LTD.:
LLC:
By: /s/ Xxxx Xxxx By: /s/ Xxxxxxx Xxxxxxxx Xxxxxx
--------------------- -----------------------------
Name: Xxxx Xxxx Name: Xxxxxxx Xxxxxxxx Xxxxxx
Title: A.V.P. Operations Title: Director
27
