Exhibit 4.12
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BLACK HILLS CORPORATION
and
[ ],
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of ___________, [ ]
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ARTICLE 1
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Definitions and Other Provisions of General Applications
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Section 1.01. Definitions 1
Section 1.03. Form of Documents Delivered to Purchase Contract Agent ................................... 12
Section 1.04. Acts of Holders; Record Dates ............................................................ 12
Section 1.05. Notices .................................................................................. 14
Section 1.06. Notice to Holders; Waiver ................................................................ 15
Section 1.07. Effect of Headings and Table of Contents ................................................. 15
Section 1.08. Successors and Assigns ................................................................... 15
Section 1.09. Separability Clause ...................................................................... 15
Section 1.10. Benefits of Agreement .................................................................... 15
Section 1.11. Governing Law ............................................................................ 16
Section 1.12. Legal Holidays ........................................................................... 16
Section 1.13. Counterparts ............................................................................. 16
Section 1.14. Inspection of Agreement .................................................................. 16
Section 1.15. Appointment of Financial Institution as Agent for the Company ............................ 16
ARTICLE 2
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Certificate Forms
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Section 2.01. Forms of Certificates Generally ........................................................... 17
Section 2.02. Form of Purchase Contract Agent's Certificate of Authentication ........................... 18
ARTICLE 3
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The Securities
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Section 3.01. Amount; Form and Denominations .............................................................. 18
Section 3.02. Rights and Obligations Evidenced by the Certificates ........................................ 18
Section 3.03. Execution, Authentication, Delivery and Dating .............................................. 19
Section 3.04. Temporary Certificates ...................................................................... 19
Section 3.05. Registration; Registration of Transfer and Exchange ......................................... 19
Section 3.06. Book-Entry Interests ........................................................................ 22
Section 3.07. Notices to Holders .......................................................................... 22
Section 3.08. Appointment of Successor Depositary ......................................................... 22
Section 3.09. Definitive Certificates ..................................................................... 22
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates .......................................... 23
Section 3.11. Persons Deemed Owners ....................................................................... 24
Section 3.12. Cancellation ................................................................................ 25
Section 3.13. Creation of Treasury Stock Purchase Units by Substitution of Treasury Securities ............ 25
Section 3.14. Reestablishment of Stock Purchase Units ..................................................... 27
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event ................................. 28
Section 3.16. No Consent to Assumption .................................................................... 29
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ARTICLE 4
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The Notes and Applicable Ownership Interest of the Treasury Portfolio
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Section 4.01. Interest Payments; Rights to Interest Payments Preserved ............................................... 29
Section 4.02. Notice and Voting ...................................................................................... 30
Section 4.03. Tax Event Redemption ................................................................................... 31
ARTICLE 5
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The Purchase Contracts
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Section 5.01. Purchase of Shares of Common Stock ..................................................................... 31
Section 5.02. Payment of Purchase Price .............................................................................. 34
Section 5.03. Issuance of Shares of Common Stock ..................................................................... 38
Section 5.04. Adjustment of Settlement Rate .......................................................................... 39
Section 5.05. Notice of Adjustments and Certain Other Events ......................................................... 46
Section 5.06. Termination Event; Notice .............................................................................. 46
Section 5.07. Intentionally Omitted .................................................................................. 47
Section 5.08. Intentionally Omitted .................................................................................. 47
Section 5.09. No Fractional Shares ................................................................................... 47
Section 5.10. Charges and Taxes ...................................................................................... 47
Section 5.11. Purchase Contract Payments ............................................................................. 47
Section 5.12. Deferral of Purchase Contract Payments ................................................................. 48
ARTICLE 6
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Remedies
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Section 6.01. Unconditional Right of Holders to Receive Purchase Contract Payments and to Purchase Shares of Common
Stock ........................................................................................................... 49
Section 6.02. Restoration of Rights and Remedies ..................................................................... 50
Section 6.03. Rights and Remedies Cumulative ......................................................................... 50
Section 6.04. Delay or Omission Not Waiver ........................................................................... 50
Section 6.05. Undertaking for Costs .................................................................................. 50
Section 6.06. Waiver of Stay or Extension Laws ....................................................................... 51
ARTICLE 7
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The Purchase Contract Agent
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Section 7.01. Certain Duties and Responsibilities .................................................................... 51
Section 7.02. Notice of Default ...................................................................................... 52
Section 7.03. Certain Rights of Purchase Contract Agent .............................................................. 52
Section 7.04. Not Responsible for Recitals or Issuance of Securities ................................................. 54
Section 7.05. May Hold Securities .................................................................................... 54
Section 7.06. Money Held in Custody .................................................................................. 54
Section 7.07. Compensation and Reimbursement ......................................................................... 54
Section 7.08. Corporate Purchase Contract Agent Required; Eligibility ................................................ 55
Section 7.09. Resignation and Removal; Appointment of Successor ...................................................... 55
Section 7.10. Acceptance of Appointment by Successor ................................................................. 57
Section 7.11. Merger, Conversion, Consolidation or Succession to Business ............................................ 57
Section 7.12. Preservation of Information; Communications to Holders ................................................. 57
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Section 7.13. No Obligations of Purchase Contract Agent ........................................................... 58
Section 7.14. Tax Compliance ...................................................................................... 58
ARTICLE 8
Supplemental Agreements
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Section 8.01. Supplemental Agreements Without Consent of Holders .................................................. 60
Section 8.02. Supplemental Agreements with Consent of Holders ..................................................... 60
Section 8.03. Execution of Supplemental Agreements ................................................................ 61
Section 8.04. Effect of Supplemental Agreements ................................................................... 62
Section 8.05. Reference to Supplemental Agreements ................................................................ 62
ARTICLE 9
Consolidation, Merger, Conveyance, Transfer or Lease
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Section 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under Certain
Conditions .................................................................................................... 62
Section 9.02. Rights and Duties of Successor Corporation .......................................................... 63
Section 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent ....................... 63
ARTICLE 10
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Covenants
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Section 10.01. Performance under Purchase Contracts ............................................................... 64
Section 10.02. Maintenance of Office or Agency .................................................................... 64
Section 10.03. Company to Reserve Common Stock .................................................................... 64
Section 10.04. Covenants as to Common Stock ....................................................................... 64
Section 10.05. Statements of Officers of the Company as to Default ................................................ 65
Section 10.06. ERISA .............................................................................................. 65
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PURCHASE CONTRACT AGREEMENT, dated as of __________, 200[ ], between BLACK
HILLS CORPORATION, a South Dakota corporation (the "Company"), and [
], an __________ banking corporation, acting as purchase contract
agent for the Holders of Securities (as defined herein) from time to time (the
"Purchase Contract Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Purchase Contract Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done. For and
in consideration of the premises and the purchase of the Securities by the
Holders thereof, it is mutually agreed as follows:
ARTICLE 1
Definitions and Other Provisions of General Applications
Section 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular, and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision; and
(d) the following terms have the meanings given to them in this Section
1.01(d):
"Act" has the meaning, with respect to any Holder, set forth in Section
1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning set forth in Section 5.01.
"Applicable Ownership Interest" shall mean, with respect to a Stock
Purchase Unit that includes the Treasury Portfolio, (A) a [__]% undivided
beneficial ownership interest in a $1,000 face amount of a principal or interest
strip in a U.S. treasury security included in such Treasury Portfolio that
matures on or prior to [ ], 200[ ] and (B) for each scheduled interest payment
date on the Senior Deferrable Notes after the Tax Event Redemption Date, a
_____%, undivided beneficial ownership interest in a $1,000 face amount of a
principal or interest strip in a U.S. treasury security included in such
Treasury Portfolio that matures on or prior to such date.
"Applicants" has the meaning set forth in Section 7.12(b).
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the
books of the Depositary or on the books of a Person maintaining an account with
such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"Board of Directors" means the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of Directors,
a copy of which has been certified by the Secretary or an Assistant Secretary of
the Company, to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivered to the
Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global Certificate,
registered in the name of a Depositary or a nominee thereof, ownership and
transfers of which shall be maintained and made through book entries by such
Depositary as described in Section 3.06.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in New York City, New York, or Chicago, Illinois are
authorized or required by law or executive order to remain closed or a day on
which the Indenture Trustee or the
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Property Trustee is closed for business; provided that for purposes of the
second paragraph of Section 1.12 only, the term "Business Day" shall also be
deemed to exclude any day on which trading on the New York Stock Exchange, Inc.
is closed or suspended.
"Cash Settlement" has the meaning set forth in Section 502(a)(i).
"Certificate" means a Stock Purchase Units Certificate or a Treasury Stock
Purchase Units Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book-entry transfers and pledges of the Securities.
"Closing Price" has the meaning set forth in Section 5.01.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.
"Collateral Agent" means [ ], as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning set forth in Section 3.13.
"Common Stock" means the common stock, par value $1.00 of Black Hills
Corporation.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"Constituent Person" has the meaning set forth in Section 5.04(b).
"Corporate Trust Office" means the principal corporate trust office of the
Purchase Contract Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at [
], Attention: Corporate Trust Department.
"Coupon Rate" means the percentage rate per annum at which each Note will
bear
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interest initially and, on and after _____, the Reset Rate.
"Current Market Price" has the meaning set forth in Section 5.04(a)(8).
"Depositary" means a clearing agency registered under the Exchange Act that
is designated to act as Depositary for the Securities as contemplated by
Sections 3.06, 3.07, 3.08 and 3.09.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"DTC" means The Depository Trust Company.
"Early Settlement" has the meaning set forth in Section 5.04(b)(2).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Expiration Date" has the meaning set forth in Section 1.04(e).
"Expiration Time" has the meaning set forth in Section 5.04(a)(6).
"Failed Remarketing" has the meaning set forth in Section 5.02(b).
"Global Certificate" means a Certificate that evidences all or part of the
Securities and is registered in the name of a Clearing Agency or a nominee
thereof.
"Holder" means, with respect to a Security, the Person in whose name the
Security evidenced by a Certificate is registered in the Security Register;
provided, however, that in determining whether the Holders of the requisite
number of Securities have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Security
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the Securities are credited on the record date, the term "Holder" shall mean
such Depositary Participant acting at the direction of the Beneficial Owners.
"Indenture" means the Indenture, dated as of [ ], 200[ ] between the
Company and the Indenture Trustee (including any provisions of the TIA that are
deemed incorporated therein), as amended and supplemented as of the date hereof,
pursuant to which the Notes will be
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issued.
"Indenture Trustee" means [__________________ ], as trustee under the
Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Company by its Chairman of the Board, its President or one of
its Vice Presidents, and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Purchase Contract Agent.
"non-electing share" has the meaning set forth in Section 5.04(b).
"Notes" means the series of Notes designated the [Subordinated] [senior]
notes due [________], 200[ ] to be issued by the Company under the Indenture and
held by the Property Trustee.
"NYSE" has the meaning set forth in Section 5.01.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, its President or one of its Vice Presidents, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Purchase Contract Agent. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Agreement shall include:
(i) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(ii) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(iii) a statement that, in the opinion of each such officer, each such
officer has made such examination or investigation as is necessary to
enable such officer to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
to the Company (and who may be an employee of the Company), and who shall be
reasonably acceptable to the Purchase Contract Agent. An opinion of counsel may
rely on certificates as to matters of fact.
"Outstanding Securities" means, with respect to any Security and as of the
date of determination, all Securities evidenced by Certificates theretofore
authenticated, executed and
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delivered under this Agreement, except:
(i) If a Termination Event has occurred, (a) Treasury Stock Purchase
Units and (b) Stock Purchase Units for which the underlying Notes have been
theretofore deposited with the Purchase Contract Agent in trust for the
Holders of such Stock Purchase Units;
(ii) Securities evidenced by Certificates theretofore cancelled by
the Purchase Contract Agent or delivered to the Purchase Contract Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Securities evidenced by Certificates in exchange for or in lieu
of which other Certificates have been authenticated, executed on behalf of
the Holder and delivered pursuant to this Agreement, other than any such
Certificate in respect of which there shall have been presented to the
Purchase Contract Agent proof satisfactory to it that such Certificate is
held by a protected purchaser in whose hands the Securities evidenced by
such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding Securities, except that, in determining whether the Purchase
Contract Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Securities so owned that have been pledged in good
faith may be regarded as Outstanding Securities if the pledgee establishes to
the satisfaction of the Purchase Contract Agent the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
Affiliate of the Company.
"Payment Date" means each [_________], [_________], [_________] and
[_________], commencing [________], 200[ ] .
"Permitted Investments" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Plan" means an employee benefit plan that is subject to ERISA, a plan or
individual retirement account that is subject to Section 4975 of the Code or any
entity whose assets are considered assets of any such plan.
"Pledge" means the pledge under the Pledge Agreement of the Notes, the
Treasury
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Securities or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, in each
case constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of __________,
200[], among the Company, the Collateral Agent, the Securities Intermediary and
the Purchase Contract Agent, on its own behalf and as attorney-in-fact for the
Holders from time to time of the Securities.
"Pledged Notes" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Predecessor Certificate" means a Predecessor Stock Purchase Units
Certificate or a Predecessor Treasury Stock Purchase Units Certificate.
"Predecessor Stock Purchase Units Certificate" of any particular Stock
Purchase Units Certificate means every previous Stock Purchase Units Certificate
evidencing all or a portion of the rights and obligations of the Company and the
Holder under the Stock Purchase Units evidenced thereby; and, for the purposes
of this definition, any Stock Purchase Units Certificate authenticated and
delivered under Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Stock Purchase Units Certificate shall be deemed to
evidence the same rights and obligations of the Company and the Holder as the
mutilated, destroyed, lost or stolen Stock Purchase Units Certificate.
"Predecessor Treasury Stock Purchase Units Certificate" of any particular
Treasury Stock Purchase Units Certificate means every previous Treasury Stock
Purchase Units Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Treasury Stock Purchase
Units evidenced thereby; and, for the purposes of this definition, any Treasury
Stock Purchase Units Certificate authenticated and delivered under Section 3.10
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury
Stock Purchase Units Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed, lost or
stolen Treasury Stock Purchase Units Certificate.
"Primary Treasury Dealer" shall mean a primary U.S. government securities
dealer in New York City.
"Proceeds" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Pro Rata" shall mean pro rata to each Holder according to the aggregate
principal amount of the Securities held by such Holder in relation to the
aggregate principal amount of all Securities outstanding.
"Prospectus" means the prospectus relating to the delivery of shares of
Common Stock in connection with an Early Settlement under Section 5.07 or an
early settlement of Purchase Contracts during the Early Settlement Week under
Section 5.04(b)(2), in the form in which first filed, or transmitted for filing,
with the Commission after the effective date of the Registration
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Statement pursuant to Rule 424(b) under the Securities Act, including the
documents incorporated by reference therein as of the date of such Prospectus.
"Purchase Contract" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and the
Holder of such Security to purchase, shares of Common Stock and (ii) pay the
Holder thereof Purchase Contract Payments, in each case on the terms and subject
to the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase Contract
Agent" in the first paragraph of this Agreement until a successor Purchase
Contract Agent shall have become such pursuant to the applicable provisions of
this Agreement, and thereafter "Purchase Contract Agent" shall mean such Person.
"Purchase Contract Payments" means the payments payable by the Company on
the Payment Dates in respect of each Purchase Contract, at a rate per year
of____% of the Stated Amount per Purchase Contract.
"Purchase Contract Settlement Date" means [________], 200[ ].
"Purchase Contract Settlement Fund" has the meaning set forth in Section
5.03.
"Purchase Price" has the meaning set forth in Section 5.01.
"Purchased Shares" has the meaning set forth in Section 5.04(a)(6).
"Record Date" for any distribution and Purchase Contract Payment payable on
any Payment Date means, as to any Global Certificate, the Business Day next
preceding such Payment Date, and as to any other Certificate, the fifteenth
Business Day prior to such Payment Date.
"Redemption Amount" shall mean, for each Note, the product of the principal
amount of such Note and a fraction, the numerator of which shall be the Treasury
Portfolio Purchase Price and the denominator of which shall be the principal
amount of such Note.
"Reference Dealer" means a dealer engaged in trading of convertible
securities.
"Reference Price" has the meaning set forth in Section 5.01.
"Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of the shares of Common Stock in connection with an Early Settlement
under Section 5.07 or an early settlement of Purchase Contracts during the Early
Settlement Week under Section 5.04(b)(2), including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in such
registration statement, and any post-effective amendments thereto.
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"Remarketing Agent" has the meaning set forth in Section 5.02(b).
"Remarketing Agreement" means the Remarketing Agreement, dated as of
_____________ __, 200[_], between the Company and the Remarketing Agent.
"Reorganization Event" has the meaning set forth in Section 5.04(b).
"Reset Rate" means the interest rate per year determined by the Remarketing
Agent as necessary for a successful completion of the Remarketing.
"Responsible Officer" means, with respect to the Purchase Contract Agent,
any officer of the Purchase Contract Agent assigned by the Purchase Contract
Agent to administer this Purchase Contract Agreement.
"Securities Act" means the Securities Act of 1933 and any statute successor
thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Securities Intermediary" means [ ], as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"Security" means a Stock Purchase Unit or a Treasury Stock Purchase Unit,
as the case may be.
"Security Register" and "Securities Registrar" have the respective meanings
set forth in Section 3.05.
"Settlement Rate" has the meaning set forth in Section 5.01.
"Stated Amount" means $[__].
"Stock Purchase Unit" means the collective rights and obligations of a
Holder of a Stock Purchase Units Certificate in respect of the Notes or an
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, subject in each case to the Pledge thereof, and the related Purchase
Contract; provided that the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio shall not be subject to the Pledge.
"Stock Purchase Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Stock Purchase
Units specified on such certificate.
"Tax Event" shall mean the receipt by the Company of an opinion of
independent counsel,
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rendered by a law firm having a recognized national tax practice, to the effect
that, as a result of any amendment to, or change, including any announced
prospective change in, the laws or any regulations of the United States or any
political subdivision or taxing authority or which affects taxation, any
amendment to or change in an interpretation or application of these laws or
regulations by any legislative body, court, governmental agency or regulatory
authority or any interpretation or pronouncement that provides for a position
with respect to these laws or regulations that differs from the generally
accepted position on the Closing Date, which amendment or change is effective or
which interpretation or pronouncement is announced on or after the Closing Date,
there is more than an insubstantial increase in the risk that interest payable
by the Company on the Notes is not, or within 90 days of the date of such
opinion will not be, deductible by the Company, in whole or in part, for United
States federal income tax purposes.
"Tax Event Redemption" shall mean that a Tax Event has occurred and is
continuing and the Notes have been called for redemption pursuant to the
Indenture.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under the Bankruptcy Code, adjudicating the Company to be insolvent,
or approving as properly filed a petition seeking reorganization or
liquidation of the Company or any other similar applicable Federal or State
law, and, unless such judgment, decree or order shall have been entered
within 60 days prior to the Purchase Contract Settlement Date, such decree
or order shall have continued undischarged and unstayed for a period of 60
days;
(ii) a judgment, decree or court order for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of the Company or of its property, or for the termination or liquidation of
its affairs, shall have been entered, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase Contract
Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or
(iii) at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under the Bankruptcy
Code, or shall consent to the filing of a bankruptcy proceeding against it,
or shall file a petition or answer or consent seeking reorganization or
liquidation under the Bankruptcy Code or any other similar applicable
Federal or State law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee
or assignee in bankruptcy or the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning set forth in Section 5.01.
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"TIA" means the Trust Indenture Act of 1939, as amended from time to time,
or any successor legislation.
"Trading Day" has the meaning set forth in Section 5.01.
"Treasury Stock Purchase Units" means, following the substitution of
Treasury Securities for Notes as collateral to secure a Holder's obligations
under the Purchase Contract, the collective rights and obligations of a Holder
of a Treasury Stock Purchase Units Certificate in respect of such Treasury
Securities, subject to the Pledge thereof, and the related Purchase Contract.
"Treasury Stock Purchase Units Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of Treasury
Stock Purchase Units specified on such certificate.
"Treasury Securities" means [zero-coupon] U.S. Treasury Securities
(CUSIP No. ______________) which mature on [________], 200[ ].
"Underwriting Agreement" means the Underwriting Agreement, dated as of
__________, 200[_], between the Company and the Underwriters identified in
Schedule A thereto.
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
Section 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or
11
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the information with respect to
such factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Purchase
Contract Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.01) conclusive in favor of the
12
Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved in any manner which the Purchase Contract Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Certificate evidencing such Security
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Stock Purchase Units and the Outstanding Treasury
Stock Purchase Units, as the case may be, on such record date, and no other
Holders, shall be entitled to take the relevant action with respect to the Stock
Purchase Units or the Treasury Stock Purchase Units, as the case may be, whether
or not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken prior to or on the applicable
Expiration Date by Holders of the requisite number of Outstanding Securities on
such record date. Nothing contained in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and be of no effect), and nothing contained in this paragraph shall
be construed to render ineffective any action taken by Holders of the requisite
number of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to the Purchase Contract Agent in
writing and to each Holder of Securities in the manner set forth in Section
1.06.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Purchase Contract Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.06, prior to or on the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
13
Section 1.05. Notices.
Any notice or communication is duly given if in writing and delivered in
Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
If to the Company:
Black Hills Corporation
Telecopier No.:
Attention:
with a copy to:
[ ]
[ ]
If to the Collateral Agent:
[ ]
[ ]
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
If to the Property Trustee:
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
14
If to the Indenture Trustee:
[ ]
[ ]
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
Section 1.06. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Purchase Contract Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Purchase Contract Agent
shall constitute a sufficient notification for every purpose hereunder.
Section 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and the
Purchase Contract Agent shall bind their respective successors and assigns,
whether so expressed or not.
Section 1.09. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
Section 1.10. Benefits of Agreement.
15
Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Securities
evidenced by their Certificates by their acceptance of delivery of such
Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by, and construed in
accordance with, the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Securities),
Purchase Contract Payments or other distributions shall not be paid on such
date, but Purchase Contract Payments or such other distributions shall be paid
on the next succeeding Business Day with the same force and effect as if made on
such Payment Date, provided that no interest shall accrue or be payable by the
Company or to any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date or Early Settlement
Date shall not be a Business Day (notwithstanding any other provision of this
Agreement or the Securities) Purchase Contracts shall not be performed and Early
Settlement shall not be effected on such date, but Purchase Contracts shall be
performed or Early Settlement effected, as applicable, on the next succeeding
Business Day with the same force and effect as if made on such Purchase Contract
Settlement Date or Early Settlement Date, as applicable.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the parties
hereto on separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any Holder
or Beneficial Owner.
Section 1.15. Appointment of Financial Institution as Agent for the
Company.
The Company may appoint a financial institution (which may be the
Collateral Agent) to
16
act as its agent in performing its obligations and in accepting and enforcing
performance of the obligations of the Purchase Contract Agent and the Holders,
under this Agreement and the Purchase Contracts, by giving notice of such
appointment in the manner provided in Section 1.05 hereof. Any such appointment
shall not relieve the Company in any way from its obligations hereunder.
ARTICLE 2
Certificate Forms
Section 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming part of
each Security evidenced thereby) shall be in substantially the form set forth in
Exhibit A hereto (in the case of Certificates evidencing Stock Purchase Units)
or Exhibit B hereto (in the case of Certificates evidencing Treasury Stock
Purchase Units), with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Securities are listed or any depositary therefor, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.
The definitive Certificates shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing the Securities evidenced by such
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE
(OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT
IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
17
REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN."
Section 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of authentication of
the Securities shall be in substantially the form set forth on the form of the
applicable Certificates.
ARTICLE 3
The Securities
Section 3.01. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
______________ [(_____________ if the over-allotment option granted in the
Underwriting Agreement is exercised in full)], except for Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Certificates pursuant to Sections 3.04, 3.05,
3.10, 3.13, 3.14 or 8.05.
The Certificates shall be issuable only in registered form and only in
denominations of a single Stock Purchase Unit or Treasury Stock Purchase Unit
and any integral multiple thereof.
Section 3.02. Rights and Obligations Evidenced by the Certificates.
Each Stock Purchase Units Certificate shall evidence the number of Stock
Purchase Units specified therein, with each such Stock Purchase Unit
representing (1) the ownership by the Holder thereof of a beneficial interest in
a Note or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, subject to the Pledge of such Note or the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Purchase Contract Agent, as
attorney-in-fact for, and on behalf of, the Holder of each Stock Purchase Unit
shall pledge, pursuant to the Pledge Agreement, the Note or the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, forming a part of such Stock
Purchase Unit, to the Collateral Agent and grant to the Collateral Agent a
security interest in the right, title and interest of such Holder in
18
such Note or the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, for
the benefit of the Company, to secure the obligation of the Holder under each
Purchase Contract to purchase shares of Common Stock.
Upon the formation of a Treasury Stock Purchase Unit pursuant to Section
3.13, each Treasury Stock Purchase Units Certificate shall evidence the number
of Treasury Stock Purchase Units specified therein, with each such Treasury
Stock Purchase Unit representing (1) the ownership by the Holder thereof of a
[1/40] undivided beneficial interest in a Treasury Security with a principal
amount equal to $1,000, subject to the Pledge of such Treasury Security by such
Holder pursuant to the Pledge Agreement, and (2) the rights and obligations of
the Holder thereof and the Company under one Purchase Contract.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Security to
any of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
Section 3.03. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its President or one of its Vice Presidents. The signature of any
of these officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Purchase Contract Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Purchase
Contract Agent shall be conclusive evidence that the Holder of such Certificate
has entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
19
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.04. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Stock Purchase Units or Treasury Stock Purchase Units, as the case may be, are
listed, or as may, consistently herewith, be determined by the officers of the
Company executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Securities as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Securities, evidenced
thereby as definitive Certificates.
Section 3.05. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "Security Registrar"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing Stock Purchase Units and Treasury Stock Purchase Units.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Stock
Purchase
20
Units or Treasury Stock Purchase Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Stock Purchase Units or Treasury Stock Purchase Units, as the case may be, upon
surrender of the Certificates to be exchanged at the Corporate Trust Office.
Whenever any Certificates are so surrendered for exchange, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of Stock Purchase
Units or Treasury Stock Purchase Units, as the case may be, and be entitled to
the same benefits and subject to the same obligations, under this Agreement as
the Stock Purchase Units or Treasury Stock Purchase Units, as the case may be,
evidenced by the Certificate surrendered upon such registration of transfer or
exchange.
Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Purchase Contract Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Purchase Contract Agent duly executed, by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.06 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earliest of any Early Settlement Date for
such Certificate, the Purchase Contract Settlement Date or the Termination Date.
In lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
(i) if the Purchase Contract Settlement Date or an Early Settlement
Date with respect to such other Certificate has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase Contracts
forming a part of the Securities evidenced by such other Certificate; or
(ii) if a Cash Settlement or an Early Settlement Date with respect to
such other Certificate shall have occurred, or if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
Notes, the Treasury Securities, or the
21
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Section 3.15
and Article Five hereof.
Section 3.06. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
or its custodian by, or on behalf of, the Company. The Company hereby designates
DTC as the initial Depositary. Such Global Certificates shall initially be
registered on the books and records of the Company in the name of Cede & Co.,
the nominee of the Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.09. The Purchase Contract Agent
shall enter into an agreement with the Depositary if so requested by the
Company. Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.09:
(i) the provisions of this Section 3.06 shall be in full force and
effect;
(ii) the Company shall be entitled to deal with the Depositary for
all purposes of this Agreement (including making Purchase Contract Payments
and receiving approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificates and shall have no
obligation to the Beneficial Owners;
(iii) to the extent that the provisions of this Section 3.06 conflict
with any other provisions of this Agreement, the provisions of this Section
3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be exercised only
through the Depositary and shall be limited to those established by law and
agreements between such Beneficial Owners and the Depositary or the
Depositary Participants.
Section 3.07. Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of the Depositary or the nominee of the Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
Section 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.
Section 3.09. Definitive Certificates.
22
If:
(i) the Depositary elects to discontinue its services as securities
depositary with respect to the Securities and a successor Depositary is not
appointed pursuant to Section 3.08 within 90 days after such
discontinuance; or
(ii) the Company elects, after consultation with the Purchase Contract
Agent, to terminate the book-entry system for the Securities,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Securities and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Securities by the
Depositary, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Depositary. The Company shall not be liable for any
delay in delivery of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions. Each definitive Certificate so
delivered shall evidence Securities of the same kind and tenor as the Global
Certificate so surrendered in respect thereof.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract Agent,
the Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and
deliver in exchange therefor, a new Certificate, evidencing the same number of
Stock Purchase Units or Treasury Stock Purchase Units, as the case may be, and
bearing a Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract Agent
(i) evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity as may be required by them to
hold each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Purchase Contract Agent that such Certificate has
been acquired by a protected purchaser, the Company shall execute and deliver to
the Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the same
number of Stock Purchase Units or Treasury Stock Purchase Units, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earliest of any Early Settlement Date for such lost or
mutilated Certificate, the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
23
(i) if the Purchase Contract Settlement Date or an Early Settlement
Date with respect to such lost or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate;
or
(ii) if a Cash Settlement with respect to such lost or mutilated
Certificate shall have occurred or if a Termination Event shall have
occurred prior to the Purchase Contract Settlement Date, transfer the
Notes, the Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Section 3.15 and Article Five hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Purchase Contract Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Purchase Contract Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer, the
Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Security evidenced thereby, for the purpose of
receiving distributions on the Treasury Securities, the Notes, or on the
maturing quarterly interest strips of the Treasury Portfolio, as applicable,
receiving Purchase Contract Payments, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any distributions on the
Treasury Securities, the Notes, or Treasury Portfolio, as applicable, or
Purchase Contract Payments payable on the Purchase Contracts, each constituting
a part of the Security evidenced thereby shall be overdue and notwithstanding
any notice to the contrary, and neither the Company nor the Purchase Contract
Agent, nor any agent of the Company or the Purchase Contract Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained
24
herein shall prevent the Company, the Purchase Contract Agent or any agent of
the Company or the Purchase Contract Agent, from giving effect to any written
certification, proxy or other authorization furnished by the Depositary (or its
nominee), as a Holder, with respect to such Global Certificate or impair, as
between such Depositary and the related Beneficial Owner, the operation of
customary practices governing the exercise of rights of the Depositary (or its
nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on or
after the Purchase Contract Settlement Date, upon the transfer of Notes, the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of that term) of the Treasury Portfolio or Treasury Securities, as
the case may be, after the occurrence of a Termination Event or pursuant to an
Early Settlement, or upon the registration of transfer or exchange of a
Security, or a Collateral Substitution or the reestablishment of Stock Purchase
Units shall, if surrendered to any Person other than the Purchase Contract
Agent, be delivered to the Purchase Contract Agent and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Purchase Contract Agent for cancellation any Certificates
previously authenticated, executed and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Certificates so delivered shall,
upon Issuer Order, be promptly cancelled by the Purchase Contract Agent. No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as provided
in this Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Purchase Contract Agent shall be disposed of in
accordance with its customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
Section 3.13. Creation of Treasury Stock Purchase Units by Substitution of
Treasury Securities.
Subject to the conditions set forth in this Agreement, a Holder may
separate the Notes, as applicable, from the related Purchase Contracts in
respect of such Holder's Stock Purchase Units by substituting for such Notes, as
applicable, Treasury Securities in an aggregate principal amount equal to the
aggregate principal amount of such Notes, as applicable (a "Collateral
Substitution"), at any time from and after the date of this Agreement and prior
to or on the seventh Business Day immediately preceding the Purchase Contract
Settlement Date. To effect such substitution, the Holder must:
(1) deposit with the Securities Intermediary Treasury Securities
having an aggregate principal amount equal to the aggregate
principal amount of the Notes comprising part of such Stock
Purchase Units, as the case may be; and
(2) transfer the related Stock Purchase Units to the Purchase
Contract Agent
25
accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that
the Holder has transferred the relevant amount of Treasury
Securities to the Securities Intermediary and (ii) requesting
that the Purchase Contract Agent instruct the Collateral Agent
to release the Notes, as the case may be, underlying such Stock
Purchase Units, whereupon the Purchase Contract Agent shall
promptly provide an instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Treasury Securities described in clause (1) above and
the instruction described in clause (2) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Notes, as the case may be, from the
Pledge, free and clear of the Company's security interest therein, and the
transfer of such Notes, as the case may be, to the Purchase Contract Agent on
behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall
promptly:
(i) cancel the related Stock Purchase Units;
(ii) transfer the Notes, as the case may be, to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Stock Purchase Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Stock Purchase Units.
Holders who elect to separate the Notes, as the case may be, from the
related Purchase Contracts and to substitute Treasury Securities for such Notes,
as the case may be, shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral Agent in respect of the
substitution, and the Company shall not be responsible for any such fees or
expenses.
Holders may make Collateral Substitutions only in integral multiples of 40
Stock Purchase Units. If a Tax Event Redemption has occurred, Holders may no
longer convert their Stock Purchase Units into Treasury Stock Purchase Units.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Stock Purchase Units
or fails to deliver Stock Purchase Units Certificates to the Purchase Contract
Agent after depositing Treasury Securities with the Collateral Agent, any
distributions on the Notes constituting a part of such Stock Purchase Units, as
the case may be, shall be held in the name of the Purchase Contract Agent or its
nominee in trust for the benefit of such Holder, until such Stock Purchase Units
are so transferred or the Stock Purchase Units Certificate is so delivered, as
the case may be, or, such Holder provides evidence satisfactory to the Company
and the Purchase Contract Agent that such Stock Purchase Units Certificate has
been destroyed, lost or stolen, together with any indemnity that may be required
by the Purchase Contract Agent and the Company.
26
Except as described in this Section 3.13 or in connection with a Cash
Settlement, for so long as the Purchase Contract underlying a Stock Purchase
Unit remains in effect, such Stock Purchase Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder in respect of
the Notes, as the case may be, and the Purchase Contract comprising such Stock
Purchase Unit may be acquired, and may be transferred and exchanged, only as a
Stock Purchase Unit.
Section 3.14. Reestablishment of Stock Purchase Units.
Subject to the conditions set forth in this Agreement, a Holder of
Treasury Stock Purchase Units may reestablish Stock Purchase Units at any time
(i) prior to or on the seventh Business Day immediately preceding the Purchase
Contract Settlement Date, by:
(1) depositing with the Securities Intermediary Notes, as the
case may be, having an aggregate principal amount equal to
the aggregate principal amount at maturity of the Treasury
Securities comprising part of the Treasury Stock Purchase
Units; and
(2) transferring the related Treasury Stock Purchase Units to
the Purchase Contract Agent accompanied by a notice to the
Purchase Contract Agent, substantially in the form of
Exhibit C hereto, (i) stating that the Holder has
transferred the relevant amount of Notes, as the case may
be, to the Securities Intermediary and (ii) requesting that
the Purchase Contract Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Treasury
Stock Purchase Units, whereupon the Purchase Contract Agent
shall promptly provide an instruction to such effect to the
Collateral Agent, substantially in the form of Exhibit C to
the Pledge Agreement.
Upon receipt of the Notes, as the case may be, described in clause (1) above and
the instruction described in clause (2) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of the Treasury Securities having a
corresponding aggregate principal amount at maturity from the Pledge, free and
clear of the Company's security interest therein, and the transfer to the
Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the
Purchase Contract Agent shall promptly:
(i) cancel the related Treasury Stock Purchase Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver
a Stock Purchase Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Treasury Stock Purchase
Units.
27
Holders who elect to reestablish Stock Purchase Units shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the reestablishment, and the Company
shall not be responsible for any such fees or expenses.
Holders of Treasury Stock Purchase Units may only reestablish Stock
Purchase Units in integral multiples of 40 Treasury Stock Purchase Units. If a
Tax Event Redemption has occurred, Holders may no longer convert their Treasury
Stock Purchase Units into Stock Purchase Units.
Except as provided in this Section 3.14 or in connection with a Cash
Settlement, for so long as the Purchase Contract underlying a Treasury Stock
Purchase Unit remains in effect, such Treasury Stock Purchase Unit shall not be
separable into its constituent parts and the rights and obligations of the
Holder of such Treasury Stock Purchase Unit in respect of the [1/40] of a
Treasury Security and the Purchase Contract comprising such Treasury Stock
Purchase Unit may be acquired, and may be transferred and exchanged, only as a
Treasury Stock Purchase Unit.
Section 3.15. Transfer of Collateral upon Occurrence of Termination
Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Notes, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities, as the case may
be, underlying the Stock Purchase Units and the Treasury Stock Purchase Units,
as the case may be, pursuant to the terms of the Pledge Agreement, the Purchase
Contract Agent shall request transfer instructions with respect to such Notes,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, from each Holder by written request,
substantially in the form of Exhibit D hereto, mailed to such Holder at its
address as it appears in the Security Register.
Upon book-entry transfer of the Stock Purchase Units or the Treasury
Stock Purchase Units or delivery of a Stock Purchase Units Certificate or
Treasury Stock Purchase Units Certificate to the Purchase Contract Agent with
such transfer instructions, the Purchase Contract Agent shall transfer the
Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio
or Treasury Securities, as the case may be, underlying such Stock Purchase Units
or Treasury Stock Purchase Units, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in accordance with such
instructions. In the event a Holder of Stock Purchase Units or Treasury Stock
Purchase Units fails to effect such transfer or delivery, the Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Stock Purchase Units or Treasury
Stock Purchase Units, as the case may be, and any distributions thereon, shall
be held in the name of the Purchase Contract Agent or its nominee in trust for
the benefit of such Holder, until the earlier to occur of:
(i) the transfer of such Stock Purchase Units or Treasury
Stock Purchase Units or surrender of the Stock Purchase Units
Certificate or Treasury Stock Purchase Units Certificate or receipt by
the Company and the Purchase Contract Agent from such Holder of
satisfactory evidence that such Stock Purchase Units Certificate or
Treasury Stock Purchase Units Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and
28
(ii) the expiration of the time period specified in the abandoned
property laws of the relevant State.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.
ARTICLE 4
The Notes and Applicable Ownership Interest of the Treasury Portfolio
Section 4.01. Interest Payments; Rights to Interest Payments Preserved.
Any distribution on any Note or on the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, which is paid on any
Payment Date shall, subject to receipt thereof by the Purchase Contract Agent
from the Collateral Agent as provided by the terms of the Pledge Agreement, be
paid to the Person in whose name the Stock Purchase Units Certificate (or one or
more Predecessor Stock Purchase Units Certificates) of which such Note or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, is registered at the close of business on the Record Date for such
Payment Date. Any such distribution shall be subject to deferral at the option
of the Company in accordance with the Indenture and the Declaration.
Each Stock Purchase Units Certificate evidencing Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other Stock Purchase Units Certificate shall carry the right to distributions
accrued and unpaid, and to accrue distributions interest, which were carried by
the Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio underlying such other Stock Purchase Units Certificate.
In the case of any Stock Purchase Units with respect to which Cash
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.02 hereof, or with respect to which Early Settlement of the underlying
Purchase Contract is properly effected pursuant to Section 5.04 hereof, or with
respect to which a Collateral Substitution is effected, in each case on a date
that is after any Record Date and prior to or on the next succeeding Payment
Date, distributions on the Notes or on the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying such Stock
Purchase Unit otherwise payable on such Payment Date shall be payable on such
Payment Date notwithstanding such Cash Settlement or
29
Early Settlement or Collateral Substitution, and such distributions shall,
subject to receipt thereof by the Purchase Contract Agent, be payable to the
Person in whose name the Stock Purchase Units Certificate (or one or more
Predecessor Stock Purchase Units Certificates) was registered at the close of
business on the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Stock Purchase Unit with
respect to which Cash Settlement or Early Settlement of the underlying Purchase
Contract is properly effected, or with respect to which a Collateral
Substitution has been effected, distributions on the related Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, that would otherwise be payable after the Purchase Contract Settlement
Date, Early Settlement Date or the date of the Collateral Substitution, as the
case may be, shall not be payable hereunder to the Holder of such Stock Purchase
Units; provided, however, that to the extent that such Holder continues to hold
separated Notes that formerly comprised a part of such Holder's Stock Purchase
Unit, such Holder shall be entitled to receive distributions on such separated
Notes.
Not later than 15 calendar days nor more than 30 calendar days prior to
the Remarketing Date, the Company shall request the Depositary to notify the
Beneficial Owners or Depositary Participants holding Securities of the
procedures to be followed by Holders of Securities who intend to effect a Cash
Settlement.
Section 4.02. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Notes, but only to the extent instructed in writing by the Holders
as described below. Upon receipt of notice of any meeting at which holders of
Notes are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Notes, the Purchase Contract Agent shall, as soon as
practicable thereafter, mail, first class, postage pre-paid, to the Holders of
Stock Purchase Units a notice:
(i) containing such information as is contained in the notice or
solicitation;
(ii) stating that each Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Notes, as
the case may be, entitled to vote) shall be entitled to instruct the
Purchase Contract Agent as to the exercise of the voting rights pertaining
to such Notes underlying their Stock Purchase Units; and
(iii) stating the manner in which such instructions may be given.
Upon the written request of the Holders of Stock Purchase Units on such record
date received by the Purchase Contract Agent at least six days prior to such
meeting, the Purchase Contract Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Notes, as the case may be, as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Stock Purchase Unit, the Purchase Contract
Agent shall abstain from voting the
30
Notes underlying such Stock Purchase Unit. The Company hereby agrees, if
applicable, to solicit Holders of Stock Purchase Units to timely instruct the
Purchase Contract Agent in order to enable the Purchase Contract Agent to vote
such Notes.
Section 4.03. Tax Event Redemption.
(a) Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, an amount equal to the Redemption Amount,
plus any accumulated and unpaid distributions or accrued and unpaid interest, as
the case may be, payable on the Tax Event Redemption Date with respect to the
principal amount of the Notes shall be deposited in the Collateral Account in
exchange for the Pledged Notes. Thereafter, pursuant to the terms of the Pledge
Agreement, the Collateral Agent shall cause the Securities Intermediary to apply
an amount equal to the Redemption Amount of such funds to purchase on behalf of
the Holders of Stock Purchase Units the Treasury Portfolio and promptly remit
the remaining portion of such funds to the Purchase Contract Agent for payment
to the Holders of such Stock Purchase Units.
(b) The Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio will be substituted as
Collateral for the Pledged Notes, as the case may be, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of Stock Purchase Unit to purchase the Common
Stock of the Company under the Purchase Contract constituting a part of such
Stock Purchase Unit. Following the occurrence of a Tax Event Redemption prior to
the Purchase Contract Settlement Date, the Holders of Stock Purchase Units and
the Collateral Agent shall have such security interest rights and obligations
with respect to the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio as the Holders of Stock
Purchase Units and the Collateral Agent had in respect of the Notes, as the case
may be, subject to the Pledge thereof as provided in the Pledge Agreement, and
any reference herein to the Notes shall be deemed to be reference to such
Treasury Portfolio. The Company may cause to be made in any Stock Purchase Units
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio for Notes as Collateral.
ARTICLE 5
The Purchase Contracts
Section 5.01. Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement has occurred in accordance with
Section 5.04 hereof or, prior to or on the Purchase Contract Settlement Date,
there shall have occurred a
31
Termination Event with respect to the Security of which such Purchase Contract
is a part. The "Settlement Rate" is equal to:
(i) if the Applicable Market Value (as defined below) is
greater than or equal to $______ (the "Threshold Appreciation Price"),
________ share of Common Stock per Purchase Contract; and
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $_______ (the "Reference Price"),
the number of shares of Common Stock per Purchase Contract having a
value, based on the Applicable Market Value, equal to the Stated
Amount; and
(iii) if the Applicable Market Value is less than or equal to
the Reference Price, _______ share of Common Stock per Purchase
Contract,
in each case subject to adjustment as provided in Section 5.04 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
The "Closing Price" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the 4:15 p.m. close of the
principal trading session (or, if no closing price is reported, the
last reported sale price) per share on the New York Stock Exchange,
Inc. (the "NYSE") on such date;
(ii) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities
exchange on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per
share as reported by The Nasdaq National Market;
(iv) if the Common Stock is not so reported, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(v) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of the Common Stock on such
date from at least three nationally recognized independent investment
banking firms retained for this purpose by the Company.
32
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
(b) Each Holder of a Stock Purchase Unit or a Treasury Stock Purchase
Unit, by its acceptance thereof:
(i) irrevocably authorizes the Purchase Contract Agent to
enter into and perform the related Purchase Contract on its behalf as
its attorney-in- fact (including the execution of Certificates on
behalf of such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
iii) covenants and agrees to perform its obligations under such
Purchase Contract;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to
enter into and perform this Agreement and the Pledge Agreement on its
behalf as its attorney-in-fact; and
(vi) consents to, and agrees to be bound by, the Pledge of such
Holder's right, title and interest in and to the Collateral Account,
including the Notes, the Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio or
the Treasury Securities pursuant to the Pledge Agreement,
provided that upon a Termination Event, the rights of the Holder of such
Security under the Purchase Contract may be enforced without regard to any other
rights or obligations. Each Holder of a Stock Purchase Unit or a Treasury Stock
Purchase Unit, by its acceptance thereof, further covenants and agrees, that to
the extent and in the manner provided in Section 5.02 and the Pledge Agreement,
but subject to the terms thereof, payments in respect of the Notes or the
proceeds from the Treasury Securities or the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio at maturity on the Purchase Contract Settlement Date, as the case may
be, shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate, the Declaration and the Pledge Agreement and the transferor
shall be released from the obligations under this Agreement, the Purchase
Contracts underlying the Certificate so transferred and the Pledge Agreement.
The Company
33
covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
Section 5.02. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder of
a Stock Purchase Unit effects an Early Settlement of the underlying Purchase
Contract in the manner described in Section 5.04, each Holder who intends to pay
in cash to satisfy such Holder's obligations under the Purchase Contract on the
Purchase Contract Settlement Date shall notify the Purchase Contract Agent by
use of a notice in substantially the form of Exhibit E hereto of his intention
to pay in cash ("Cash Settlement") the Purchase Price for the shares of Common
Stock to be purchased pursuant to the related Purchase Contract. Such notice
shall be given prior to 5:00 p.m. (New York City time) on the seventh Business
Day immediately preceding the Purchase Contract Settlement Date. Prior to 11:00
a.m. (New York City time) on the next succeeding Business Day, the Purchase
Contract Agent shall notify the Collateral Agent and the Property Trustee or the
Indenture Trustee, as the case may be, of the receipt of such notices from
Holders intending to make a Cash Settlement.
(ii) A Holder of a Stock Purchase Unit who has so notified the
Purchase Contract Agent of his intention to effect a Cash Settlement in
accordance with paragraph 5.02(a)(i) above shall pay the Purchase Price
to the Securities Intermediary for deposit in the Collateral Account
prior to 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, in lawful
money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or
upon the order of the Securities Intermediary. Any cash received by the
Collateral Agent shall be invested promptly by the Securities
Intermediary in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase
Contracts in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in respect
of the investment earnings from such Permitted Investments in excess of
the Purchase Price for the shares of Common Stock to be purchased by
such Holder shall be distributed to the Purchase Contract Agent when
received for payment to the Holder.
(iii) If a Holder of a Stock Purchase Unit fails to notify the
Purchase Contract Agent of his intention to make a Cash Settlement in
accordance with paragraph 5.02(a)(i) above, or does notify the Purchase
Contract Agent as provided in paragraph 5.02(a)(i) above of his
intention to pay the Purchase Price in cash, but fails to make such
payment as required by paragraph 5.02(a)(ii) above, such Holder shall
be deemed to have consented to the disposition of the Pledged Notes
pursuant to the Remarketing as described in paragraph 5.02(b) below.
(iv) Promptly after 11:00 a.m. (New York City time) on the
fifth Business Day preceding the Purchase Contract Settlement
Date, the Purchase Contract Agent, based on notices received by
the Purchase Contract Agent pursuant to Section 5.02(a) hereof
and notice from the Securities Intermediary regarding cash
received
34
by it prior to such time, shall notify the Collateral Agent and the
Property Trustee or the Indenture Trustee, as applicable of the
aggregate number of Notes to be tendered for purchase in the
Remarketing in a notice substantially in the form of Exhibit F hereto.
(b) (i) In order to dispose of the Notes, Stock Purchase Units Holders who
have not notified the Purchase Contract Agent of their intention to effect a
Cash Settlement as provided in paragraph 5.02(a)(i) above, or who have so
notified the Purchase Contract Agent but failed to make such payment as required
by paragraph 5.02(a)(ii) above, the Company shall engage _____________________,
as Remarketing Agent (the "Remarketing Agent"), pursuant to the Remarketing
Agreement (and subject to removal as provided in the Remarketing Agreement) to
sell such Notes. In order to facilitate the Remarketing, the Purchase Contract
Agent, based on the notices specified in Section 5.02(a)(iv), shall notify the
Remarketing Agent, promptly after 11:00 a.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, of the
aggregate number of Notes that are part of Stock Purchase Units to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, shall cause such Notes to be presented to the Remarketing
Agent for Remarketing.
Upon receipt of such notice from the Purchase Contract Agent and such
Notes, the Remarketing Agent shall, on the third Business Day immediately
preceding the Purchase Contract Settlement Date, use reasonable efforts to
remarket such Notes on such date at a price equal to [ ]% of the Stated Amount
($[ ]) per Note, as provided in the Remarketing Agreement. The proceeds from the
Remarketing shall be invested by the Collateral Agent in Permitted Investments,
in accordance with the Pledge Agreement, and then applied to satisfy in full
such Stock Purchase Units Holders' obligations to pay the Purchase Price for the
shares of Common Stock under the related Purchase Contracts on the Purchase
Contract Settlement Date. In addition, [$ ] per Note of the proceeds shall
automatically be remitted to the Remarketing Agent for services rendered in
connection with the Remarketing (the "Remarketing Fee").
If, in spite of using its reasonable efforts, the Remarketing Agent cannot
remarket the related Notes of such Holders of Stock Purchase Units at a price
equal to [ ]% of the Stated Amount ($[ ]), then the Remarketing Agent shall
increase the interest rate on the Notes so that the market value of such Notes
will equal ($[ ]). If the Remarketing Agent determines that it will be able to
remarket the related Notes of such Holders of Stock Purchase Units at a price in
excess of [ ]% of the Stated Amount ($[ ]), then the Remarketing Agent shall
decrease the interest rate on the Notes so that the market value of such Notes
will be equal to [$ ]. If the Remarketing Agent cannot Remarket the Notes, as
the case may be, after such increase or decrease, the Remarketing shall be
deemed to have failed (a "Failed Remarketing"), an event of default shall be
deemed to have occurred under this Agreement and the Pledge Agreement and in
accordance with the terms of the Pledge Agreement, the Collateral Agent, for the
benefit of the Company, shall exercise its rights as a secured party with
respect to such Notes, including those actions specified in paragraph 5.02(c)
below; provided, that if upon a Failed Remarketing the Collateral Agent
exercises such rights for the benefit of the Company with respect to such Notes,
any accrued and unpaid distributions on such Notes and any accrued and unpaid
Purchase Contract Payments (including any deferred Purchase Contract Payments)
shall become payable by
35
the Company to the Purchase Contract Agent for payment to the Beneficial Owner
of the Stock Purchase Units to which such Notes relate. The Company shall cause
a notice of such Failed Remarketing to be published on the second Business Day
immediately preceding the Purchase Contract Settlement Date in a daily newspaper
in the English language of general circulation in the City of New York, which is
expected to be The Wall Street Journal, and on Bloomberg News.
(c) With respect to any Notes which are subject to a Failed Remarketing,
the Collateral Agent for the benefit of the Company reserves all of its rights
as a secured party with respect thereto and, subject to applicable law and
paragraph 5.02(g) below, shall, in full satisfaction of the Holders' obligations
under the Purchase Contracts among other things, (i) retain the Notes, (ii) sell
the Notes in one or more public or private sales or (iii) take, or choose not to
take, any other action with respect to the Notes, which in every case specified
in (i), (ii) and (iii) shall constitute payment in full for the aggregate
Purchase Price for the shares of Common Stock to be purchased under the Purchase
Contracts.
(d) Unless a Holder of a Treasury Stock Purchase Unit or Stock Purchase
Unit (if a Tax Event Redemption has occurred) effects an Early Settlement of the
underlying Purchase Contract through the early delivery of cash to the Purchase
Contract Agent in the manner described in Section 5.04, each Holder of a
Treasury Stock Purchase Unit or Stock Purchase Unit (if a Tax Event Redemption
has occurred) who intends to pay in cash shall notify the Purchase Contract
Agent by use of a notice in substantially the form of Exhibit E hereto of his
intention to pay in cash the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract. Such notice shall be given
prior to 5:00 p.m. (New York City time) on the second Business Day immediately
preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York
City time) on the next succeeding Business Day, the Purchase Contract Agent
shall notify the Collateral Agent of the receipt of such notices from such
Holders intending to make a Cash Settlement. Treasury Stock Purchase Unit
holders may make Cash Settlements only in integral multiples of 40 Treasury
Stock Purchase Units.
(ii) A Holder of a Treasury Stock Purchase Unit or Stock Purchase
Units (if a Tax Event Redemption has occurred) who has so notified the
Purchase Contract Agent of his intention to make a Cash Settlement in
accordance with paragraph 5.02(d)(i) above shall pay the Purchase
Price to the Securities Intermediary for deposit in the Collateral
Account prior to 11:00 a.m. (New York City time) on the Business Day
immediately preceding the Purchase Contract Settlement Date, in lawful
money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or
upon the order of the Securities Intermediary. Any cash received by
the Collateral Agent shall be invested promptly by the Securities
Intermediary in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase
Contract in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in
respect of the investment earnings from the investment in such
Permitted Investments in excess of the Purchase Price for the shares
of Common Stock to be purchased by such Holder shall be
36
distributed to the Purchase Contract Agent when received for payment
to the Holder.
(iii) If a Holder of a Treasury Stock Purchase Unit or Holder of a
Stock Purchase Unit (if a Tax Event Redemption has occurred) fails to
notify the Purchase Contract Agent of his intention to make a Cash
Settlement in accordance with paragraph 5.02(d)(i) above, or does
notify the Purchase Contract Agent as provided in paragraph 5.02(d)(i)
above of his intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph 5.02(d)(ii) above, then
upon the maturity of the Pledged Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio held by the
Securities Intermediary on the Business Day immediately preceding the
Purchase Contract Settlement Date, the principal amount of the
Treasury Securities or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the
Treasury Portfolio received by the Securities Intermediary shall be
invested promptly in Permitted Investments. On the Purchase Contract
Settlement Date, an amount equal to the Purchase Price shall be
remitted to the Company as payment thereof without receiving any
instructions from the Holder. In the event the sum of the proceeds
from the related Pledged Treasury Securities or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio and the investment
earnings earned from such investments is in excess of the aggregate
Purchase Price of the Purchase Contracts being settled thereby, the
Collateral Agent shall cause the Securities Intermediary to distribute
such excess to the Purchase Contract Agent for the benefit of the
Holder of the related Treasury Stock Purchase Unit or Stock Purchase
Unit when received.
(iv) A holder of a Note that is no longer part of a Stock Purchase
Unit may elect to have such Note, as the case may be, remarketed. A
holder making such an election must notify the Indenture Trustee prior
to 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, of the
aggregate number of Notes, as the case may be, that are not part of
Stock Purchase Units to be remarketed. Any such notice will be
irrevocable and may not be conditioned upon the level at which the
Reset Rate is established in the Remarketing. Concurrently, the
Property Trustee or the Indenture Trustee, as the case may be, shall
cause such Notes, as the case may be, to be presented to the
Remarketing Agent for Remarketing.
(e) Any distribution to Holders of any payments described above shall be
payable at the office of the Purchase Contract Agent in New York City maintained
for that purpose or, at the option of the Holder, by check mailed to the address
of the Person entitled thereto at such address as it appears on the Security
Register.
(f) Upon Cash Settlement of any Purchase Contract:
37
(i) the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Notes, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio or the Pledged Treasury Securities, as the
case may be, underlying the relevant Security to be released from the
Pledge, free and clear of any security interest of the Company, and
transferred to the Purchase Contract Agent for delivery to the Holder
thereof or its designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase Contract Agent
shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Notes, or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio or such Treasury Securities, as the case may be (or, if no such
instructions are given to the Purchase Contract Agent by the Holder, the
Purchase Contract Agent shall hold such Notes, or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio or such Treasury Securities, as the
case may be, and any interest payment thereon, in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder until
the expiration of the time period specified in the abandoned property laws
of the relevant state).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early Settlement
or Cash Settlement, are payable solely out of the proceeds of any Collateral
pledged to secure the obligations of the Holders and in no event will Holders be
liable for any deficiency between the proceeds of the disposition of Collateral
and the Purchase Price.
(h) The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates thereof to the
Holder of the related Security unless the Company shall have received payment in
full for the aggregate Purchase Price for the Common Stock to be purchased
thereunder in the manner herein set forth.
Section 5.03. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
subject to Section , on the Purchase Contract Settlement Date upon receipt of
the aggregate Purchase Price payable on all Outstanding Securities, the Company
shall issue and deposit with the Purchase Contract Agent, for the benefit of the
Holders of the Outstanding Securities, one or more certificates representing
newly issued shares of Common Stock registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such certificates
for shares of Common Stock, together with any dividends or distributions for
which a record date and payment date for such dividend or distribution has
occurred after the Purchase Contract Settlement Date, being hereinafter referred
to as the "Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder.
38
Subject to the foregoing, upon surrender of a Certificate to the Purchase
Contract Agent on or after the Purchase Contract Settlement Date or Early
Settlement Date, as the case may be, together with settlement instructions
thereon duly completed and executed, the Holder of such Certificate shall be
entitled to receive forthwith in exchange therefor a certificate representing
that number of newly issued whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all Securities then held by such Holder), together with cash
in lieu of fractional shares as provided in Section and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Purchase Contract Agent. If any
shares of Common Stock issued in respect of a Purchase Contract are to be
registered to a Person other than the Person in whose name the Certificate
evidencing such Purchase Contract is registered, no such registration shall be
made unless the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name other than that of
the registered Holder of the Certificate evidencing such Purchase Contract or
has established to the satisfaction of the Company that such tax either has been
paid or is not payable.
Section 5.04. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other distribution
on Common Stock in Common Stock, the Settlement Rate in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination; and
(ii) the denominator shall be the sum of such number of shares and the
total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) In case the Company shall issue rights, warrants or options to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of shareholders entitled to
39
receive such rights, warrants or options, the Settlement Rate in effect at the
opening of business on the day following the date fixed for such determination
shall be increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the aggregate
of the offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market
Price; and
(ii) the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not issue
any such rights, warrants or options in respect of shares of Common Stock held
in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or split
into a greater number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights, warrants or options referred to in
paragraph (2) of this Section 5.04(a), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in paragraph
(1) of this Section 5.04(a)), the Settlement Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution by a
fraction of which:
(i) the numerator shall be the Current Market Price per share of
Common Stock on the date fixed for such determination less the then fair
market value (as reasonably
40
determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board
Resolution) of the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock; and
(ii) the denominator shall be such Current Market Price per share of
Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.04(a) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.
(5) In case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock cash (excluding:
(i) any quarterly cash dividend on Common Stock to the extent that
the aggregate cash dividend per share of Common Stock in any fiscal quarter
does not exceed $____ per share (as adjusted from time to time to reflect
the subdivisions or combinations of Common Stock, the "Dividend
Threshold"), and
(ii) any dividend or distribution in connection with the liquidation,
dissolution or termination of the Company, whether voluntary or
involuntary),
then, in such case, the Settlement Rate shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on such record date by a fraction of
which:
(i) the numerator shall be the Current Market Price of Common Stock
on the record date less the amount of cash so distributed (and not excluded
as provided above) applicable to one share of Common Stock; and
(ii) the denominator shall be the Current Market Price of Common
Stock,
such increase to be effective immediately prior to the opening of
business on the day following the record date; provided, however, that in
the event the portion of cash so distributed applicable to one share of
Common Stock is equal to or greater than the Current Market Price per share
of Common Stock on the record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder of a Security shall
have the right to receive upon settlement of the Securities the amount of
cash such Holder would have received had such Holder settled each Security
on the record date. In the event that such dividend or distribution is not
so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or
distribution had not been declared. If any adjustment is required to be
made as
41
set forth in this Section 5.04(a)(5) as a result of a distribution that is
a quarterly dividend, such adjustment shall be based upon the amount by
which such distribution exceeds the amount of the Dividend Threshold. If an
adjustment is required to be made as set forth in this Section 5.04(a)(5)
above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares as
herein defined) of (I) an aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution)
that combined together with the aggregate of the cash plus the fair market value
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration payable
in respect of any other tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of Common Stock expiring within
the 12 months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to this paragraph (6) has been made, and
(II) the aggregate amount of any distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be equal to (A) the product of (I)
the Current Market Price per share of Common Stock on the date of the
Expiration Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the transactions
described in clauses (I) and (II) above (assuming in the case of clause (I)
the acceptance, up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares); and
(ii) the denominator of which shall be equal to the product of (A) the
Current Market Price per share of Common Stock as of the Expiration Time
and (B) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred
42
to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.04(b) applies) shall be deemed to
involve:
(i) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification
shall be deemed to be "the date fixed for the determination of shareholders
entitled to receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this Section); and
(ii) a subdivision, split or combination, as the case may be, of the
number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares of Common Stock outstanding
immediately thereafter (and the effective date of such reclassification
shall be deemed to be "the day upon which such subdivision or split becomes
effective" or "the day upon which such combination becomes effective", as
the case may be, and "the day upon which such subdivision, split or
combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on any date of
determination means the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more than 30
Trading Days before, and ending not later than the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date," when used with respect to any issuance or distribution, shall
mean the first date on which Common Stock trades on such exchange or in such
market without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.04(a), an adjustment shall
also be made to the Applicable Market Value solely to determine which of clauses
(i), (ii) or (iii) of the definition of Settlement Rate in Section 5.01 will
apply on the Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction of which the numerator
shall be the Settlement Rate immediately after such adjustment pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.04(a) and
the denominator shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.04(a)
during the period taken into consideration for
43
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
(10) The Company may, but shall not be required to, make such increases in
the Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the shares of Common Stock outstanding
immediately prior to the merger or consolidation are not exchanged for
cash, securities or other property of the Company or another corporation);
(ii) any sale, transfer, lease or conveyance to another Person of the
property of the Company as an entirety or substantially as an entirety;
(iii) any statutory share exchange of the Company with another Person
(other than in connection with a merger or acquisition); or
(iv) any liquidation, dissolution or termination of the Company other
than as a result of or after the occurrence of a Termination Event, (any
such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of
Securities will receive on the Purchase Contract Settlement Date with
respect to each Purchase Contract forming a part thereof, the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right
to dividends or distribution thereon which have a record date that is prior
to the Purchase Contract Settlement Date) by a Holder of the number of
shares of Common Stock issuable on account of each Purchase Contract if the
Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event, assuming such Holder of Common Stock is not a Person
with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made,
as the case may be (any such Person, a "Constituent Person"), or an
Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided
44
that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each share of
Common Stock held immediately prior to such Reorganization Event by other
than a Constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised ("Non-electing
Share"), then for the purpose of this Section the kind and amount of
securities, cash and other property receivable upon such Reorganization
Event by each non-electing share shall be deemed to be the kind and amount
so receivable per share by a plurality of the non-electing shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets
of the Company or, in the event of a liquidation, dissolution or
termination of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Purchase Contract
Agent an agreement supplemental hereto providing that each Holder of an
Outstanding Security shall have the rights provided by this Section
5.04(b). Such supplemental agreement shall provide for adjustments which,
for events subsequent to the effective date of such supplemental agreement,
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section. The above provisions of this Section shall
similarly apply to successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with or
into another Person, any merger of another Person into the Company (other
than a merger that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Stock) in which
30% or more of the total consideration paid to the Company's shareholders
consists of cash or cash equivalents, then a Holder of a Security may
settle his Purchase Contract for cash as described in Section 5.02(a)(i) or
5.02(d)(i) hereof, as applicable, during the one week period beginning on
the twenty-third Trading Day following the closing date of such merger (the
"Early Settlement Week"), at the applicable Settlement Rate. For the
purposes of this Section, the twenty-third Trading Day after the closing of
the merger or consolidation shall be deemed to be the Purchase Contract
Settlement Date for the purpose of determining the Applicable Market Value
and the deadline for submitting the notice to settle early and the related
cash payment shall be 5:00 p.m. (New York City time) of the last Business
Day of the Early Settlement Week. Notwithstanding the foregoing, no early
settlement will be permitted under this Section 5.04(b)(2) unless, at the
time such early settlement is effected, there is an effective Registration
Statement with respect to the shares of Common Stock to be issued and
delivered in connection with such early settlement, if such a Registration
Statement is required (in the view of counsel, which need not be in the
form of a written opinion, for either the Company or the Purchase Contract
Agent) under the Securities Act. If such a Registration Statement is so
required, the Company covenants and agrees to use its best efforts to (A)
have in effect a Registration Statement covering the shares of Common Stock
to be delivered in respect of the Purchase Contracts being settled and (B)
provide a Prospectus in connection therewith, in each case in a form that
the Purchase Contract Agent may use in connection with such early
settlement.
45
(c) All calculations and determinations pursuant to this Section 5.04
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
Section 5.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance with
Section 5.04 and prepare and transmit to the Purchase Contract Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.04 (or
if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase Contract;
and the Purchase Contract Agent makes no representation with respect thereto.
The Purchase Contract Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 5.06. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of
the Holders to receive and the obligation of the Company to pay any
Purchase Contract Payments (including any deferred or accrued and unpaid
Purchase Contract Payments), if the Company shall have such obligation, and
the rights and obligations of Holders to purchase Common Stock, shall
immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Purchase Contract Agent or the Company,
if, prior to or on the Purchase Contract Settlement Date, a Termination
Event shall have occurred.
Upon and after the occurrence of a Termination Event, the Securities
shall thereafter represent the right to receive the Notes, the Treasury
Securities or the
46
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, forming part of such Securities, in accordance with the
provisions of Section 5.04 of the Pledge Agreement. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Purchase Contract
Agent, the Collateral Agent and the Holders, at their addresses as they
appear in the Security Register.
Section 5.07. Intentionally Omitted.
Section 5.08. Intentionally Omitted.
Section 5.09. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be
surrendered for settlement at one time by the same Holder, the number of
full shares of Common Stock which shall be delivered upon settlement shall
be computed on the basis of the aggregate number of Purchase Contracts
evidenced by the Certificates so surrendered. Instead of any fractional
share of Common Stock which would otherwise be deliverable upon settlement
of any Purchase Contracts on the Purchase Contract Settlement Date or upon
Early Settlement, the Company, through the Purchase Contract Agent, shall
make a cash payment in respect of such fractional interest in an amount
equal to the value of such fractional shares times the Applicable Market
Value. The Company shall provide the Purchase Contract Agent from time to
time with sufficient funds to permit the Purchase Contract Agent to make
all cash payments required by this Section 5.09 in a timely manner.
Section 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant
to the Purchase Contracts; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a Security or
any issuance of a share of Common Stock in a name other than that of the
registered Holder of a Certificate surrendered in respect of the Securities
evidenced thereby, other than in the name of the Purchase Contract Agent,
as custodian for such Holder, and the Company shall not be required to
issue or deliver such share certificates or Certificates unless or until
the Person or Persons requesting the transfer or issuance thereof shall
have paid to the Company the amount of such tax or shall have established
to the satisfaction of the Company that such tax has been paid.
Section 5.11. Purchase Contract Payments.
(a) Subject to Section 5.12, the Company shall pay, on each Payment Date,
the
47
Purchase Contract Payments payable in respect of each Purchase Contract to the
Person in whose name a Certificate is registered at the close of business on the
Record Date next preceding such Payment Date. The Purchase Contract Payments
will be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such Person's address as it
appears on the Security Register. If any date on which Purchase Contract
Payments are to be made is not a Business Day, then payment of the Purchase
Contract Payments payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment will be made on the immediately preceding Business Day. Purchase
Contract Payments payable for any period will be computed (i) for any full
quarterly period on the basis of a 360-day year of twelve 30-day months and (ii)
for any period shorter than a full quarterly period, on the basis of a 30-day
month and, for periods of less than a month, on the basis of the actual number
of days elapsed per 30-day month.
(b) Upon the occurrence of a Termination Event, the Company's obligation
to pay future Purchase Contract Payments (including any accrued or deferred
Purchase Contract Payments) shall cease.
(c) Each Certificate delivered under this Agreement upon registration
of transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the reestablishment of Stock Purchase Units) any
other Certificate shall carry the right to accrued or deferred and unpaid
Purchase Contract Payments and the right to accrue Purchase Contract
Payments, which rights were carried by the Purchase Contracts underlying
such other Certificates.
(d) Subject to Section 5.04, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and prior to or on the next
succeeding Payment Date, Purchase Contract Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Purchase Contract Payments shall be paid to the Person in
whose name the Certificate evidencing such Security is registered at the close
of business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Purchase Contract Payments that would otherwise be
payable after the Early Settlement Date with respect to such Purchase Contract
shall not be payable.
Section 5.12. Deferral of Purchase Contract Payments.
(a) The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date, but only if the Company shall give
the Holders and the Purchase Contract Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the
48
Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Purchase Contract Payments to the NYSE or other
applicable self-regulatory organization or to Holders of the Securities, but in
any event not less than one Business Day prior to such Record Date. If the
Company so elects to defer Purchase Contract Payments, the Company shall pay
additional Purchase Contract Payments on such deferred installments of Purchase
Contract Payments at a rate equal to ___% per annum, compounding quarterly,
until such deferred installments are paid in full. Deferred Purchase Contract
Payments shall be due on the Payment Date except to the extent that payment is
deferred pursuant to this Section. Except as otherwise provided in Section
5.11(d), in the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected on an Early Settlement Date, the
Holder will have no right to receive any accrued or deferred Purchase Contract
Payments.
(b) In the event the Company elects to defer the payment of Purchase
Contract Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Purchase Contract Payments. The
Company shall pay such amounts on the Purchase Contract Settlement Date in the
manner described in Section 5.02(e).
(c) In the event the Company exercises its option to defer the payment of
Purchase Contract Payments, then, until all deferred Purchase Contract Payments
have been paid, the Company shall not, and shall not permit any of its
subsidiaries to (a) make any payment of principal, interest or premium, if any,
on or repay, repurchase or redeem any debt securities that rank junior to the
Notes in the right of payment issued by the Company or any subsidiary of the
Company, or (b) make any guarantee payments with respect to any guarantee by the
Company of any securities of any of its subsidiaries if such guarantee ranks
junior to the Notes in the right of payment, (c) declare or pay any dividends or
distributions on any of the Company's capital stock or (d) redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock. Notwithstanding the foregoing, the Company may (1) purchase or
acquire its capital stock in connection with the satisfaction by it of its
obligations under any employee benefit plans or pursuant to any contract or
security outstanding on the first day of any such event requiring it to purchase
its capital stock; (2) reclassify its capital stock or exchange or convert one
class or series of its capital stock for another class or series of its capital
stock; (3) purchase fractional interests in shares of its capital stock pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted or exchanged; (4) declare dividends or distributions in its
capital stock; and (5) redeem or repurchase any rights pursuant to a rights
agreement.
ARTICLE 6
Remedies
Section 6.01. Unconditional Right of Holders to Receive Purchase Contract
Payments and to Purchase Shares of Common Stock.
Each Holder of a Security shall have the right, which is absolute and
unconditional, (i) subject to the right of the Company to defer such payments in
accordance with Section 5.12, to
49
receive each Purchase Contract Payment with respect to the Purchase Contract
comprising part of such Security on the respective Payment Date for such
Security and (ii) to purchase shares of Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the enforcement of any
such right to receive Purchase Contract Payments and the right to purchase
shares of Common Stock, and such rights shall not be impaired without the
consent of such Holder.
Section 6.02. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
Section 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.04. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right. Every right and remedy given by this Article or by law to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by such
Holders.
Section 6.05. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a Security, by its
acceptance of such Security shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Agreement, or in any suit against the Purchase Contract Agent
for any action taken, suffered or omitted by it as Purchase Contract Agent, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and costs against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section shall not apply to any suit instituted by the Purchase Contract Agent,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Securities, or to any suit instituted
50
by any Holder for the enforcement of interest on any Notes or Purchase Contract
Payments on or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to purchase shares
of Common Stock under the Purchase Contracts constituting part of any Security
held by such Holder.
Section 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
The Purchase Contract Agent
Section 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Securities, such duties and
only such duties as are specifically set forth in this Agreement and the Pledge
Agreement, and no implied covenants or obligations shall be read into this
Agreement or the Pledge Agreement against the Purchase Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part, may, with
respect to the Securities, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Purchase Contract Agent and conforming to the
requirements of this Agreement or the Pledge Agreement, as applicable, but in
the case of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Purchase Contract Agent, the
Purchase Contract Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement or the Pledge
Agreement, as applicable (but need not confirm or investigate the accuracy of
the mathematical calculations or other facts stated therein).
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
51
(1) this SubSection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Purchase Contract Agent was negligent in ascertaining the pertinent
facts;
(3) no provision of this Agreement or the Pledge Agreement shall require
the Purchase Contract Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if indemnity satisfactory to the
Purchase Contract Agent is not provided to it; and
(4) the Purchase Contract Agent shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Securities.
(c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Purchase Contract Agent.
Section 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the Company hereunder
of which a Responsible Officer of the Purchase Contract Agent has actual
knowledge, the Purchase Contract Agent shall transmit by mail to the Company and
the Holders of Securities, as their names and addresses appear in the Security
Register, notice of such default hereunder, unless such default shall have been
cured or waived.
Section 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, Note, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
52
(3) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a matter be
proved or established prior to taking, suffering or omitting any action
hereunder, the Purchase Contract Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its selection
appointed with due care by it hereunder and the advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Purchase Contract Agent, in its discretion, and at the expense
of the Company, may make reasonable further inquiry or investigation into such
facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Purchase Contract Agent shall
determine to make such further inquiry or investigation, it shall be given a
reasonable opportunity to examine the relevant books, records and premises of
the Company, personally or by agent or attorney and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation;
(6) the Purchase Contract Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate and the Purchase Contract Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it hereunder;
(7) the Purchase Contract Agent shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement at the request or
direction of any of the Holders pursuant to this Agreement, unless such Holders
shall have offered to the Purchase Contract Agent security or indemnity
satisfactory to the Purchase Contract Agent against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(8) the Purchase Contract Agent shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(9) the Purchase Contract Agent shall not be deemed to have notice of any
default hereunder unless a Responsible Officer of the Purchase Contract Agent
has actual knowledge thereof or unless written notice of any event which is in
fact such a default is received by the Purchase Contract Agent at the Corporate
Trust Office of the Purchase Contract Agent, and such notice references the
Securities and this Agreement;
(10) the Purchase Contract Agent may request that the Company deliver an
Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to
53
take specified actions pursuant to this Agreement, which Officers' Certificate
may be signed by any person authorized to sign an Officers' Certificate,
including any person specified as so authorized in any such certificate
previously delivered and not superseded; and
(11) the rights, privileges, protections, immunities and benefits given to
the Purchase Contract Agent, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Purchase Contract
Agent in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder.
Section 7.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
Section 7.05. May Hold Securities.
Any Security Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it would
have if it were not Security Registrar or such other agent, or the Purchase
Contract Agent. The Company may become the owner or pledgee of Securities.
Section 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder or agreed in writing with the Company.
Section 7.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all services
rendered by it hereunder and under the Pledge Agreement as the Company and the
Purchase Contract Agent shall from time to time agree in writing;
(2) except as otherwise expressly provided for herein, to reimburse the
Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent in
accordance with any provision of this Agreement and
54
the Pledge Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its gross negligence, willful misconduct or
bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor Purchase
Contract Agent for, and to hold it harmless against, any loss, liability or
expense incurred without gross negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or administration
of its duties hereunder, including the costs and expenses of defending itself
against any claim (whether asserted by the Company, a Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
The provisions of this Section shall survive the resignation and removal of
the Purchase Contract Agent and the termination of this Agreement.
Section 7.08. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which shall
be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Section 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Purchase Contract
Agent required by Section 7.10 shall not have been delivered to the Purchase
Contract Agent within 30 days after the giving of such notice of resignation,
the resigning Purchase Contract Agent may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
55
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Securities delivered to
the Purchase Contract Agent and the Company. If the instrument of acceptance by
a successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after the giving of such
notice of resignation, the resigning Purchase Contract Agent may petition, at
the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Purchase Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section
310(b) of the TIA, as if the Purchase Contract Agent were an indenture
trustee under an indenture qualified under the TIA, after written
request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible
under Section 7.08 and shall fail to resign after written request
therefor by the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of
the Purchase Contract Agent or of its property shall be appointed or
any public officer shall take charge or control of the Purchase
Contract Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract Agent shall have
been so appointed by the Company and accepted appointment in the manner required
by Section 7.10, any Holder who has been a bona fide Holder of a Security for at
least six months, on behalf of itself and all others similarly situated, or the
Purchase Contract Agent may petition at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the
56
applicable Register. Each notice shall include the name of the successor
Purchase Contract Agent and the address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph 7.10(a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Purchase Contract Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided that such
corporation shall be otherwise qualified and eligible under this Article, with
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Certificates shall have been authenticated and
executed on behalf of the Holders, but not delivered, by the Purchase Contract
Agent then in office, any successor by merger, conversion or consolidation to
such Purchase Contract Agent may adopt such authentication and execution and
deliver the Certificates so authenticated and executed with the same effect as
if such successor Purchase Contract Agent had itself authenticated and executed
such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Purchase Contract Agent shall preserve, in as current a form
as is reasonably
57
practicable, the names and addresses of Holders received by the Purchase
Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "Applicants")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders with respect to their rights under this Agreement or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Purchase
Contract Agent shall mail to all the Holders copies of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Purchase Contract Agent of the materials to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of such mailing.
Section 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this Agreement,
the Purchase Contract Agent assumes no obligations and shall not be subject to
any liability under this Agreement, the Pledge Agreement or any Purchase
Contract in respect of the obligations of the Holder of any Security thereunder.
The Company agrees, and each Holder of a Certificate, by his or her acceptance
thereof, shall be deemed to have agreed, that the Purchase Contract Agent's
execution of the Certificates on behalf of the Holders shall be solely as agent
and attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, employees or agents be liable under
this Agreement to any third party for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Purchase
Contract Agent, incurred without any act or deed that is found to be
attributable to gross negligence or willful misconduct on the part of the
Purchase Contract Agent.
Section 7.14. Tax Compliance.
(a) The Company and the Purchase Contract Agent will comply with all
applicable certification, information reporting and withholding (including
"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (i) any payments made with respect to
the Securities or (ii) the issuance, delivery, holding, transfer, redemption or
exercise of rights under the Securities. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any written direction received from the Company with respect
to the execution or certification of any required documentation and the
application of such requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement
58
conclusively rely on any such direction in accordance with the provisions of
Section 7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE 8
Supplemental Agreements
Section 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Purchase
Contract Agent, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Company and the
Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.04(b); or
(5) except as provided for in Section 5.04, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent
with any other provisions herein, or make any other provisions with
respect to such matters or questions arising under this Agreement,
provided that such action shall not adversely affect the interests of
the Holders.
Section 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract Agent may enter into
an agreement or agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous
59
consent of the Holders of each outstanding Purchase Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Stock Purchase Units to substitute Treasury Securities for
the Pledged Notes or the rights of Holders of Treasury Stock Purchase
Units to substitute Notes for the Pledged Treasury Securities) or
otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(3) impair the right to institute suit for the enforcement of any
Purchase Contract;
(4) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase
shares of Common Stock upon settlement of any Purchase Contract or
change the Purchase Contract Settlement Date;
(5) reduce the percentage of the outstanding Purchase Contracts
the consent of whose Holders is required for any such supplemental
agreement; or
(6) reduce any Purchase Contract Payments or change any place
where, or the coin or currency in which, any Purchase Contract Payment
is payable;
provided that if any amendment or proposal referred to above would adversely
affect only the Stock Purchase Units or the Treasury Stock Purchase Units, then
only the affected class of Holders as of the record date for the Holders
entitled to vote thereon will be entitled to vote on such amendment or proposal,
and such amendment or proposal shall not be effective except with the consent of
Holders of not less than a majority of such class; and provided, further, that
the unanimous consent of the Holders of each outstanding Purchase Contract of
such class affected thereby shall be required to approve any amendment or
proposal specified in clauses (1) through (6) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement and that
60
any and all conditions precedent to the execution and delivery of such
supplemental agreement have been satisfied. The Purchase Contract Agent may, but
shall not be obligated to, enter into any such supplemental agreement which
affects the Purchase Contract Agent's own rights, duties or immunities under
this Agreement or otherwise.
Section 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.
Section 8.05. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.
ARTICLE 9
Consolidation, Merger, Conveyance, Transfer or Lease
Section 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions.
The Company covenants that it will not consolidate with or merge into
any other corporation or convey, transfer or lease all or substantially all of
its properties and assets to any Person, unless:
(i) the corporation formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, all or substantially all of the Company's
properties and assets shall be a corporation organized and existing
under the laws of the United States of America or a State thereof or
the District of Columbia and such corporation shall expressly assume
all the obligations of the Company under the Purchase Contracts, this
Agreement, and the Pledge Agreement, by one or more supplemental
agreements in form reasonably satisfactory to the Purchase Contract
Agent and the Collateral Agent, executed and delivered to the Purchase
Contract Agent and the Collateral Agent by such corporation; and
61
(ii) the Company or such successor corporation, as the case may
be, shall not, immediately after such consolidation, merger,
conveyance, transfer or lease, be in default in the performance of any
covenant or condition hereunder, under any of the Securities or under
the Pledge Agreement.
Section 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of Black Hills Corporation, any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Purchase Contract Agent; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Agreement prescribed, the Purchase
Contract Agent shall authenticate and execute on behalf of the Holders and
deliver any Certificates which previously shall have been signed and delivered
by the officers of the Company to the Purchase Contract Agent for authentication
and execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Securities
thereafter to be issued as may be appropriate.
Section 9.03. Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent.
The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such merger, consolidation, share exchange, sale, assignment,
transfer, lease or conveyance, and any such assumption, complies with the
provisions of this Article and that all conditions precedent to the consummation
of any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance have been met.
62
ARTICLE 10
Covenants
Section 10.01. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, where Certificates may be
surrendered for registration of transfer or exchange, for a Collateral
Substitution or reestablishment of Stock Purchase Units and where notices and
demands to or upon the Company in respect of the Securities and this Agreement
may be served. The Company will give prompt written notice to the Purchase
Contract Agent of the location, and any change in the location, of such office
or agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Purchase Contract Agent with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Company hereby appoints the
Purchase Contract Agent as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.
Section 10.03. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.04. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against
63
tender of payment in respect of any Purchase Contract constituting a part of the
Outstanding Securities will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable.
Section 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate
(one of the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company), stating
whether or not to the knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
Section 10.06. ERISA.
Each Holder from time to time of the Securities that is a Plan hereby
represents that its acquisition of the Stock Purchase Units and the holding of
the same satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of ERISA
and the Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.
[SIGNATURES ON THE FOLLOWING PAGE]
64
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BLACK HILLS CORPORATION
By: __________________________________
Name:
Title:
[ ],
as Purchase Contract Agent
By: __________________________________
Name:
Title:
EXHIBIT A
FACE OF STOCK PURCHASE UNITS CERTIFICATE
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"),
OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. ____ CUSIP No._____________
Number of Stock Purchase Units:______________
BLACK HILLS CORPORATION
Stock Purchase Units
This Stock Purchase Units Certificate certifies that ___________________ is
the registered Holder of the number of Stock Purchase Units set forth above.
Each Stock Purchase Units consists of (i) either (a) the beneficial ownership by
the Holder of $__ principal amount of Notes due 200[ ] (the "Notes") of Black
Hills Corporation, a South Dakota corporation (the "Company"), subject to the
Pledge of such Note by such Holder pursuant to the Pledge Agreement, or (b) upon
the occurrence of a Tax Event Redemption prior to the Purchase Contract
Settlement Date, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio by such
Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with the Company. All capitalized terms
used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Notes or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, constituting part of each Stock
Purchase Unit evidenced hereby has been pledged to the Collateral Agent, for the
benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising part of such Stock Purchase Unit.
The Pledge Agreement provides that all payments of the principal amount
with respect to any of the Pledged Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or interest on any Pledged Notes (as
defined in the Pledge Agreement) or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, constituting part of the Stock Purchase
Units received by the Securities Intermediary shall be paid by wire transfer in
same day funds (i) in the case of (A) interest on Pledged Notes or cash
distributions with respect to the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, and (B) any payments of the principal amount of
any Notes or liquidation amount with respect to the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, that have been released from the
Pledge pursuant to the Pledge Agreement, to the Purchase Contract Agent to the
account designated by the Purchase Contract Agent, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Securities
Intermediary (provided that in the event such payment is received by the
Securities Intermediary on a day that is not a Business Day or after 12:30 p.m.,
New York City time, on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding Business Day) and
(ii) in the case of payments of the principal amount of the Notes or the
liquidation amount with respect to the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, to the Company on the Purchase Contract Settlement Date (as described
herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Stock Purchase
Units of which such Pledged Notes or the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming a
part of such Stock Purchase Units. Interest on the Notes and distributions on
the appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, forming
part of an Stock Purchase Units evidenced hereby, which are payable quarterly in
arrears on _______________, ___________________, ________________, and
________________ of each year, commencing ______________, 200[ ] (a "Payment
Date"), shall, subject to receipt thereof by the Purchase Contract Agent from
the Securities Intermediary, be paid to the Person in whose name this Stock
Purchase Units Certificate (or a Predecessor Stock Purchase Units Certificate)
is registered at the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this Stock
Purchase Units Certificate to purchase, and the Company to sell, on [_______],
200[ ] (the "Purchase
A-2
Contract Settlement Date"), at a price equal to $[__] (the "Stated Amount"), a
number of shares of Common Stock, par value $1.00 ("Common Stock"), of the
Company, equal to the Settlement Rate, unless on or prior to the Purchase
Contract Settlement Date there shall have occurred a Termination Event or an
Early Settlement with respect to the Stock Purchase Units of which such Purchase
Contract is a part, all as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. The purchase price (the "Purchase Price")
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the principal
amount with respect to any Pledged Notes pursuant to the Remarketing or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, pledged
to secure the obligations under such Purchase Contract of the Holder of the
Stock Purchase Unit of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a Stock Purchase Unit evidenced hereby, an amount (the
"Purchase Contract Payments") equal to ___% per year of the Stated Amount. Such
Purchase Contract Payments shall be payable to the Person in whose name this
Stock Purchase Units Certificate is registered at the close of business on the
Record Date for such Payment Date. The Company may, at its option, defer such
Purchase Contract Payments.
Interest on the Notes and distributions on the Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) and the
Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Security Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this Stock Purchase Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
BLACK HILLS CORPORATION
By: ______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [ ],
not individually but solely as
Attorney-in-Fact of such Holder
By: ______________________________
Name:
Title:
DATED:__________________
A-4
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Stock Purchase Units Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: [ ],
as Purchase Contract Agent
By: ____________________________
Authorized Signatory
Dated: ____________________
A-5
(FORM OF REVERSE OF STOCK PURCHASE UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of _____________, 200[ ] (as may be supplemented from time
to time, the "Purchase Contract Agreement"), between the Company and
[ ], as Purchase Contract Agent (including its successors
hereunder, the "Purchase Contract Agent"), to which Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Stock Purchase Units Certificates are,
and are to be, executed and delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each Purchase
Contract evidenced hereby obligates the Holder of this Stock Purchase Units
Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock equal to the Settlement Rate, unless, prior to
or on the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part or an Early Settlement shall have occurred. The "Settlement Rate" is
equal to:
(1) if the Applicable Market Value (as defined below) is greater than
or equal to $______ (the "Threshold Appreciation Price"), _______ shares of
Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $______ (the "REFERENCE PRICE"), the
number of shares of Common Stock per Purchase Contract having a value,
based on the Applicable Market Value, equal to $25; and
(3) if the Applicable Market Value is less than or equal to the
Reference Price, _____ share of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Stock Purchase Units to purchase at the Purchase Price, and the Company to sell,
a number of shares of Common Stock equal to the Early Settlement Rate or
Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price per
share of
A-6
Common Stock on each of the 20 consecutive Trading Days ending on the third
Trading Day immediately preceding the Purchase Contract Settlement Date.
The "Closing Price" per share of Common Stock on any date of determination
means:
(1) the closing sale price as of the close of the principal trading
session (or, if no closing price is reported, the last reported sale price)
per share on the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if Common Stock is not listed for trading on the NYSE on any such
date, the closing sale price per share as reported in the composite
transactions for the principal United States securities exchange on which
Common Stock is so listed;
(3) if Common Stock is not so listed on a United States national or
regional securities exchange, the closing sale price per share as reported
by The Nasdaq National Market;
(4) if Common Stock is not so reported, the last quoted bid price for
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Common Stock on such date from at least
three nationally recognized independent investment banking firms retained
for this purpose by the Company.
A "Trading Day" means a day on which Common Stock (1) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of this Stock Purchase Units Certificate may pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement or an Early Settlement or from the
proceeds of the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio or a Remarketing of the
related Pledged Notes. A Holder of Stock Purchase Units who does not effect, on
or prior to 11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date (or in the event a
Tax Event Redemption has occurred, the Business Day prior to the Purchase
Contract Settlement Date), an effective Cash Settlement, or who does not effect
on or prior to 5:00 p.m. (New York City time) on the seventh Business Day prior
to the Purchase Contract Settlement Date an effective Early Settlement, shall
pay the Purchase Price for the shares of Common Stock to be delivered under the
related Purchase Contract from the proceeds of the sale of the related Pledged
Notes held by the Collateral Agent. Such sale will be made by the Remarketing
Agent pursuant to the terms of the Remarketing Agreement on the third
A-7
Business Day prior to the Purchase Contract Settlement Date. If, as provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing,
the Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Notes related to this Stock
Purchase Units certificate, any accrued and unpaid interest on such Pledged
Notes will become payable by the Company to the holder of this Stock Purchase
Units Certificate in the manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Notes or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio forming a part of each Stock
Purchase Unit from the Pledge. A Stock Purchase Unit shall thereafter represent
the right to receive the Note or the appropriate Applicable Ownership Interest
of the Treasury Portfolio forming a part of such Stock Purchase Unit in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Under the terms of the Pledge Agreement, the Purchase Contract Agent will
be entitled to exercise the voting and any other consensual rights pertaining to
the Pledged Notes. Upon receipt of notice of any meeting at which holders of
Notes are entitled to vote or upon the solicitation of consents, waivers or
proxies of holders of Notes, the Purchase Contract Agent shall, as soon as
practicable thereafter, mail to the Stock Purchase Units Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Stock Purchase Unit Holder on the record date
set by the Purchase Contract Agent therefor (which, to the extent possible,
shall be the same date as the record date for determining the holders of
Notes entitled to vote) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting rights pertaining to the Notes
constituting a part of such Holder's Stock Purchase Unit; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Stock Purchase Units Holders on such record
date, the Purchase Contract Agent shall endeavor insofar as practicable to vote
or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a Stock Purchase Unit, the Purchase Contract Agent shall abstain from
voting the Note
A-8
evidenced by such Stock Purchase Unit.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, an amount equal to the Redemption Amount plus any
accumulated and unpaid interest payable on the Tax Event Redemption Date with
respect to the principal amount of the Notes shall be deposited in the
Collateral Account in exchange for the Pledged Notes. Thereafter, pursuant to
the terms of the Pledge Agreement, the Collateral Agent shall cause the
Securities Intermediary to apply an amount equal to the Redemption Amount of
such funds to purchase on behalf of the Holders of Stock Purchase Units, the
Treasury Portfolio and promptly (a) transfer the Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio to the Collateral Account to secure the obligations of each Holder of
Stock Purchase Units to purchase shares of Common Stock under the Purchase
Contracts constituting a part of such Stock Purchase Units, (b) transfer the
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio to the Purchase Contract Agent for the
benefit of the Holders of such Stock Purchase Units and (C) remit the remaining
portion of such funds to the Purchase Contract Agent for payment to the Holders
of such Stock Purchase Units.
Following the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Stock Purchase Units and the Collateral
Agent shall have such security interest rights and obligations with respect to
the Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio as the Holder of Stock Purchase Units
and the Collateral Agent had in respect of the Notes, as the case may be,
subject to the Pledge thereof as provided in the Pledge Agreement and any
reference herein to the Notes shall be deemed to be a reference to such Treasury
Portfolio.
The Stock Purchase Units Certificates are issuable only in registered form
and only in denominations of a single Stock Purchase Unit and any integral
multiple thereof. The transfer of any Stock Purchase Units Certificate will be
registered and Stock Purchase Units Certificates may be exchanged as provided in
the Purchase Contract Agreement. The Security Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Purchase Contract Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. A Holder who
elects to substitute a Treasury Security for a Note, thereby creating Treasury
Stock Purchase Units, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Purchase Contract Agreement, for
so long as the Purchase Contract underlying an Stock Purchase Units remains in
effect, such Stock Purchase Units shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Stock Purchase Units
in respect of the Notes and Purchase Contract constituting such Stock Purchase
Units may be transferred and exchanged only as an Stock Purchase Units.
The Holder of Stock Purchase Units may substitute for the Pledged Notes
securing such Holder's obligations under the related Purchase Contracts Treasury
Securities in an aggregate
A-9
principal amount equal to the aggregate principal amount of the Pledged Notes in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such Collateral Substitution, each Security for which
such Pledged Treasury Securities secures the Holder's obligation under the
Purchase Contract shall be referred to as a "Treasury Stock Purchase Units". A
Holder may make such Collateral Substitution only in integral multiples of [40]
Stock Purchase Units for [40] Treasury Stock Purchase Units.
A Holder of Treasury Stock Purchase Units may recreate Stock Purchase Units
by delivering to the Securities Intermediary Notes with an aggregate
principal amount equal to the aggregate principal amount at maturity of the
Pledged Treasury Securities in exchange for the release of such Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. A Holder may recreate Stock Purchase Units only in
integral multiples of [40] Treasury Stock Purchase Units for [40] Stock Purchase
Units.
If a Tax Event Redemption has occurred, a Stock Purchase Unit Holder may
not create Treasury Stock Purchase Units, and a Treasury Stock Purchase Unit
Holder may recreate a Stock Purchase Unit.
The Company shall pay, on each Payment Date, the Purchase Contract Payments
payable in respect of each Purchase Contract to the Person in whose name the
Stock Purchase Units Certificate evidencing such Purchase Contract is registered
at the close of business on the Record Date for such Payment Date. Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City or, at the option of the Holder, by check mailed to the address
of the Person entitled thereto at such address as it appears on the Security
Register.
The Company has the right to defer payment of all or part of the Purchase
Contract Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date. If the Company so elects to defer Purchase
Contract Payments, the Company shall pay additional Purchase Contract Payments
on such deferred installments of Purchase Contract Payments at a rate equal to
___% per annum, compounding quarterly, until such deferred installments are
paid. In the event that the Company elects to defer the payment of Purchase
Contract Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Purchase Contract Payments.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Purchase Contract
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Purchase Contract Agent, the Collateral Agent and the
Holders, at their addresses as they appear in the Security Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent shall release
the Notes or the appropriate Applicable Ownership Interest (as specified in
A-10
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, from the Pledge in accordance with the provisions of the Pledge
Agreement.
Upon registration of transfer of this Stock Purchase Units Certificate,
the transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Stock Purchase Units Certificate. The Company covenants and
agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees,
to be bound by the provisions of this paragraph.
The Holder of this Stock Purchase Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Stock Purchase Units evidenced
hereby on its behalf as its attorney-in-fact, expressly withholds any consent to
the assumption (i.e., affirmance) of the Purchase Contracts by the Company or
its trustee in the event that the Company becomes the subject of a case under
the Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, underlying this Stock Purchase Units
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged Notes or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to conflicts
of laws principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Stock Purchase Units Certificate is registered as the owner of
the Stock Purchase Units evidenced hereby for the purpose of receiving payments
of interest payable on the Notes, receiving payments of Purchase Contract
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent
A-11
shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
A-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ___________________ Custodian ___________________
(cust) (minor)
Under Uniform Gifts to Minors Act of _____________
__________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying
Number of Assignee)
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee)
the within Stock Purchase Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Stock Purchase Units Certificates on the books of Black Hills Corporation,
with full power of substitution in the premises.
Dated: _______________________ _________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within Stock
Purchase Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ________________________________
A-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Treasury Stock Purchase
Units evidenced by this Treasury Stock Purchase Units Certificate be registered
in the name of, and delivered, together with a check in payment for any
fractional share, to the undersigned at the address indicated below unless a
different name and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated: _____________________________ _____________________________________
Signature
Signature Guarantee: ________________
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person REGISTERED HOLDER
other than the Holder, please (i)
print such Person's name and address
and (ii) provide a guarantee of your
signature: Please print name and address of
Registered Holder:
____________________________________ _____________________________________
Name Name
____________________________________ _____________________________________
Address Address
____________________________________ _____________________________________
____________________________________ _____________________________________
____________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stock Purchase Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Stock Purchase Units evidenced by this Stock
Purchase Units Certificate specified below. The undersigned Holder directs that
a certificate for shares of Common Stock deliverable upon such Early Settlement
be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Stock Purchase Units Certificate representing
any Stock Purchase Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated: ______________________ ________________________________________
Signature
Signature Guarantee: ______________________________
A-15
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Stock Purchase Units Certificates are to be
registered in the name of and delivered to and Pledged Notes or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, are to be
transferred to a Person other than the Holder, please print such Person's name
and address:
_______________________________
Name
_______________________________
Address
_______________________________
_______________________________
_______________________________
Social Security or other
Taxpayer Identification
Number, if any
_______________________________
REGISTERED HOLDER
Please print name and address of
Registered Holder:
_______________________________
Name
_______________________________
Address
_______________________________
_______________________________
_______________________________
A-16
Transfer Instructions for Pledged Notes or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, transferable upon Early Settlement
or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
=====================================================================================================================
Number of Stock
Amount of increase Amount of decrease Purchase Units
in Number of Stock in Number of Stock evidenced by this Signature of
Purchase Units Purchase Units Global Certificate authorized signatory
evidenced by the evidenced by the following such of Trustee or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
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A-18
EXHIBIT B
FACE OF TREASURY STOCK PURCHASE CERTIFICATE
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"),
OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. ____ CUSIP No.__________
Number of Treasury Stock Purchase Units:___________
BLACK HILLS CORPORATION
Treasury Stock Purchase Units
This Treasury Stock Purchase Units Certificate certifies that
__________________ is the registered Holder of the number of Treasury Stock
Purchase Units set forth above. Each Treasury Stock Purchase Unit consists of
(i) a [1/40] undivided beneficial ownership interest of a Treasury Security
having a principal amount at maturity equal to [$1,000], subject to the Pledge
of such Treasury Security by such Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract with
Black Hills Corporation, a South Dakota corporation (the "Company"). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting part
of each Treasury Stock Purchase Units evidenced hereby have been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations of
the Holder under the Purchase Contract comprising part of such Treasury Stock
Purchase Units. Each Purchase Contract evidenced hereby obligates the Holder of
this Treasury Stock Purchase Units Certificate to purchase, and the Company, to
sell, on [_______], 200[ ] (the "Purchase Contract Settlement Date"), at a price
equal to $[__] (the "Stated Amount"), a number of shares of Common Stock, par
value $1.00 ("Common Stock"), of the Company, equal to the Settlement Rate,
unless prior to or on the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement with respect to the Treasury
Stock Purchase Unit of which such Purchase Contract is a part, all as provided
in the Purchase Contract Agreement and more fully described on the reverse
hereof. The purchase price (the "Purchase Price") for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the proceeds from the Treasury Securities at maturity pledged to secure the
obligations of the Holder under such Purchase Contract of the Treasury Stock
Purchase Unit of which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a Treasury Stock Purchase Unit evidenced hereby, an
amount (the "Purchase Contract Payments") equal to ___% per year of the Stated
Amount. Such Purchase Contract Payments shall be payable to the Person in whose
name this Treasury Stock Purchase Units Certificate is registered at the close
of business on the Record Date for such Payment Date. The Company may, at its
option, defer such Purchase Contract Payments.
Interest on the Notes and distributions with respect to the Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
and the Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Security Register.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this Treasury Stock Purchase Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
BLACK HILLS CORPORATION
By: _____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations
of such Holder under the Purchase Contracts)
By: [ ],
not individually but solely as
Attorney-in-Fact of such Holder
By: _____________________________________
Name:
Title:
Dated:_____________________
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Stock Purchase Units referred to in the
within-mentioned Purchase Contract Agreement.
By: [ ],
as Purchase Contract Agent
By: ______________________
Authorized Signatory
Dated:_________________
B-4
(REVERSE OF TREASURY STOCK PURCHASE UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ___________, 200[ ] (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and
[ ], as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury Stock Purchase Units
Certificates are, and are to be, executed and delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each
Purchase Contract evidenced hereby obligates the Holder of this Treasury Stock
Purchase Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock equal to the Settlement Rate, unless
prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part or an Early Settlement shall have occurred. The "Settlement Rate" is
equal to
(1) if the Applicable Market Value (as defined below) is
greater than or equal to $______ (the "THRESHOLD APPRECIATION
PRICE"), ______ share of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $______ (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase
Contract having a value, based on the Applicable Market Value,
equal to $25; and
(3) if the Applicable Market Value is less than or equal to
the Reference Price, then ______ share of Common Stock per
Purchase Contract, in each case subject to adjustment as
provided in the Purchase Contract Agreement (and in each case
rounded upward or downward to the nearest 1/10,000th of a
share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Treasury Stock Purchase Unit to purchase at the Purchase Price for cash,
and the Company to sell, a number of shares of Common Stock equal to the Early
Settlement Rate or Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date.
B-5
The "Closing Price" per share of Common Stock on any date of
determination means the:
(1) closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(2) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States securities
exchange on which the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per
share as reported by The Nasdaq National Market;
(4) if the Common Stock is not so reported, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the
mid-point of the last bid and ask prices of the Common Stock on such
date from at least three nationally recognized independent investment
banking firms retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Stock Purchase Unit shall pay the Purchase Price for the
shares of the Common Stock purchased pursuant to each Purchase Contract
evidenced hereby either by effecting a Cash Settlement or an Early Settlement of
each such Purchase Contract or by applying a principal amount of the Pledged
Treasury Securities underlying such Holder's Treasury Stock Purchase Unit equal
to the Stated Amount of such Purchase Contract to the purchase of the Common
Stock. A Holder of Treasury Stock Purchase Unit who does not effect, prior to or
on 11:00 a.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, an effective Cash Settlement,
or who does not effect on or prior to 5:00 p.m. (New York City time) on the
seventh Business Day prior to the Purchase Contract Settlement Date an effective
Early Settlement, shall pay the Purchase Price for the shares of Common Stock to
be issued under the related Purchase Contract from the proceeds of the Pledged
Treasury Securities.
The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have
B-6
received payment of the aggregate purchase price for the shares of Common Stock
to be purchased thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations
and rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall occur. Upon the occurrence of a Termination Event, the
Company shall give written notice to the Purchase Contract Agent and to the
Holders, at their addresses as they appear in the Security Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent shall release
the Pledged Treasury Securities (as defined in the Pledge Agreement) forming a
part of each Treasury Stock Purchase Unit. A Treasury Stock Purchase Unit shall
thereafter represent the right to receive the interest in the Treasury Security
forming a part of such Treasury Stock Purchase Unit, in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
The Treasury Stock Purchase Units Certificates are issuable
only in registered form and only in denominations of a single Treasury Stock
Purchase and any integral multiple thereof. The transfer of any Treasury Stock
Purchase Certificate will be registered and Treasury Stock Purchase Certificates
may be exchanged as provided in the Purchase Contract Agreement. The Security
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Purchase Contract
Agreement. No service charge shall be required for any such registration of
transfer or exchange, but the Company and the Purchase Contract Agent may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. A Holder who elects to substitute Notes,
for Treasury Securities, thereby recreating Stock Purchase Units, shall be
responsible for any fees or expenses associated therewith. Except as provided in
the Purchase Contract Agreement, for so long as the Purchase Contract underlying
a Treasury Stock Purchase Unit remains in effect, such Treasury Stock Purchase
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Treasury Stock Purchase Unit in respect of the
Treasury Security and the Purchase Contract constituting such Treasury Stock
Purchase Unit may be transferred and exchanged only as a Treasury Stock Purchase
Unit.
A Holder of Treasury Stock Purchase Units may recreate Stock
Purchase Units by delivering to the Securities Intermediary Notes with an
aggregate principal amount, equal to the aggregate principal amount at maturity
of the Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such substitution, the
Holder's Security shall be referred to as a "STOCK PURCHASE UNIT". Any such
creation of Stock Purchase Units may be effected only in multiples of [40]
Treasury Stock Purchase Units for [40] Stock Purchase Units.
A Holder of Stock Purchase Units may recreate Treasury Stock
Purchase Units by delivering to the Securities Intermediary Treasury Securities
in an aggregate principal amount equal to the aggregate principal amount at
maturity of the Pledged Notes, as the case may be, in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. Any such recreation
of Treasury Stock Purchase Units may be effected only in multiples of [40] Stock
Purchase Units for [40] Treasury Stock Purchase Units.
B-7
If a Tax Event Redemption has occurred, a Treasury Stock Purchase
Unit Holder may not recreate Stock Purchase Units, and a Stock Purchase Unit
Holder may not create a Treasury Stock Purchase Unit.
The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury Stock Purchase Units Certificate evidencing such Purchase
Contract is registered at the close of business on the Record Date for such
Payment Date. Purchase Contract Payments will be payable at the office of the
Purchase Contract Agent in New York City or, at the option of the Holder, by
check mailed to the address of the Person entitled thereto at such address as it
appears on the Security Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to ___% per annum, compounding quarterly, until such deferred installments
are paid. In the event that the Company elects to defer the payment of Purchase
Contract Payments on the Purchase Contracts until the Purchase Contract
Settlement Date), each Holder will receive on the Purchase Contract Settlement
Date the aggregate amount of accrued and unpaid Purchase Contract Payments.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the rights of
the Holders to receive and the obligation of the Company to pay any Purchase
Contract Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Treasury Stock Purchase Unit shall
thereafter represent the right to receive the interest in the Treasury Security
forming a part of such Treasury Stock Purchase Unit, in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement.
Upon registration of transfer of this Treasury Stock Purchase
Certificate, the transferee shall be bound (without the necessity of any other
action on the part of such transferee, except as may be required by the Purchase
Contract Agent pursuant to the Purchase Contract Agreement), under the terms of
the Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Treasury Stock Purchase Units Certificate. The
Company covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
B-8
The Holder of this Treasury Stock Purchase Units Certificate, by
its acceptance hereof, authorizes the Purchase Contract Agent to enter into and
perform the related Purchase Contracts forming part of the Treasury Stock
Purchase Units evidenced hereby on its behalf as its attorney-in-fact, expressly
withholds any consent to the assumption (i.e., affirmance) of the Purchase
Contracts by the Company or its trustee in the event that the Company becomes
the subject of a case under the Bankruptcy Code, agrees to be bound by the terms
and provisions thereof, covenants and agrees to perform its obligations under
such Purchase Contracts, consents to the provisions of the Purchase Contract
Agreement, authorizes the Purchase Contract Agent to enter into and perform the
Purchase Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Treasury Stock Purchase Units Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and in
the manner provided in the Purchase Contract Agreement and the Pledge Agreement,
but subject to the terms thereof, payments in respect to the aggregate principal
amount of the Pledged Treasury Securities on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contract and such Holder shall
acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflicts of laws principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and
any agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Treasury Stock Purchase Units Certificate is registered as the
owner of the Treasury Stock Purchase Units evidenced hereby for the purpose of
receiving payments of interest on the Treasury Securities, receiving payments of
Purchase Contract Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the Company,
the Purchase Contract Agent nor any such agent shall be affected by notice to
the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent.
B-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ___________________ Custodian ___________________
(cust) (minor)
Under Uniform Gifts to Minors Act of _____________
__________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
_____________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying
Number of Assignee)
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of
Assignee)
the within Treasury Stock Purchase Units Certificates and all rights thereunder,
hereby irrevocably constituting and appointing ___________________attorney to
transfer said Treasury Stock Purchase Units Certificates on the books of Black
Hills Corporation, with full power of substitution in the premises.
Dated: _______________________ _________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Treasury Stock Purchase Units Certificates
in every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ________________________________
B-10
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Treasury Stock Purchase
Units evidenced by this Treasury Stock Purchase Units Certificate be registered
in the name of, and delivered, together with a check in payment for any
fractional share, to the undersigned at the address indicated below unless a
different name and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated: _____________________________ _____________________________________
Signature
Signature Guarantee: ________________
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person REGISTERED HOLDER
other than the Holder, please (i)
print such Person's name and address
and (ii) provide a guarantee of your
signature: Please print name and address of
Registered Holder:
____________________________________ _____________________________________
Name Name
____________________________________ _____________________________________
Address Address
____________________________________ _____________________________________
____________________________________ _____________________________________
____________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
B-11
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Stock Purchase Units
Certificate hereby irrevocably exercises the option to effect Early Settlement
in accordance with the terms of the Purchase Contract Agreement with respect to
the Purchase Contracts underlying the number of Treasury Stock Purchase Units
evidenced by this Treasury Stock Purchase Units Certificate specified below. The
option to effect Early Settlement may be exercised only with respect to Purchase
Contracts underlying Treasury Stock Purchase Units with an aggregate Stated
Amount equal to [$1,000] or an integral multiple thereof. The undersigned Holder
directs that a certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Treasury Stock Purchase Units
Certificate representing any Treasury Stock Purchase Units evidenced hereby as
to which Early Settlement of the related Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Treasury Securities deliverable upon
such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ______________________ _______________________________________
Signature
Signature Guarantee: ___________________________
B-12
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury Stock Purchase Units Certificates are to
be registered in the name of and delivered to and Pledged Treasury Securities
are to be transferred to a Person other than the Holder, please print such
Person's name and address:
______________________________________
Name
______________________________________
Address
______________________________________
______________________________________
______________________________________
Social Security or other
Taxpayer Identification
Number, if any
______________________________________
REGISTERED HOLDER
Please print name and address of Registered Holder:
______________________________________
Name
______________________________________
Address
______________________________________
______________________________________
______________________________________
B-13
Transfer Instructions for Pledged Treasury Securities Transferable Upon or Early
Settlement or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
B-14
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
====================================================================================================================
Amount of increase Amount of decrease Number of Treasury
in Number of in Number of Stock Purchase Units
Treasury Stock Treasury Stock evidenced by this Signature of
Purchase Units Purchase Units Global Certificate authorized signatory
evidenced by the evidenced by the following such of Trustee or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
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B-15
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
[ ]
[ ]
[ ]
Attention: Corporate Trust Department
Re: [_______ Stock Purchase Units] [_______ Treasury Stock Purchase
Units] of Black Hills Corporation, a South Dakota corporation (the "Company").
The undersigned Holder hereby notifies you that it has delivered to
[ ], as Securities Intermediary, for credit to the Collateral Account, $______
aggregate principal amount of [Notes][Treasury Securities] in exchange for the
[Pledged Notes] [Pledged Treasury Securities] held in the Collateral Account, in
accordance with the Pledge Agreement, dated as of ____________, 200[ ] (the
"Pledge Agreement"; unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as defined therein), between you, the Company, the
Collateral Agent and the Securities Intermediary. The undersigned Holder has
paid all applicable fees relating to such exchange. The undersigned Holder
hereby instructs you to instruct the Collateral Agent to release to you on
behalf of the undersigned Holder the [Pledged Notes] [Pledged Treasury
Securities] related to such [Stock Purchase Units] [Treasury Stock Purchase
Units].
Date: _______________________________
___________________________________
Signature
Signature Guarantee: _______________________
Please print name and address of Registered Holder:
__________________________________ ____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
__________________________________
__________________________________
__________________________________
__________________________________
C-2
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_____________________________________
_____________________________________
Attention:
Telecopy: __________
Re: [__________ Stock Purchase Units] [______ Treasury Stock
Purchase Units] of Black Hills Corporation, a South Dakota
corporation (the "Company")
Please refer to the Purchase Contract Agreement, dated as of
__________, 200[ ] (the "Purchase Contract Agreement"; unless otherwise defined
herein, terms defined in the Purchase Contract Agreement are used herein as
defined therein), between the Company and the undersigned, as Purchase Contract
Agent and as attorney-in-fact for the holders of Stock Purchase Units and
Treasury Stock Purchase Units from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Notes] [the Treasury Securities] underlying your ownership interest in
_____ [Stock Purchase Units] [Treasury Stock Purchase Units] have been released
and are being held by us for your account pending receipt of transfer
instructions with respect to such [Notes][Treasury Securities] (the "Released
Securities").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [Stock
Purchase Units][Treasury Stock Purchase Units] effected through book-entry or by
delivery to us of your [Stock Purchase Units Certificate][Treasury Stock
Purchase Units Certificate], we shall transfer the Released Securities by
book-entry transfer or other appropriate procedures, in accordance with your
instructions. In the event you fail to effect such transfer or delivery, the
Released Securities and any distributions thereon, shall be held in our name, or
a nominee in trust for your benefit, until such time as such [Stock Purchase
Units][Treasury Stock Purchase Units] are transferred or your [Stock Purchase
Units Certificate] [Treasury Stock Purchase Units Certificate] is surrendered or
satisfactory evidence is provided that such [Stock Purchase Units
Certificate][Treasury Stock Purchase Units Certificate] has been destroyed, lost
or stolen, together with any indemnification that we or the Company may require.
Date: By: [ ]
______________________________________
Name:
Title: Authorized Signatory
D-2
EXHIBIT E
NOTICE TO SETTLE BY CASH
[ ]
[ ]
[ ]
Attention: Corporate Trust Department
Re: [_______ Stock Purchase Units] [Treasury Stock Purchase
Units] of Black Hills Corporation, a South Dakota
corporation (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Purchase Contract Agreement, dated as of
______________, 200[ ] (the "Purchase Contract Agreement"; unless otherwise
defined herein, terms defined in the Purchase Contract Agreement are used herein
as defined therein), between the Company and you, as Purchase Contract Agent and
as Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder
has elected to pay to the Securities Intermediary for deposit in the Collateral
Account, prior to or on 11:00 a.m. (New York City time) on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date (in lawful money
of the United States by certified or cashiers' check or wire transfer, in
immediately available funds), $_______ as the Purchase Price for the shares of
Common Stock issuable to such Holder by the Company under the related Purchase
Contracts on the Purchase Contract Settlement Date. The undersigned Holder
hereby instructs you to notify promptly the Collateral Agent of the undersigned
Holders' election to make such cash settlement with respect to the Purchase
Contracts related to such Holder's [Stock Purchase Units] [Treasury Stock
Purchase Units].
Date: ________________________ Signature _____________________________
Signature Guarantee: __________________
Please print name and address of Registered Holder:
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT AND PROPERTY TRUSTEE
(Settlement of Purchase Contract through Remarketing)
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: __________ Stock Purchase Units of Black Hills Corporation,
a South Dakota corporation (the "Company")
Please refer to the Purchase Contract Agreement, dated as of _________,
200[ ] (the "Purchase Contract Agreement"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Stock Purchase Units from time to
time.
In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on instructions and Cash Settlements received from Holders of Stock
Purchase Units as of 11:00 a.m. (New York City time), the fifth Business Day
preceding the [Purchase Contract Settlement Date], we hereby notify you that
______ Notes are to be tendered for purchase in the Remarketing.
Date: By: [ ]
_________________________________________
Name:
Title: Authorized Signatory
F-1
