Exhibit 4(g)
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FIRSTENERGYCORP.
AND
THE BANK OF NEW YORK,
as Share Purchase Contract Agent
and Trustee
SHARE PURCHASE CONTRACT AGREEMENT
Dated as of ______, 2003
================================================================================
TIE SHEET
Section of Section of Share
Trust Indenture Act Purchase Contract
of 1939, as amended Agreement
------------------- ---------
310(a) ...................................................................... 7.8
310(b) ...................................................................... 7.9(d) and (g), 11.8
310(c) ...................................................................... Inapplicable
311(a) ...................................................................... 11.2(b)
311(b) ...................................................................... 11.2(b)
311(c) ...................................................................... Inapplicable
312(a) ...................................................................... 11.2(a)
312(b) ...................................................................... 11.2(b)
313 ......................................................................... 11.3
314(a) ...................................................................... 11.4
314(b) ...................................................................... Inapplicable
314(c) ...................................................................... 11.5
314(d) ...................................................................... Inapplicable
314(e) ...................................................................... 1.2
314(f) ...................................................................... 11.1
315(a) ...................................................................... 7.1(a)
315(b) ...................................................................... 7.2
315(c) ...................................................................... 7.1(e)
315(d)(1) ................................................................... 7.1(b)
315(d)(2) ................................................................... 7.1(b)
315(d)(3) ................................................................... 11.9
316(a)(1)(A) ................................................................ 11.9
316(a)(1)(B) ................................................................ 11.6
316(b) ...................................................................... 6.1
316(c) ...................................................................... 11.2
317(a) ...................................................................... Inapplicable
317(b) ...................................................................... Inapplicable
318(a) ...................................................................... 11.1(b)
_____________
* This Cross-Reference Table does not constitute part of the Share Purchase
Contract Agreement and shall not affect the interpretation of any of its
terms or provisions.
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TABLE OF CONTENTS
Page
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RECITALS 1
Article I Definitions and Other Provisions of General Application ................ 1
Section 1.1 Definitions .................................................... 1
Section 1.2 Compliance Certificates and Opinions ........................... 13
Section 1.3 Form of Documents Delivered to Agent ........................... 14
Section 1.4 Acts of Holders; Record Dates .................................. 14
Section 1.5 Notices ........................................................ 15
Section 1.6 Notice to Holders; Waiver ...................................... 16
Section 1.7 Effect of Headings and Table of Contents ....................... 16
Section 1.8 Successors and Assigns ......................................... 16
Section 1.9 Separability Clause ............................................ 17
Section 1.10 Benefits of Agreement .......................................... 17
Section 1.11 Governing Law .................................................. 17
Section 1.12 Legal Holidays ................................................. 17
Section 1.13 Counterparts ................................................... 17
Section 1.14 Inspection of Agreement ........................................ 17
Article II Certificate Forms ..................................................... 18
Section 2.1 Forms of Certificates Generally ................................ 18
Section 2.2 Form of Agent's Certificate of Authentication .................. 19
Article III The Securities ....................................................... 19
Section 3.1 Title and Terms; Denominations ................................. 19
Section 3.2 Rights and Obligations Evidenced by the Certificates ........... 19
Section 3.3 Execution, Authentication, Delivery and Dating ................. 20
Section 3.4 Temporary Certificates ......................................... 21
Section 3.5 Registration; Registration of Transfer and Exchange ............ 21
Section 3.6 Book-Entry Interests ........................................... 22
Section 3.7 Notices to Holders ............................................. 23
Section 3.8 Appointment of Successor Clearing Agency ....................... 23
Section 3.9 Definitive Certificates ........................................ 23
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 Establishment or Reestablishment of Treasury Units ............. 25
Section 3.14 Establishment or Reestablishment of Share Purchase Units ....... 27
Section 3.15 Transfer of Collateral upon Occurrence of Termination Event .... 29
Section 3.16 No Consent to Assumption ....................................... 30
Section 3.17 CUSIP Numbers .................................................. 30
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Article IV The Debt Securities ................................................................. 30
Section 4.1 Payment of Interest; Rights to Interest Preserved; Interest Rate Reset;
Notice ....................................................................... 30
Section 4.2 Notice and Voting ............................................................ 31
Section 4.3 Substitution of a Treasury Portfolio for Debt Securities ..................... 32
Section 4.4 Consent to Treatment for Tax Purposes ........................................ 33
Article V The Share Purchase Contracts ......................................................... 33
Section 5.1 Purchase of Shares of Common Stock ........................................... 33
Section 5.2 Contract Adjustment Payments ................................................. 35
Section 5.3 Deferral of Payment Dates For Contract Adjustment Payments ................... 36
Section 5.4 Payment of Purchase Price .................................................... 37
Section 5.5 Issuance of Shares of Common Stock ........................................... 41
Section 5.6 Adjustment of Settlement Rate ................................................ 42
Section 5.7 Notice of Adjustments and Certain Other Events ............................... 47
Section 5.8 Termination Event; Notice .................................................... 47
Section 5.9 Early Settlement ............................................................. 48
Section 5.10 No Fractional Shares ......................................................... 49
Section 5.11 Charges and Taxes ............................................................ 50
Article VI Remedies ............................................................................ 50
Section 6.1 Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock ........................................ 50
Section 6.2 Restoration of Rights and Remedies ........................................... 50
Section 6.3 Rights and Remedies Cumulative ............................................... 50
Section 6.4 Delay or Omission Not Waiver ................................................. 51
Section 6.5 Undertaking for Costs ........................................................ 51
Section 6.6 Waiver of Stay or Extension Laws ............................................. 51
Article VII The Agent .......................................................................... 51
Section 7.1 Certain Duties and Responsibilities .......................................... 51
Section 7.2 Notice of Default ............................................................ 53
Section 7.3 Certain Rights of Agent ...................................................... 53
Section 7.4 Not Responsible for Recitals or Issuance of Securities ....................... 54
Section 7.5 May Hold Securities .......................................................... 54
Section 7.6 Money Held in Custody ........................................................ 54
Section 7.7 Compensation and Reimbursement ............................................... 54
Section 7.8 Corporate Agent Required; Eligibility ........................................ 55
Section 7.9 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
Section 7.13 No Obligations of Agent ...................................................... 58
Section 7.14 Tax Compliance ............................................................... 58
Article VIII Supplemental Agreements ........................................................... 58
Section 8.1 Supplemental Agreements Without Consent of Holders ........................... 58
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Section 8.2 Supplemental Agreements with Consent of Holders .............................. 59
Section 8.3 Execution of Supplemental Agreements ......................................... 60
Section 8.4 Effect of Supplemental Agreements ............................................ 60
Section 8.5 Reference to Supplemental Agreements ......................................... 60
Article IX Consolidation, Merger, Sale or Conveyance ........................................... 61
Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions ..................................................... 61
Section 9.2 Rights and Duties of Successor Entity ........................................ 61
Section 9.3 Opinion of Counsel Given to Agent ............................................ 61
Article X Covenants ............................................................................ 62
Section 10.1 Performance Under Share Purchase Contracts ................................... 62
Section 10.2 Maintenance of Office or Agency .............................................. 62
Section 10.3 Company to Reserve Common Stock .............................................. 62
Section 10.4 Covenants as to Common Stock ................................................. 62
Section 10.5 Statement of Officers of the Company as to Default ........................... 63
Article XI Trust Indenture Act ................................................................. 63
Section 11.1 Trust Indenture Act; Application ............................................. 63
Section 11.2 Lists of Holders of Securities ............................................... 63
Section 11.3 Reports by the Agent ......................................................... 64
Section 11.4 Periodic Reports to Agent .................................................... 64
Section 11.5 Evidence of Compliance with Conditions Precedent ............................. 64
Section 11.6 Defaults; Waiver ............................................................. 64
Section 11.7 Agent's Knowledge of Defaults ................................................ 64
Section 11.8 Conflicting Interests ........................................................ 64
Section 11.9 Direction of Agent ........................................................... 64
EXHIBIT A
EXHIBIT B
EXHIBIT C
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SHARE PURCHASE CONTRACT AGREEMENT, dated as of _____, 2003, between
FirstEnergy Corp., an Ohio corporation (the "Company"), and The Bank of New
York, a New York Banking corporation, acting as Share Purchase Contract agent,
attorney-in-fact and trustee for the Holders of Securities from time to time (in
any one or more of such capacities, the "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 Share Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid and binding obligations of the Company and the Holders, and to constitute
these presents a valid and binding agreement of the Company, in accordance with
its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
and nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision; and
(d) the following terms have the meanings given to them in
this Section 1.1(d):
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"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 Benchmark Treasury" on a particular determination date
shall mean direct obligations of the United States (which may be obligations
traded on a when-issued basis only) having a maturity comparable to the
remaining term to maturity of the Debt Securities, which may be two years or
between two and one half and two and one quarter years, as applicable, as agreed
upon by the Company and the Reset Agent. The yield for the Applicable Benchmark
Treasury will be the bid side yield displayed at 10:00 A.M., New York City time,
on the third Business Day immediately preceding the applicable Reset Date in the
Telerate system (or if the Telerate system is (a) no longer available on the
third Business Day immediately preceding such Reset Date or (b) in the opinion
of the Reset Agent (after consultation with the Company) no longer an
appropriate system from which to obtain such yield, such other nationally
recognized quotation system as, in the opinion of the Reset Agent (after
consultation with the Company), is appropriate). If such yield is not so
displayed, the yield for the Applicable Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Applicable
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30 A.M., New
York City time, on the third Business Day immediately preceding the applicable
Reset Date of three leading United States government securities dealers selected
by the Reset Agent (after consultation with the Company) (which may include the
Reset Agent or an affiliate thereof).
"Applicable Market Value" has the meaning specified in Section 5.1.
"Applicable Ownership Interest" means, with respect to the U.S.
Treasury Securities in a Treasury Portfolio contained in a Share Purchase Unit,
(1) for a Remarketing Treasury Portfolio, (i) a 1/20, or 5%, undivided
beneficial ownership interest in a $1,000 face amount of a principal or interest
strip in a U.S. Treasury Security included in the Treasury Portfolio that
matures on or prior to [_____], 200[_], (ii) for the originally scheduled
quarterly interest payment date on the Senior Notes that would have occurred on
[_____], 200[_] if no remarketing had occurred, a [______]% undivided beneficial
ownership interest in a $1,000 face amount of a principal or interest strip in a
U.S. Treasury Security maturing on or prior to[_____], 200[_], and (iii) if the
Initial Reset Date occurs prior to [_____], 200[_], for the originally scheduled
quarterly interest payment date on the Senior Notes that would have occurred on
[_____], 200[_] if no remarketing had occurred, an undivided beneficial
ownership interest to be determined by the reset agent, in a $1,000 face amount
of a principal or interest strip in a U.S. Treasury Security maturing on or
prior to [_____], 200[_], or (2) for a Tax Event Treasury Portfolio, (i) a 1/20,
or 5%, undivided beneficial ownership interest in a $1,000 face amount of a
principal or interest strip in a U.S.
2
Treasury Security included in the Treasury Portfolio that matures on or prior to
[_____], 200[_], and (ii) for each scheduled interest payment date on the Senior
Notes that occurs after the Tax Event Redemption Date and on or prior to
[_____], 200[_], a [______]% undivided beneficial ownership interest in a $1,000
face amount of a principal or interest strip in a U.S. Treasury Security
maturing on or prior to that interest payment date.
"Applicable Principal Amount" means (i) on any date prior to the Reset
Date, the aggregate principal amount of Debt Securities that are components of
Share Purchase Units on such date or (ii) on or after the Reset Date, the
aggregate principal amount of the Debt Securities outstanding on such date.
"Authorized Officer" means the Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer, or any other officer
or agent of the Company duly authorized by the Board of Directors to act in
respect of matters relating to this Agreement.
"Authorized Newspaper" means a newspaper in the English language of
general circulation in the City of New York and generally published each
Business Day. As of the date of this Agreement, the Company anticipates that for
purposes of each Reset Announcement Date, the Authorized Newspaper will be the
Wall Street Journal.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Clearing Agency or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Board of Directors" means 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 Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in Xxx Xxxx Xxxx (xx xxx Xxxxx xx Xxx Xxxx)
are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means a Share Purchase Unit Certificate or a Treasury
Unit Certificate.
3
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered as a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means [_________], 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" means the substitution of the pledged
components of one type of Security for pledged components of the other type of
Security in connection with establishment or reestablishment of Treasury Units
or Share Purchase Units, as described in Sections 3.13 and 3.14 hereof.
"Common Stock" means the Common Stock, par value $0.10, of the Company,
including, where applicable, the preference stock purchase rights appurtenant
thereto.
"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.
"Company Certificate" means a certificate signed by an Authorized
Officer and delivered to the Agent.
"Contract Adjustment Payments" means the amounts payable by the Company
in respect of each Share Purchase Contract issued in connection with the Share
Purchase Units and the Treasury Units, which amounts shall be equal to [___]%
per annum of the Stated Amount; computed on the basis of a 360-day year of
twelve 30-day months, plus any Deferred Contract Adjustment Payments accrued
pursuant to Section 5.2.
"Corporate Trust Office" means the corporate trust office of the Agent
at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 000
Xxxxxxx Xxxxxx, Xxxxx 0X, Xxx Xxxx, Xxx Xxxx 00000, Attn: Corporate Trust
Administration.
"Coupon Rate" with respect to a Debt Security means the percentage rate
per annum at which such Debt Security will bear interest.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
4
"Debt Securities" means the series of debt securities of the Company to
be designated "Series [__] Senior Notes due [_____], 200[_]" issued under the
Indenture.
"Default" means a default by the Company in any of its obligations
under this Agreement.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" means a remarketing that does not occur because a
condition precedent to such remarketing is not fulfilled, or if in spite of
using their reasonable efforts, the Remarketing Agents cannot remarket the Debt
Securities of Holders of Share Purchase Units at a price not less than 100% of
the Remarketing Treasury Portfolio Purchase Price, in the case of the
remarketing of Debt Securities on the Initial Remarketing Date, or 100% of the
aggregate principal amount of such Debt Securities, in the case of the
remarketing of Debt Securities on the Secondary Remarketing Date, in each case,
plus accrued and unpaid interest.
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by a Share Purchase Unit Certificate and/or a
Treasury Unit Certificate is registered on the Share Purchase Unit Register
and/or the Treasury Unit Register, as the case may be.
"Indenture" means the Indenture (For Unsecured Debt Securities Series)
dated as of November 15, 2001 between the Company and the Indenture Trustee
pursuant to which the Debt Securities are to be issued, as originally executed
and delivered and as it may from time to time be supplemented or amended by one
or more indentures supplemental thereto entered into
5
pursuant to the applicable provisions thereof and shall include the terms of a
particular series of securities established as contemplated by Section 301
thereof.
"Indenture Trustee" means Bank One Trust Company, N.A., as trustee
under the Indenture, or any successor thereto.
"Initial Remarketing Date" means the third Business Day immediately
preceding the Initial Reset Date.
"Initial Reset Date" means any Business Day, as selected by the Company
in its sole discretion, from [_____], 200[_] to [_____], 200[_].
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by an Authorized Officer and delivered to the
Agent.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by an authorized
signatory of the Company establishing the terms of the debt securities of any
series pursuant to the Indenture.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate.
"Outstanding," with respect to any Share Purchase Units or Treasury
Units means, as of the date of determination, all Share Purchase Units or
Treasury Units evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Treasury
Units for which Treasury Securities have been deposited with the Agent
in trust for the Holders of such Treasury Units and (B) Share Purchase
Units for which Debt Securities or the appropriate Applicable Ownership
Interest in a Treasury Portfolio (or as contemplated in Section 3.15
hereto with respect to a Holder's interest in the Treasury Portfolio,
cash) has been theretofore deposited with the Agent in trust for the
Holders of such Share Purchase Units;
(ii) Share Purchase Units and Treasury Units evidenced by
Certificates theretofore cancelled by the Agent or delivered to the
Agent for cancellation or deemed cancelled pursuant to the provisions
of this Agreement; and
(iii) Share Purchase Units and Treasury Units evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such Certificate in respect
of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Share Purchase Units or Treasury Units
evidenced by such Certificate are valid obligations of the Company;
6
provided, however, that in determining whether the Holders of the requisite
number of the Share Purchase Units or Treasury Units have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Share
Purchase Units or Treasury Units owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Share
Purchase Units or Treasury Units which a Responsible Officer of the Agent
actually knows to be so owned shall be so disregarded. Share Purchase Units or
Treasury Units so owned which have been pledged in good faith may be regarded as
Outstanding Securities if the pledgee establishes to the satisfaction of the
Agent the pledgee's right so to act with respect to such Share Purchase Units or
Treasury Units and that the pledgee is not the Company or any Affiliate of the
Company.
"Payment Date" means each of (i) [_____],[_____],[_____] and [_____],
commencing [_____], 200[_], and (ii) the Initial Reset Date if the remarketing
of the Senior Notes on the third business day immediately preceding the Initial
Reset Date is successful and the Initial Reset Date is not [_____], 200[_] or
[_____], 200[_].
"Permitted Investments" has the meaning set forth in Article I 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 association or government or any agency
or political subdivision thereof or any other entity of whatever nature.
"Pledge" means the pledge under the Pledge Agreement of the Debt
Securities, the Treasury Securities or the appropriate Applicable Ownership
Interest in a Treasury Portfolio, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Agent, as Share Purchase Contract agent
and as attorney-in-fact for the Holders from time to time of Securities, and the
Collateral Agent, as the collateral agent, the custodial agent and the
securities intermediary.
"Pledged Applicable Ownership Interest in a Treasury Portfolio" has the
meaning specified in Section 2.1 of the Pledge Agreement.
"Pledged Debt Securities" has the meaning specified in Section 2.1 of
the Pledge Agreement.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Share Purchase Unit
Certificate or a Predecessor Treasury Unit Certificate.
"Predecessor Share Purchase Unit Certificate" of any particular Share
Purchase Unit Certificate means every previous Share Purchase Unit Certificate
evidencing all or a portion of the rights and obligations of the Company and the
Holder under the Share Purchase Units
7
evidenced thereby; and, for the purposes of this definition, any Share Purchase
Unit Certificate authenticated and delivered under Section 3.10 in exchange for
or in lieu of a mutilated, destroyed, lost or stolen Share Purchase Unit
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Share
Purchase Unit Certificate.
"Predecessor Treasury Unit Certificate" of any particular Treasury Unit
Certificate means every previous Treasury Unit Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Treasury Units evidenced thereby; and, for the purposes of this definition, any
Treasury Unit Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Unit
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 Unit
Certificate.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in New York City.
"Proceeds" has the meaning set forth in Article I of the Pledge
Agreement.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quotation Agent" means (i) [____________] or its successor, provided,
however, that, if the foregoing shall cease to be a Primary Treasury Dealer, the
Company shall substitute therefor another Primary Treasury Dealer, and (ii) any
other Primary Treasury Dealer selected by the Company.
"Record Date" for the payment of interest, distribution and Contract
Adjustment Payments 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, a day selected by the Company which shall be at least one
Business Day but not more than 60 Business Days prior to such Payment Date (and
which shall correspond to the related record date for the Debt Securities).
"Redemption Amount" means for each Debt Security, the product of (i)
the principal amount of such Debt Security and (ii) a fraction whose numerator
is the applicable Treasury Portfolio Purchase Price and whose denominator is the
Applicable Principal Amount.
"Redemption Price" means an amount per Debt Security equal to the
Redemption Amount plus accrued and unpaid interest, if any, to the date of
redemption.
"Register" means the Share Purchase Unit Register and the Treasury Unit
Register.
"Registrar" means the Share Purchase Unit Registrar and the Treasury
Unit Registrar.
"Remarketing Agents" has the meaning specified in Section 5.4.
8
"Remarketing Agreement" means a Remarketing Agreement contemplated by
Section 5.4 by and between the Company, the Remarketing Agents and the Share
Purchase Contract Agent, including any supplements thereto.
"Remarketing Fee" means an amount not exceeding [__] basis points ([__]%)
of (i) the applicable Treasury Portfolio Purchase Price, in the case of any
successful remarketing of Debt Securities on the Initial Remarketing Date, or
(ii) the aggregate principal amount of the remarketed Debt Securities, in the
case of any successful remarketing of Debt Securities on the Secondary
Remarketing Date.
"Remarketing Treasury Portfolio" means (a) interest or principal strips of
U.S. Treasury Securities that mature on or prior to [_____], 200[_] in an
aggregate amount equal to the principal amount of the Debt Securities included
in Share Purchase Units; (b) with respect to the originally scheduled quarterly
interest payment date on the Debt Securities that would have occurred on
[_____], 200[_], interest or principal strips of U.S. Treasury Securities that
mature on or prior to [_____], 200[_] in an aggregate amount equal to the
aggregate interest payment that would be due on [_____], 200[_] on the principal
amount of the Debt Securities that would have been included in Share Purchase
Units assuming no remarketing and assuming that the interest rate on the Debt
Securities was not reset; and (c) if the Initial Reset Date occurs prior to
[_____], 200[_], with respect to the originally scheduled quarterly interest
payment date on the Debt Securities that would have occurred on [_____], 200[_],
interest or principal strips of U.S. Treasury Securities that mature on or prior
to [_____], 200[_] in an aggregate amount equal to the aggregate interest
payment that would be due on [_____], 200[_] on the principal amount of the Debt
Securities that would have been included in the Share Purchase Units assuming no
remarketing and assuming no reset of the interest rate on the Debt Securities
and assuming that interest on the Debt Securities accrued from the Initial Reset
Date to, but excluding, [_____], 200[_].
"Remarketing Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by a Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Initial Reset Date for the purchase of
the Remarketing Treasury Portfolio for settlement on the Initial Reset Date.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Reset Agent" means [________________], or such other Reset Agent as the
Company shall select from time to time.
"Reset Announcement Date" means the seventh Business Day immediately
preceding the Reset Date, the date on which the Reset Spread, and the Applicable
Benchmark Treasury will be announced by the Company.
"Reset Date" means the Initial Reset Date, or if the remarketing of the
Debt Securities on the Initial Remarketing Date results in a Failed Remarketing,
[_____], 200[_].
"Reset Rate" means the Coupon Rate to be in effect for the Debt Securities
on and after the Reset Date and determined as provided in Section 4.1.
9
"Reset Spread" means an amount determined by the Reset Agent which, when
added to the Applicable Benchmark Treasury in effect on the third Business Day
immediately preceding the Reset Date, will produce the rate the Debt Securities
should bear in order to have an approximate market value on the third Business
Day immediately preceding the Reset Date of [____]% of (a) the Remarketing
Treasury Portfolio Purchase Price, if the Reset Date is the Initial Reset Date
or (b) their aggregate principal amount if the Reset Date is [_____], 200[_];
provided that (i) the Company may limit the Reset Rate to be no higher than the
rate on the Applicable Benchmark Treasury on such Business Day plus [____ basis
points ([__]%); (ii) such market value may be less than [___]% if the Company
exercises such right to limit the Reset Rate; and (iii) the Reset Rate shall in
no event exceed the maximum permitted by applicable law.
"Responsible Officer," when used with respect to the Agent, means any Vice
President, Assistant Vice President, Trust Officers or other officer of the
Agent assigned by the Agent to the Corporate Trust Administration Division of
the Agent (or any successor division or department of the Agent) and who shall
have responsibility for the administration of this Agreement.
"Secondary Remarketing Date" means the third Business Day immediately
preceding [_____], 200[_].
"Security" means a Share Purchase Unit or a Treasury Unit.
"Senior Indebtedness" means indebtedness of any kind of the Company
(including the Debt Securities) unless the instrument under which such
indebtedness is incurred expressly provides that it is in parity or subordinate
in right of payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Share Purchase Contract," when used with respect to any Security, means
the contract forming a part of such Security and obligating the Company (A) to
sell to the Holder of such Security and the Holder of such Security to purchase
not later than the Share Purchase Contract Settlement Date, for $[50] in cash, a
number of newly issued shares of Common Stock equal to the applicable Settlement
Rate, and (B) to pay the Holder Contract Adjustment Payments on the terms and
subject to the conditions set forth in Article Five hereof.
"Share Purchase Contract Settlement Date" means [_____], 200[_].
"Share Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Share Purchase Unit" means a Security, initially issued in substantially
the form set forth as Exhibit A hereto in the Stated Amount of $[50], which
represents (i) beneficial ownership by the Holder of either (a) (1) one Debt
Security in a principal amount of $[50], or (2) following a successful
remarketing of the Debt Securities on the Initial Remarketing Date, on and after
the Initial Reset Date an Applicable Ownership Interest in the Remarketing
Treasury Portfolio, subject to the Pledge of such Debt Security or Applicable
Ownership Interest in the Remarketing Treasury Portfolio by the Holder pursuant
to the Pledge Agreement or (b) upon the occurrence of a Tax Event Redemption
prior to the Share Purchase Contract Settlement Date, an
10
Applicable Ownership Interest in a Tax Event Treasury Portfolio, subject to the
Pledge of such Applicable Ownership Interest in the Tax Event Treasury Portfolio
by the Holder pursuant to the Pledge Agreement, and (ii) the rights and
obligations of the Holder under one Share Purchase Contract.
"Share Purchase Unit Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Share Purchase Units
specified on such certificate.
"Share Purchase Unit Register" and "Share Purchase Unit Registrar" have the
respective meanings specified in Section 3.5.
"Stated Amount" means $[50], which is equal to the stated amount of a Share
Purchase Unit and the face amount of a Treasury Unit.
"Tax Event" means the receipt by the Company of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, change in, or announced proposed
change in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein affecting taxation,
(b) any amendment to or change in an interpretation or application of any such
laws or regulations by any legislative body, court, governmental agency or
regulatory authority or (c) any interpretation or pronouncement by any such
legislative body, court, governmental agency or regulatory authority that
provides for a position with respect to any such laws or regulations that
differs from the generally accepted position on [_____], 200[_], which
amendment, change or proposed change is effective or which interpretation or
pronouncement is announced on or after [_____], 200[_], there is more than an
insubstantial risk that interest payable by the Company on the Debt Securities
would not be deductible, in whole or in part, by the Company for United States
federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be continuing,
the redemption of Debt Securities, in whole but not in part, at the option of
the Company on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date on which a Tax Event Redemption
is to occur.
"Tax Event Treasury Portfolio" means (a) if the Tax Event Redemption occurs
prior to the Initial Reset Date, or if the Senior Notes are not successfully
remarketed on the third business day immediately preceding the Initial Reset
Date, prior to [_____], 200[_] (i) interest or principal strips of U.S. Treasury
Securities that mature on or prior to [_____], 200[_] in an aggregate amount
equal to the principal amount of Senior Notes included in the Share Purchase
Units, and (ii) with respect to each scheduled interest payment date on the
Senior Notes that occurs after the Tax Event Redemption and on or before
[_____], 200[_], interest or principal strips of U.S. Treasury Securities which
mature on or prior to that interest payment date in an aggregate amount equal to
the aggregate interest payment that would be due on the aggregate principal
amount of the Senior Notes on that date if the interest rate of the Senior Notes
was not reset on any applicable Reset Date; or (b) if the Tax Event Redemption
occurs on or after the Initial Reset
11
Date, or if the Senior Notes are not successfully remarketed on the third
business day immediately preceding the Initial Reset Date, on or after [_____],
200[_] (i) interest or principal strips of U.S. Treasury Securities that mature
on or prior to [_____], 200[_] in an aggregate amount equal to the principal
amount of Senior Notes outstanding, and (ii) with respect to each scheduled
interest payment date on the Senior Notes that occurs after the Tax Event
Redemption and on or before [_____], 200[_], interest or principal strips of
U.S. Treasury Securities which mature on or prior to that interest payment date
in an aggregate amount equal to the aggregate interest payment that would be due
on the aggregate principal amount of the Senior Notes outstanding on that date.
"Tax Event Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Tax Event Treasury Portfolio for settlement on the Tax Event
Redemption Date.
"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 Share 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 Share
Purchase Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (ii) at any time on or
prior to the Share Purchase Contract Settlement Date, a judgment, decree or
court order for the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of the Company or of its property, or for
the winding up or liquidation of its affairs, shall have been entered, and,
unless such judgment, decree or order shall have been entered within 60 days
prior to the Share 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 Share 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 insolvency
of it or of its property, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally as
they become due.
"Threshold Appreciation Price" has the meaning specified in Section 5.1.
"TIA" means, as of any time, the Trust Indenture Act of 1939, as amended,
or any successor statute, as in effect at such time.
"Trading Day" has the meaning specified in Section 5.1.
12
"Treasury Portfolio" means, as applicable, the Remarketing Treasury
Portfolio or a Tax Event Treasury Portfolio.
"Treasury Portfolio Purchase Price" means, as applicable, the Remarketing
Treasury Portfolio Purchase Price or the Tax Event Treasury Portfolio Purchase
Price.
"Treasury Security" means a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $1,000 and maturing on [_____], 200[_]
(CUSIP No. [ ]).
"Treasury Units" means a Security, initially issued in substantially the
form set forth as Exhibit B hereto in a Stated Amount of $[50], which represents
(i) a 1/20 undivided beneficial ownership in a Treasury Security having a
principal amount at maturity equal to $1,000, and (ii) the rights and
obligations of the Company and the Holder under one Share Purchase Contract.
"Treasury Unit Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.
"Treasury Unit Register" and "Treasury Unit Registrar" have the respective
meanings specified in Section 3.5.
"Underwriting Agreement" means the Underwriting Agreement dated [_____],
200[_] relating to the Share Purchase Units between the Company and [________],
as representative[s] of the underwriters named therein.
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
Section 1.2 Compliance Certificates and Opinions. Except as otherwise
expressly provided by this Agreement, upon any application or request by the
Company to the Agent to take any action under any provision of this Agreement,
the Company shall furnish to the Agent a Company Certificate stating that in the
opinion of the Authorized Officer signing such Company Certificate all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and 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:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
13
(c) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable such
individual to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to 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 1.4 Acts of Holders; Record Dates. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Agreement to be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Agent and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to Section 7.1)
conclusive in favor of the Agent and the Company, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Share Purchase
Unit Register or the Treasury Unit Register, as the case may be.
14
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding 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 Share Purchase Units and the Outstanding Treasury
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 Share Purchase Units or
the Treasury Units, as the case may be, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite number of Outstanding Securities on such record date. Nothing
in this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding 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 Agent in writing and to each Holder of Securities in the
manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Agent in writing, and to each Holder of Securities in the manner set forth
in Section 1.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
Section 1.5 Notices. Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with,
(a) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing (which may be via facsimile to
212.___.____) and personally delivered or mailed, first-class postage prepaid,
to the Agent at The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx
00
Xxxx, Xxx Xxxx 00000, Attention: Vice President, Corporate Trust Administration,
or at any other address previously furnished in writing by the Agent to the
Holders and the Company;
(b) the Company by the Agent or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at FirstEnergy Corp., 00 Xxxxx Xxxx
Xxxxxx, Xxxxx, Xxxx 00000-0000, Attention: Treasurer, or at any other address
previously furnished in writing to the Agent by the Company;
(c) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the Collateral
Agent at [________________], Attention: [___________], or at any other address
previously furnished in writing by the Collateral Agent to the Agent, the
Company and the Holders; or
(d) the Indenture Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if made,
given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, addressed to the Indenture Trustee at Bank One
Trust Company, N.A., 000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx Xxxxxxxx, Xxxx 00000,
Attention: Corporate Trust Administration, or at any other address previously
furnished in writing by the Indenture Trustee to the Company.
Section 1.6 Notice to Holders; Waiver. Where this Agreement provides for
notice to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at its address as it
appears in the applicable Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Agent, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Agent shall constitute a
sufficient notification for every purpose hereunder.
Section 1.7 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 1.8 Successors and Assigns. All covenants and agreements in this
Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
16
Section 1.9 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. Nothing in this Agreement or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder 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
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 1.12 Legal Holidays. In any case where any Payment Date shall not
be a Business Day, then (notwithstanding any other provision of this Agreement
or the Share Purchase Unit Certificates or the Treasury Unit Certificates)
payment of the Contract Adjustment Payments, if any, shall not be made on such
date, but such payments shall be made on the next succeeding Business Day with
the same force and effect as if made on such Payment Date, and no interest shall
accrue or be payable by the Company or 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 the Share Purchase Contract Settlement Date shall not be
a Business Day, then (notwithstanding any other provision of this Agreement, the
Share Purchase Unit Certificates or the Treasury Unit Certificates), the Share
Purchase Contracts shall not be performed on such date, but the Share Purchase
Contracts shall be performed on the immediately following Business Day with the
same force and effect as if performed on the Share Purchase Contract Settlement
Date.
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 upon reasonable prior written notice at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any
Holder.
17
ARTICLE II
CERTIFICATE FORMS
Section 2.1 Forms of Certificates Generally. The Share Purchase Unit
Certificates (including the form of Share Purchase Contract forming part of the
Share Purchase Units evidenced thereby) shall be in substantially the form set
forth in Exhibit A hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Share Purchase Units are listed or any
depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Share Purchase Unit Certificates, as
evidenced by their execution of the Share Purchase Unit Certificates.
The definitive Share Purchase Unit 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
Share Purchase Units evidenced by such Share Purchase Unit Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
The Treasury Unit Certificates (including the form of Share Purchase
Contracts forming part of the Treasury Units evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury Units may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury Unit Certificates, as evidenced by their
execution of the Treasury Unit Certificates.
The definitive Treasury Unit 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 Treasury Units
evidenced by such Treasury Unit 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 SHARE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE SHARE PURCHASE CONTRACT AGREEMENT.
18
Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) to the Company or
its agent for registration of transfer, exchange or payment, and any Certificate
issued is registered in the name of Cede & Co., or such other name as requested
by an authorized representative of The Depository Trust Company, and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede &
Co., has an interest herein.
Section 2.2 Form of Agent's Certificate of Authentication. The form of the
Agent's certificate of authentication of the Share Purchase Units shall be in
substantially the form set forth on the form of the Share Purchase Unit
Certificates set forth as Exhibit A hereto.
The form of the Agent's certificate of authentication of the Treasury Units
shall be in substantially the form set forth on the form of the Treasury Unit
Certificates set forth as Exhibit B hereto.
ARTICLE III
THE SECURITIES
Section 3.1 Title and Terms; Denominations. The aggregate number of Share
Purchase Units and Treasury Units evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
[________] units (or [________] if the overallotment option provided for 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 Section 3.4, 3.5,
3.10, 3.12, 3.13, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Share Purchase Unit or Treasury Unit and any integral
multiple thereof.
Section 3.2 Rights and Obligations Evidenced by the Certificates. Each
Share Purchase Unit Certificate shall evidence the number of Share Purchase
Units specified therein, with each such Share Purchase Unit representing the
ownership by the Holder thereof of a beneficial interest in a Debt Security or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as the
case may be, subject to the Pledge of such Debt Security or Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Share Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Share Purchase Unit
shall pledge, pursuant to the Pledge Agreement, each Debt Security or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, forming a part of such Share 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 such Debt Security or Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, for the benefit of
the Company, to secure the obligation of the Holder under one Share Purchase
Contract to purchase the Common Stock of the Company. Prior to the purchase of
shares of Common Stock under each Share Purchase Contract, such Share Purchase
Contract shall not entitle the holder of a Share Purchase Unit Certificate to
any of the rights of a holder of
19
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.
Upon the formation of Treasury Units pursuant to Section 3.13, each
Treasury Unit Certificate shall evidence the number of Treasury Units specified
therein, with each such Treasury Unit representing the ownership by the Holder
thereof of a 1/20, or 5%, undivided beneficial interest in a Treasury Security
with a principal amount equal to $[__], subject to the Pledge of such Treasury
Security by such Holder pursuant to the Pledge Agreement, and the rights and
obligations of the Holder thereof and the Company under one Share Purchase
Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of
each Treasury Unit shall pledge, pursuant to the Pledge Agreement, each Treasury
Security forming a part of such Treasury Unit, to the Collateral Agent and grant
to the Collateral Agent a security interest in the right, title, and interest of
such Holder in such Treasury Security for the benefit of the Company, to secure
the obligation of the Holder under one Share Purchase Contract to purchase the
Common Stock of the Company.
Section 3.3 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 Agent for
authentication, execution on behalf of the Holders and delivery, together with
its Issuer Order for authentication of such Certificates, and the Agent in
accordance with such Issuer Order shall authenticate, execute on behalf of the
Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its President, one of its Vice Presidents, its Treasurer, one of
its Assistant Treasurers, its Secretary or one of its Assistant Secretaries. 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 Share 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 Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Share Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by
20
manual signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4 Temporary Certificates. Pending the preparation of definitive
Certificates, the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and deliver, in lieu of
such definitive Certificates, temporary Certificates which are in substantially
the forms 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 Share Purchase
Units or Treasury Units are or may be 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 Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver in exchange
therefor, one or more definitive Certificates of like tenor and denominations
and evidencing a like number of Share Purchase Units or Treasury Units, as the
case may be, as the temporary Certificate or Certificates so surrendered. Until
so exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Share Purchase Units or
Treasury Units, as the case may be, evidenced thereby as definitive
Certificates.
Section 3.5 Registration; Registration of Transfer and Exchange. The Agent
shall keep at the Corporate Trust Office a register (the "Share Purchase Unit
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of Share Purchase Unit Certificates
and of transfers of Share Purchase Unit Certificates (the Agent, in such
capacity, the "Share Purchase Unit Registrar") and a register (the "Treasury
Unit Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of the Treasury Unit
Certificates and of transfers of Treasury Unit Certificates (the Agent, in such
capacity, the "Treasury Unit Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of Share Purchase Units or Treasury 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
Share Purchase Units or Treasury 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
21
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver the Certificates which the Holder making the
exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of Share Purchase
Units or Treasury Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Share
Purchase Units or Treasury 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
for exchange shall (if so required by the Company or the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent, duly executed by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company will not be obligated to execute
and deliver to the Agent, and the Agent will not be obligated to authenticate,
execute on behalf of the Holder and deliver any Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the Share Purchase Contract Settlement Date
or on or after the Termination Date. In lieu of delivery of a new Certificate,
upon satisfaction of the applicable conditions specified above in this Section
and receipt of appropriate registration or transfer instructions from such
Holder, the Agent shall (i) if the Share Purchase Contract Settlement Date has
occurred, deliver the shares of Common Stock issuable in respect of the Share
Purchase Contracts forming a part of the Securities evidenced by such
Certificate, (ii) in the case of Share Purchase Units, if a Termination Event
shall have occurred prior to the Share Purchase Contract Settlement Date,
transfer the aggregate principal amount of the Debt Securities or the aggregate
Stated Amount of the appropriate Treasury Portfolio, as applicable, evidenced
thereby, or (iii) in the case of Treasury Units, if a Termination Event shall
have occurred prior to the Share Purchase Contract Settlement Date, transfer the
Treasury Securities evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Article V hereof.
Section 3.6 Book-Entry Interests. The Certificates, on original issuance,
will be issued in the form of one or more fully registered Global Certificates,
to be delivered to the Depositary or a nominee or custodian thereof by, or on
behalf of, the Company. 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 3.9. The Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until definitive, fully
registered Certificates have been issued to Beneficial Owners pursuant to
Section 3.9:
22
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including the payment of Contract Adjustment
Payments, if any, and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section 3.6
shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. The Clearing Agency will make book entry transfers
among Clearing Agency Participants and receive and transmit payments of Contract
Adjustment Payments to such Clearing Agency Participants.
Section 3.7 Notices to Holders. Whenever a notice or other communication
to the Holders is required to be given under this Agreement, the Company or the
Company's agent shall give such notices and communications to the Holders and,
with respect to any Certificates registered in the name of a Clearing Agency or
the nominee of a Clearing Agency, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.
Section 3.8 Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depositary with respect
to the Securities, the Company may, in its sole discretion, appoint a successor
Clearing Agency with respect to the Securities.
Section 3.9 Definitive Certificates. If (i) a Clearing Agency elects to
discontinue its services as securities depositary with respect to the Securities
and a successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 3.8, or (ii) the Company elects to terminate
the book-entry system through the Clearing Agency with respect to the
Securities, then upon surrender of the Global Certificates representing the
Book-Entry Interests with respect to the Securities by the Clearing Agency,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Clearing Agency. The Company 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.
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates. If any
mutilated Certificate is surrendered to the Agent, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver in exchange therefor, a new Certificate at the cost of the
Holder, evidencing the same number of Share Purchase Units or Treasury Units, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.
23
If there shall be delivered to the Company and the Agent (i) evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Share Purchase
Units or Treasury Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
Notwithstanding the foregoing, the Company will not be obligated to execute
and deliver to the Agent, and the Agent will not be obligated to authenticate,
execute on behalf of the Holder and deliver any Certificate on or after the
Business Day immediately preceding the Share Purchase Contract Settlement Date
or on or after the Termination Date. In addition, in lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent may (i) if the Share Purchase Contract Settlement
Date has occurred, deliver the shares of Common Stock issuable in respect of the
Share Purchase Contracts forming a part of the Securities evidenced by such
Certificate, or (ii) if a Termination Event shall have occurred, transfer the
Debt Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or the Treasury Securities, as the case may be, forming a part of the
Securities represented by such Certificate to such Holder, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article V hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Agent may require payment from the Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the 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 Agent, and any
agent of the Company or the Agent, may treat the Person in whose name such
Certificate is registered on the Share Purchase Units Register or the Treasury
Units Register, as applicable, as the owner of the Share Purchase Units or
Treasury Units evidenced thereby, for the purpose of receiving interest on the
Debt Securities or distributions on the maturing quarterly interest strips of
the appropriate Treasury Portfolio, as applicable, receiving payments of
Contract Adjustment Payments, performance of the Share
24
Purchase Contracts and for all other purposes whatsoever, whether or not any
interest on the Debt Securities or the Contract Adjustment Payments payable in
respect of the Share Purchase Contracts constituting a part of the Share
Purchase Units or Treasury Units evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the Company nor the
Agent, nor any agent of the Company or the Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from treating the Clearing Agency as the sole Holder of such
Global Certificate or from giving effect to any written certification, proxy or
other authorization furnished by any Clearing Agency (or its nominee), as a
Holder, with respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global Certificate,
the operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12 Cancellation. All Certificates surrendered for delivery of
shares of Common Stock on or after the Share Purchase Contract Settlement Date,
upon the transfer of Debt Securities, the Applicable Ownership Interest in the
appropriate 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 a transfer or exchange of a Security, or a Collateral
Substitution or the re-establishment of a Share Purchase Unit shall, if
surrendered to any Person other than the Agent, be delivered to the Agent and,
if not already cancelled, shall be promptly cancelled by it. The Company may at
any time deliver to the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall, upon
Issuer Order, be promptly cancelled by the Agent. No Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Certificates cancelled as provided in this Section, except as
expressly permitted by this Agreement. All cancelled Certificates held by the
Agent shall upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13 Establishment or Reestablishment of Treasury Units. A Holder
of a Share Purchase Unit may, at any time on or prior to the fifth Business Day
immediately preceding the Share Purchase Contract Settlement Date, create or
recreate a Treasury Unit and separate the Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as applicable, from
the related Share Purchase Contract in respect of such Share Purchase Unit by
substituting a Treasury Security for the Debt Security, or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, that form a part of
such Share Purchase Unit in accordance with this Section 3.13; provided,
however, that if a successful remarketing of the Debt Securities has occurred on
the Initial Remarketing Date or a Tax Event Redemption has occurred, Holders of
such Share Purchase Units may make such Collateral Substitutions at any time on
or prior to the second Business Day immediately preceding the Share Purchase
Contract Settlement Date. Holders may make Collateral Substitutions and
establish Treasury Units (i) only in integral
25
multiples of [20] Share Purchase Units if only Debt Securities are being
substituted by Treasury Securities, or (ii) only in integral multiples of
[40,000] Share Purchase Units if the Applicable Ownership Interests in the
appropriate Treasury Portfolio are being substituted by Treasury Securities. To
create [20] Treasury Units (if a Tax Event Redemption has not occurred and the
Debt Securities remain a component of the Share Purchase Units), or [40,000]
Treasury Units (if a Tax Event Redemption has occurred or the Remarketing
Treasury Portfolio has replaced the Debt Securities as a component of the Share
Purchase Units as a result of a successful remarketing of such Debt Securities),
the Share Purchase Unit Holder shall
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Share Purchase Units as a result of a successful remarketing of the
Debt Securities or a Tax Event Redemption, deposit with the Collateral Agent a
Treasury Security having a principal amount at maturity of $1,000; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Share Purchase Units as a result of a successful remarketing of the
Debt Securities or a Tax Event Redemption, on or prior to the second Business
Day immediately preceding the Share Purchase Contract Settlement Date, deposit
with the Collateral Agent Treasury Securities having an aggregate principal
amount at maturity of $[__________]; and
(c) in each case, transfer and surrender the related [20] Share
Purchase Units, or, in the event a Treasury Portfolio is a component of Share
Purchase Units, [40,000] Share Purchase Units, to the Agent accompanied by a
notice to the Agent, substantially in the form of Exhibit B to the Pledge
Agreement, stating that the Holder has transferred the relevant types and
amounts of Treasury Securities to the Collateral Agent and requesting that the
Agent instruct the Collateral Agent to release the applicable Debt Securities or
the Applicable Ownership Interest in the appropriate Treasury Portfolio, as the
case may be, underlying such Share Purchase Unit, whereupon the Agent shall
promptly give such instruction to the Collateral Agent, substantially in the
form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
that had been components of such Share Purchase Unit, free and clear of the
Company's security interest therein, and upon receipt thereof the Agent shall
promptly:
(i) cancel the related Share Purchase Units surrendered and
transferred;
(ii) transfer the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, that
had been components of such Share Purchase Unit to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Unit Certificate executed by the Company in accordance with
Section 3.3
26
evidencing the same number of Share Purchase Contracts as were evidenced by
the cancelled Share Purchase Units.
Holders who elect to separate the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
from the related Share Purchase Contracts and to substitute Treasury Securities
for such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Share Purchase Units
or fails to deliver a Share Purchase Unit Certificate to the Agent after
depositing the appropriate Treasury Securities with the Collateral Agent, the
Debt Securities or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, constituting a part of such Share Purchase Unit,
and any interest on such Debt Securities or distributions with respect to the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, shall be held in the name of the Agent or its nominee in trust for the
benefit of such Holder, until such Share Purchase Unit is so transferred or the
Share Purchase Unit Certificate is so delivered, as the case may be, or, until
such Holder provides evidence satisfactory to the Company and the Agent that
such Share Purchase Unit Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Share Purchase
Contract underlying a Share Purchase Unit remains in effect, such Share Purchase
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
and Share Purchase Contract comprising such Share Purchase Unit may be acquired,
and may be transferred and exchanged, only as an entire Share Purchase Unit.
Section 3.14 Establishment or Reestablishment of Share Purchase Units. A
Holder of a Treasury Unit may, at any time on or prior to the fifth Business Day
immediately preceding the Share Purchase Contract Settlement Date, create or
recreate a Share Purchase Unit by depositing with the Collateral Agent a Debt
Security or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Treasury Unit
in accordance with this Section 3.14; provided, however, that if a Treasury
Portfolio has replaced the Debt Securities as a component of Share Purchase
Units as a result of a successful remarketing of the Debt Securities or a Tax
Event Redemption, such Collateral Substitutions may be made at any time on or
prior to the second Business Day immediately preceding the Share Purchase
Contract Settlement Date. Holders of Treasury Units may make such Collateral
Substitutions and establish Share Purchase Units (i) only in integral multiples
of [20] Treasury Units if Treasury Securities are being replaced by only Debt
Securities, or (ii) only in integral multiples of [40,000] Treasury Units if any
Treasury Security is being replaced by the Applicable Ownership Interest in the
appropriate Treasury Portfolio. To create [20] Share Purchase Units (if a Tax
Event Redemption has not occurred and the Debt Securities remain components of
Share Purchase Units), or [40,000] Share
27
Purchase Units (if a Tax Event Redemption has occurred or the Remarketing
Treasury Portfolio has replaced the Debt Securities as a result of a successful
remarketing of such Debt Securities), the Treasury Unit Holder shall
(a) if a Treasury Portfolio has not replaced the Debt Securities as a
component of Share Purchase Units as a result of a successful remarketing of the
Debt Securities on the Initial Remarketing Date or a Tax Event Redemption, on or
prior to the fifth Business Day immediately preceding the Share Purchase
Contract Settlement Date, deposit with the Collateral Agent $1,000 in aggregate
principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Share Purchase Units as a result of a successful remarketing of the
Debt Securities or a Tax Event Redemption, on or prior to the second Business
Day immediately preceding the Share Purchase Contract Settlement Date, deposit
with the Collateral Agent the Applicable Ownership Interest in the Treasury
Portfolio for each [40,000] Share Purchase Units being created by the Holder,
and having an aggregate principal amount of $[_______]; and
(c) in each case, transfer and surrender the related [20] Treasury
Units, or in the event the Treasury Portfolio is a component of Share Purchase
Units, [40,000] Share Purchase Units, to the Agent accompanied by a notice to
the Agent, substantially in the form of Exhibit B to the Pledge Agreement,
stating that the Holder has transferred the relevant amount of Debt Securities
or the Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, to the Collateral Agent and requesting that the Agent instruct
the Collateral Agent to release the Treasury Securities underlying such Treasury
Units, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Debt Securities or the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, described in clause (a)
or (b) above and the instructions described in clause (c) above, in accordance
with the terms of the Pledge Agreement, the Collateral Agent will effect the
release of the Treasury Securities having a corresponding aggregate principal
amount from the Pledge to the Agent free and clear of the Company's security
interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Treasury Units surrendered and
transferred;
(ii) transfer the Treasury Securities that had been components of
such Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Share Purchase Unit Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Share Purchase Contracts as were
evidenced by the cancelled Treasury Units.
Holders who elect to separate Treasury Securities from the related Share
Purchase Contract and to substitute Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, for such
Treasury Securities shall be responsible for any fees or expenses payable to the
Collateral Agent for its services as Collateral
28
Agent in respect of the substitution, and the Company shall not be responsible
for any such fees or expenses.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Treasury Units or
fails to deliver a Treasury Unit Certificate to the Agent after depositing the
Debt Securities or Applicable Ownership Interest in the appropriate Treasury
Portfolio with the Collateral Agent, the Treasury Securities constituting a part
of such Treasury Unit Certificate, and any interest on such Treasury Securities,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Treasury Unit is so transferred or the Treasury Unit
is so delivered, or until such Holder provides evidence satisfactory to the
Company and the Agent that such Treasury Unit has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as provided in this Section 3.14, for so long as the Share Purchase
Contract underlying a Treasury Unit remains in effect, such Treasury Unit shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury Unit in respect of the Treasury Security and Share
Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged only as an entire Treasury Unit.
Section 3.15 Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the Agent of the
Debt Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or the Treasury Securities, as the case may be, underlying the Share
Purchase Units and the Treasury Units pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Debt Securities or the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, from each Holder by
written request mailed to such Holder at its address as it appears in the Share
Purchase Unit Register or the Treasury Unit Register, as the case may be. Upon
book-entry transfer of a Share Purchase Unit Certificate or Treasury Unit
Certificate or delivery of a Share Purchase Unit Certificate or Treasury Unit
Certificate to the Agent with such transfer instructions, the Agent shall
transfer the Debt Securities, the Applicable Ownership Interest in the
appropriate Treasury Portfolio or Treasury Securities, as the case may be,
underlying such Share Purchase Units or Treasury 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 Share Purchase Units
or Treasury Units fails to effect such transfer or delivery, the Debt
Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, underlying such Share
Purchase Units or Treasury Units, as the case may be, and any interest thereon,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Share Purchase Units or Treasury Units are
transferred or the Share Purchase Unit Certificate or Treasury Unit Certificate
is surrendered or such Holder provides satisfactory evidence that such Share
Purchase Unit Certificate or Treasury Unit Certificate has been destroyed, lost
or stolen, together with any indemnity that may be required by the Agent and the
Company. In the case of a Treasury Portfolio or any Treasury Securities, the
Agent may dispose of the subject securities for cash and pay the applicable
portion of such cash to the Holders in lieu of such Holders' Applicable
Ownership Interest in such Treasury Portfolio, or any Treasury Securities, where
such Holder would otherwise have been entitled to receive less than $1,000 of
any such security.
29
Section 3.16 No Consent to Assumption. Each Holder of a Security, by
acceptance thereof, will be deemed expressly to have withheld any consent to the
assumption under Section 365 of the Bankruptcy Code or otherwise, of the Share
Purchase Contract by the Company, its trustee in bankruptcy, receiver,
liquidator or a person or entity performing similar functions, in the event that
the Company becomes a debtor under the Bankruptcy Code or subject to other
similar State or Federal law providing for reorganization or liquidation.
Section 3.17 CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Agent shall use
"CUSIP" in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made to as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Agent of any change in the "CUSIP" numbers..
ARTICLE IV
THE DEBT SECURITIES
Section 4.1 Payment of Interest; Rights to Interest Preserved; Interest
Rate Reset; Notice. A payment of interest on the Debt Securities or distribution
with respect to the Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, which is paid on any Payment Date shall, subject
to receipt thereof by the Agent from the Collateral Agent as provided by the
terms of the Pledge Agreement, be paid to the Person in whose name the Share
Purchase Unit Certificate (or one or more Predecessor Share Purchase Unit
Certificates) of which such Debt Securities or the Applicable Ownership Interest
in the appropriate Treasury Portfolio, as the case may be, are a part is
registered at the close of business on the Record Date for such Payment Date.
Each Share Purchase Unit Certificate evidencing Debt Securities delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Share Purchase Unit Certificate shall carry the rights to
payment of interest accrued and unpaid, and to accrue interest, which are
carried by the Debt Securities underlying such other Share Purchase Unit
Certificate.
In the case of any Share Purchase Unit with respect to which Cash
Settlement of the underlying Share Purchase Contract is effected on the Business
Day immediately preceding the Share Purchase Contract Settlement Date pursuant
to prior notice, or with respect to which Early Settlement of the underlying
Share Purchase Contract is effected on an Early Settlement Date, or with respect
to which a Collateral Substitution is effected, in each case on a date that is
after any Record Date and on or prior to the next succeeding Payment Date,
interest on the Debt Securities or distributions with respect to the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
underlying such Share Purchase Unit otherwise payable on such Payment Date shall
be payable on such Payment Date notwithstanding such Cash Settlement or Early
Settlement or Collateral Substitution, and such interest or distributions shall,
subject to receipt thereof by the Agent, be payable to the Person in whose name
the Share Purchase Unit
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Certificate (or one or more Predecessor Share Purchase Unit Certificates) was
registered at the close of business on the Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Share Purchase Unit with respect to which Cash Settlement or Early Settlement of
the underlying Share Purchase Contract is effected on the Business Day
immediately preceding the applicable Share Purchase Contract Settlement Date or
an Early Settlement Date, as the case may be, or with respect to which a
Collateral Substitution has been effected, payment of interest on the related
Debt Securities or distributions with respect to the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, that would
otherwise be payable after the Share Purchase Contract Settlement Date or Early
Settlement Date shall not be payable hereunder to the Holder of such Share
Purchase Unit; provided, however, that to the extent that such Holder continues
to hold the separated Debt Security that formerly comprised a part of such
Holder's Share Purchase Unit, such Holder shall be entitled to receive the
payment of interest on such separated Debt Security.
The Reset Rate on the Debt Securities to be in effect on and after the
Reset Date will be determined on the third Business Day immediately preceding
the Reset Date (such Reset Rate to be effective from and after the Reset Date).
If the Initial Remarketing results in a Failed Remarketing, the Coupon Rate on
the Debt Securities will not be reset to the Reset Rate but will continue at the
initial Coupon Rate. If the Secondary Remarketing results in a Failed
Remarketing, the Reset Rate will be the rate determined by the Reset Agent as
the rate the Debt Securities should bear in order for each Senior Note to have
an approximate market value of [____]% of the principal amount of the Debt
Securities. The Company may limit the reset rate to [__] basis points over the
yield on the Applicable Benchmark Treasury. In addition, the Reset Rate will in
no event exceed the maximum rate permitted by applicable law. On each Reset
Announcement Date, the Reset Spread and the Applicable Benchmark Treasury to be
used to determine the Reset Rate will be announced by the Company. In addition,
on any Reset Announcement Date relating to an Initial Reset Date occurring prior
to [_____], 200[_], the percentage undivided beneficial ownership interest
determined by the Reset Agent for purposes of clause (1)(iii) of the definition
of "Applicable Ownership Interest" will be announced by the Company. On the
Business Day immediately following the Reset Announcement Date, the Company will
cause a notice of the Reset Spread, Applicable Benchmark Treasury and, if
applicable, percentage undivided beneficial ownership interest in the to be
published in an Authorized Newspaper.
Not later than 7 calendar days nor more than 15 calendar days prior to each
Reset Announcement Date and the Share Purchase Contract Settlement Date, if the
Share Purchase Contract Settlement Date is not also a Reset Date, the Company
will request that the Depositary (or any successor Clearing Agency or its
nominee) notify by first-class mail, postage prepaid, the Beneficial Owners or
Clearing Agency Participants holding Share Purchase Units or Treasury Units, of
each Reset Announcement Date and any procedures to be followed by such Holders
of Securities, who intend to settle their obligation under the Share Purchase
Contract with separate cash on the Share Purchase Contract Settlement Date.
Section 4.2 Notice and Voting. Under and subject to the terms of the Pledge
Agreement, the Agent will be entitled to exercise the voting and any other
consensual rights pertaining to the Pledged Debt Securities but only to the
extent instructed by the Holders as described below. Upon receipt of notice of
any meeting at which holders of Debt Securities are
31
entitled to vote or upon any solicitation of consents, waivers or proxies of
holders of Debt Securities, the Agent shall, as soon as practicable thereafter,
mail to the Holders of Share Purchase Units a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Share Purchase Unit Holder on the record date set by the Agent therefor (which,
to the extent possible, shall be the same date as the record date for
determining the holders of Debt Securities entitled to vote) shall be entitled
to instruct the Agent as to the exercise of the voting rights pertaining to the
Debt Securities constituting a part of such Holder's Share Purchase Units and
(c) stating the manner in which such instructions may be given. Upon the written
request of the Holders of Share Purchase Units on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Debt Securities as to which any particular voting instructions are received.
In the absence of specific instructions from the Holder of a Share Purchase
Unit, the Agent shall abstain from voting the Debt Security constituting a part
of such Holder's Share Purchase Unit. The Company hereby agrees, if applicable,
to solicit Holders of Share Purchase Units to timely instruct the Agent in order
to enable the Agent to vote such Debt Securities.
Section 4.3 Substitution of a Treasury Portfolio for Debt Securities. (a)
Upon the occurrence of a Tax Event Redemption prior to the Share Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Share Purchase Units
the Tax Event Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price to the Agent for payment to the Holders of such Share
Purchase Units. The Tax Event Treasury Portfolio will be substituted for the
outstanding Pledged Debt Securities, 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 a Share Purchase Unit to purchase the Common Stock of the Company
on the Share Purchase Contract Settlement Date under the Share Purchase Contract
constituting a part of such Share Purchase Unit. Following the occurrence of a
Tax Event Redemption prior to the Share Purchase Contract Settlement Date, the
Holders of Share Purchase Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Tax Event
Treasury Portfolio as the Holder of Share Purchase Units and the Collateral
Agent had in respect of the Debt Securities subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Debt Securities shall be deemed to be reference to such
Tax Event Treasury Portfolio. The Company may cause to be made in any Share
Purchase Unit Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the
substitution of the Tax Event Treasury Portfolio for Debt Securities as
collateral.
(b) Upon the successful remarketing of the Pledged Debt Securities on
the Initial Remarketing Date, the proceeds of such remarketing (after deducting
any Remarketing Fee) shall be delivered to the Collateral Agent in exchange for
the Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Remarketing Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Share Purchase
Units the Remarketing Treasury Portfolio and promptly remit the remaining
32
portion of such proceeds to the Agent for payment to the Holders of such Share
Purchase Units. The Remarketing Treasury Portfolio will be substituted for the
outstanding Pledged Debt Securities, 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 a Share Purchase Unit to purchase the Common Stock of the Company
on the Share Purchase Contract Settlement Date under the Share Purchase Contract
constituting a part of such Share Purchase Unit. Following the successful
remarketing of the Pledged Debt Securities on the Initial Remarketing Date, the
Holders of Share Purchase Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Remarketing
Treasury Portfolio as the Holder of Share Purchase Units and the Collateral
Agent had in respect of the Debt Securities subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Debt Securities shall be deemed to be reference to such
Remarketing Treasury Portfolio. The Company may cause to be made in any Share
Purchase Unit Certificates thereafter to be issued such change in phraseology
and form (but not in substance) as may be appropriate to reflect the
substitution of the Remarketing Treasury Portfolio for Debt Securities as
collateral.
Section 4.4 Consent to Treatment for Tax Purposes. Each Holder of a Share
Purchase Unit or a Treasury Unit, by its acceptance thereof, covenants and
agrees to treat itself as the owner, for United States federal, state and local
income and franchise tax purposes, of (i) the related Debt Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, in the case
of the Share Purchase Units, or (ii) the Treasury Securities, in the case of the
Treasury Units. Each Holder of a Share Purchase Unit, by its acceptance thereof,
further covenants and agrees to treat the Debt Securities as indebtedness of the
Company for United States federal, state and local income and franchise tax
purposes.
ARTICLE V
THE SHARE PURCHASE CONTRACTS
Section 5.1 Purchase of Shares of Common Stock. Each Share Purchase
Contract shall, unless a Termination Event or an Early Settlement in accordance
with Section 5.9 hereof has occurred, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Share Purchase Contract
Settlement Date, for $[50] in cash (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the applicable Settlement Rate. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $[____] (the "Threshold Appreciation Price"),
[____] shares of Common Stock per Share Purchase Contract, (b) if the Applicable
Market Value is less than the Threshold Appreciation Price, but is greater than
$[___], the number of shares of Common Stock equal to $[50] divided by the
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal to $[____], [_____] shares of Common Stock per Share Purchase Contract, in
each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share). As provided in
Section 5.10, no fractional shares of Common Stock will be issued upon
settlement of Share Purchase Contracts.
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 Share Purchase Contract Settlement
Date.
33
The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States national or regional securities exchange on which the Common Stock is so
listed. If the Common Stock is not so listed on a United States national or
regional securities exchange, the Closing Price means the last sale price of the
Common Stock as reported by the NASDAQ Stock Market, or if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization. If such bid price is not available (as of 4:00 p.m, New York City
time, the Closing Price means market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained by the Company for this purpose.
A "Trading Day" means a day on which the Common Stock (A) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
Each Holder of a Share Purchase Unit or a Treasury Unit, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Share Purchase Contract on its behalf as its attorney-in-fact (including the
execution of Certificates on behalf of such Holder), agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform its obligations
under such Share Purchase Contracts, and consents to the provisions hereof,
irrevocably authorizes the Agent to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to and agrees to be bound by
the Pledge of the Debt Securities, the Treasury Portfolios or the Treasury
Securities, as the case may be, pursuant to the Pledge Agreement, provided that
upon a Termination Event, the rights of a Holder of such Security under the
Share Purchase Contract may be enforced with such regard to any other rights or
obligations. Each Holder of a Share Purchase Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees, that, to the extent and in the
manner provided in Section 5.4 and the Pledge Agreement, but subject to the
terms thereof, payments in respect of the principal of and interest on Debt
Securities or the Proceeds of the Treasury Securities or the Applicable
Ownership Interest in any Treasury Portfolio on the Share Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Share 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,
except as may be required by the Agent pursuant hereto), under the terms of this
Agreement, the Share Purchase Contracts underlying such Certificate and the
Pledge Agreement; and the transferor shall be released from the obligations
under this Agreement, the Share Purchase Contracts underlying the Certificates
so transferred and the Pledge Agreement. The Company covenants and agrees, and
each Holder of a Certificate, by its acceptance thereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
34
Section 5.2 Contract Adjustment Payments. Subject to Section 5.3 herein,
the Company shall pay, on each Payment Date, except the Initial Reset Date, if
the Initial Reset Date is not also a regular quarterly Payment Date, the
Contract Adjustment Payments payable in respect of each Share Purchase Contract
to the Person in whose name a Certificate (or one or more Predecessor
Certificates) is registered on the Register at the close of business on the
Record Date next preceding such Payment Date in such coin or currency of the
United States as at the time of payment shall be legal tender for the payment of
public and private debts. The Contract Adjustment Payments will be payable at
the Corporate Trust Office or, at the option of the Company, by check mailed to
the address of the Person entitled thereto at such Person's address as it
appears on the Share Purchase Unit Register or Treasury Unit Register or by wire
transfer to an account appropriately designated in writing by the Person
entitled to payment. If any date on which Contract Adjustment Payments are to be
made is not a Business Day, then payment of the Contract Adjustment Payment
payable on such date will be made on the next day that is a Business Day (and
without any interest in respect of such delay), except that if such Business Day
is in the next calendar year, such payment will be made on the preceding
Business Day.
Upon the occurrence of a Termination Event, the Company's obligation to pay
Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other Certificate (including as
a result of a Collateral Substitution or the re-establishment of a Share
Purchase Unit) shall carry the rights to Contract Adjustment Payments accrued
and unpaid, and to accrue Contract Adjustment Payments, and the right to accrue
Contract Adjustment Payment, which were carried by the Share Purchase Contracts
which were represented by such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to which
Early Settlement of the underlying Share Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor Certificates)
was 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 Share Purchase
Contract is effected on an Early Settlement Date, Contract Adjustment Payments
that would otherwise be payable after the Early Settlement Date with respect to
such Share Purchase Contract shall not be payable.
Promptly after the calculation of any adjustment to the Contract Adjustment
Payments arising from the occurrence of a Reset Date, the Company shall give the
Agent notice thereof. All calculations and determinations of the Adjusted
Contract Adjustment Payment shall me made by the Company or its Agent and the
Agent shall have no responsibility with respect thereto. The 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 to the
Contract Adjustment
35
Payments, 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 Company's obligations with respect to Contract Adjustment Payments
(including any accrued or Deferred Contract Adjustment Payments), will be
subordinated and junior in right of payment to the Company's obligations under
any Senior Indebtedness.
Section 5.3 Deferral of Payment Dates For Contract Adjustment Payments. The
Company shall have the right, at any time prior to the Share Purchase Contract
Settlement Date, to defer the payment of any or all of the Contract Adjustment
Payments otherwise payable on any Payment Date, but only if the Company shall
give the Holders and the 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
Company is required to give notice of the Record Date or Payment Date with
respect to payment of such Contract Adjustment 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. In
connection with any Contract Adjustment Payments so deferred, additional
Contract Adjustment Payments on the amounts so deferred will accrue at the rate
of [____]% per annum (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
accrued additional Contract Adjustment Payments accrued thereon, being referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section 5.3. No
Contract Adjustment Payments may be deferred to a date that is after the Share
Purchase Contract Settlement Date and no such deferral period may end other than
on a Payment Date. If the Share Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments and Deferred Contract Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Share Purchase Contracts until the Share Purchase
Contract Settlement Date, each Holder will receive on the Share Purchase
Contract Settlement Date, in lieu of a cash payment, a number of shares of
Common Stock (in addition to a number of shares of Common Stock equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to such Holder divided by (y) the Applicable Market
Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Share
Purchase Contract Settlement Date. In lieu of fractional shares otherwise
issuable with respect to such payment of Deferred Contract Adjustment Payments,
the Holder will be entitled to receive an amount in cash as provided in Section
5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) redemptions,
36
purchases or acquisitions of capital stock of the Company in connection with the
satisfaction by the Company in connection with any employment contract, benefit
plan or other similar arrangement with or for the benefit of employees,
officers, directors or agents or a stock purchase or dividend reinvestment plan,
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
redeem, purchase or acquire its capital stock, (ii) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
all or a portion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of the Company's capital stock or the security
being converted or exchanged, (iv) dividends or distributions in capital stock
of the Company (or rights to acquire capital stock), or repurchases, redemptions
or acquisitions of capital stock in connection with the issuance or exchange of
capital stock (or securities convertible into or exchangeable for shares of the
Company's capital stock) or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or payment thereunder of a
dividend or distribution of or with respect to rights in the future.
Section 5.4 Payment of Purchase Price. (a) (i) Unless a Treasury Portfolio
has replaced the Debt Securities as a component of the Share Purchase Units or a
Holder settles the underlying Share Purchase Contract through the early delivery
of cash to the Agent in the manner described in Section 5.9, each Holder of a
Share Purchase Unit must notify the Agent of its intention to pay in cash ("Cash
Settlement") the Purchase Price for the shares of Common Stock to be purchased
pursuant to the Share Purchase Contract on a Share Purchase Contract Settlement
Date by presenting and surrendering to the Agent the Share Purchase Unit
Certificate with a notice in substantially the form of Exhibit C hereto
completed and executed. Such presentation, surrender and notice shall be made on
or prior to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Share Purchase Contract Settlement Date. The Agent shall promptly
notify the Collateral Agent of the receipt of such a notice from a Holder
intending to make a Cash Settlement.
(ii) A Holder of a Share Purchase Unit who has so notified the
Agent of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City
time, on the fifth Business Day immediately preceding the Share 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 Company. Any cash received by the
Collateral Agent will be invested promptly by the Collateral Agent in
Permitted Investments and paid to the Company on the Share Purchase
Contract Settlement Date in settlement of the Share Purchase Contract in
accordance with the terms of this Agreement and the Pledge Agreement. Any
funds received by the Collateral Agent in respect of the investment
earnings from the investment in such Permitted Investments, will be
distributed to the Agent when received for payment to the Holder of the
related Share Purchase Unites on the Share Purchase Contract Settlement
Date.
(iii) If a Holder of a Share Purchase Unit fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, such
37
failure shall constitute a default under the Share Purchase Contract and
the Holder shall be deemed to have consented to the disposition of the
Pledged Debt Securities pursuant to the remarketing as described in
paragraph (b) below. If a Holder of a Share Purchase Unit does notify the
Agent as provided in paragraph (a)(i) above of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by
paragraph (a)(ii) above, such failure shall also constitute a default;
however, the Debt Securities of such a Holder will not be remarketed but
instead the Collateral Agent, for the benefit of the Company, will exercise
its rights as a secured party with respect to such Debt Securities,
including those rights specified in paragraph (c) below.
(iv) Promptly after 3:00 p.m., New York City time, on the
fourth Business Day immediately preceding the Share Purchase Contract
Settlement Date, the Agent, based on notices received by the Agent pursuant
to Section 5.4(a)(i) hereof and notice from the Company regarding cash
received by it prior to such time, shall notify the Agent and the and the
Indenture Trustee of the aggregate principal amount of Debt Securities to
be tendered for purchase in the Remarketing in a notice substantially in
the form of Exhibit __ hereto.
(v) Not later than 15 calendar days nor more than 30 calendar
days prior to the third Business Day immediately preceding the Share
Purchase Contract Settlement Date, the Company shall request DTC (or any
successor Clearing Agency), to notify the Beneficial Owners or Clearing
Agency Participants] holding Share Purchase Units of the procedures to be
followed by Holders of Share Purchase Units who intend to effect a Cash
Settlement on or prior to the fifth Business Day immediately preceding the
Share Purchase Contract Settlement Date.
(b) In order to dispose of the Debt Securities of Share Purchase
Unit Holders who have not notified the Agent of their intention to effect a Cash
Settlement with respect to the Share Purchase Contract Settlement Date as
provided in paragraph (a)(i) above, the Company shall engage one or more
nationally recognized investment banking firms (the "Remarketing Agents")
pursuant to a Remarketing Agreement to sell such Debt Securities. In order to
facilitate the remarketing, the Agent shall notify the Remarketing Agents, by
10:00 a.m., New York City time, on the fourth Business Day immediately preceding
the Share Purchase Contract Settlement Date, of the aggregate principal amount
of Debt Securities that are part of Share Purchase Units to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for remarketing such Debt Securities to the Remarketing
Agents. Upon receipt of such notice from the Agent and such Debt Securities from
the Collateral Agent, the Remarketing Agents shall, on the third Business Day
immediately preceding the Share Purchase Contract Settlement Date, use their
commercially reasonable efforts to remarket such Debt Securities on such date at
a price of approximately [____]% (but not less than [100]%) of the aggregate
principal amount of such Debt Securities, plus accrued and unpaid interest
(including deferred interest), if any, thereon. After deducting any Remarketing
Fee, the Remarketing Agents will remit the remaining portion of the proceeds
from such remarketing to the Collateral Agent. Such portion of the proceeds,
equal to the aggregate principal amount of such Debt Securities, will
automatically be applied by the Collateral Agent, in accordance with the Pledge
Agreement to satisfy in full such Share Purchase Unit Holders' obligations to
pay the Purchase Price for the Common Stock under the related Share Purchase
38
Contracts on the Share Purchase Contract Settlement Date. Any proceeds in excess
of those required to pay the Purchase Price and the Remarketing Fee will be
remitted to the Agent for payment to the Holders of the related Share Purchase
Units. Share Purchase Unit Holders whose Debt Securities are so remarketed will
not otherwise be responsible for the payment of any Remarketing Fee in
connection therewith.
If such a remarketing results in a Failed Remarketing in accordance
with the terms of the Pledge Agreement, the Collateral Agent, for the benefit of
the Company, will exercise its rights as a secured party with respect to such
Debt Securities, including those actions specified in paragraph (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 Debt Securities, any
accrued and unpaid interest on such Debt Securities will become payable by the
Company to the Agent for payment to the Holder of the Share Purchase Units to
which such Debt Securities relate. Such payment will be made by the Company on
or prior to 11:00 a.m., New York City time, on the Share 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 Agent. The Company will cause a notice of such Failed
Remarketing to be published on the Business Day immediately preceding the Share
Purchase Contract Settlement Date in an Authorized Newspaper.
(c) With respect to any Debt Securities beneficially owned by Holders
who have elected Cash Settlement but failed to deliver cash as required in
(a)(ii) above, or with respect to Debt Securities 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 (h) below, may, among other things, (i) retain such Debt
Securities in full satisfaction of the Holders' obligations under the Share
Purchase Contracts or (ii) sell such Debt Securities in one or more public or
private sales and apply the proceeds of such sale in full satisfaction of the
Holders' obligations under the Share Purchase Contracts.
(d) (i) Unless a Holder of a Treasury Unit or Share Purchase Unit (if a
Treasury Portfolio has replaced the Debt Securities as a component of the Share
Purchase Units) settles the underlying Share Purchase Contract through the early
delivery of cash to the Share Purchase Contract Agent in the manner described in
Section 5.9, each Holder of a Treasury Unit or Share Purchase Unit (if a
Treasury Portfolio has replaced the Debt Securities as a component of the Share
Purchase Units) must notify the Agent of its intention to pay in cash the
Purchase Price for the shares of Common Stock to be purchased pursuant to the
Share Purchase Contract on the Share Purchase Contract Settlement Date by
presenting and surrendering to the Agent the Treasury Unit Certificate or Share
Purchase Unit Certificate, as the case may be, with a notice in substantially
the form of Exhibit C hereto completed and executed. Such presentation,
surrender and notice must be made on or prior to 5:00 p.m., New York City time,
on the second Business Day immediately preceding the Share Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent of the
receipt of such notice from a Holder intending to make a Cash Settlement.
(ii) A Holder of a Treasury Unit or Share Purchase Unit (if a
Treasury Portfolio has replaced the Debt Securities as a component of the
Share Purchase Units), who has so notified the Agent of its intention to
make a Cash Settlement in accordance
39
with paragraph (d)(i) above is required to pay the Purchase Price to the
Collateral Agent prior to 11:00 a.m., New York City time, on the Business
Day immediately preceding the Share 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 Company. Any cash received by the Collateral Agent will be
invested promptly by the Collateral Agent in Permitted Investments and paid
to the Company on the Share Purchase Contract Settlement Date in settlement
of the Share Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Collateral
Agent in respect of the investment earnings from the investment in such
Permitted Investments will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of a Treasury Unit or Share Purchase Unit (if a
Treasury Portfolio has replaced the Debt Securities as a component of the
Share Purchase Units), fails to notify the Agent of its intention to make a
Cash Settlement in accordance with paragraph (d)(i) above, or if such
Holder does notify the Agent as provided in paragraph (d)(i) above of its
intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph (d)(ii) above, then such failure shall constitute
a default under the Share Purchase Contract and upon the maturity of the
Pledged Treasury Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, held by the Collateral
Agent on the Business Day immediately prior to the Share Purchase Contract
Settlement Date, the principal amount of the Treasury Securities or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the
case may be, received by the Collateral Agent will be invested promptly in
overnight Permitted Investments. On the Share Purchase Contract Settlement
Date an amount equal to the Purchase Price will 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 Applicable Ownership Interest in the appropriate Treasury
Portfolio, as the case may be, and the investment earnings earned from such
investments is in excess of the aggregate Purchase Price of the Share
Purchase Contracts being settled thereby, the Collateral Agent will
distribute such excess to the Agent for the benefit of the Holder of the
related Treasury Units or Share Purchase Units when received.
(e) Any distribution to Holders of excess funds and interest described
above, shall be payable at the Corporate Trust Office 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 Register.
(f) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Share Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of the
Purchase Price for the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
(g) Upon Cash Settlement with respect to a Share Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the Pledge Agreement
cause the Pledged Debt Security or the Pledged Applicable Ownership Interest in
the appropriate Treasury
40
Portfolio, as the case may be, or the Pledged Treasury Security underlying the
relevant Security to be released from the Pledge by the Collateral Agent free
and clear of any security interest of the Company and transferred to the Agent
for delivery to the Holder thereof or its designee as soon as practicable and
(ii) subject to the receipt thereof from the Collateral Agent, the Agent shall,
by book-entry transfer, or other appropriate procedures, in accordance with
instructions provided by the Holder thereof, transfer such Debt Security or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as the case
may be, or such Treasury Security (or, if no such instructions are given to the
Agent by the Holder, the Agent shall hold such Debt Security or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be, or
such Treasury Security, and any distribution thereon, in the name of the Agent
or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price on the
Share Purchase Contract Settlement Date are non-recourse obligations and are
payable solely out of any Cash Settlement or the proceeds of any Collateral
pledged to secure the obligations of the Holders with respect to such Purchase
Price, and in no event will Holders be liable for any deficiency between the
proceeds of Collateral disposition and the Purchase Price.
Section 5.5 Issuance of Shares of Common Stock. Unless a Termination Event
shall have occurred, and except with respect to Share Purchase Contracts with
respect to which there has been an Early Settlement, on the Share Purchase
Contract Settlement Date, upon the Company's receipt of payment in full of the
Purchase Price for the shares of Common Stock purchased by the Holders pursuant
to the foregoing provisions of this Article and subject to Section 5.6(b), the
Company shall issue and deposit with the Agent, for the benefit of the Holders
of the Outstanding Securities, one or more certificates representing the newly
issued shares of Common Stock registered in the name of the Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which both a record date
and payment date for such dividend or distribution has occurred after the Share
Purchase Contract Settlement Date, being hereinafter referred to as the "Share
Purchase Contract Settlement Fund") to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the Agent on
or after the Share Purchase Contract Settlement Date, together with settlement
instructions thereon duly completed and executed, the Holder of such Certificate
shall be entitled to receive in exchange therefor a certificate representing
that number of whole shares of Common Stock which such Holder is entitled to
receive pursuant to the provisions of this Article V (after taking into account
all Securities then held by such Holder) together with cash in lieu of
fractional shares as provided in Section 5.10 and any dividends or distributions
with respect to such shares constituting part of the Share Purchase Contract
Settlement Fund, but without any interest thereon, and any Certificate so
surrendered shall forthwith be cancelled. Such shares shall be registered in the
name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Share Purchase Contract are to be registered to a Person
other than the Person in whose name the Certificate evidencing such Share
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
41
Certificate evidencing such Share Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.6 Adjustment of Settlement Rate. (a) Adjustments for Dividends,
Distributions, Stock Splits, Etc. (i) In case the Company shall pay or make a
dividend or other distribution on the Common Stock in Common Stock, the
Settlement Rate, as in effect at the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing such Settlement
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (i), 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 will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
(ii) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock that are not available on an equivalent
basis to Holders of the Securities upon settlement of the Share Purchase
Contracts underlying such Securities entitling such holders of the Common
Stock, entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common
Stock at a price per share less than the Current Market Price per share of
the Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants (other than pursuant
to any dividend reinvestment plan or share purchase plan, including such a
plan that provides for purchases of Common Stock by non-shareholders), 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 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 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 (ii), 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 issue any such rights, options or
warrants in respect of shares of Common Stock held in the treasury of the
Company.
42
(iii) 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.
(iv) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness
or assets (including securities, but excluding any rights or warrants
referred to in paragraph (ii) of this Section, any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to in
paragraph (i) of this Section), the Settlement Rate, in effect at the
opening of business on the day following the day on which such dividend or
distribution was effected, shall be adjusted so that the same shall equal
the rate determined by dividing the Settlement Rate in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which
the numerator shall be the Current Market Price per share of the Common
Stock on the date fixed for such determination less the then fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive and 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 the denominator shall be such Current Market Price per
share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for
the determination of stockholders entitled to receive such distribution. In
any case in which this paragraph (iv) is applicable, paragraph (ii) of this
Section shall not be applicable.
(v) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that
is distributed in a Reorganization Event to which Section 5.6(b) applies or
as part of a distribution referred to in paragraph (iv) of this Section) in
an aggregate amount that, combined together with (II) the aggregate amount
of any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to this
paragraph (v) or paragraph (vi) of this Section has been made and (III) the
aggregate of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a Board Resolution) of consideration payable in respect of any tender or
exchange offer (other than consideration payable in respect of any odd-lot
tender offer) by the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the
date of payment of the distribution described in clause (I) above and in
respect of which no adjustment pursuant to this paragraph (v) or paragraph
(vi) of this Section has been made, exceeds [__]% of the product of the
Current Market Price per share of the Common Stock on the date for
43
the determination of holders of shares of Common Stock entitled to receive
such distribution times the number of shares of Common Stock outstanding on
such date, then, and in each such case, immediately after the close of
business on such date for determination, the Settlement Rate, shall be
increased so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
Current Market Price per share of the Common Stock on the date fixed for
such determination less an amount equal to the quotient of (x) the combined
amount distributed or payable in the transactions described in clauses (I),
(II) and (III) above and (y) the number of shares of Common Stock
outstanding on such date for determination and (ii) the denominator of
which shall be equal to the Current Market Price per share of the Common
Stock on such date for determination.
(vi) In case (I) a tender or exchange offer made by the Company
or any subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as
of the expiration of such tender or exchange offer, of consideration
payable in respect of any other tender or exchange offer (other than
consideration payable in respect of any odd-lot tender offer), by the
Company or any subsidiary of the Company for all or any portion of the
Common Stock expiring within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (v) of this Section or this paragraph (vi) has been made and
(III) the aggregate amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash (other than regular
quarterly cash dividends) within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment
pursuant to paragraph (vi) of this Section or this paragraph (vi) has been
made, exceeds [__]% of the product of the Current Market Price per share of
the Common Stock as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender or exchange offer (as it may be
amended) times the number of shares of Common Stock outstanding (including
any tendered shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate, shall be adjusted so that the
same shall equal the rate determined by dividing the Settlement Rate
immediately prior to the close of business on the date of the Expiration
Time by a fraction (i) the numerator of which shall be equal to (A) the
product of (I) the Current Market Price per share of the Common Stock on
the date of the Expiration Time and (II) the number of shares of Common
Stock outstanding (including any tendered shares) on the Expiration Time
less (B) the amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on
the transactions described in clauses (I), (II) and (III) above (assuming
in the case of
44
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 the 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 to as the "Purchased Shares").
(vii) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.6(b)
applies) shall be deemed to involve (a) a distribution of such securities
other than Common Stock to all holders of Common Stock (and the effective
date of such reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution" and
the "date fixed for such determination" within the meaning of paragraph
(iv) of this Section), and (b) 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).
(viii) The "Current Market Price" per share of Common Stock on
any day 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 the day
in question 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 the Common Stock trades regular way the
applicable exchange or in the applicable market without the right to
receive such issuance or distribution.
(ix) 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 therein; 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 (i), (ii), (iii), (iv), (v),
(vi), (vii) or (x) of this Section 5.6(a), an adjustment shall also be made
to the Applicable Market Value solely to determine which of clauses (a),
(b) or (c) of the definition of Settlement Rate in Section 5.1 will apply
on the Share 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 (i), (ii), (iii), (iv), (v), (vi), (vii) or (x) of
this Section 5.6(a) and the denominator shall be the Settlement Rate
45
immediately before 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 (i), (ii), (iii),
(iv), (v), (vii) or (x) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
(x) The Company may make such increases in the Settlement Rate,
in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish the effect of any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event. 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 Common Stock outstanding
immediately prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another Person of the property of the
Company as an entirety or substantially as an entirety, (iii) any statutory
exchange of securities of the Company with another Person (other than in
connection with a merger or acquisition) or (iv) any liquidation, dissolution or
winding up of the Company other than as a result of or after the occurrence of a
Termination Event (any such event, a "Reorganization Event"), the Settlement
Rate will be adjusted to provide that each Holder of Securities will receive on
the Share Purchase Contract Settlement Date with respect to each Share 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 Share Purchase Contract Settlement Date) by a
Holder of the number of shares of Common Stock issuable on account of each Share
Purchase Contract if the Share 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 with which such statutory
exchange of securities was effected or to which such sale, transfer, lease or
conveyance 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
its rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Reorganization Event (provided that if the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). In the event of such a Reorganization Event, the Person
formed by such consolidation, merger or exchange or the Person which acquires
the assets of the Company or, in the event of a liquidation or dissolution of
the Company, the
46
Company or a liquidating trust created in connection therewith, shall execute
and deliver to the Agent an agreement supplemental hereto providing that the
Holders of each Outstanding Security shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for adjustments which,
for events subsequent to the effective date of such supplemental agreement,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section. The above provisions of this Section shall similarly apply
to successive Reorganization Events.
Section 5.7 Notice of Adjustments and Certain Other Events. (a) Whenever
the Settlement Rate is adjusted as herein provided, the Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent a Company 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 5.6 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the 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 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 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 Share Purchase Contract, and the
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Share Purchase Contract or to comply with
any of the duties, responsibilities or covenants of the Company contained in
this Article.
Section 5.8 Termination Event; Notice. The Share 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 Contract Adjustment Payments or any Deferred Contract
Adjustment Payments, and the rights and obligations of the Holders to purchase
Common Stock, will immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Share 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 thereof to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the applicable Register. Upon and after the
occurrence of a Termination Event, the Securities shall thereafter represent the
right to receive the Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, forming a part of such
Securities in the case
47
of Share Purchase Units, or Treasury Securities in the case of Treasury
Units, in accordance with the provisions of Section 4.3 of the Pledge
Agreement.
Section 5.9 Early Settlement. (a) A holder of Share Purchase Units may
settle the related Share Purchase Contracts in their entirety at any time on or
prior to the fifth Business Day immediately preceding the Share Purchase
Contract Settlement Date in the manner described herein, but only in integral
multiples of [20] Share Purchase Units; provided, however, if a Treasury
Portfolio has become a component of the Share Purchase Units, Holders of Share
Purchase Units may settle early only in integral multiples of [40,000] Share
Purchase Units. A holder of Treasury Units may settle the related Share Purchase
Contracts in their entirety at any time on or prior to the second Business Day
immediately preceding the Share Purchase Contract Settlement Date in the manner
described herein (in either case, "Early Settlement") but only in integral
multiples of [20] Treasury Units. The right to Early Settlement is subject to
there being in effect, if so required under Federal securities laws, a
registration statement covering the shares of Common Stock to be delivered in
respect of the Share Purchase Contracts being settled. Upon Early Settlement,
(i) the holder's rights to receive Deferred Contract Adjustment Payments, if
any, on the Share Purchase Contracts being settled will be forfeited, (ii) the
holder's right to receive additional Contract Adjustment Payments in respect of
such Share Purchase Contracts will terminate and (iii) no adjustment will be
made to or for the holder on account of Deferred Contract Adjustment Payments,
or any amount accrued in respect of Contract Adjustment Payments. In order to
exercise the right to effect any Early Settlement with respect to any Share
Purchase Contracts, the Holder of the Certificate evidencing Securities shall
deliver such Certificate to the Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early therein duly completed and executed and accompanied by payment
payable to the Company in immediately available funds in an amount (the "Early
Settlement Amount") equal to the sum of (i) $[50] times the number of Share
Purchase Contracts being settled (ii) if such delivery is made with respect to
any Share Purchase Contracts during the period from the close of business on any
Record Date next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments payable on
such Payment Date with respect to such Share Purchase Contracts; provided that
no payment is required if the Company has elected to defer the Contract
Adjustment Payments which would otherwise be payable on the Payment Date. Except
as provided in the immediately preceding sentence and subject to the second to
last paragraph of Section 5.2, no payment or adjustment shall be made upon Early
Settlement of any Share Purchase Contract on account of any Contract Adjustment
Payments accrued on such Share Purchase Contract or on account of any dividends
on the Common Stock issued upon such Early Settlement. In order for any of the
foregoing requirements to be considered satisfied or effective with respect to a
Share Purchase Contract underlying any Security on or by a particular Business
Day, such requirement must be met at or prior to 5:00 p.m., New York City time,
on such Business Day; the first Business Day on which all of the foregoing
requirements have been satisfied by 5:00 p.m., New York City time shall be the
"Early Settlement Date" with respect to such Security.
(b) Upon Early Settlement of Share Purchase Contracts by a Holder of
the related Securities, the Company shall issue, and the Holder shall be
entitled to receive [_____] newly issued shares of Common Stock per Share
Purchase Unit or Treasury Unit (the "Early Settlement Rate") (regardless of the
market price of the Common Stock on the date of Early
48
Settlement); provided, however, that upon the Early Settlement of the Share
Purchase Contracts, the Holder of such related Securities will forfeit the right
to receive any Deferred Contract Adjustment Payments. The Early Settlement Rate
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted, in accordance with Section 5.6. As promptly as practicable after
Early Settlement of Share Purchase Contracts in accordance with the provisions
of this Section 5.9, the Company shall issue and shall deliver to the Agent at
the Corporate Trust Office a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement together with payment
in lieu of any fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Share Purchase Contracts to be issued and delivered,
and (ii) the related Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, in the case of Share Purchase Units, or the
related Treasury Securities, in the case of Treasury Units, to be released from
the Pledge by the Collateral Agent and transferred, in each case to the Agent
for delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Share Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and the Debt
Securities, the Applicable Ownership Interest in the appropriate Treasury
Portfolio or Treasury Securities, as the case may be, from the Collateral Agent,
as applicable, the Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early in the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Debt Securities, Treasury Portfolio or Treasury Securities, as the case may be,
forming a part of such Securities, and (ii) deliver to the Holder a certificate
or certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Share Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10 No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued or delivered upon
settlement on the Share Purchase Contract Settlement Date or upon Early
Settlement of any Share Purchase Contracts. If Certificates evidencing more than
one Share 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 Share 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 Share Purchase Contracts on the Share
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the fractional share times (i) the Threshold Appreciation
Price, in the case of an Early Settlement or (ii) the Applicable Market Value,
in all other circumstances. The
49
Company shall provide the Agent from time to time with sufficient funds to
permit the Agent to make all cash payments required by this Section 5.10 in a
timely manner. Promptly after calculation of the Applicable Market Value, the
Company shall give the agent notice thereof. All calculations and determinations
of the Applicable Market Value shall be made by the Company or its agent and the
Agent shall have no responsibility with respect thereto.
Section 5.11 Charges and Taxes. The Company will pay all stock transfer and
-----------------
similar taxes attributable to the initial issuance and delivery of the shares of
Common Stock pursuant to the Share Purchase Contracts and in payment of any
Deferred Contract Adjustment Payments; 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 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
or that no such tax is due.
ARTICLE VI
REMEDIES
--------
Section 6.1 Unconditional Right of Holders to Receive Contract Adjustment
-------------------------------------------------------------
Payments and to Purchase Common Stock. The Holder of any Share Purchase Unit or
-------------------------------------
Treasury Unit shall have the right, which is absolute and unconditional (subject
to the right of the Company to defer payment thereof pursuant to Section 5.3,
the prepayment of Contract Adjustment Payments pursuant to Section 5.9(a) and
the forfeiture of any Deferred Contract Adjustment Payments upon Early
Settlement pursuant to Section 5.9(b) or upon the occurrence of a Termination
Event), to receive payment of each installment of the Contract Adjustment
Payments with respect to the Share Purchase Contract constituting a part of such
Security on the respective Payment Date for such Security and to purchase Common
Stock pursuant to such Share Purchase Contract and, in each such case, to
institute suit for the enforcement of any such payment and right to purchase
Common Stock, and such rights shall not be impaired without the consent of such
Holder.
Section 6.2 Restoration of Rights and Remedies. If any Holder has
----------------------------------
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company and such Holder shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of such Holder shall continue as though no
such proceeding had been instituted.
Section 6.3 Rights and Remedies Cumulative. Except as otherwise provided
------------------------------
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Certificates in the last paragraph of Section 3.10, no right or remedy
herein conferred upon or reserved to the
50
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4 Delay or Omission Not Waiver. No delay or omission of any
----------------------------
Holder to exercise any right or remedy upon a default shall impair any such
right or remedy or constitute a waiver of any such right. Every right and remedy
given by this Article or by law to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by such Holders.
Section 6.5 Undertaking for Costs. All parties to this Agreement agree, and
---------------------
each Holder of Share Purchase Units or Treasury Units, by its acceptance of such
Share Purchase Units or Treasury Units shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Agreement, or in any suit against the Agent for any
action taken, suffered or omitted by it as Agent, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Agent, to any
suit instituted by any Holder, or group of Holders, holding in the aggregate
more than [10]% of the Outstanding Securities, or to any suit instituted by any
Holder for the enforcement of payment of interest on any Debt Securities or
Contract Adjustment Payments on any Share Purchase Contract 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
Share Purchase Contracts constituting part of any Security held by such Holder.
Section 6.6 Waiver of Stay or Extension Laws. The Company covenants (to the
--------------------------------
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Agreement; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Agent or the
Holders, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VII
THE AGENT
---------
Section 7.1 Certain Duties and Responsibilities. (a) Prior to a Default and
-----------------------------------
after the curing or waiving of all such Defaults that may have occurred,
(i) the Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth
in this Agreement and the
51
Pledge Agreement, and no implied covenants or obligations shall be read
into this Agreement or the Pledge Agreement against the Agent; and
(ii) the Agent may, with respect to the Securities, conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, in the absence of bad faith or negligence on the part of
the Agent, upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement and 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 Agent,
the 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 shall have not duty to confirm or investigate
the accuracy of mathematical calculations or other facts stated therein.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(ii) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved that
the Agent was negligent in ascertaining the pertinent facts; and
(iii) no provision of this Agreement or the Pledge Agreement
shall require the Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that adequate indemnity is not provided to
it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute, deliver and perform the
Pledge Agreement in its capacity as Agent and to grant the Pledge. The Agent
shall be entitled to all of the rights, privileges, immunities and indemnities
contained in this Agreement with respect to any duties of the Agent under, or
actions taken by the Agent pursuant to, such Pledge Agreement.
(e) In case a Default has occurred (that has not been cured or
waived), and is actually known by a Responsible Officer of the Agent, the Agent
shall exercise such of the rights and powers vested in it by this Agreement, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
52
(f) At the request of the Company, the Agent is authorized to execute
and deliver one or more Remarketing Agreements to, among other things,
effectuate Section 5.4.
Section 7.2 Notice of Default. Within 90 days after the occurrence of any
Default hereunder of which a Responsible Officer of the Agent has actual
knowledge, the Agent shall transmit by mail to the Company and the Holders of
Securities, as their names and addresses appear in the Register, notice of such
Default hereunder, unless such Default shall have been cured or waived; provided
that, except for a Default in any payment obligation hereunder, the Agent shall
be protected in withholding such notice if and so long as a Responsible Officer
of the Agent in good faith determines that the withholding of such notice is in
the interests of the Holders of the Securities.
Section 7.3 Certain Rights of Agent. Subject to the provisions of Section
7.1:
(a) the Agent may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
(whether in original or facsimile form) believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company 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;
(c) whenever in the administration of this Agreement or the Pledge
Agreement the Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Agent (unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon a Company Certificate;
(d) the Agent may consult with counsel of its selection 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;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Share Purchase Contracts as it may see fit, and, if the Agent shall determine to
make such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney;
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall
53
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; and
(g) the rights, privileges, protections, immunities and benefits given
to the Agent, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Agent in each of its capacities
hereunder.
(h) the 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 Agent security or indemnity satisfactory to the Agent against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction.
Section 7.4 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 Agent assumes no responsibility for their
accuracy. The 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 Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Share Purchase Contracts.
Section 7.5 May Hold Securities. Any Registrar or any other agent of the
Company, or the Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of 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 Registrar or such other agent, or the Agent.
The Agent and its Affiliates may (without having to account therefor to the
Company or any Holder of Units or holder of Separate Notes) accept deposits
from, lend money to, make their investments in and generally engage in any kind
of banking, trust or other business with the Company, any Holder of Units and
any holder of Separate Notes (and any of their respective subsidiaries or
Affiliates) as if it were not acting as the Agent and the Agent and its
Affiliates may accept fees and other consideration from the Company, any Holder
of Units or any holder of Separate Notes without having to account for the same
to any such Person.
Section 7.6 Money Held in Custody. Money held by the Agent in custody
hereunder need not be segregated from the other funds except to the extent
required by law or provided herein. The Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
Section 7.7 Compensation and Reimbursement. The Company agrees:
(a) to pay to the Agent from time to time such compensation for all
services rendered by it hereunder [and under the Pledge Agreement] as the
parties shall agree from time to time in writing [(which compensation shall not
be limited by any provisions of law in regards to the compensation of a trustee
of an express trust)];
(b) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and advances
incurred or made by
54
the Agent in accordance with any provision of this Agreement (including the
reasonable compensation and the reasonable expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as shall
be determined to have been caused by its own negligence or willful misconduct;
and
(c) to fully indemnify the Agent and any predecessor Agent for, and to
hold it harmless against, any loss, liability, claim damage or expense incurred
without negligence or willful misconduct on its part, arising out of or in
connection with the acceptance or administration or the performance of its
duties hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The Agent shall promptly notify the Company of
any third party claim which may give rise to the indemnity hereunder and give
the Company the opportunity to participate in the defense of such claim with
counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent shall
not be unreasonably withheld.
"Agent" for purposes of this Section 7.7 shall include any predecessor
Agent; provided, however, that the negligence or bad faith of any Agent
hereunder shall not affect the rights of any other Agent hereunder.
[When the Agent incurs expenses or renders services in an action or
proceeding commenced pursuant to Section 4.3 of the Pledge Agreement upon the
occurrence of a Termination Event, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any applicable Federal
or State bankruptcy, insolvency or other similar law.]
The provisions of this Section 7.7 shall survive the termination of this
Agreement and the Pledge Agreement and resignation or removal of the Agent.
Section 7.8 Corporate Agent Required; Eligibility. There shall at all times
be an Agent hereunder which shall be [(i) not an Affiliate of the Company and
(ii)] 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 and subject to supervision or examination by Federal or State
authority. [and having a corporate trust office in the Borough of Manhattan, the
City of New York, if there such a corporation in the Borough of Manhattan, The
City of New York, eligible under this Article and willing to act or reasonable
terms] If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.9 Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Agent and no appointment of a successor Agent
pursuant to this Article shall
55
become effective until the acceptance of appointment by the successor Agent in
accordance with the applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition ,at the expense of the Company,
any court of competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company. If the instrument of acceptance by a successor Agent required by
Section 7.10 shall not have been delivered to the Agent within 30 days after
such removal, the Agent being removed may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Agent.
(d) If at any time
(i) the Agent fails to comply with Section 310(b) of 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, or
(ii) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(iii) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case, (i)
the Company by a Board Resolution may remove the 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 Agent and the appointment
of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by Section 7.10, the Agent or 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 appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders
57
as their names and addresses appear in the applicable Register. Each notice
shall include the name of the successor Agent and the address of its Corporate
Trust Office.
(g) If the Agent has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the TIA, the Agent and the Company shall
in all respects comply with the provisions of Section 310(b) of the TIA.
Section 7.10 Acceptance of Appointment by Successor.
---------------------------------------
(a) In case of the appointment hereunder of a successor Agent, every such
successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Agent all such rights, powers and agencies referred
to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
Section 7.11 Merger, Conversion, Consolidation or Succession to Business.
------------------------------------------------------------
Any Person into which the Agent may be merged or converted or with which it may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Agent, shall be the
successor of the Agent hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Agent then in office, any successor by
merger, conversion or consolidation to such Agent may adopt such authentication
and execution and deliver the Certificates so authenticated and executed with
the same effect as if such successor Agent had itself authenticated and executed
such Securities.
Section 7.11 Preservation of Information; Communications to Holders.
-------------------------------------------------------
(a) The Agent shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders received by the Agent in its capacity as
Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a 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 Agent
57
shall mail to all the Holders copies of the form of proxy or other communication
which is specified in such request, with reasonable promptness after a tender to
the Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
Section 7.13 No Obligations of Agent. Except to the extent otherwise
provided in this Agreement, the Agent assumes no obligations and shall not be
subject to any liability under this Agreement, the Pledge Agreement or any Share
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
acceptance thereof, shall be deemed to have agreed, that the Agent's execution
of the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Agent shall have no obligation to
perform such Share Purchase Contracts on behalf of the Holders, except to the
extent expressly provided in Article V hereof. Anything contained in this
Agreement to the contrary notwithstanding, in no event shall the Agent or its
officers, employees or agents be liable for indirect, special, punitive, or
consequential loss or damage of any kind whatsoever, including, but not limited
to, lost profits, whether or not the likelihood of such loss or damage was known
to the Agent and regardless of the form of action.
Section 7.14 Tax Compliance. (a) The Agent, on its own behalf and on behalf
of the Company, will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
upon it 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 Agent shall comply in accordance with the terms hereto 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 conclusively rely on any
such direction in accordance with the provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.1 Supplemental Agreements Without Consent of Holders. Without the
consent of any Holders, the Company (when authorized by Board Resolution) and
the Agent, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Company and the
Agent, for any of the following purposes:
58
(a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Certificates; or
(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the Company;
or
(c) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(d) to make provision with respect to the rights of Holders pursuant
to the requirements of Section 5.6(b); or
(e) to cure any ambiguity, to correct or supplement any provisions
herein which may be inconsistent with any other provisions herein, or to make
any other provisions with respect to such matters or questions arising under
this Agreement, provided such action shall not adversely affect the interests of
the Holders.
Section 8.2 Supplemental Agreements with Consent of Holders. With the
consent of the Holders of not less than a majority of the outstanding Share
Purchase Contracts voting together as one class, by Act of said Holders
delivered to the Company and the Agent, the Company, when authorized by a Board
Resolution, and the Agent may enter into an agreement or agreements supplemental
hereto for the purpose of modifying in any manner the terms of the Share
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 consent
of the Holder of each Outstanding Security affected thereby,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be Pledged
to secure a Holder's Obligations under the Share Purchase Contract, impair the
right of the Holder of any Share Purchase Contract to receive distributions on
the related Collateral (except for the rights of Holders of Share Purchase Units
to substitute the Treasury Securities for the Pledged Debt Securities or the
Applicable Ownership Interest in a Treasury Portfolio or the rights of holders
of Treasury Units to substitute Debt Securities or the Applicable Ownership
Interest in a Treasury Portfolio 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;
(c) reduce any Contract Adjustment Payments or any Deferred Contract
Adjustment Payment, or change any place where, or the coin or currency in which,
any Contract Adjustment Payment is payable;
(d) impair the right to institute suit for the enforcement of any
Share Purchase Contract;
(e) reduce the number of shares of Common Stock to be purchased
pursuant to any Share Purchase Contract, increase the price to purchase shares
of Common Stock upon
59
settlement of any Share Purchase Contract, change the Share Purchase Contract
Settlement Date or the right to Early Settlement or otherwise adversely affect
the Holder's rights under any Share Purchase Contract; or
(f) reduce the percentage of the outstanding Share Purchase Contracts
the consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Share Purchase Units or the Treasury Units, then only the
Holders of the affected class of Security as of the record date for the Holders
entitled to vote thereon will be entitled to vote on or consent to 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;
provided further, however, that no such agreement, whether with or without the
consent of the Holders, shall affect Section 3.16 hereof.
It shall not be necessary for any Act of the 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 and provided,
further, however that the unanimous consent of the Holders of each outstanding
Share Purchase Contract of the related Share Purchase Unit or Treasury Unit, as
the case may be, shall be required to approve any amendment of proposal
specified in clauses (a) through (f) above.
Section 8.3 Execution of Supplemental Agreements. In executing, or
accepting the additional agencies created by, any supplemental agreement
permitted by this Article or the modifications thereby of the agencies created
by this Agreement, the Agent shall be provided with and (subject to Section 7.1)
shall be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement. The Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
Section 8.4 Effect of Supplemental Agreements. Upon the execution of any
supplemental agreement under this Article, this Agreement shall be modified in
accordance therewith, and such supplemental agreement shall form a part of this
Agreement for all purposes; and every Holder of Certificates theretofore or
thereafter authenticated, executed on behalf of the Holders and delivered
hereunder, shall be bound thereby.
Section 8.5 Reference to Supplemental Agreements. Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the Company shall so
determine, new Certificates so modified as to conform, in the opinion of the
Agent and the Company, to any such supplemental agreement may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
60
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions. The Company covenants that it will not merge,
consolidate or enter into a share exchange with or into any other Person or
sell, assign, transfer, lease or convey all or substantially all of its
properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing entity, or the successor (if other than the Company)
shall be a Person, other than an individual, organized and existing under the
laws of the United States of America or a State thereof or the District of
Columbia and such entity shall expressly assume all the obligations of the
Company under the Share Purchase Contracts, the Debt Securities, this Agreement
and the Pledge Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such Person, and (ii) the
Company or such successor entity, as the case may be, shall not, immediately
after such merger, consolidation or share exchange, or such sale, assignment,
transfer, lease or conveyance, be in default in its payment obligations or in
any material default in the performance of any of its other obligations
hereunder, or under any of the Securities or the Pledge Agreement.
Section 9.2 Rights and Duties of Successor Entity. In case of any such
merger consolidation, share exchange sale, assignment, transfer, lease or
conveyance and upon any such assumption by a successor entity in accordance with
Section 9.1, such successor entity 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 entity thereupon may cause to be signed, and may issue either in its
own name or in the name of FirstEnergy Corp. any or all of the Certificates
evidencing Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Agent; and, upon the order of such
successor entity, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the 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 Agent for authentication and execution, and any Certificate
evidencing Securities which such successor entity thereafter shall cause to be
signed and delivered to the Agent for that purpose. All the Certificates so
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 9.3 Opinion of Counsel Given to Agent. The Agent, subject to
Sections 7.1 and 7.3, shall receive 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
61
consummation of any such merger, consolidation, share exchange sale, assignment,
transfer, lease or conveyance have been met.
ARTICLE X
COVENANTS
Section 10.1 Performance Under Share 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
Share Purchase Contracts in accordance with the terms of the Share Purchase
Contracts and this Agreement.
Section 10.2 Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, The City of New York an office or agency where
Certificates may be (i) presented or surrendered for acquisition of shares of
Common Stock upon settlement of the Share Purchase Contracts on the Share
Purchase Contract Settlement Date or Early Settlement and for transfer of
Collateral upon occurrence of a Termination Event, (ii) surrendered for
registration of transfer or exchange, for a Collateral Substitution or
re-establishment of a Share Purchase Unit and (iii) 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 Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
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, The City of New York for such purposes. The Company will give prompt
written notice to the Agent of any such designation or rescission and of any
change in the location of any such other office or agency. The Company hereby
designates as the place of payment for the Securities the Corporate Trust Office
and appoints the Agent at its Corporate Trust Office as paying agent in such
city.
Section 10.3 Company to Reserve Common Stock. The Company shall at all
times prior to the Share 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 Share Purchase Contracts constituting a part of the
Securities evidenced by Outstanding Certificates.
Section 10.4 Covenants as to Common Stock. The Company covenants that all
shares of Common Stock which may be issued against tender of payment in respect
of any Share Purchase Contract constituting a part of the Outstanding Securities
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable.
62
Section 10.5 Statement of Officers of the Company as to Default.
---------------------------------------------------
The Company will deliver to the Agent, within 120 days after the end of each
fiscal year of the Company (which as of the date hereof is December 31) ending
after the date hereof, an Officer's 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 best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provision 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. The Company shall deliver to
the Agent, as soon as practicable and in any event within five Business Days
after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or the lapse of time or both, would constitute an Event
of Default, an Officer's Certificate setting forth the details of such Event of
Default or default and the action which the Company proposes to take with
respect thereto.
Section 10.6 ERISA. Each Holder from time to time of the Share Purchase
Units which is a Plan here by represents that is acquisition of the Share
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.
ARTICLE XI
TRUST INDENTURE ACT
-------------------
Section 11.1 Trust Indenture Act; Application.
---------------------------------
(a) This Agreement is subject to the provisions of the TIA that are
required or deemed to be part of this Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Agreement limits,
qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive,
of the TIA, such imposed duties shall control.
Section 11.2 Lists of Holders of Securities.
-------------------------------
(a) The Company shall furnish or cause to be furnished to the Agent (a)
semi-annually, not later than [_____] 1 and [_____] 1 in each year, commencing
[_____] 1, 200[_], a list, in such form as the Agent may reasonably require, of
the names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Agent may request in writing, within 30 days after the receipt by the Company of
any such request, a List of Holders as of a date not more than 15 days prior to
the time such list is furnished; provided that, the Company shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Agent by the
Company. The Agent may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Agent shall comply with its obligations under Section 311(a)
of the TIA, subject to the provisions of Section 311(b) and Section 312(b) of
the TIA.
63
Section 11.3 Reports by the Agent. Not later than [_____]r 1 of each year,
commencing [_____] 1, 200[_], the Agent shall provide to the Holders such
reports, if any, as are required by Section 313(a) of the TIA in the form and in
the manner provided by Section 313(a) of the TIA. Such reports shall be as of
the preceding September 15. The Agent shall also comply with the requirements of
Sections 313(b), (c) and (d) of the TIA.
Section 11.4 Periodic Reports to Agent. The Company shall provide to the
Agent such documents, reports and information as required by Section 314(a) (if
any) and the compliance certificate required by Section 314(a) of the TIA in the
form, in the manner and at the times required by Section 314(a) of the TIA.
Delivery of such reports, information and documents to the Agent is for
informational purposes only and the Agent receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Agent is entitled to rely exclusively
on Officers' Certificates).
Section 11.5 Evidence of Compliance with Conditions Precedent. The Company
shall provide to the Agent such evidence of compliance with any conditions
precedent provided for in this Agreement as and to the extent required by
Section 314(c) of the TIA. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) of the TIA may be given in the form of a
Company's Certificate. Any opinion required to be given pursuant to Section
314(c)(2) of the TIA may be given in the form of an Opinion of Counsel.
Section 11.6 Defaults; Waiver. The Holders of a majority of the Outstanding
Share Purchase Contracts voting together as one class may, by vote or consent,
on behalf of all of the Holders, waive any past Default and its consequences,
except a Default:
(a) in the payment on any Security, or
(b) in respect of a provision hereof which under Section 8.2 cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.
Upon such waiver, any such Default shall cease to exist, and any Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Agreement, but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
Section 11.7 Agent's Knowledge of Defaults. The Agent shall not be deemed
to have knowledge of any Default unless a Responsible Officer shall have
obtained written notice of such Default.
Section 11.8 Conflicting Interests. [________shall be deemed to be
specifically described in this Agreement for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the TIA.
Section 11.9 Direction of Agent. Sections 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Agreement, as permitted by the TIA.
64
IN WITNESS WHEREOF, the parties hereto have caused this Share Purchase
Contract Agreement to be duly executed as of the day and year first above
written.
FIRSTENERGY CORP.
By: /s/
----------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Share Purchase Contract Agent and
Trustee
By: /s/
----------------------------
Name:
Title:
65
EXHIBIT A
FORM OF SHARE PURCHASE UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE SHARE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE SHARE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
No. _____ Cusip No.___________
Number of Share Purchase Units _______
FIRSTENERGY CORP.
[____]% Share Purchase Units
($[50] Stated Amount)
This Share Purchase Unit Certificate certifies that ___________ is the
registered Holder of the number of Share Purchase Units set forth above. Each
Share Purchase Unit represents (a) a stock Share Purchase Contract of
FirstEnergy Corp., an Ohio corporation (the "Company") (as modified and
supplemented and in effect from time to time, a "Share Purchase Contract") and
(b) beneficial ownership of either (A) (i) beneficial ownership of a Series [_]
Senior Note due [____], 200[_] of the Company ("Debt Security"), having a
principal amount of $[50] or (ii) following a successful remarketing of the Debt
Securities on the Initial Remarketing Date, an Applicable Ownership Interest in
the appropriate Treasury Portfolio, subject to the pledge of such Debt Security
or Applicable Ownership Interest in the appropriate Treasury Portfolio by the
Holder pursuant to the Pledge Agreement or (B) upon the occurrence of a Tax
Event Redemption prior to the Share Purchase Contract Settlement Date, an
Applicable Ownership Interest in the appropriate Treasury Portfolio, subject to
the Pledge of such Applicable Ownership Interest in the appropriate Treasury
Portfolio by the Holder pursuant to the Pledge Agreement. All capitalized terms
used herein without definition herein shall have the meaning set forth in the
Share Purchase Contract Agreement referred to below.
A-1
Pursuant to the Pledge Agreement, the Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
constituting part of each Share Purchase Unit evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Share Purchase Contract comprising a portion
of such Share Purchase Unit.
The Pledge Agreement provides that all payments of the principal amount of
Pledged Debt Securities or the Stated Amount of the Pledged Applicable Ownership
Interest (as specified in clause (1) of the definition of such term) in the
appropriate Treasury Portfolio, as the case may be, or payments of interest on
any Pledged Debt Securities or the Pledged Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, constituting part of the
Share Purchase Units received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the case of (A)
payments of interest with respect to Pledged Debt Securities or cash
distributions on the Pledged Applicable Ownership Interest (as specified in
clauses (1)(ii), (1)(iii) or (2)(ii) of the definition of such term) in the
appropriate Treasury Portfolio, as the case may be, and (B) any payments of the
principal amount of Pledged Debt Securities or the Stated Amount of the Pledged
Applicable Ownership Interest (as specified in clauses (1)(i) or (2)(i) of the
definition of such term) in the appropriate Treasury Portfolio, as the case may
be, with respect to any Debt Securities or the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, that have been released
from the Pledge pursuant to the Pledge Agreement, to the Agent to the account
designated by the Agent, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral Agent (provided that in
the event such payment is received by the Collateral Agent on a day that is not
a Business Day or after 12:30 p.m., New York City time, on a Business Day, then
such payment shall be made no later than 10:30 a.m., New York City time, on the
next succeeding Business Day) and (ii) in the case of payments of the principal
amount of Debt Securities or the Applicable Ownership Interest (as specified in
clauses (1)(i) or (2)(i) of the definition of such term) in the appropriate
Treasury Portfolio, as the case may be, to the Company on the Share Purchase
Contract Settlement Date (as defined herein) in accordance with the terms of the
Pledge Agreement, in full satisfaction of the respective obligations of the
Holders of the Share Purchase Units of which such Pledged Debt Securities or the
Pledged Applicable Ownership Interest in the appropriate Treasury Portfolio, as
the case may be, are a part under the Share Purchase Contracts forming a part of
such Share Purchase Units. Payment of interest on any Pledged Debt Securities or
cash distribution on the Pledged Applicable Ownership Interest (as specified in
clauses (1)(ii), 1(iii) or (2)(ii) of the definition of such term) in the
appropriate Treasury Portfolio, as the case may be, forming part of a Share
Purchase Unit evidenced hereby which are payable quarterly in arrears on
[_____],[_____],[_____] and [_____] of each year, commencing [_____], 200[_],
and on the Initial Reset Date if the remarketing of the Pledged Debt Securities
on the third Business Day immediately preceding the Initial Reset Date is
successful and the Initial Reset Date is not [_____], 200[_] or [_____], 200[_]
(each a "Payment Date"), shall, subject to receipt thereof by the Agent from the
Collateral Agent, be paid to the Person in whose name this Share Purchase Unit
Certificate (or a Predecessor Share Purchase Unit Certificate) is registered at
the close of business on the Record Date for such Payment Date.
Each Share Purchase Contract evidenced hereby obligates the Holder of this
Share Purchase Unit Certificate to purchase, and the Company to sell, not later
than [_____], 200[_] (the "Share Purchase Contract Settlement Date"), at a price
of $[50] in cash (the "Purchase Price"), a number of newly-issued shares of
Common Stock, without par value including, where
A-2
applicable, the preference stock purchase rights appurtenant thereto ("Common
Stock"), of the Company equal to the applicable Settlement Rate (as defined
below), unless on or prior to the Share Purchase Contract Settlement Date there
shall have occurred a Termination Event or an Early Settlement with respect to
the Share Purchase Units of which such Share Purchase Contract is a part, all as
provided in the Share Purchase Contract Agreement and more fully described on
the herein.
The Settlement Rate is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $[_____] (the "Threshold Appreciation
Price"), [_____] shares of Common Stock per Share Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Application Price but is
greater than $[__], the number of shares of Common Stock per Share Purchase
Contract equal to $[50] divided by the Applicable Market Value, and (c) if the
Applicable Market Value is less than or equal to $[___], [_____] shares of
Common Stock per Share Purchase Contract, in each case subject to adjustment as
provided in the Share Purchase Contract Agreement. No fractional shares of
Common Stock will be issued upon settlement of Share Purchase Contracts, as
provided in the Share Purchase Contract Agreement.
The Company shall pay, on each Payment Date other than the Initial Reset
Date, if the Initial Reset Date is not also a regular quarterly Payment Date in
respect of each Share Purchase Contract forming part of a Share Purchase Unit
evidenced hereby, an amount (the "Contract Adjustment Payments") equal to [___]%
per annum of the Stated Amount; computed on the basis of a 360-day year of
twelve 30-day months, subject to deferral at the option of the Company as
provided in the Share Purchase Contract Agreement and more fully described
herein. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Share Purchase Unit Certificate (or a Predecessor Share Purchase
Unit Certificate or a Predecessor Treasury Unit Certificate) is registered on
the Register at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust Office
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Share Purchase
Unit Register or by wire transfer to an account appropriately designated in
writing by the Person entitled to payment.
Unless the context otherwise requires, each provision of this Security
shall be part of the Share Purchase Contracts evidenced hereby. This Security
and each Share Purchase Contract evidenced hereby is governed by a Share
Purchase Contract Agreement, dated as of [_____], 200[_] (as it may be
supplemented from time to time, the "Share Purchase Contract Agreement"),
between the Company and The Bank of New York, as Share Purchase Contract agent
and trustee (including any successor thereunder, herein called the "Agent"), to
which Share Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights, limitations
of rights, obligations, duties and immunities thereunder of the Agent, the
Company, and the Holders and of the terms upon which the Share Purchase Unit
Certificates are, and are to be, executed and delivered.
Each Share Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Share Purchase Units to purchase at the applicable Purchase Price, and
the Company to sell, a number of newly issued shares of Common Stock equal to
the Early Settlement Rate or the applicable Settlement Rate, as applicable.
A-3
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Share Purchase Contract Settlement
Date. The "Closing Price" of the Common Stock on any date of determination means
the closing sale price (or, if no closing price is reported, the last reported
sale price) of the Common Stock on the New York Stock Exchange (the "NYSE") on
such date or, if the Common Stock is not listed for trading on the NYSE on any
such date, as reported in the composite transactions for the principal United
States national or regional securities exchange on which the Common Stock is so
listed. If the Common Stock is not so listed on a United States national or
regional securities exchange, the Closing Price means the last sale price of the
Common Stock as reported by the NASDAQ Stock Market, or if the Common Stock is
not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization. If such bid price is not available, the Closing Price means market
value of the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained by the Company for this purpose. A
"Trading Day" means a day on which the Common Stock (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Share Purchase Contract Agreement, the
Holder of the Share Purchase Units evidenced hereby shall pay, on the Share
Purchase Contract Settlement Date, the applicable Purchase Price for the shares
of Common Stock purchased pursuant to each Share Purchase Contract evidenced
hereby by effecting a Cash Settlement or, an Early Settlement. A Holder of Share
Purchase Units who does not make such payment in accordance with the Share
Purchase Contract Agreement or who does not notify the Agent of such Holder's
intention, on or prior to 5:00 p.m., New York City time, on the fifth Business
Day immediately preceding the Share Purchase Contract Settlement Date, to make
an effective Cash Settlement or an Early Settlement, shall have defaulted in its
obligations under the related Share Purchase Contract and the Collateral Agent
shall exercise its rights as a secured creditor for the benefit of the Company
under the Share Purchase Contract Agreement and the Pledge Agreement and shall
apply the Proceeds of the sale of the related applicable Pledged Debt Securities
held by the Collateral Agent to satisfy the Holder's obligations under such
Share Purchase Contract to purchase Common Stock at the Purchase Price.
The Company shall not be obligated to issue any shares of Common Stock in
respect of the Share Purchase Contract on the Share Purchase Contract Settlement
Date or deliver any certificates therefor to the Holder unless it shall have
received payment in full of the aggregate Purchase Price for the shares of
Common Stock to be purchased thereunder in the manner herein set forth.
Under and subject to the terms of the Pledge Agreement and the Share
Purchase Contract Agreement, the Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Debt Securities, but
only to the extent instructed by the Holders as described in the paragraph
below. Upon receipt of notice of any meeting at which holders of Debt Securities
are entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Debt Securities, the Agent shall, as soon as practicable thereafter,
mail to the Holders of Share Purchase Units a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Share Purchase Unit Holder on the record date set by the Agent
A-4
therefor shall be entitled to instruct the Agent as to the exercise of the
voting rights pertaining to the Debt Securities constituting a part of such
Holder's Share Purchase Unit and (c) stating the manner in which such
instructions may be given. Upon the written request of the Share Purchase Unit
Holders on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Debt Securities as to which any particular
voting instructions are received. In the absence of specific instructions from
the Holder of a Share Purchase Units, the Agent shall abstain from voting any
Debt Securities evidenced by such Share Purchase Units.
Upon the occurrence of a Tax Event Redemption prior to the Share Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debt
Securities shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Share Purchase Units
the Tax Event Treasury Portfolio and promptly remit the remaining portion of
such Redemption Price, if any, to the Agent for payment to the Holders of such
Share Purchase Units. The Tax Event Treasury Portfolio will be substituted for
the Pledged Debt Securities, 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 a Share Purchase Unit to purchase the Common Stock of the Company
on the Share Purchase Contract Settlement Date under the Share Purchase Contract
constituting a part of such Share Purchase Unit. Following the occurrence of a
Tax Event Redemption prior to the Share Purchase Contract Settlement Date, the
Holders of Share Purchase Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Tax Event
Treasury Portfolio as the Holder of Share Purchase Units and the Collateral
Agent had in respect of the Debt Securities subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Pledged Debt Securities shall be deemed to be reference
to such Tax Event Treasury Portfolio. The Company may cause to be made in any
Share Purchase Unit Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Tax Event Treasury Portfolio for Debt Securities as
collateral.
Upon the successful remarketing of the Pledged Debt Securities on the
Initial Remarketing Date, the proceeds of such remarketing (after deducting any
Remarketing Fee) shall be delivered to the Collateral Agent in exchange for the
Pledged Debt Securities. Pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Remarketing Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Share Purchase
Units the Remarketing Treasury Portfolio and promptly remit the remaining
portion of such proceeds to the Agent for payment to the Holders of such Share
Purchase Units. The Remarketing Treasury Portfolio will be substituted for the
outstanding Pledged Debt Securities, 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 a Share Purchase Unit to purchase the Common Stock of the Company
on the Share Purchase Contract Settlement Date under the Share Purchase Contract
constituting a part of such Share Purchase Unit. Following the successful
remarketing of the Pledged Debt Securities on the Initial Remarketing Date, the
Holders of Share Purchase Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Remarketing
Treasury Portfolio as the Holder of Share Purchase Units and the Collateral
Agent had in respect of the Debt Securities subject to the Pledge thereof as
provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any
reference herein to the Debt
A-5
Securities shall be deemed to be reference to such Remarketing Treasury
Portfolio. The Company may cause to be made in any Share Purchase Unit
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Remarketing Treasury Portfolio for Debt Securities as collateral.
The Share Purchase Units are issuable only in registered form and only in
denominations of a single Share Purchase Unit and any integral multiple thereof.
The transfer of any Share Purchase Unit Certificate will be registered and Share
Purchase Unit Certificates may be exchanged as provided in the Share Purchase
Contract Agreement. The Share Purchase Unit Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
permitted by the Share Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
A Holder of a Share Purchase Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Share Purchase Contract Settlement Date,
create or recreate a Treasury Unit and separate the Debt Security or the
Applicable Ownership Interest in the appropriate Treasury Portfolio, as
applicable, from the related Share Purchase Contract in respect of such Share
Purchase Unit by substituting the appropriate Treasury Security for the Debt
Security, or the Applicable Ownership Interest in the appropriate Treasury
Portfolio, that form a part of such Share Purchase Unit in accordance with the
Share Purchase Contract Agreement; provided, however, that if a successful
remarketing of the Debt Securities has occurred on the Initial Remarketing Date
or a Tax Event Redemption has occurred, Holders of such Share Purchase Units may
make such Collateral Substitutions at any time on or prior to the second
Business Day immediately preceding the Share Purchase Contract Settlement Date.
Holders may make Collateral Substitutions and establish Treasury Units (i) only
in integral multiples of [20] Share Purchase Units if only Debt Securities are
being substituted by Treasury Securities, or (ii) only in integral multiples of
[40,000] Share Purchase Units if the Applicable Ownership Interests in the
appropriate Treasury Portfolio are being substituted by Treasury Securities. To
create [20] Treasury Units (if a Tax Event Redemption has not occurred and the
Debt Securities remain a component of the Share Purchase Units), or [40,000]
Treasury Units (if a Tax Event Redemption has occurred or the Remarketing
Treasury Portfolio has replaced the Debt Securities as a component of the Share
Purchase Units as a result of a successful remarketing of such Debt Securities),
the Share Purchase Unit Holder shall:
(a) if a Treasury Portfolio has not replaced any Debt Securities as a
component of Share Purchase Units as a result of a successful remarketing
of the Debt Securities on the Initial Remarketing Date or a Tax Event
Redemption, deposit with the Collateral Agent a Treasury Security having a
principal amount at maturity of $1,000; or
(b) if a Treasury Portfolio has replaced the Debt Securities as a
component of Share Purchase Units as a result of a successful remarketing
of the Debt Securities on the Initial Remarketing Date or a Tax Event
Redemption, on or prior to the second Business Day immediately preceding
the Share Purchase Contract Settlement Date, deposit with the Collateral
Agent Treasury Securities having an aggregate principal amount at maturity
of $[_____]; and
A-6
(c) in each case, transfer and surrender the related [20] Share
Purchase Units, or, in the event a Treasury Portfolio is a component of
Share Purchase Units, [40,000] Share Purchase Units, to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit
B to the Pledge Agreement, stating that the Holder has transferred the
relevant types and amounts of Treasury Securities to the Collateral Agent
and requesting that the Agent instruct the Collateral Agent to release the
applicable Debt Securities or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as the case may be, underlying such Share
Purchase Unit, whereupon the Agent shall promptly give such instruction to
the Collateral Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
that had been components of such Share Purchase Unit, free and clear of the
Company's security interest therein, and upon receipt thereof the Agent shall
promptly:
(i) cancel the related Share Purchase Units surrendered and
transferred;
(ii) transfer the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, that
had been components of such Share Purchase Unit to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver
a Treasury Unit Certificate executed by the Company in accordance with the
Share Purchase Contract Agreement evidencing the same number of Share
Purchase Contracts as were evidenced by the cancelled Share Purchase Units.
Holders who elect to separate the Debt Securities or the Applicable
Ownership Interest in the appropriate Treasury Portfolio, as the case may be,
from the related Share Purchase Contracts and to substitute Treasury Securities
for such Debt Securities or the Applicable Ownership Interest in the appropriate
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
A Holder of a Treasury Unit may create or recreate a Share Purchase Unit by
depositing with the Collateral Agent a Debt Security or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, having an
aggregate principal amount equal to the aggregate principal amount at maturity
of, and in substitution for all, but not less than all, of the Treasury
Securities comprising part of the Treasury Unit in exchange for the release of
such Pledged Treasury Securities in accordance with the terms of the Share
Purchase Contract Agreement and the Pledge Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, except the Initial Reset Date, if the Initial Reset Date is not
also a quarterly Payment Date the Contract Adjustment Payments payable in
respect of each Share Purchase Contract to the Person in whose name the Share
Purchase Unit Certificate evidencing such Share Purchase Contract is registered
on the Register at the close of business on the Record Date next preceding such
A-7
Payment Date. The Contract Adjustment Payments will be payable at the Corporate
Trust Office or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the Share Purchase
Unit Register or by wire transfer to an account appropriately designated in
writing by such person.
The Company shall have the right, at any time prior to the Share Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Share Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of
[____]% per annum (computed on the basis of a 360-day year of twelve 30-day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Share Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a date that is
after the Share Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Share Purchase Contracts until the Share Purchase
Contract Settlement Date, the Holder of this Share Purchase Unit Certificate
will receive on the Share Purchase Contract Settlement Date, in lieu of a cash
payment, a number of shares of Common Stock (in addition to the number of shares
equal to the Settlement Rate) equal to (x) the aggregate amount of Deferred
Contract Adjustment Payments payable to the Holder of this Share Purchase Unit
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event or agent benefit plans or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase, redeem or acquire its capital stock,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of the Company's capital stock or the security
being converted or exchanged, (iv) dividends or distributions in capital stock
of the Company (or rights to acquire capital stock) or repurchases, redemptions
or acquisitions of capital stock in connection with the issuance or exchange of
the Company's capital stock (or securities convertible into or exchangeable for
shares of capital stock) or (v) redemptions, exchanges or repurchases of any
A-8
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Share 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 Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the rights
and obligations of the Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Share 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 Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Share Purchase Unit
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Debt Securities or the Applicable Ownership Interest in
the appropriate Treasury Portfolio, as the case may be, forming a part of the
Share Purchase Units evidenced hereby from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Share Purchase
Contract Agreement, a Holder of Share Purchase Units may settle the related
Share Purchase Contracts in their entirety at any time on or prior to the fifth
Business Day immediately preceding the Share Purchase Contract Settlement Date,
but only in integral multiples of [20] Share Purchase Units; provided, however,
that if a Treasury Portfolio has become a component of the Share Purchase Units,
Holders of Share Purchase Units may settle early only in integral multiples of
[40,000] Share Purchase Units at any time on or prior to the second Business Day
immediately preceding the Share Purchase Contract Settlement Date. In order to
exercise the right to effect any such early settlement ("Early Settlement") with
respect to any Share Purchase Contracts evidenced by this Share Purchase Unit
Certificate, the Holder of this Share Purchase Unit Certificate shall deliver
this Share Purchase Unit Certificate to the Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and executed and accompanied by
payment payable to the Company in immediately available funds in an amount (the
"Early Settlement Amount") equal to the sum of (i) $[50] times the number of
Share Purchase Contracts being settled, plus (ii) if such delivery is made with
respect to any Share Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable, if any, on such Payment Date with respect to such Share
Purchase Contracts. Upon Early Settlement of Share Purchase Contracts by a
Holder of the related Securities, the Pledged Debt Securities or the Pledged
Applicable Ownership Interest in the a Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive a number of shares of Common Stock
on account of each Share Purchase Contract forming part of a Share Purchase Unit
as to which Early Settlement is effected equal to the Early Settlement Rate
which shall be equal to [____] newly issued shares of Common Stock per Share
Purchase Contract (the "Early Settlement Rate"); provided however, that upon the
Early Settlement of the Share Purchase Contracts, (i) the Holder thereof will
forfeit the right to receive any Deferred Contract Adjustment Payments, if any,
on such Share Purchase Contracts, (ii) the Holder's right to receive additional
Contract Adjustment Payments in respect of such Share Purchase Contracts will
terminate, and (iii) no adjustment will be made to or for the Holder on account
of Deferred Contract Adjustment Payments, or any amount accrued in respect of
Contract Adjustment Payments. The Early Settlement Rate shall be adjusted in the
same
A-9
manner and at the same time as the Settlement Rate is adjusted as provided in
the Share Purchase Contract Agreement.
Upon registration of transfer of this Share Purchase Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the Share
Purchase Contract Agreement), under the terms of the Share Purchase Contract
Agreement and the Share Purchase Contracts evidenced hereby and the transferor
shall be released from the obligations under the Share Purchase Contracts
evidenced by this Share Purchase Unit 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 Share Purchase Unit Certificate, by its acceptance
hereof, irrevocably authorizes the Agent to enter into and perform the related
Share Purchase Contracts forming part of the Share Purchase Units evidenced
hereby on its behalf as its attorney-in-fact, expressly withholds any consent to
the assumption of the Share Purchase Contracts by the Company, its trustee in
bankruptcy, receiver, liquidator or a person or entity performing similar
functions, in the event that the Company becomes the subject of a case under the
Bankruptcy Code or subject to other similar Federal or State law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Share
Purchase Contracts, consents to the provisions of the Share Purchase Contract
Agreement, authorizes the Agent to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to and agrees to be bound by
the Pledge of the Pledged Debt Securities or the Pledged Applicable Ownership
Interest in a Treasury Portfolio, as the case may be, underlying this Share
Purchase Unit Certificate pursuant to the Pledge Agreement. The Holder, by its
acceptance hereof, further covenants and agrees, that, to the extent and in the
manner provided in the Share Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect of the
principal of the Pledged Debt Securities, or the portion of the Applicable
Ownership Interest (as specified in clauses (1)(i) or 2(i) of the definition of
such term) in the appropriate Treasury Portfolio, on the Share Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Share Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
The Holder of this Share Purchase Unit Certificate, by its acceptance
hereof, covenants and agrees to treat itself as the owner, for United States
federal, state and local income and franchise tax purposes, of the Debt
Securities or the Applicable Ownership Interest in the appropriate Treasury
Portfolio forming part of the Share Purchase Units evidenced hereby. The Holder
of this Share Purchase Unit Certificate, by its acceptance hereof, further
covenants and agrees to treat the Debt Securities forming part of the Share
Purchase Units evidenced hereby as indebtedness of the Company for United States
federal, state and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the Share Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Share Purchase Contracts. In addition, certain amendments to the Share
Purchase Contract Agreement may be made without any consent of the Holders as
provided in the Share Purchase Contract Agreement.
A-10
THE SHARE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Share Purchase Unit Certificate is
registered on the Share Purchase Unit Register as the owner of the Share
Purchase Units evidenced hereby for the purpose of receiving payments of
interest payable quarterly and on the Initial Reset Date, if the remarketing of
the Debt Securities on the third Business Day immediately preceding the Initial
Reset Date is successful and the Initial Reset Date is not [_____], 200[_] or
[_____], 200[_], on the Debt Securities receiving payments of Contract
Adjustment Payments and any Deferred Contract Adjustment Payments, performance
of the Share 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 Agent nor any such agent shall be
affected by notice to the contrary.
The Share Purchase Contracts shall not, prior to the settlement thereof in
accordance with the Share Purchase Contract Agreement, entitle the Holder to any
of the rights of a holder of shares of Common Stock.
A copy of the Share Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Share Purchase Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Share Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-11
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
FIRSTENERGY Corp.
By:________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Share Purchase Contracts evidenced
hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:________________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Share Purchase Unit Certificates referred to in the
within mentioned Share Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Share Purchase Contract Agent and Trustee
By:________________________________
Authorized Signatory
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___________
(a) (minor)
Under Uniform Gifts to Minors Act
_______________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
______________________________
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 Share Purchase Unit Certificate and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Share Purchase
Unit Certificate on the books of FirstEnergy Corp. 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
Share Purchase Unit Certificates in
every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: __________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Share Purchase Contract
Settlement Date of the Share Purchase Contracts underlying the number of Share
Purchase Units evidenced by this Share Purchase Unit 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)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person 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 Share Purchase Unit Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Share Purchase Contract Agreement with respect to the Share
Purchase Contracts underlying the number of Share Purchase Units evidenced by
this Share Purchase Unit 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 Share Purchase Unit
Certificate representing any Share Purchase Units evidenced hereby as to which
Early Settlement of the related Share Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Debt Securities or the Applicable Ownership
Interest in the appropriate 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: _________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early Settlement of the
related Share Purchase Contracts is being elected:
If shares of Common Stock or Share Purchase Unit
Certificates are to be registered in the name of
and delivered to, and Pledged Debt Securities, or
the Treasury Portfolio, REGISTERED HOLDER
as the case may be, are to be transferred to, a
Person other than the Holder, please print such
Person's name and address:
Please print name and address of
Registered Holder:
________________________________________________________________________________
Name Name
________________________________________________________________________________
Address Address
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-15
Social Security or other Taxpayer Identification
Number, if any ______________________________________
Transfer Instructions for Pledged Debt Securities, or the Treasury Portfolio, as
the case may be, Transferable Upon Early Settlement or a Termination Event:
A-16
[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:
--------------------------------------------------------------------------------
Date Amount of Amount of Principal Signature of
decrease in increase in Amount of this authorized
Principal Principal Global officer of
Amount of the Amount of the Certificate Trustee or
Global Global following such Securities
Certificate Certificate decrease or Custodian
increase
--------------------------------------------------------------------------------
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
X-00
XXXXXXX X
FORM OF TREASURY UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
SHARE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN
THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER
OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE SHARE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. ____________________ Cusip No. _____________
Number of Treasury Units ___________________
FIRSTENERGY CORP.
Treasury Units
($[50] Stated Amount)
This Treasury Unit Certificate certifies that ___________ is the
registered Holder of the number of Treasury Units set forth above. Each Treasury
Unit represents (a) a stock Share Purchase Contract of FirstEnergy Corp., an
Ohio corporation (the "Company") (as modified and supplemented and in effect
from time to time, a "Share Purchase Contract") and (b) a 1/20, or 5% undivided
beneficial ownership interest in a Treasury Security. All capitalized terms used
herein without definition herein have the meaning set forth in the Share
Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Share Purchase Contract comprising a portion of such Treasury Unit.
B-1
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Treasury Units to the accounts designated by them in writing for such
purpose no later than 2:00 p.m. New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time on the next
succeeding Business Day), and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Share Purchase Contract Settlement
Date (as defined herein) in accordance with the terms of the Pledge Agreement,
in full satisfaction of the respective obligations of the Holders of the
Treasury Units of which such Pledged Treasury Securities are a part under the
Purchaser Contracts forming a part of such Treasury Units.
Each Share Purchase Contract evidenced hereby obligates the Holder of
this Treasury Unit Certificate to purchase, and the Company, to sell not later
than [_____], 200[_] (the "Share Purchase Contract Settlement Date"), at a price
of $[50] in cash (the "Purchase Price"), a number of newly issued shares of
Common Stock, without par value, of the Company including, where applicable, the
preference stock purchase rights appurtenant thereto ("Common Stock"), equal to
the applicable Settlement Rate (as defined below), unless on or prior to the
Share Purchase Contract Settlement Date there shall have occurred a Termination
Event or an Early Settlement with respect to the Treasury Units of which such
Share Purchase Contract is a part, all as provided in the Share Purchase
Contract Agreement and more fully described below.
The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) determined with respect to such Share Purchase Contract
Settlement Date is equal to or greater than $[______] (the "Threshold
Appreciation Price"), [______] shares of Common Stock per Share Purchase
Contract, (b) if such Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $[______], the number of shares of Common
Stock per Share Purchase Contract equal to $[50] divided by the Applicable
Market Value and (c) if the Applicable Market Value is less than or equal to
$[______], [______] shares of Common Stock per Share Purchase Contract, in each
case subject to adjustment as provided in the Share Purchase Contract Agreement.
No fractional shares of Common Stock will be issued upon settlement of Share
Purchase Contracts, as provided in the Share Purchase Contract Agreement.
The Company shall pay on each Payment Date other than the Initial Reset
Date is not also a regular quarterly Payment Date in respect of each Share
Purchase Contract forming part of a Treasury Unit evidenced hereby an amount
(the "Contract Adjustment Payments") equal to [______]% per annum of the Stated
Amount computed on the basis of a 360 day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Share Purchase
Contract Agreement and more fully described below. Such Contract Adjustment
Payments shall be payable to the Person in whose name this Treasury Unit
Certificate (or a Predecessor Treasury Unit Certificate or a Predecessor Share
Purchase Unit Certificate) is registered on the Register at the close of
business on the Record Date for such Payment Date.
B-2
Contract Adjustment Payments will be payable at the Corporate Trust
Office or, at the option of the Company, by check mailed to the address of the
Person entitled thereto as such address appears on the Treasury Unit Register or
by wire transfer to an account appropriately designated in writing by the Person
entitled to payment.
Unless the context otherwise requires, each provision of this Security
shall be part of the Share Purchase Contracts evidenced hereby. This Security
and each Share Purchase Contract evidenced hereby is governed by a Share
Purchase Contract Agreement, dated as of [______], 200[_] (as may be
supplemented from time to time, the "Share Purchase Contract Agreement") between
the Company and The Bank of New York, as Share Purchase Contract agent and
trustee (including any successor thereunder, herein called the "Agent"), to
which Share Purchase Contract Agreement and supplemental agreements thereto
reference is hereby made for a description of the respective rights, limitations
of rights, obligations, duties and immunities thereunder of the Agent, the
Company and the Holders and of the terms upon which the Treasury Unit
Certificates are, and are to be, executed and delivered.
Each Share Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Treasury Unit to purchase at the applicable Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
applicable Early Settlement Rate or the Settlement Rate, as applicable.
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 Share Purchase Contract
Settlement Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is reported,
the last reported sale price) of the Common Stock on the New York Stock Exchange
(the "NYSE") on such date or, if the Common Stock is not listed for trading on
the NYSE on any such date, as reported in the composite transactions for the
principal United States national or regional securities exchange on which the
Common Stock is so listed. If the Common Stock is not so listed on a United
States national or regional securities exchange, the Closing Price means the
last sale price of the Common Stock as reported by the NASDAQ Stock Market, or
if the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization. If such bid price is not available, the Closing
Price means market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained by the
Company for this purpose. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Share Purchase Contract Agreement,
the Holder of the Treasury Units evidenced hereby shall pay, on the Share
Purchase Contract Settlement Date, the Purchase Price for the shares of Common
Stock purchased pursuant to each Share Purchase Contract evidenced hereby by
effecting a Cash Settlement or an Early Settlement of each such Share Purchase
Contract or by applying a principal amount of the Pledged Treasury Securities
B-3
underlying such Holder's Treasury Units equal to the Stated Amount of such Share
Purchase Contract to the purchase of Common Stock. A Holder of Treasury Units
who does not make such payment in accordance with the Share Purchase Contract
Agreement or who does not notify the Agent of such Holder's intention, on or
prior to 5:00 p.m., New York City time, on the fifth Business Day immediately
preceding the Share Purchase Contract Settlement Date, to make an effective Cash
Settlement or an Early Settlement, shall have defaulted in its obligations under
the related Share Purchase Contract, and the Collateral Agent shall exercise its
rights as a secured creditor for the benefit of the Company under the Share
Purchase Contract Agreement and the Pledge Agreement and shall apply the
principal amount at maturity of the related Pledged Treasury Securities held by
the Collateral Agent to the Purchase Price of the Common Stock on such Share
Purchase Contract Settlement Date.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Share Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have received payment in full of the Purchase Price
for the shares of Common Stock to be purchased thereunder in the manner set
forth in the Share Purchase Contract Agreement.
The Treasury Unit Certificates are issuable only in registered form and
only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Unit Certificate will be registered and
Treasury Unit Certificates may be exchanged as provided in the Share Purchase
Contract Agreement. The Treasury Unit Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Share Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
A Holder of a Treasury Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Share Purchase Contract Settlement Date,
create or recreate a Share Purchase Unit by depositing with the Collateral Agent
a Debt Security or the Applicable Ownership Interest in the applicable Treasury
Portfolio, as the case may be, having an aggregate principal amount equal to the
aggregate principal amount at maturity of, and in substitution for all, but not
less than all, of the Treasury Securities comprising part of the Treasury Unit
in accordance with the Share Purchase Contract Agreement; provided, however,
that if the Treasury Portfolio has replaced the Debt Securities as a component
of Share Purchase Units as a result of a successful remarketing of the Debt
Securities on the Initial Remarketing Date or a Tax Event Redemption, such
Collateral Substitutions may be made at any time on or prior to the second
Business Day immediately preceding the Share Purchase Contract Settlement Date.
Holders of Treasury Units may make such Collateral Substitutions and establish
Share Purchase Units (i) only in integral multiples of [20] Treasury Units if
Treasury Securities are being replaced by only Debt Securities, or (ii) only in
integral multiples of [40,000] Treasury Units if any Treasury Security is being
replaced by the Applicable Ownership Interest in the appropriate Treasury
Portfolio. To create [20] Share Purchase Units (if a Tax Event Redemption has
not occurred and the Debt Securities remain components of Share Purchase Units),
or [40,000] Share Purchase Units (if a Tax Event Redemption has occurred or the
Remarketing Treasury Portfolio has replaced the Debt Securities as a result of a
successful remarketing of such Debt Securities), the Treasury Unit Holder shall:
B-4
(a) if a Treasury Portfolio has not replaced the Debt
Securities as a component of Share Purchase Units as a result of a
successful remarketing of the Debt Securities on the Initial
Remarketing Date or a Tax Event Redemption, on or prior to the fifth
Business Day immediately preceding the Share Purchase Contract
Settlement Date, deposit with the Collateral Agent $1,000 in aggregate
principal amount of Debt Securities; or
(b) if a Treasury Portfolio has replaced the Debt Securities
as a component of Share Purchase Units as a result of a successful
remarketing of the Debt Securities on the Initial Remarketing Date or a
Tax Event Redemption, on or prior to the second Business Day
immediately preceding the Share Purchase Contract Settlement Date,
deposit with the Collateral Agent the Applicable Ownership Interest in
the Treasury Portfolio for each [40,000] Share Purchase Units being
created by the Holder, and having an aggregate principal amount of
$[______]; and
(c) in each case, transfer and surrender the related [20]
Treasury Units, or in the event the Treasury Portfolio is a component
of Share Purchase Units, [40,000] Share Purchase Units, to the Agent
accompanied by a notice to the Agent, substantially in the form of
Exhibit B to the Pledge Agreement, stating that the Holder has
transferred the relevant amount of Debt Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, to the Collateral Agent and requesting that the Agent instruct
the Collateral Agent to release the Treasury Securities underlying such
Treasury Units, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of
Exhibit A to the Pledge Agreement.
Upon receipt of the Debt Securities or the Applicable Ownership
Interest in the appropriate Treasury Portfolio, as the case may be, described in
clause (a) or (b) above and the instructions described in clause (c) above, in
accordance with the terms of the Pledge Agreement, the Collateral Agent will
effect the release of the Treasury Securities having a corresponding aggregate
principal amount from the Pledge to the Agent free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Treasury Units surrendered and
transferred;
(ii) transfer the Treasury Securities that had been
components of such Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Share Purchase Unit Certificate executed by the Company
in accordance with the Share Purchase Contract Agreement evidencing the
same number of Share Purchase Contracts as were evidenced by the
cancelled Treasury Units.
Holders who elect to separate Pledged Treasury Securities from the
related Share Purchase Contracts and to substitute Debt Securities or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for
such Pledged Treasury Securities 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.
B-5
A Holder of a Share Purchase Unit may create or recreate a Treasury
Unit and separate the Debt Security or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, as applicable, from the related Share Purchase
Contract in respect of such Share Purchase Unit by substituting a Treasury
Security for the Debt Security, or the Applicable Ownership Interest in the
appropriate Treasury Portfolio, that form a part of such Share Purchase Unit in
accordance with the Share Purchase Contract Agreement.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, except Initial Reset Date, if the Initial Reset Date is not
also a quarterly Payment Date, the Contract Adjustment Payments payable in
respect of each Share Purchase Contract to the Person in whose name the Treasury
Unit Certificate evidencing such Share Purchase Contract is registered on the
Register at the close of business on the Record Date next preceding such Payment
Date. The Contract Adjustment Payments will be payable at the Corporate Trust
Office or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Treasury Unit
Register or by wire transfer to an account appropriately designated in writing
by such person.
The Company shall have the right, at any time prior to the Share
Purchase Contract Settlement Date, to defer the payment of any or all of the
Contract Adjustment Payments otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Share Purchase Contract Agreement. Any Contract Adjustment Payments so deferred
shall bear additional Contract Adjustment Payments thereon at the rate of
[______]% per annum (computed on the basis of a 360-day year of twelve 30-day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Share Purchase Contract
Agreement. No Contract Adjustment Payments may be deferred to a date that is
after the Share Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Share Purchase Contracts until the Share Purchase
Contract Settlement Date, the Holder of this Treasury Unit Certificate will
receive on the Share Purchase Contract Settlement Date, in lieu of a cash
payment, a number of shares of Common Stock (in addition to the number of shares
equal to the Settlement Rate) equal to (x) the aggregate amount of Deferred
Contract Adjustment Payments payable to the Holder of this Treasury Unit
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of
B-6
employees, officers, directors or agents or a stock purchase or dividend
reinvestment plan, or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event or
agent benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase, redeem or acquire its capital stock, (ii) as
a result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of the Company's capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases, redemptions or
acquisitions of capital stock in connection with the issuance or exchange of the
Company's capital stock (or securities convertible into or exchangeable for
shares of capital stock) or (v) redemptions, exchanges or repurchases of any
rights outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future.
The Share 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 Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, and the rights
and obligations of the Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Share 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 Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Treasury Unit
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.
Subject to and upon compliance with the provisions of the Share
Purchase Contract Agreement, a Holder of Treasury Units may settle the related
Share Purchase Contracts in their entirety on or prior to the second Business
Day immediately preceding the Share Purchase Contract Settlement Date, but only
in integral multiples of [20] Treasury Units. In order to exercise the right to
effect any such early settlement ("Early Settlement") with respect to any Share
Purchase Contracts evidenced by this Treasury Unit Certificate, the Holder of
this Treasury Unit Certificate shall deliver this Treasury Unit Certificate to
the Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early set forth below
duly completed and executed and accompanied by payment payable to the Company in
immediately available funds payable to the order of the Company in an amount
(the "Early Settlement Amount") equal to the sum of (i) $[50] times the number
of Share Purchase Contracts being settled, (ii) if such delivery is made with
respect to any Share Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments payable, if any, on such Payment Date with respect to such Share
Purchase Contracts. Upon Early Settlement of Share Purchase Contracts by a
Holder of the related Securities, the Pledged Treasury Securities underlying
such Securities shall be released from the Pledge as provided in the Pledge
Agreement and the Holder shall be entitled
B-7
to receive a number of shares of Common Stock on account of each Share Purchase
Contract forming part of a Treasury Unit as to which Early Settlement is
effected equal to the Early Settlement Rate which shall be equal to [______]]
newly issued shares of Common Stock per Share Purchase Contract (the "Early
Settlement Rate"); provided however, that upon the Early Settlement of the Share
Purchase Contracts, (i) the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments, if any, on such Share Purchase Contracts,
(ii) the Holder's right to receive additional Contract Adjustment Payments in
respect of such Share Purchase Contracts will terminate, and (iii) no adjustment
will be made to or for the Holder on account of Deferred Contract Adjustment
Payments, or any amount accrued in respect of Contract Adjustment Payments. The
Early Settlement Rate shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted, as provided in the Share Purchase Contract
Agreement.
Upon registration of transfer of this Treasury Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the Share
Purchase Contract Agreement), under the terms of the Share Purchase Contract
Agreement and the Share Purchase Contracts evidenced hereby and the transferor
shall be released from the obligations under the Share Purchase Contracts
evidenced by this Treasury Unit 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 Treasury Unit Certificate, by its acceptance hereof,
irrevocably authorizes the Agent to enter into and perform the related Share
Purchase Contracts forming part of the Treasury Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Share Purchase Contracts by the Company or
its trustee in bankruptcy, receiver, liquidator or a person or entity performing
similar functions, in the event that the Company becomes the subject of a case
under the Bankruptcy Code or subject to other similar Federal or State law
providing for reorganization or liquidation, agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Share Purchase Contracts, consents to the provisions of the Share Purchase
Contract Agreement, authorizes the Agent to enter into and perform the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of
the Treasury Securities underlying this Treasury Unit Certificate pursuant to
the Pledge Agreement. The Holder, by its acceptance hereof, further covenants
and agrees, that, to the extent and in the manner provided in the Share Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect to the Stated Amount of the Pledged Treasury Securities on
the Share Purchase Contract Settlement Date shall be paid by the Collateral
Agent to the Company in satisfaction of such Holder's obligations under such
Share Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
The Holder of this Treasury Unit Certificate, by its acceptance hereof,
covenants and agrees to treat itself as the owner, for United States federal,
state and local income and franchise tax purposes, of the Treasury Securities
forming part of the Treasury Units evidenced hereby.
Subject to certain exceptions, the provisions of the Share Purchase
Contract Agreement may be amended with the consent of the Holders of a majority
of the Share Purchase Contracts.
B-8
In addition, certain amendments to the Share Purchase Contract Agreement may be
made without any consent of the Holders as provided in the Share Purchase
Contract Agreement.
THE SHARE PURCHASE CONTRACTS SHALL FOR ALL PURPOSES BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company and the Agent and any agent of the Company or the Agent may
treat the Person in whose name this Treasury Unit Certificate is registered on
the Treasury Unit Register as the owner of the Treasury Units evidenced hereby
for the purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Contract Adjustment Payments and any Deferred Contract
Adjustment Payments, performance of the Share 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 Agent nor any such agent shall be affected by notice to the contrary.
The Share Purchase Contracts shall not, prior to the settlement thereof, in
accordance with the Purchase Agreement, entitle the Holder to any of the rights
of a holder of shares of Common Stock.
A copy of the Share Purchase Contract Agreement is available for inspection
at the offices of the Agent during regular business hours of the Agent.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Treasury Unit Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Share Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-9
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
FIRSTENERGY Corp.
By:_____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Share Purchase Contracts
evidenced hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:_____________________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury Unit Certificates referred to in the
within-mentioned Share Purchase Contract Agreement.
THE BANK OF NEW YORK,
as Share Purchase Contract Agent and
Trustee
By:_____________________________________
Authorized Signatory
B-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - -------------Custodian-------------
(cust) (minor)
Under Uniform Gifts to Minors Act
___________________________________
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used though not in the above list.
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 Unit Certificate and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Treasury Unit
Certificate on the books of FirstEnergy Corp. 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 Unit Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
_____________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Share Purchase Contract
Settlement Date of the Share Purchase Contracts underlying the number of
Treasury Units evidenced by this Treasury Unit 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:
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name REGISTERED HOLDER
of and delivered to a Person other than the
Holder, please print such Person's name Please print name and
and address: address of Registered Holder:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
______________________________________
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Unit Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Share Purchase Contract Agreement with respect to the Share Purchase
Contracts underlying the number of Treasury Units evidenced by this Treasury
Unit 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 Treasury Unit Certificate representing any Treasury
Units evidenced hereby as to which Early Settlement of the related Share
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: ________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-13
Number of Securities evidenced hereby as to which Early Settlement of the
related Share Purchase Contracts is being elected:
If shares of Common Stock or Treasury REGISTERED HOLDER
Unit 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 Please print name and address of
print such Person's name and address: Registered Holder:
Name Name
Address Address
Social Security or other Taxpayer
Identification Number, if any
______________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon 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:
---------------------------------------------------------------------------------------------
Date Amount of Amount of Principal Signature of
decrease in increase in Amount of this authorized
Principal Principal Global officer of
Amount of the Amount of the Certificate Trustee or
Global Global following such Securities
Certificate Certificate decrease or Custodian
increase
---------------------------------------------------------------------------------------------
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
_____________________________________________________________________________________________
B-15
EXHIBIT C
NOTICE TO SETTLE BY SEPARATE CASH
Attention:
Re: Securities of FirstEnergy Corp. (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.4 of the Share Purchase Contract Agreement, dated as of [______],
200[_] among the Company, yourselves, as Share Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Share Purchase Contracts, that such
Holder has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New
York City time, on the Business Day immediately preceding the Share 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 Share Purchase Contract on the Share 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 Share Purchase Contracts related to such Holder's
[Share Purchase Units] [Treasury Units].
Dated:__________________________________________________________________________
Signature
Signature Guarantee: ___________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
________________________________________________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
_____________________
_____________________
C-1
