ALLTEL CORPORATION
as the Company
and
X. X. XXXXXX TRUST COMPANY, NATIONAL ASSOCIATION
as Purchase Contract Agent
----------------------
PURCHASE CONTRACT AGREEMENT
----------------------
dated as of May [ ], 2002
Table of Contents
Page
Article I Definitions and Other Provisions of General Applications.................. 1
Section 1.1 Definitions................................................... 1
Section 1.2 Compliance Certificates and Opinions.......................... 16
Section 1.3 Form of Documents Delivered to Agent.......................... 17
Section 1.4 Acts of Holders; Record Dates................................. 17
Section 1.5 Notices....................................................... 18
Section 1.6 Notice to Holders; Waiver..................................... 19
Section 1.7 Effect of Headings and Table of Contents...................... 20
Section 1.8 Successors and Assigns........................................ 20
Section 1.9 Separability Clause........................................... 20
Section 1.10 Benefits of Agreement........................................ 20
Section 1.11 Governing Law................................................ 20
Section 1.12 Legal Holidays............................................... 20
Section 1.13 Counterparts................................................. 21
Section 1.14 Inspection of Agreement...................................... 21
Section 1.15 Appointment of Financial Institution as Agent for the Company 21
Section 1.16 No Waiver.................................................... 21
Article II Certificate Forms........................................................ 22
Section 2.1 Forms of Certificates Generally............................... 22
Section 2.2 Form of Agent's Certificate of Authentication................. 23
Article III The Securities.......................................................... 23
Section 3.1 Title and Terms; Denominations................................ 23
Section 3.2 Rights and Obligations Evidenced by the Certificates.......... 23
i
Section 3.3 Execution, Authentication, Delivery and Dating................ 24
Section 3.4 Temporary Certificates........................................ 25
Section 3.5 Registration; Registration of Transfer and Exchange........... 25
Section 3.6 Book-Entry Interests.......................................... 26
Section 3.7 Notices to Holders............................................ 27
Section 3.8 Appointment of Successor Clearing Agency...................... 27
Section 3.9 Definitive Certificates....................................... 27
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates........... 28
Section 3.11 Persons Deemed Owners........................................ 29
Section 3.12 Cancellation................................................. 29
Section 3.13 Establishment of Treasury Units.............................. 30
Section 3.14 Reestablishment of Corporate Units........................... 31
Section 3.15 Transfer of Collateral upon Occurrence of Termination Event.. 33
Section 3.16 No Consent to Assumption..................................... 33
Section 3.17 CUSIP Numbers................................................ 33
Article IV The Notes and Applicable Ownership Interest in the Treasury Portfolio.... 34
Section 4.1 Interest and Other Payments; Rights to Payments Preserved; Rate
Reset; Notice..................................................... 34
Section 4.2 Notice and Voting............................................. 35
Section 4.3 Tax Event Redemption.......................................... 36
Section 4.4 CUSIP Numbers................................................. 36
Article V The Purchase Contracts.................................................... 36
Section 5.1 Purchase of Shares of Common Stock............................ 36
Section 5.2 Contract Adjustment Payments.................................. 38
Section 5.3 Deferral of Payment Dates for Contract Adjustment Payments.... 43
Section 5.4 Initial Remarketing and Secondary Remarketing................. 45
ii
Section 5.5 Payment of Purchase Price, Cash Settlement, Secondary
Remarketing....................................................... 46
Section 5.6 Issuance of Shares of Common Stock............................ 50
Section 5.7 Adjustment of Settlement Rate................................. 50
Section 5.8 Notice of Adjustments and Certain Other Events................ 56
Section 5.9 Termination Event; Notice..................................... 57
Section 5.10 Early Settlement............................................. 58
Section 5.11 No Fractional Shares......................................... 60
Section 5.12 Charges and Taxes............................................ 60
Article VI Remedies 60
Section 6.1 Unconditional Right of Holders to Purchase Common Stock....... 60
Section 6.2 Restoration of Rights and Remedies............................ 61
Section 6.3 Rights and Remedies Cumulative................................ 61
Section 6.4 Delay or Omission Not Waiver.................................. 61
Section 6.5 Undertaking for Costs......................................... 61
Section 6.6 Waiver of Stay or Extension Laws.............................. 62
Article VII The Agent 62
Section 7.1 Certain Duties and Responsibilities........................... 62
Section 7.2 Notice of Default............................................. 63
Section 7.3 Certain Rights of Agent....................................... 63
Section 7.4 Not Responsible for Recitals or Issuance of Securities........ 64
Section 7.5 May Hold Securities........................................... 64
Section 7.6 Money Held in Custody......................................... 64
Section 7.7 Compensation and Reimbursement................................ 65
Section 7.8 Corporate Agent Required; Eligibility......................... 65
Section 7.9 Resignation and Removal; Appointment of Successor............. 66
iii
Section 7.10 Acceptance of Appointment by Successor....................... 67
Section 7.11 Merger, Conversion, Consolidation or Succession to Business.. 67
Section 7.12 Preservation of Information; Communications to Holders....... 68
Section 7.13 No Obligations of Agent...................................... 68
Section 7.14 Tax Compliance............................................... 68
Article VIII Supplemental Agreements................................................ 69
Section 8.1 Supplemental Agreements Without Consent of Holders............ 69
Section 8.2 Supplemental Agreements with Consent of Holders............... 69
Section 8.3 Execution of Supplemental Agreements.......................... 70
Section 8.4 Effect of Supplemental Agreements............................. 71
Section 8.5 Reference to Supplemental Agreements.......................... 71
Article IX Consolidation, Merger, Sale or Conveyance................................ 71
Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions................................... 71
Section 9.2 Rights and Duties of Successor Corporation.................... 72
Section 9.3 Opinion of Counsel Given to Agent............................. 72
Article X Covenants................................................................. 72
Section 10.1 Performance Under Purchase Contracts......................... 72
Section 10.2 Maintenance of Office or Agency.............................. 73
Section 10.3 Company to Reserve Common Stock.............................. 73
Section 10.4 Covenants as to Common Stock, Dividends and Distributions.... 73
Section 10.5 Tax Treatment................................................ 74
iv
PURCHASE CONTRACT AGREEMENT, dated as of May [ ], 2002 between ALLTEL
Corporation, a Delaware corporation (the "Company"), and X. X. Xxxxxx Trust
Company, National Association, a National banking association, acting as
purchase contract agent for the Holders of Securities (as defined herein) from
time to time (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 Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATIONS
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;
(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 hereof.
1
"Affiliate" has the same meaning as given to that term in Rule
405 promulgated under the Securities Act of 1933, as amended, as is in
effect on the date hereof.
"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 Market Value" has the meaning specified in Section
5.1 hereof.
"Applicable Ownership Interest" means, with respect to a
Corporate Unit and the Treasury Securities in the Treasury
Portfolio, (A) a 1/20, or 5%, undivided beneficial ownership interest
in a $1,000 principal or interest amount of a principal or interest
strip in a U.S. Treasury Security included in such Treasury Portfolio
which matures on or prior to May 17, 2005 and (B) for the scheduled
interest payment date on the Notes that occurs on the Purchase
Contract Settlement Date, in the case of a Successful Initial
Remarketing, or for each scheduled interest payment date on the Notes
that occurs after the Tax Event Redemption Date and on or before the
Purchase Contract Settlement Date, in the case of a Tax Event
Redemption, a .[ ]% undivided beneficial ownership interest in a
$1,000 principal or interest amount of a principal or interest strip
in a U.S. Treasury Security included in the Treasury Portfolio that
matures on or prior to that interest payment date.
"Applicable Principal Amount" means the aggregate principal
amount of the Notes which are components of Corporate Units on the
Initial Remarketing Date.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in
The City of New York, whether or not published on days that are Legal
Holidays, and of general circulation in The City of New York. The
Authorized Newspaper for the purposes of the Reset Announcement Date
is currently anticipated to 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 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
2
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 hereof.
"Business Day" means any day other than a Saturday, a 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 Merger Date" has the meaning set forth in Section 5.7(b)
(2) hereof.
"Cash Merger Notice" has the meaning set forth in Section 5.7
(b)(2) hereof.
"Cash Settlement" has the meaning set forth in Section 5.5(a)
(i) hereof.
"Certificate" means a Corporate Unit Certificate or a Treasury
Unit Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is
acting as a depositary for the Securities and in whose name, or in
the name of a nominee of that organization, shall be registered a
Global Certificate and which shall undertake to effect book entry
transfers and pledges of the Securities.
"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
hereof.
"Collateral" has the meaning specified in Section 2.1 of the
Pledge Agreement.
"Collateral Account" has the meaning specified in Article I
of the Pledge Agreement.
3
"Collateral Agent" means Wachovia Bank, National Association,
as Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the applicable
provisions of the Pledge Agreement, and thereafter "Collateral Agent"
shall mean the Person who is then the Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in Section
3.13 hereof.
"Common Equity Securities" means shares of a class of stock of
the Company that is not entitled to priority over any other class of
stock of the Company in the payment of dividends or with respect to
rights upon the liquidation, dissolution or winding up of the Company.
"Common Stock" means the Common Stock, $1.00 par value, of the
Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provisions of this Agreement, and
thereafter "Company" shall mean such successor.
"Constituent Person" has the meaning specified in Section
5.7(b).
"Contract Adjustment Payments" means the amount payable by
the Company in respect of each Purchase Contract constituting a part
of a Corporate Unit or a Treasury Unit equal to .[ ]% of the Stated
Amount per year, in each case 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 or 5.3 hereof. Contract
Adjustment Payments will accrue from [ ], 2002 and will be payable
quarterly in arrears on any Payment Date, commencing on August 17,
2002.
"Corporate Trust Office" means the principal 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 Chase Financial Tower, Suite 220, 000 X.
Xxxxx Xxxx, Xxxxxxxxx, Xxxx 00000.
"Corporate Units" means the collective rights and obligations
of a Holder of a Corporate Unit Certificate in respect of a Note or
an appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, subject in each case to the Pledge
thereof, and the related Purchase Contract.
"Corporate Unit Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Corporate Units specified on such certificate.
"Corporate Units Register" and "Corporate Units Registrar"
have the respective meanings specified in Section 3.5 hereof.
4
"Coupon Rate" means the percentage rate per year at which each
Note will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.7(a)(8) hereof.
"Custodial Agent" has the meaning specified in Article I of
the Pledge Agreement, which as described therein shall initially be
the same Person as the Collateral Agent.
"Deferred Contract Adjustment Payments" has the meaning
specified in Section 5.3 hereof.
"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
5.10(a) hereof.
"Early Settlement Amount" has the meaning specified in Section
5.10(a) hereof.
"Early Settlement Date" has the meaning specified in Section
5.10(a) hereof.
"Early Settlement Rate" has the meaning specified in Section
5.10(c) hereof.
"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
hereof.
"Expiration Time" has the meaning specified in Section
5.7(a)(6) hereof.
"Failed Initial Remarketing" has the meaning specified in
Section 5.4(a) hereof.
"Failed Secondary Remarketing" has the meaning specified in
Section 5.5(b).
"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.
"Global Note Certificate" means a certificate evidencing the
respective rights and obligations of Holders in respect of the
number of Notes specified on
5
such certificate and which is registered in the name of a Clearing
Agency or a nominee thereof.
"Holder", when used with respect to a Security, means the
Person in whose name the Security evidenced by a Corporate Unit
Certificate and/or a Treasury Unit Certificate is registered in the
related Corporate Units Register and/or Treasury Units Register, as
the case may be.
"Indenture" means the Indenture dated as of January 1, 1987,
by and between the Company and the Indenture Trustee (or its
predecessor), as supplemented by a First Supplemental Indenture dated
as of March 1, 1987, a Second Supplemental Indenture dated as of
April 1, 1989, a Third Supplemental Indenture dated as of May 8,
1990, a Fourth Supplemental Indenture dated as of March 1, 1991, a
Fifth Supplemental Indenture dated as of October 15, 1993, a Sixth
Supplemental Indenture dated as of April 1, 1994, a Seventh
Supplemental Indenture dated as of September 1, 1995, an Eighth
Supplemental Indenture dated as of March 1, 1996, a Ninth
Supplemental Indenture dated as of April 1, 1999, and a Tenth
Supplemental Indenture dated as of May [ ], 2002, and as further
supplemented and amended in accordance with the terms thereof.
"Indenture Trustee" means X. X. Xxxxxx Trust Company, National
Association, as trustee under the Indenture, or any successor thereto.
"Initial Remarketing" has the meaning specified in Section 5.4
hereof.
"Initial Remarketing Date" has the meaning specified in
Section 5.4 hereof.
"Issuer Order" or "Issuer Request" means a written order or
request signed in the name of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, an Executive Vice
President, or a Senior Vice President, and by its Chief Financial
Officer, its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Agent.
"New York Office" shall have the meaning set forth in Section
10.2 hereof.
"Notes" means the series of senior notes of the Company
designated the senior notes due May 17, 2007, to be issued under the
Indenture as of the date hereof.
"NYSE" has the meaning specified in Section 5.1 hereof.
"Officer's Certificate" means a certificate of the Company
signed on its behalf by the Chairman of the Board, its Chief
Executive Officer, its President, an Executive Vice President, or a
Senior Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to
the Agent.
6
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company or
an Affiliate and who shall be reasonably acceptable to the Agent.
"Outstanding Securities", with respect to the Corporate Units
or Treasury Units, means, as of the date of determination, all
Corporate Units or Treasury Units, as the case may be, evidenced by
Certificates theretofore authenticated, executed and delivered under
this Agreement, except:
(i) If a Termination Event has occurred, (A) Treasury
Units for which the Stated Amount of Treasury Securities has
been theretofore deposited with the Agent in trust for the
Holders of such Treasury Units and (B) Corporate Units for
which the Stated Amount of the related Notes or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, has been theretofore deposited
with the Agent in trust for the Holders of such Corporate
Units;
(ii) Corporate Units or 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) Corporate Units or 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 protected purchaser in whose hands
the Corporate Units or Treasury Units evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the
-------- -------
requisite number of the Corporate Units or Treasury Units have given
any request, demand, authorization, direction, notice, consent or
waiver hereunder, Corporate 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 Corporate
Units or Treasury Units which a Responsible Officer of the Agent
actually knows to be so owned shall be so disregarded. Corporate
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 Corporate Units or Treasury Units and
that the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means each February 17, May 17, August 17 and
November 17, commencing August 17, 2002.
7
"Permitted Investments" has the meaning set forth in Article 1
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
Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, and of the Treasury
Securities, in each case constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of May
[ ], 2002, by and among the Company, the Collateral Agent and the
Agent, on its own behalf and as attorney-in-fact for the Holders from
time to time of the Securities, as the same may hereafter be amended
in accordance with the terms thereof.
"Predecessor Certificate" means a Predecessor Corporate Unit
Certificate or a Predecessor Treasury Unit Certificate.
"Predecessor Corporate Unit Certificate" of any particular
Corporate Unit Certificate means every previous Corporate Unit
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Corporate Units evidenced
thereby; and, for the purposes of this definition, any Corporate Unit
Certificate authenticated and delivered under Section 3.10 hereof in
exchange for or in lieu of a mutilated, destroyed, lost or stolen
Corporate 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 Corporate 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 hereof 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 The City of New York.
"Proceeds" has the meaning set forth in Article 1 of the
Pledge Agreement.
8
"Purchase Contract", when used with respect to any Security,
means the contract forming a part of such Security and obligating the
Company to sell and the Holder of such Security to purchase Common
Stock on the terms and subject to the conditions set forth in Article
Five hereof.
"Purchase Contract Settlement Date" means May 17, 2005.
"Purchase Contract Settlement Fund" has the meaning specified
in Section 5.6 hereof.
"Purchase Price" has the meaning specified in Section 5.1
hereof.
"Purchased Shares" has the meaning specified in Section
5.7(a)(6) hereof.
"Quotation Agent" means (i) Xxxxxxx Xxxxx Government
Securities, Inc. and its respective successors or (ii) any other
primary U.S. government securities dealer in New York City selected by
the Company.
"Record Date":
(a) for the distribution payable in respect of the Notes on
any Payment Date;
(b) for the distribution payable in respect of the Applicable
Ownership Percentage of the Treasury Portfolio on any Payment Date;
and
(c) for the Contract Adjustment Payment payable on any
Payment Date,
means, in each case, the first day of the month in which the
relevant Payment Date occurs.
"Redemption Amount" means, for each Note, the product of (i)
the principal amount of such Note and (ii) a fraction whose numerator
is the applicable Treasury Portfolio Purchase Price and whose
denominator is the applicable Tax Event Redemption Principal Amount.
"Redemption Price" means the redemption price per Note equal
to the Redemption Amount plus any accrued and unpaid interest on such
Note to the date of redemption.
"Register" means the Corporate Units Register and the Treasury
Units Register.
"Registrar" means the Corporate Units Registrar and the
Treasury Units Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4
hereof.
9
"Remarketing Agreement" means the Remarketing Agreement dated
as of May [ ], 2002 by and among the Company, the Remarketing Agent
and the Agent.
"Remarketing Fee" has the meaning specified in Section 5.4
hereof.
"Remarketing Per Note Price" means the Treasury Portfolio
Purchase Price divided by the number of Notes held as components of
Corporate Units and remarketed in the Initial Remarketing.
"Reorganization Event" has the meaning specified in Section
5.7(b) hereof.
"Reset Agent" means a nationally recognized investment banking
firm chosen by the Company to determine the Reset Rate. It is
currently anticipated that Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated will act in such capacity.
"Reset Announcement Date" means, in the case of the Reset Rate
to be determined on the Initial Remarketing Date, the tenth Business
Day immediately preceding February 17, 2005 and, in the case of the
Reset Rate to be determined on the Secondary Remarketing Date, the
tenth Business Day immediately preceding the Purchase Contract
Settlement Date.
"Reset Rate" means the interest rate per year (to be
determined by the Reset Agent in accordance with this Agreement),
equal to the sum of (X) the Reset Spread and (Y) the rate of interest
on (1) in the case of the Reset Rate to be determined on the Initial
Remarketing Date, the Two and One-Quarter Year Benchmark Treasury in
effect on the Initial Remarketing Date or (2) in the case of the
Reset Rate to be determined on the Secondary Remarketing Date, the
Two-Year Benchmark Treasury in effect on the Secondary Remarketing
Date; provided, however, that the Reset Rate shall not exceed the
-------- -------
maximum rate permitted by applicable law.
"Reset Spread" means (a) in the case of the Reset Rate to be
determined on the Initial Remarketing Date, a spread amount to be
determined by the Reset Agent on the applicable Reset Announcement
Date as the appropriate spread so that the Reset Rate will be the
interest rate that the Notes should bear in order for the Applicable
Principal Amount of Notes to have an approximate aggregate market
value of 100.5% of the Treasury Portfolio Purchase Price on the
Initial Remarketing Date and (b) in the case of the Reset Rate to be
determined on the Secondary Remarketing Date, a spread amount
determined by the Reset Agent on the applicable Reset Announcement
Date as the appropriate spread so that the Reset Rate will be the
interest rate that the Notes should bear in order for the Notes to
have an approximate market value of 100.5% of their principal amount
on the Secondary Remarketing Date.
10
"Responsible Officer", when used with respect to the Agent,
means any officer of the Agent with primary responsibility for the
administration of this Agreement and the Pledge Agreement.
"Secondary Remarketing" has the meaning specified in Section
5.5(b) hereof.
"Secondary Remarketing Date" has the meaning specified in
Section 5.5(b) hereof.
"Securities Intermediary" has the meaning specified in Article
I of the Pledge Agreement, which as described therein shall initially
be the same Person as the Collateral Agent.
"Security" means a Corporate Unit or a Treasury Unit.
"Senior Indebtedness" means indebtedness of any kind of the
Company unless the instrument under which such indebtedness is
incurred expressly provides that it is on a parity in right of
payment with or subordinate in right of payment to the Contract
Adjustment Payments.
"Separate Notes" means Notes that are no longer a component of
Corporate Units.
"Separate Notes Purchase Price" means the amount in cash equal
to the product of the Remarketing Per Note Price multiplied by the
number of Separate Notes remarketed in the Initial Remarketing.
"Settlement Rate" has the meaning specified in Section 5.1
hereof.
"Stated Amount" means $50.
"Subsidiary" means (i) a corporation, a majority of whose
capital stock with voting power, under ordinary circumstances, to
elect directors is, at the date of determination, directly or
indirectly owned by the Company, by one or more Subsidiaries of the
Company or by the Company and one or more Subsidiaries of the
Company, (ii) a partnership in which the Company or a Subsidiary of
the Company holds a majority interest in the equity capital or
profits of such partnership, or (iii) any other Person (other than a
corporation) in which the Company, a Subsidiary of the Company or the
Company and one or more Subsidiaries of the Company, directly or
indirectly, at the date of determination, has (x) at least a majority
ownership interest or (y) the power to elect or direct the election
of a majority of the directors or other governing body of such Person.
"Successful Initial Remarketing" has the meaning specified in
Section 5.4 hereof.
11
"Successful Secondary Remarketing" has the meaning specified
in Section 5.5(b) hereof.
"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, or
change (including any announced proposed change) in, the laws (or any
regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein affecting taxation,
(b) any amendment to or change in an interpretation or application of
such laws or regulations by any legislative body, court, governmental
agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws
or regulations that differs from the generally accepted position on
May [ ], 2002, which amendment, change or proposed change is effective
or which interpretation or pronouncement is announced on or after [ ],
2002, there is more than an insubstantial risk that interest or
original issue discount on the Notes 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 the Notes, at the option of the
Company, in whole but not in part, on not less than 30 days nor more
than 60 days1' written notice.
"Tax Event Redemption Date" means the date upon which a Tax
Event Redemption is to occur.
"Tax Event Redemption Principal Amount" means, either:
(a) if the Tax Event Redemption Date occurs:
(i) prior to February 17, 2005; or
(ii) prior to the Purchase Contract Settlement Date
(in the event of a Failed Initial Remarketing),
the aggregate principal amount of the Notes which are
components of Corporate Units on the Tax Event Redemption
Date; or
(b) if the Tax Event Redemption Date occurs:
(i) on or after February 17, 2005; or
(ii) on or after the Purchase Contract Settlement
Date (in the event of a Failed Initial Remarketing),
the aggregate principal amount of the Notes
outstanding on the Tax Event Redemption Date.
12
"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of
the following events: (i) at any time on or prior to the Purchase
Contract Settlement Date, a judgment, decree or court order shall
have been entered granting relief under the Bankruptcy Code,
adjudicating the Company to be insolvent, or approving as properly
filed a petition seeking reorganization or liquidation of the Company
under the Bankruptcy Code or any other similar applicable Federal or
State law, and, unless such judgment, decree or order shall have been
entered within 60 days prior to the Purchase Contract Settlement
Date, such decree or order shall have continued undischarged and
unstayed for a period of 60 days; or (ii) at any time on or prior to
the 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 Purchase Contract
Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days, or (iii) at any
time on or prior to the Purchase Contract Settlement Date, the
Company shall file a petition for relief under the Bankruptcy Code,
or shall consent to the filing of a bankruptcy proceeding against it,
or shall file a petition or answer or consent seeking reorganization
or liquidation under the Bankruptcy Code or any other similar
applicable Federal or State law, or shall consent to the filing of
any such petition, or shall consent to the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or 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 hereof.
"TIA" means the Trust Indenture Act of 1939, as amended, or
any successor statute.
"Trading Day" has the meaning specified in Section 5.1 hereof.
"Treasury Portfolio":
(1) in connection with the Initial Remarketing, means a
portfolio of zero-coupon U.S. Treasury Securities consisting of (x)
principal or interest strips of U.S. Treasury Securities that mature
on or prior to May 17, 2005 in an aggregate amount equal to the
Applicable Principal Amount and (y) with respect to the scheduled
interest payment date on the Notes that occurs on the Purchase
Contract Settlement Date, principal or interest strips of U.S.
Treasury Securities that mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the
13
Notes on such date if the applicable Coupon Rate on the Notes were not
reset to the Reset Rate as described in Section 4.1 hereof; and
(2) in connection with a Tax Event Redemption, means
either:
(a) (i) if the Tax Event Redemption Date occurs prior
to February 17, 2005; or
(ii) prior to the Purchase Contract Settlement Date
(in the event of a Failed Initial Remarketing),
a portfolio of zero-coupon U.S. Treasury Securities
consisting of (x) principal or interest strips of U.S.
Treasury Securities which mature on or prior to May 17, 2005
in an aggregate amount equal to the applicable Tax Event
Redemption Principal Amount and (y) with respect to each
scheduled interest payment date on the Notes that occurs after
the Tax Event Redemption Date and on or before the Purchase
Contract Settlement Date, principal or interest strips of U.S.
Treasury Securities that mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that
would be due on the applicable Tax Event Redemption Principal
Amount of the Notes on such date; or
(b) (i) if the Tax Event Redemption Date occurs on or
after February 17, 2005; or
(ii) on or after the Purchase Contract Settlement
Date (in the event of a Failed Initial Remarketing),
a portfolio of zero-coupon U.S. Treasury Securities
consisting of (x) principal or interest strips of U.S.
Treasury Securities which mature on or prior to May 17, 2005
in an aggregate amount equal to the applicable Tax Event
Redemption Principal Amount and (y) with respect to each
scheduled interest payment date on the Notes that occurs after
the Tax Event Redemption Date, principal or interest strips of
such U.S. Treasury Securities that mature on or prior to such
date in an aggregate amount equal to the aggregate interest
payment that would be due on the applicable Tax Event
Redemption Principal Amount of the Notes on such date.
"Treasury Portfolio Purchase Price":
(a) in the case of a Tax Event Redemption, 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 applicable Treasury
Portfolio for settlement on the Tax Event Redemption Date; or
14
(b) in the case of the Initial Remarketing, means the
lowest aggregate price quoted by the Primary Treasury Dealer to the
Quotation Agent on the Initial Remarketing Date for the purchase of
the applicable Treasury Portfolio for settlement on February 17, 2005.
"Treasury Security" means zero-coupon U.S. Treasury Securities
(CUSIP Number [ ]), which are the principal strip of the U.S. Treasury
Securities that are scheduled to mature on May 15, 2005.
"Treasury Units" means the collective rights and obligations
of a Holder of a Treasury Unit Certificate in respect of the Treasury
Securities, subject to Pledge thereof, and the related 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 Units Register" and "Treasury Units Registrar" have
the respective meanings specified in Section 3.5 hereof.
"Two-Year Benchmark Treasury" means 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 Notes, as agreed upon by the Company and the Reset Agent. The
rate for the Two-Year Benchmark Treasury will be the bid side rate
displayed at 10:00 A.M., New York City time, on the third Business
Day immediately preceding the Purchase Contract Settlement Date in
the Telerate system (or if the Telerate system is (a) no longer
available on the Secondary Remarketing 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 rate, such other
nationally recognized quotation system as, in the opinion of the
Reset Agent (after consultation with the Company), is appropriate).
If such rate is not so displayed, the rate for the Two-Year Benchmark
Treasury shall be, as calculated by the Reset Agent, the yield to
maturity for the Two-Year 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 Secondary Remarketing 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).
"Two and One-Quarter Year Benchmark Treasury" means 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 Notes, as agreed upon by the
Company and the Reset Agent. The rate for the Two and One-Quarter
Year Benchmark Treasury will be the bid side rate displayed at 10:00
A.M., New York City time, on the Initial Remarketing Date in
15
the Telerate system (or if the Telerate system is (a) no longer
available on the Initial Remarketing 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 rate, such other
nationally recognized quotation system as, in the opinion of the Reset
Agent (after consultation with the Company) is appropriate). If such
rate is not so displayed, the rate for the Two and One-Quarter Year
Benchmark Treasury shall be, as calculated by the Reset Agent, the
yield to maturity for the Two and One-Quarter Year 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 Initial Remarketing 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).
"Underwriting Agreement" means the Terms Agreement dated April
[ ], 2002 between the Company, Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated, Banc of America Securities
LLC and Xxxxxxx Xxxxx Barney, Inc. as underwriters.
Section 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
reasonably requested by the Agent, an Opinion of Counsel addressed to the Agent
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:
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) 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;
(3) a statement that, in the opinion of each such Person, he or
she or it has made such examination or investigation as is necessary to
enable such individual to
16
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
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 the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless the Company 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, the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless the Person giving such certificate or
Opinion of 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.
17
(c) The ownership of Securities shall be proved by the Corporate
Units Register or the Treasury Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Agent
or the Company in reliance thereon, whether or not notation of such action is
made upon such Certificate.
(e) The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding 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 Corporate 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 Corporate 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, instruction, 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,
18
(1) 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)
and personally delivered or mailed, first-class postage prepaid, to the
Agent at Chase Financial Tower, Suite 220, 000 X. Xxxxx Xxxx, Xxxxxxxxx,
Xxxx 00000, Attention: Institutional Trust Services, Facsimile: [ ], with a
copy to: 15th Floor, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at
any other address previously furnished in writing by the Agent to the
Holders and the Company; or
(2) 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 Xxx Xxxxxx Xxxxx,
Xxxxxx Xxxx, Xxxxxxxx, 00000, Attention: [ ], Facsimile: [ ] or at any
other address previously furnished in writing to the Agent by the Company;
or
(3) 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
(4) 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
Chase Financial Tower, Suite 220, 000 X. Xxxxx Xxxx, Xxxxxxxxx, Xxxx 00000,
Attention: Institutional Trust Services, Facsimile: [ ], with a copy to the
Agent at 15th Floor, 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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.
19
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.
Section 1.9 Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, then, to the extent permitted by law, 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 applicable 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 ANY
CONFLICT OF LAW PROVISION THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY
OTHER JURISDICTION.
Section 1.12 Legal Holidays.
In any case where any Purchase Contract Settlement Date or any Early
Settlement Date shall not be a Business Day, then (notwithstanding any other
provision of this Agreement, the Corporate Unit Certificates or the Treasury
Unit Certificates), the Purchase Contracts shall not be performed on such date,
but the Purchase Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on the Purchase
Contract Settlement Date or Early Settlement Date, as applicable.
20
In any case where the Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement, the Corporate Unit
Certificates or the Treasury Unit Certificates), the Contract Adjustment
Payment shall not be made on such date, but shall be made on the immediately
following Business Day with the same force and effect as if made on the Payment
Date, provided that no interest shall accrue or be payable by the Company or to
any Holder for the period from and after any such Payment Date unless there
shall be a default in the payment due on such next succeeding Business Day,
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 the applicable Payment 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 at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
Section 1.15 Appointment of Financial Institution as Agent for the
Company.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Agent and the
holders, under this Agreement and the Purchase Contracts, by giving notice of
such appointment in the manner provided in Section 1.5 hereof. Any such
appointment shall not relieve the Company in any way from its obligation
hereunder.
Section 1.16 No Waiver.
No failure on the part of the Company, the Agent, the Collateral
Agent, the Securities Intermediary or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Company, the Agent, the Collateral
Agent, the Securities Intermediary or any of their respective agents of any
right, power or remedy hereunder preclude any further exercise thereof or the
exercise of any right, power or remedy. The remedies herein are cumulative and
are not exclusive of any remedies provided by law.
21
ARTICLE II
CERTIFICATE FORMS
Section 2.1 Forms of Certificates Generally.
The Corporate Unit Certificates (including the form of Purchase
Contract forming part of the Corporate 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 Corporate Units are listed or
any depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Corporate Unit Certificates, as
evidenced by their execution of the Corporate Unit Certificates.
The definitive Corporate Unit Certificates may be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Corporate Unit Certificates, consistent with the provisions of this Agreement,
as evidenced by their execution thereof.
The Treasury Unit Certificates (including the form of Purchase
Contract 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 are 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 may be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing such 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
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART
FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE
IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
22
Section 2.2 Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Corporate
Units shall be in substantially the form set forth on the form of the Corporate
Unit Certificates.
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.
ARTICLE III
THE SECURITIES
Section 3.1 Title and Terms; Denominations.
The aggregate number of Corporate Units and Treasury Units evidenced
by Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 25,000,000 (or 28,750,000 if the underwriters'
overallotment option pursuant to the Underwriting Agreement is exercised in
full) except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Certificates
pursuant to Section 3.4, 3.5, 3.9, 3.10, 3.13, 3.14, 5.10 or 8.5 hereof.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
Section 3.2 Rights and Obligations Evidenced by the Certificates.
Each Corporate Unit Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing the
ownership by the Holder thereof of a beneficial interest in a Note or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject to the Pledge of such Note or the Applicable Ownership Interest of the
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 Purchase Contract. The Agent as attorney-in-fact for, and on behalf
of, the Holder of each Corporate Unit shall pledge, pursuant to the Pledge
Agreement, the Note or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming a part of such Corporate Unit, to the
Collateral Agent and grant to the Collateral Agent a security interest in the
right, title, and interest of such Holder in such Note or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for the
benefit of the Company, to secure the obligation of the Holder under each
Purchase Contract to purchase the shares of Common Stock.
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
ownership interest in a Treasury Security with a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and the rights and obligations of the Holder
thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Treasury Unit shall
pledge, pursuant to the Pledge Agreement, the Treasury Security to the
Collateral Agent and grant to the Collateral Agent a security interest in
23
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 each
Purchase Contract to purchase the Common Stock of the Company.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contract shall not entitle the Holder of a Security to
any rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
Section 3.3 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 (i) any
one of its Chairman of the Board, its Chief Executive Officer, its President,
an Executive Vice President or a Senior Vice President and (ii) any one of its
Treasurer or one of its Assistant Treasurers or 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 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
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 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.
24
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 that are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of
any securities exchange on which the Corporate Units or Treasury Units are
listed, or as may, consistently herewith, be determined by the officers of the
Company executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office or the New York 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
Corporate 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 Corporate 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
"Corporate Units Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Corporate
Unit Certificates and of transfers of Corporate Unit Certificates (the Agent,
in such capacity, the {"Corporate Units Registrar") and a Register (the
"Treasury Units Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Treasury Unit
Certificates and of transfers of Treasury Unit Certificates (the Agent, in such
capacity, the "Treasury Units Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or the New York 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 Corporate
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
Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office or the New York
Office. Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
25
execute on behalf of the Holder, and deliver the Certificates that 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 Corporate
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
Corporate 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 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 3.4,
3.6, 3.9 and 8.5 hereof not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver, any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver (or request the Company to deliver) the shares of Common
Stock issuable in respect of the Purchase Contracts forming a part of the
Securities evidenced by such Certificate (together with any cash or other
property to which the Holder is entitled), or (ii) if a Termination Event shall
have occurred prior to the Purchase Contract Settlement Date, transfer the
Notes, the appropriate Applicable Ownership Interest of the Treasury Portfolio
or the Treasury Securities, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Notwithstanding anything in this Agreement to the contrary, no
transfer by any Holder to any Person other than the Company of any Corporate
Unit, Treasury Unit or Note may be made or will be recognized unless such
instrument has been surrendered and accepted for registration of transfer in
accordance with the provisions of this Section 3.5, or unless such transfer is
effectuated through the book-entry system described in Section 3.6.
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 by, or on behalf of, the Company. Such Global Certificate 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
26
will receive a definitive Certificate representing such Beneficial Owner's
interest in such Global Certificate, except as provided in Section 3.9 hereof.
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 hereof:
(a) the provisions of this Section 3.6 hereof shall be in full
force and effect;
(b) the Company and the Agent shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including receiving
approvals, votes or consents hereunder) as the Holder of the 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 hereof
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 hereof shall control; and
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by law
and agreements between such Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants.
Section 3.7 Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Agent shall give such notices
and communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency or the nominee of a Clearing
Agency, the Company or the 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 hereof or (ii) there shall have occurred and be continuing a
default by the Company in respect of its obligations under one or more Purchase
Contracts, or one or more Notes, 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.
27
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 Corporate
Units or Treasury Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a protected 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 Corporate Units
or Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver (or request the Company to
deliver) the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate
(together with any cash or other property to which the Holder is entitled), or
(ii) if a Termination Event shall have occurred prior to the Purchase Contract
Settlement Date, transfer the Notes, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities, as the case may
be, evidenced thereby, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable 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.
28
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 as the owner
of the Corporate Units or Treasury Units evidenced thereby, for the purpose of
(subject to any applicable Record Date) receiving interest on the Notes or on
the maturing quarterly interest strips of the Treasury Portfolio, as
applicable, receiving payments of Contract Adjustment Payments (if any), for
the performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any interest on the Notes 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 giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate. None of
the Company, the Agent nor any agent of the Company or the Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Global
Certificate or maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 3.12 Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, after the occurrence of a Termination Event or
pursuant to an Early Settlement, or upon the registration of a transfer or
exchange of a Security, or a Collateral Substitution or the re-establishment of
a Corporate Unit or Treasury Unit shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for
any Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
be disposed of by the Agent in its customary manner.
29
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13 Establishment of Treasury Units.
Subject to the conditions set forth in this Agreement, a Holder may
separate the Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable, from the related Purchase Contracts in
respect of a Corporate Unit by substituting for such Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
Treasury Securities in an aggregate principal amount of such Notes or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as applicable (a
"Collateral Substitution"), at any time from and after the date of this
Agreement and on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the Notes and on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
Date in the case of the appropriate Applicable Ownership Interest of the
Treasury Portfolio, in each case by (a) depositing with the Collateral Agent
Treasury Securities having an aggregate principal amount at maturity equal to
the aggregate principal amount of the Notes comprising part of such Corporate
Units or the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio comprising part
of such Corporate Unit, as the case may be, and (b) transferring the related
Corporate Units to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
---------
transferred the relevant amount of Treasury Securities to the Collateral Agent
and requesting that the Agent instruct the Collateral Agent to release the
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, underlying such Corporate Units, whereupon the
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the Treasury
---------
Securities described in clause (a) above and the instruction described in
clause (b) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder, Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, having the appropriate aggregate principal amount in the case of
such Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from the Pledge, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Corporate Units;
(ii) transfer the Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, 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 hereof evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Corporate Units.
Holders who elect to separate the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from the
related Purchase Contract and to
30
substitute Treasury Securities for such Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Corporate Units if Treasury Securities are being substituted
for the Notes, or (ii) only in integral multiples of [ ] Corporate Units if
Treasury Securities are being substituted for appropriate Applicable Ownership
Interest of the Treasury Portfolio.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Corporate Units
or fails to deliver a Corporate Unit Certificate(s) to the Agent after
depositing Treasury Securities with the Collateral Agent, the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, constituting a part of such Corporate Units, and any interest on
such Notes or the Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, shall be held in the name of the Agent or its nominee in trust
for the benefit of such Holder, until such Corporate Units are so transferred
or the Corporate Unit Certificate is so delivered, as the case may be, or, with
respect to a Corporate Unit Certificate, such Holder provides evidence
satisfactory to the Company and the Agent that such Corporate 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 Purchase
Contract underlying a Corporate Unit remains in effect, such Corporate Unit
shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Corporate Unit may be acquired, and may be transferred
and exchanged, only as a Corporate Unit.
Section 3.14 Reestablishment of Corporate Units.
Subject to the conditions set forth in this Agreement, a Holder of a
Treasury Unit may recreate Corporate Units at any time (i) on or prior to the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
if a Tax Event Redemption or a Successful Initial Remarketing has not occurred,
and (ii) on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption or a Successful
Initial Remarketing has occurred and an Applicable Ownership Interest in the
Treasury Portfolio has become a component of the Corporate Units, in each case
by (a) depositing with the Collateral Agent Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, having an
aggregate principal amount in the case of the Notes, or an appropriate
Applicable Ownership Interest (as defined in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, equal to the
aggregate principal amount of the Treasury Securities comprising part of the
Treasury Units and (b) transferring the related Treasury Units to the Agent
accompanied by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has transferred the relevant amount of Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, to the Collateral Agent and requesting that the Agent instruct the
Collateral
31
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 C hereto. Upon receipt of the Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, described in clause (a) above and the instruction described in
clause (b) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder, the
Treasury Securities having a corresponding aggregate principal amount from the
Pledge, free and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Treasury Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Unit Certificate executed by the Company in accordance with
Section 3.3 hereof evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Treasury Units.
Holders who elect to reestablish Corporate Units shall be responsible
for any fees or expenses (including, without limitation, fees and expenses
payable to the Collateral Agent for its services as Collateral Agent) in
respect of the reestablishment and the Company shall not be responsible for any
such fees.
Holders of Treasury Units may reestablish Corporate Units in integral
multiples of 20 Treasury Units for the same multiple of 20 Corporate Units if a
Tax Event Redemption or a Successful Initial Remarketing has not occurred, and
in integral multiples of [ ] Treasury Units for [ ] Corporate Units if a Tax
Event Redemption or a Successful Initial Remarketing has occurred.
In the event a Holder re-establishing Corporate Units 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(s) to the Agent after depositing
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, with the Collateral Agent, the Treasury
Securities constituting a part of such Treasury Units shall be held in the name
of the Agent or its nominee in trust for the benefit of such Holder, until such
Treasury Units are so transferred or the Treasury Unit Certificate is so
delivered, as the case may be, or, with respect to a Treasury Unit Certificate,
such Holder provides evidence satisfactory to the Company and the Agent that
such Treasury Unit Certificate 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 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
Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged, only as a Treasury Unit.
32
Section 3.15 Transfer of Collateral upon Occurrence of Termination
Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Notes, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Corporate Units and the Treasury Units pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, from each Holder by
written request mailed to such Holder at its address as it appears in the
Corporate Units Register or the Treasury Units Register, as the case may be.
Upon book-entry transfer of the Corporate Units or Treasury Units or delivery
of a Corporate Unit Certificate or a Treasury Unit Certificate to the Agent
with such transfer instructions, the Agent shall transfer the Notes, the
Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities,
as the case may be, underlying such Corporate 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; provided, however, that, to
-------- -------
the extent that a Holder of Corporate Units or Treasury Units would otherwise be
entitled to receive less than $1,000 principal amount at maturity of the
Treasury Portfolio or the Treasury Securities, the Agent shall dispose of such
securities for cash, and transfer the appropriate amount of such cash to such
Holder in accordance with such Holder's instructions. In the event a Holder of
Corporate Units or Treasury Units fails to effect such transfer or delivery,
the Notes, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, underlying such Corporate
Units or Treasury Units, as the case may be, and any distributions thereon,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Corporate Units or Treasury Units are transferred or
the Corporate Unit Certificate or Treasury Unit Certificate is surrendered or
such Holder provides satisfactory evidence that such Corporate 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.
Section 3.16 No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a Person performing similar functions, its trustee in
the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or federal law providing for reorganization or
liquidation.
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" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and 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
33
omission of such numbers. The Company will promptly notify the Agent of any
changes in the "CUSIP" numbers.
ARTICLE IV
THE NOTES AND APPLICABLE OWNERSHIP INTEREST
IN THE TREASURY PORTFOLIO
Section 4.1 Interest and Other Payments; Rights to Payments Preserved;
Rate Reset; Notice.
Any distribution on any Note or on the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, which is made
on any Payment Date shall, subject to receipt thereof by the Agent from the
Indenture Trustee or from the Collateral Agent as provided by the terms of the
Pledge Agreement, be paid to the Person in whose name the Corporate Unit
Certificate (or one or more Predecessor Corporate Unit Certificates) of which
such Note or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, is a part is registered at the close of business
on the Record Date for such Payment Date.
Each Corporate Unit Certificate evidencing Notes or the appropriate
Applicable Ownership interest in the Treasury Portfolio delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other Corporate Unit Certificate shall carry the rights to accrued and unpaid
distributions, and other amounts that are to accrue, which were or will be
carried by the Notes or the appropriate Applicable Ownership Interest in the
Treasury Portfolio underlying such other Corporate Unit Certificate.
In the case of any Corporate Units with respect to which Cash
Settlement of the underlying Purchase Contract is effected on the Business Day
immediately preceding the Purchase Contract Settlement Date pursuant to prior
notice, or with respect to which Early Settlement of the underlying 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 Notes or distributions on the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying such Corporate Units
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 distributions shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Corporate Unit Certificate
(or one or more Predecessor 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 Corporate Units with respect
to which Cash Settlement or Early Settlement of the underlying Purchase
Contract is effected on the Business Day immediately preceding the 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,
distributions on the related Notes or on the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, that would otherwise be
payable after the Purchase Contract Settlement Date or Early Settlement Date
shall not be payable hereunder to the Holder of such Corporate Units; provided,
--------
however, that to the extent that such Holder
-------
34
continues to hold the separated Notes that formerly comprised a part of such
Holder's Corporate Units, such Holder shall be entitled to receive any payments
made on such separated Notes.
The applicable Coupon Rate on the Notes on and after February 17, 2005
will be reset on the Initial Remarketing Date to the applicable Reset Rate
(such Reset Rate to be in effect on and after February 17, 2005), except in the
event of a Failed Initial Remarketing. In the event of a Failed Initial
Remarketing, the applicable Coupon Rate on the Notes outstanding on and after
the Purchase Contract Settlement Date will be reset on the Secondary
Remarketing Date to the applicable Reset Rate (such Reset Rate to be in effect
on and after the Purchase Contract Settlement Date), except in the event of a
Failed Secondary Remarketing. On the applicable Reset Announcement Date, the
Reset Spread and the Two-Year Benchmark Treasury or Two and One-Quarter
Benchmark Treasury, as applicable, to be used to determine the Reset Rate will
be announced by the Company. On the Business Day immediately following the
Reset Announcement Date, the Holders of Notes will be notified of such Reset
Spread and Two-Year Benchmark Treasury or Two and One-Quarter Benchmark
Treasury, as applicable, by the Company. Such notice shall be sufficiently
given to Holders of Notes if published in an Authorized Newspaper in The City
of New York.
Not later than seven calendar days nor more than fifteen calendar days
prior to the Reset Announcement Date, the Company will notify DTC or its
nominee (or any successor Clearing Agency or its nominee) by first-class mail,
postage prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Corporate Units or Treasury Units of such Reset
Announcement Date and, in the case of a Secondary Remarketing, the procedures
to be followed by Holders of Corporate Units who intend to settle their
obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2 Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Notes
pledged with the Collateral Agent but only to the extent instructed by the
Holders as described below. Upon receipt of notice of any meeting at which
holders of Notes are entitled to vote or upon any solicitation of consents,
waivers or proxies of holders of Notes, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Corporate Units a notice (prepared by the
Company) (a) containing such information as is contained in the notice or
solicitation, (b) stating that each Holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Notes entitled to vote) shall be entitled
to instruct the Agent as to the exercise of the voting rights pertaining to the
Notes underlying their Corporate Units and (c) stating the manner in which such
instructions may be given. Upon the written request of the Holders of Corporate
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 Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a Corporate Unit, the Agent shall abstain from voting the Notes
underlying such Corporate Units. The Company hereby agrees, if applicable, to
solicit Holders of Corporate Units to timely instruct the Agent in order to
enable the Agent to vote such Notes.
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Section 4.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to February 17,
2005 or in the event of a Failed Initial Remarketing, prior to the Purchase
Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply, out of the aggregate Redemption Price for the
Notes that are components of Corporate Units, an amount equal to the aggregate
Redemption Amount for the Notes that are components of Corporate Units to
purchase on behalf of the Holders of Corporate Units the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to the Agent for
payment to the Holders of such Corporate Units. The Treasury Portfolio will be
substituted for the pledged Notes, 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 Corporate Unit to purchase the Common Stock of the Company
under the Purchase Contract constituting a part of such Corporate Units.
Following the occurrence of a Tax Event Redemption prior to February 17, 2005,
or, in the event of a Failed Initial Remarketing, prior to the Purchase
Contract Settlement Date, the Holders of Corporate Units and the Collateral
Agent shall have such security interests, rights and obligations with respect
to the Treasury Portfolio as the Holder of Corporate Units and the Collateral
Agent had in respect of the Notes, as the case may be, subject to the Pledge
thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and
any reference herein or in the Certificates to the Note shall be deemed to be a
reference to such Treasury Portfolio and any reference herein or in the
Certificates to interest on the Notes shall be deemed to be a reference to
corresponding distributions on the Treasury Portfolio. The Company may cause to
be made in any Corporate Unit Certificates thereafter to be issued such change
in phraseology and form (but not in substance) as may be appropriate to reflect
the substitution of the Treasury Portfolio for Notes as collateral.
Section 4.4 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Indenture Trustee shall use "CUSIP" numbers
in notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Indenture Trustee and the Agent of any changes in the "CUSIP" numbers.
ARTICLE V
THE PURCHASE CONTRACTS
Section 5.1 Purchase of Shares of Common Stock.
Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless an Early Settlement has occurred in accordance with Section
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5.10 hereof, or, on or prior to the Purchase Contract Settlement Date, there
shall have occurred a Termination Event with respect to the Security of which
such Purchase Contract is a part. 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 Purchase
Contract .[ ], which is equal to the Stated Amount divided by the Threshold
Appreciation Price, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price but is greater than $[ ], (the "Reference Price"),
the number of shares of Common Stock per Purchase Contract equal to the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Value is less than or equal to the Reference Price, .[ ] shares of Common Stock
per Purchase Contract, in each case subject to adjustment as provided in
Section 5.7 (and in each case rounded upward or downward to the nearest
1/10,000th of a share). As provided in Section 5.11, no fractional shares of
Common Stock will be issued upon settlement of 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
(a) the third Trading Day immediately preceding the Purchase Contract
Settlement Date or (b) for purposes of determining cash payable in lieu of
fractional shares in connection with an Early Settlement pursuant to Section
5.11 hereof, the third Trading Day immediately preceding the relevant Early
Settlement Date or (c) for the purposes of Section 5.7(b)(2), the third Trading
Day immediately preceding the Cash Merger Date.
The "Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing sale price is reported, the
last reported sale price) of the Common Stock on The New York Stock Exchange
(the "NYSE") on any such date; or, if the Common Stock is not listed for
trading on the NYSE on any such date, the closing sale price as reported in the
composite transactions for the principal United States national or regional
securities exchange on which the Common Stock is so listed; or if the Common
Stock is not so listed on a United States national or regional securities
exchange, the last closing sale price of the Common Stock as reported by the
Nasdaq National Market; or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the- counter market as
reported by the National Quotation Bureau or similar organization; or, if such
bid price is not available, the Closing Price means the market value of the
Common Stock on the date determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the
execution of Certificates on behalf of such Holder), agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform its obligations
under such Purchase Contracts, and consents to the provisions hereof,
irrevocably
37
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Notes, the Treasury Portfolio or the
Treasury Securities pursuant to the Pledge Agreement; provided that upon a
Termination Event, the rights of the Holder of such Security under the Purchase
Contract may be enforced without regard to any other rights or obligations.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance thereof,
further covenants and agrees that, to the extent and in the manner provided in
Section 5.5 hereof and the Pledge Agreement, but subject to the terms thereof,
Proceeds of the Treasury Securities, the Notes or the Treasury Portfolio, as
applicable, on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such Proceeds.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts underlying
the Certificates so transferred and the Pledge Agreement. The Company covenants
and agrees, and each Holder of a Certificate, by its acceptance thereof,
likewise covenants and agrees, to be bound by the provisions of this paragraph.
Section 5.2 Contract Adjustment Payments.
(a) Subject to Section 5.3 herein, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Purchase Contract to the Person in whose name a Certificate (or one or
more Predecessor Certificates) is registered 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 payments. The
Contract Adjustment Payments, if any, will be payable at the New York Office
maintained for that purpose 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 Corporate Units Register or the Treasury Units Register or by
wire transfer to the account designated by a prior written notice by such
Person.
Upon the occurrence of a Termination Event, the Company's obligation
to pay Contract Adjustment Payments (including any accrued Deferred Contract
Adjustment Payments), if any, shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of a Corporate Unit) any other
Certificate shall carry the rights to Contract Adjustment Payments, if any,
accrued and unpaid (including any Deferred Contract Adjustment Payments), and
to accrue Contract Adjustment Payments, if any, which were carried by the
Purchase Contracts underlying such other Certificates.
Subject to Section 5.10 hereof, in the case of any Security with
respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or in respect of which Cash Settlement of
the underlying Purchase Contract is effected on the
38
Business Day immediately preceding the Purchase Contract Settlement Date, or
with respect to which a Collateral Substitution or an establishment or
re-establishment of Corporate Units pursuant to Section 3.14 hereof is
effected, in each case on a date that is after any Record Date and on or prior
to the next succeeding Payment Date, Contract Adjustment Payments on the
Purchase Contracts underlying such Securities otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such Cash
Settlement, Early Settlement, Collateral Substitution or establishment or
re-establishment of Corporate Units, and such Contract Adjustment Payments
shall be paid to the Person in whose name the Certificate evidencing such
Security (or one or more Predecessor Certificates) is registered at the close
of business on such Record Date.
Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Cash Settlement or
Early Settlement of the underlying Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract Settlement Date or on
an Early Settlement Date, as the case may be, or with respect to which a
Collateral Substitution or an establishment or re-establishment of Corporate
Units has been effected, Contract Adjustment Payments, if any (including any
Deferred Contract Adjustment Payments), that would otherwise be payable after
the Purchase Contract Settlement Date or Early Settlement Date, Collateral
Substitution or such establishment or re-establishment with respect to such
Purchase Contract shall not be payable.
(b) The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.
(c) In the event (x) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject to
the provisions of Subsection 5.2(e) below, that (i) a default shall have
occurred and be continuing with respect to the payment of principal, interest
or any other monetary amounts due and payable on any Senior Indebtedness and
such default shall have continued beyond the period of grace, if any, specified
in the instrument evidencing such Senior Indebtedness (and the Agent shall have
received written notice thereof from the Company or one or more holders of
Senior Indebtedness or their representative or representatives or the trustee
or trustees under any indenture pursuant to which any such Senior Indebtedness
may have been issued), or (ii) the maturity of any Senior Indebtedness shall
have been accelerated because of a default in respect of such Senior
Indebtedness (and the Agent shall have received written notice thereof from the
Company or one or more holders of Senior Indebtedness or their representative
or representatives or the trustee or trustees under any indenture pursuant to
which any such Senior Indebtedness may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be entitled
to receive, in the case of clause (x) above, payment in full of all amounts
due or to become due upon all Senior Indebtedness and, in the case of
subclauses (i) and (ii) of clause (y) above, payment of all amounts due
thereon, or provision shall be made for such payment in money or money's
worth, before the Holders of any of the Securities are entitled to
39
receive any Contract Adjustment Payments on the Purchase Contracts
underlying the Securities;
(ii) any payment by, or distribution of assets of, the Company of
any kind or character, whether in cash, property or securities, to which
the Holders of any of the Securities would be entitled except for the
provisions of Subsections 5.2(b) through (n), including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated to the
payment of such Contract Adjustment Payments on the Purchase Contracts
underlying the Securities, shall be paid or delivered by the Person making
such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of such
Senior Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably
according to the aggregate amounts remaining unpaid on account of such
Senior Indebtedness held or represented by each, to the extent necessary
to make payment in full of all Senior Indebtedness remaining unpaid after
giving effect to any concurrent payment or distribution (or provision
therefor) to the holders of such Senior Indebtedness, before any payment
or distribution is made of such Contract Adjustment Payments to the
Holders of such Securities; and
(iii) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of Contract Adjustment Payments on the Purchase Contracts underlying the
Securities, shall be received by the Agent or the Holders of any of the
Securities when such payment or distribution is prohibited pursuant to
Subsections 5.2(b) through (n), such payment or distribution shall be paid
over to the holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing any such Senior Indebtedness may have
been issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
(d) For purposes of Subsections 5.2(b) through (n), the words
"cash, property or securities" shall not be deemed to include shares of stock
of the Company as reorganized or readjusted, or securities of the Company or
any other Person provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in
Subsections 5.2(b) through (n) with respect to such Contract Adjustment
Payments on the Securities to the payment of all Senior Indebtedness which may
at the time be outstanding; provided that (i) the indebtedness or guarantee of
indebtedness, as the case may be, that constitutes Senior Indebtedness is
assumed by the Person, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness
are not, without the consent of each such holder adversely affected thereby,
altered by such reorganization or readjustment.
40
(e) Any failure by the Company to make any payment on or perform
any other obligation under Senior Indebtedness, other than any indebtedness
incurred by the Company or assumed or guaranteed, directly or indirectly, by
the Company for money borrowed (or any deferral, renewal, extension or
refunding thereof) or any indebtedness or obligation as to which the provisions
of Subsections 5.2(b) through (d) shall have been waived by the Company in the
instrument or instruments by which the Company incurred, assumed, guaranteed or
otherwise created such indebtedness or obligation, shall not be deemed a
default or event of default if (i) the Company shall be disputing its
obligation to make such payment or perform such obligation and (ii) either (A)
no final judgment relating to such dispute shall have been issued against the
Company which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the
time within which a party may seek further appeal or review, and (B) in the
event a judgment that is subject to further review or appeal has been issued,
the Company shall in good faith be prosecuting an appeal or other proceeding
for review and a stay of execution shall have been obtained pending such appeal
or review.
(f) Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all obligations of the Company which by their express terms are
subordinated to Senior Indebtedness of the Company to the same extent as
payment of the Contract Adjustment Payments in respect of the Purchase
Contracts underlying the Securities is subordinated and which are entitled to
like rights of subrogation) to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to the Senior Indebtedness until all such Contract
Adjustment Payments owing on the Securities shall be paid in full, and as
between the Company, its creditors other than holders of such Senior
Indebtedness and the Holders, no such payment or distribution made to the
holders of Senior Indebtedness by virtue of Subsections 5.2(b) through (n) that
otherwise would have been made to the Holders shall be deemed to be a payment
by the Company on account of such Senior Indebtedness, it being understood that
the provisions of Subsections 5.2(b) through (n) are and are intended solely
for the purpose of defining the relative rights of the Holders, on the one
hand, and the holders of Senior Indebtedness, on the other hand.
(g) Nothing contained in Subsections 5.2(b) through (n) or
elsewhere in this Agreement or in the Securities is intended to or shall
impair, as among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders such Contract Adjustment Payments on
the Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Agent or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Agreement, subject to the rights, if any, under these
Subsections 5.2(b) through (n), of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
(h) Upon payment or distribution of assets of the Company referred
to in these Subsections 5.2(b) through (n), the Agent and the Holders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any such dissolution, winding
41
up, liquidation or reorganization proceeding affecting the affairs of the
Company is pending or upon a certificate of the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, liquidating trustee or agent
or other person making any payment or distribution, delivered to the Agent or
to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to these Subsections 5.2(b) through (n).
(i) The Agent shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee or representative on behalf of any such holder or holders. In the
event that the Agent determines in good faith that further evidence is required
with respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to Subsections 5.2(b)
through (n), the Agent may request such Person to furnish evidence to the
reasonable satisfaction of the Agent as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under Subsections 5.2(b) through (n), and, if such evidence is not
furnished, the Agent may defer payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
(j) Nothing contained in Subsections 5.2(b) through (n) shall
affect the obligations of the Company to make, or prevent the Company from
making, payment of the Contract Adjustment Payments, except as otherwise
provided in these Subsections 5.2(b) through (n).
(k) Each Holder of Securities, by his acceptance thereof,
authorizes and directs the Agent on his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
Subsections 5.2(b) through (n) and appoints the Agent his, her or its
attorney-in-fact, as the case may be, for any and all such purposes.
(l) The Company shall give prompt written notice to the Agent of
any fact known to the Company that would prohibit the making of any payment of
moneys to or by the Agent in respect of the Securities pursuant to the
provisions of this Section. Notwithstanding the provisions of Subsections
5.2(b) through (n) or any other provisions of this Agreement, the Agent shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of moneys to or by the Agent, or the taking of any
other action by the Agent, unless and until the Agent shall have received
written notice thereof mailed or delivered to a Responsible Officer of the
Agent from the Company, any Holder, any paying agent or the holder or
representative of any Senior Indebtedness; provided that if at least two
Business Days prior to the date upon which by the terms hereof any such moneys
may become payable for any purpose, the Agent shall not have received with
respect to such moneys the notice provided for in this Section, then, anything
herein contained to the contrary notwithstanding, the Agent shall have full
power and authority to receive such moneys and to apply the same to the purpose
for which they were received and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to or on or
after such date.
42
(m) The Agent in its individual capacity shall be entitled to
all the rights set forth in this Section with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness and nothing in this Agreement shall deprive the Agent of
any of its rights as such holder.
(n) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any
way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
(o) Nothing in this Section 5.2 shall apply to claims of, or
payments to, the Agent under or pursuant to Section 7.7 hereof.
With respect to the holders of Senior Indebtedness, (i) the duties and
obligations of the Agent shall be determined solely by the express provisions
of this Agreement; (ii) the Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Agreement; (iii) no implied covenants or obligations shall be read into
this Agreement against the Agent; and (iv) the Agent shall not be deemed to be
a fiduciary as to such holders.
Section 5.3 Deferral of Payment Dates for Contract Adjustment
Payments.
(a) The Company shall have the right, at any time prior to the
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. Any Contract Adjustment Payments so deferred shall, to the extent
permitted by law, bear additional Contract Adjustment Payments thereon at the
rate of [ ]% per year (computed on the basis of a 360-day year of twelve-30 day
months), compounded quarterly up to but not including 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, 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. No Contract Adjustment Payments may be deferred to a
date that is on or after the Purchase Contract Settlement Date and no such
deferral period may end other than on a Payment Date. If the Purchase Contracts
are terminated upon the occurrence of a Termination Event, the Holder's right
to receive Contract Adjustment Payments, if any, and Deferred Contract
Adjustment Payments will terminate.
(b) In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until a Payment Date
prior to the Purchase
43
Contract Settlement Date, then all Deferred Contract Adjustment Payments, if
any, shall be payable to the registered Holders as of the close of business on
the Record Date immediately preceding such Payment Date.
(c) In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the 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.
(d) No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract Adjustment Payments on
the 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 equal to the fraction
of a share times the Applicable Market Value as provided in Section 5.11 hereof.
(e) 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, and shall not permit
its Subsidiaries to, 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 the Company's capital stock 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 or directors 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 the Company exercises its
right to defer the Contract Adjustment Payments;
(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 such 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, acquisitions or
redemptions of capital stock in exchange for or out of the net cash
proceeds of the sale of the Company's capital stock (or securities
convertible into or exchangeable for shares of the Company's capital
stock);
(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; or
44
(vi) mandatory sinking fund payments with respect to any series of
preferred stock of the Company; provided that the aggregate stated value of
--------
all such series outstanding at the time of such payment does not exceed 5%
of the aggregate value of (1) the total principal amount of all then
outstanding bonds or other securities representing secured indebtedness
issued or assumed by the Company and (2) the Company's capital and surplus
to be stated on the Company's books of account after giving effect to such
payment; provided however that any moneys deposited in to any sinking fund
and not in violation of this clause (vi) may thereafter be applied to the
purchase or redemption of such preferred stock in accordance with the terms
of such sinking fund without regard to the foregoing restrictions.
Section 5.4 Initial Remarketing and Secondary Remarketing.
(a) Unless a Tax Event Redemption has occurred, the Company shall
engage a nationally recognized investment bank (the "Remarketing Agent")
pursuant to the Remarketing Agreement to sell the Notes (the "Initial
Remarketing") on the third Business Day immediately preceding February 17, 2005
(the "Initial Remarketing Date"). In order to facilitate the remarketing, the
Agent shall notify, by 10:00 a.m., New York City time, on the Business Day
immediately preceding the Initial Remarketing Date, the Remarketing Agent of
the aggregate principal amount of Notes to be remarketed that are part of
Corporate Units. Concurrently, the Collateral Agent, pursuant to the terms of
the Pledge Agreement, or the Custodial Agent, pursuant to clause (b) below,
will present for remarketing such Notes (and the Separate Notes that are to be
remarketed pursuant to clause (b) below) to the Remarketing Agent. Upon receipt
of such notice from the Agent and such Notes from the Collateral Agent or
Custodial Agent, the Remarketing Agent will, on the Initial Remarketing Date,
use its reasonable efforts to remarket such Notes on such date at a price of
approximately 100.5% (but not less than 100%) of the sum of the Treasury
Portfolio Purchase Price plus the Separate Notes Purchase Price. If the
Remarketing Agent is able to remarket the Notes at a price equal to or greater
than 100% of the Treasury Portfolio Purchase Price plus the Separate Notes
Purchase Price (a "Successful Initial Remarketing"), the portion of the
proceeds from such Successful Initial Remarketing equal to the Treasury
Portfolio Purchase Price will be applied to purchase the Treasury Portfolio.
In addition, the Remarketing Agent may deduct as a remarketing fee
("Remarketing Fee") an amount equal to 25 basis points (.25%) of the Treasury
Portfolio Purchase Price plus the Separate Notes Purchase Price from any amount
of such proceeds in excess of the Treasury Portfolio Purchase Price plus the
Separate Notes Purchase Price. With respect to Separate Notes, any proceeds of
the Initial Remarketing in excess of the Remarketing or attributable to the
Separate Notes will be remitted to the Custodial Agent for payment to the
Holders of Separate Notes. With respect to Notes that are part of Corporate
Units, any proceeds in excess of those required to pay the Treasury Portfolio
Purchase Price and the Remarketing Fee with respect to such Notes will be
remitted to the Agent for payment to the Holders of the related Corporate
Units. A Corporate Unit Holder whose Notes are so remarketed will not otherwise
be responsible for the payment of any Remarketing Fee in connection therewith.
The Treasury Portfolio will be substituted for the Notes of Holders of
Corporate Units and will be pledged to the Collateral Agent to secure the
Corporate Unit Holders' obligation to pay the Purchase Price for the Common
Stock under the related Purchase Contracts on the Purchase Contract Settlement
Date. Following the occurrence of a Successful Initial Remarketing, the Holders
of Corporate Units and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as
45
the Holder of Corporate Units and the Collateral Agent had in respect of the
Notes, as the case may be, subject to the Pledge thereof as provided in
Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein or
in the Certificates to the Notes shall be deemed to be a reference to such
Treasury Portfolio and any reference herein or in the Certificates to interest
on the Notes shall be deemed to be a reference to corresponding distributions
on the Treasury Portfolio. The Company may cause to be made in any Corporate
Unit Certificates thereafter to be issued such change in phraseology and form
(but not in substance) as may be appropriate to reflect the substitution of the
Treasury Portfolio for Notes as collateral.
If, (i) despite using its reasonable efforts, the Remarketing Agent
cannot remarket the related Notes (other than to the Company) at a price equal
to or greater than 100% of the sum of the Treasury Portfolio Purchase Price
plus the Separate Notes Purchase Price, or (ii) the remarketing has not
occurred because of a condition precedent to the remarketing has not been
fulfilled, the remarketing will be deemed to have failed (a "Failed Initial
Remarketing"). The Company will cause a notice of a Failed Initial Remarketing
to be published on the second Business Day immediately preceding February 17,
2005 in an Authorized Newspaper. The Notes will continue to be a component of
Corporate Units, and another remarketing may be attempted as described in
Section 5.5(b).
(b) A Holder of a Note that is no longer part of a Corporate Unit
may elect to have such Note remarketed in the Initial Remarketing. A Holder
making such an election must notify the Custodial Agent and deliver such Notes
to the Custodial Agent prior to 11:00 a.m. (New York City time) on the second
Business Day immediately preceding the Initial Remarketing Date of the
aggregate principal amount of Separate Notes that are to be remarketed. Any
such notice will be irrevocable and may not be conditioned upon the level at
which the Reset Rate is established in the Remarketing. By 11:00 a.m. (New York
City time) on the Business Day immediately preceding the Initial Remarketing
Date, the Custodial Agent shall cause such Separate Notes to be presented to
the Remarketing Agent for Remarketing.
(c) Not later than seven calendar days nor more than 15 calendar days
prior to the Initial Remarketing Date, the Company shall request that the
Clearing Agency notify the Beneficial Owners or Clearing Agency participants
holding securities of the procedures followed in the Initial Remarketing.
(d) If required by applicable law, the Company agrees to endeavor to
ensure that a registration statement with regard to the full amount of the
Notes to be remarketed in the Initial Remarketing shall be effective with the
Securities and Exchange Commission in a form that will enable the Remarketing
Agent to rely on it in connection with the Initial Remarketing.
Section 5.5 Payment of Purchase Price, Cash Settlement, Secondary
Remarketing.
(a) (i) Unless a Tax Event Redemption, Successful Initial
Remarketing, Termination Event or Early Settlement has occurred, each Holder of
a Corporate Unit may pay in cash ("Cash Settlement") the Purchase Price for the
shares of Common Stock to be purchased pursuant to a Purchase Contract if such
Holder notifies the Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to make a Cash Settlement. Such
---------
46
notice shall be made on or prior to 5:00 p.m., New York City time, on the fifth
Business Day immediately preceding the 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 Corporate 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 Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check
or wire transfer, in each case 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 Purchase Contract Settlement Date in settlement of the
Purchase Contract in accordance with the terms of this Agreement and the
Pledge Agreement. Any funds received by the 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 Corporate Unit fails to notify the Agent of its
intention to make a Cash Settlement in accordance with paragraph (a)(i)
above, such Holder shall be deemed to have consented to the disposition of
the pledged Notes pursuant to the Secondary Remarketing as described in
paragraph (b) below. If a Holder of a Corporate 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 constitute a default; however, the Notes
of such a Holder will not be remarketed but instead the Collateral Agent,
for the benefit of the Company, will exercise its rights as a secured party
with respect to such Notes, including but not limited to those rights
specified in paragraph (c) below.
(b) (i) Unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred, the Notes of Corporate Unit Holders who have not
notified the Agent of their intention to effect a Cash Settlement as provided
in paragraph (a)(i) above and the Separate Notes that are to be remarketed
pursuant to clause (ii) below will be sold by the Remarketing Agent (the
"Secondary Remarketing") on the third Business Day immediately preceding the
Purchase Contract Settlement Date (the "Secondary Remarketing Date"). The Agent
shall notify, by 10:00 a.m., New York City time, on the Business Day
immediately preceding the Secondary Remarketing Date, the Remarketing Agent of
the aggregate principal amount of Notes that are part of Corporate Units to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, or the Custodial Agent pursuant to clause (ii) below, will
present for remarketing such Notes (and the Separate Notes that are to be
remarketed pursuant to clause (ii) below) to the Remarketing Agent. Upon
receipt of such notice from the Agent and such Notes from the Collateral Agent
or Custodial Agent, the Remarketing Agent will, on the Secondary Remarketing
Date, use its reasonable efforts to remarket such Notes on such date at a price
of approximately 100.5% (but not less than 100%) of the sum of the aggregate
principal amount of such Notes plus the Separate Notes Purchase Price. If the
Remarketing Agent is able to remarket the Notes at a price equal to or greater
than 100% of the sum of the aggregate principal amount of Notes plus the
Separate Notes Purchase Price (a
47
"Successful Secondary Remarketing"), the Remarketing Agent will remit the
entire amount of the proceeds from such Successful Secondary Remarketing to the
Collateral Agent; provided, however, that the Remarketing Agent may deduct as
-------- -------
the Remarketing Fee an amount equal to 25 basis points (.25%) of the sum of the
aggregate principal amount of the remarketed Notes plus the Separate Notes
Purchase Price from any amount of the proceeds of a Successful Secondary
Remarketing in excess of the sum of the aggregate principal amount of the
remarketed Notes plus the Separate Notes Purchase Price. The portion of the
entire proceeds which is equal to the aggregate principal amount of the
remarketed Notes will automatically be applied by the Collateral Agent, in
accordance with the Pledge Agreement, to satisfy in full such Corporate Unit
Holders' obligations to pay the Purchase Price for the Common Stock under the
related Purchase Contracts on the Purchase Contract Settlement Date. With
respect to Separate Notes, any proceeds of the Secondary Remarketing in excess
of the Successful Secondary Remarketing or attributable to the Separate Notes
will be remitted to the Custodial Agent for payment to the Holders of Separate
Notes. With respect to Notes that are part of Corporate Units, 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 Corporate
Units. A Corporate Unit Holder whose Notes are so remarketed will not otherwise
be responsible with respect to such Notes for the payment of any Remarketing
Fee in connection therewith. If, (i) despite using its reasonable efforts, the
Remarketing Agent cannot remarket the Notes (other than to the Company) at a
price not less than 100% of the sum of the aggregate principal amount of the
Notes plus the Separate Notes Purchase Price, or (ii) the remarketing has not
occurred because of a condition precedent to the remarketing has not been
fulfilled, the remarketing will be deemed to have failed (a "Failed Secondary
Remarketing") and 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 Notes, including those actions specified in
paragraph (c) below. The Company will cause a notice of such Failed Secondary
Remarketing to be published on the second Business Day immediately preceding
the Purchase Contract Settlement Date in an Authorized Newspaper.
(ii) A Holder of a Note that is no longer part of a Corporate Unit
may elect to have such Note remarketed in the Secondary Remarketing. A
Holder making such an election must notify the Custodial Agent and deliver
such Notes to the Custodial Agent prior to 11:00 a.m. (New York City time)
on the second Business Day immediately preceding the Secondary Remarketing
Date of the aggregate principal amount of Notes that are not part of
Corporate Units to be remarketed. Any such notice will be irrevocable and
may not be conditioned upon the level at which the Reset Rate is
established in the Remarketing. By 11:00 a.m. (New York City time) on the
Business Day immediately preceding the Secondary Remarketing Date, the
Custodial Agent shall cause such Notes to be presented to the Remarketing
Agent for Remarketing.
(iii) Not later than seven calendar days nor more than 15 calendar
days prior to the Secondary Remarketing Date, the Company shall notify the
Agent, and shall request that the Clearing Agency notify the Beneficial
Owners or Clearing Agency participants holding securities of the procedures
to be followed in the Secondary Remarketing.
(iv) If required by applicable law, the Company agrees to endeavor to
ensure that a registration statement with regard to the full amount of the
Notes to be remarketed
48
in the Secondary Remarketing shall be effective with the Securities and
Exchange Commission in a form that will enable the Remarketing Agent to
rely on it in connection with the Remarketing.
(c) With respect to any Notes beneficially owned by Holders who have
elected Cash Settlement but failed to deliver cash as required in (a)(ii)
above, or with respect to Notes which are subject to a Failed Secondary
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 the
Notes in full satisfaction of the Holders obligations under the Purchase
Contracts or (ii) sell the Notes in one or more public or private sales.
(d) Unless a Termination Event or an Early Settlement has occurred,
the Purchase Contract underlying each Treasury Unit and, if a Tax Event
Redemption or a Successful Initial Remarketing has occurred, each Corporate
Unit will be settled with the Proceeds at maturity of the Treasury Security or
the Applicable Ownership Interest (as defined in clause (A) of the definition
of such term) of the Treasury Portfolio, as applicable. Upon receipt of such
Proceeds, the Collateral Agent will invest the Proceeds promptly in Permitted
Investments and pay the Proceeds to the Company on the Purchase Contract
Settlement Date in accordance with the terms of this Agreement and the Pledge
Agreement. Any such Proceeds received by the Collateral Agent in excess of the
Purchase Price and any funds received by the Collateral Agent in respect of the
investment earnings from the investment in such Permitted Investments will be
distributed to the Agent when received for payment to the Holders.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the New York 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, or, at
the option of the Company, by wire transfer to the bank account designated by
such Holders in writing, such payments to be made to the same Persons entitled
to receive Common Stock with respect to the Purchase Contracts referred to in
Subsection (d) above.
(f) Unless a Holder settles the underlying Purchase Contract through
Early Settlement in the manner described in Section 5.10 hereof, the Company
shall not be obligated to issue any shares of Common Stock in respect of a
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 set forth in this Section
5.5.
(g) Upon Cash Settlement of any Purchase Contract, (i) the Collateral
Agent will in accordance with the terms of the Pledge Agreement cause the
pledged Notes 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 Notes (or, if no such instructions are given to the Agent by the
Holder, the Agent shall hold such Notes and any distributions thereon in the
name of the Agent or its nominee in trust for the benefit of such Holder
pending receipt of such instructions).
49
(h) The obligations of the Holders to pay the Purchase Price 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
and in no event will Holders be liable for any deficiency between the Proceeds
of Collateral and the Purchase Price.
Section 5.6 Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
on the 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
Sections 5.7(b) and 5.11 hereof, the Company shall issue and deposit with the
Agent, for the benefit of the Holders of the Outstanding Securities, one or
more certificates representing newly issued shares of Common Stock registered
in the name of the 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 on or after the Purchase Contract Settlement Date,
being hereinafter referred to as the "Purchase Contract Settlement Fund") to
which the Holders are entitled hereunder. Subject to the foregoing, upon
surrender of a Certificate to the Agent on or after the 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 Five (after taking into account all Securities then
held by such Holder) together with cash in lieu of fractional shares as
provided in Section 5.11 hereof and any dividends or distributions with respect
to such shares constituting part of the Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so surrendered shall
forthwith be cancelled. Such shares shall be registered in the name of the
Holder or the Holder's designee as specified in the settlement instructions
provided by the Holder to the Agent. If any shares of Common Stock issued in
respect of a Purchase Contract are to be registered to a Person other than the
Person in whose name the Certificate evidencing such Purchase Contract is
registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.7 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on 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 (i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination and (ii) the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to
50
become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall
include any shares issuable in respect of any share certificates issued in
lieu of fractions of shares of Common Stock.
(2) In case the Company shall issue rights, options or warrants,
other than pursuant to any dividend reinvestment plan or share purchase
plan, to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the
Purchase Contracts underlying such Securities) entitling them, for a
period expiring within 45 days after the record date for the determination
of stockholders entitled to receive such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price per share of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend
reinvestment plan or share purchase plan), the Settlement Rate in effect
at the opening of business on the day following the date fixed for such
determination shall be increased by dividing such Settlement Rate by a
fraction of which (i) the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such Current Market
Price and (ii) the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect
of any share certificates issued in lieu of fractions of shares of Common
Stock. The Company shall not issue any such rights, options or warrants in
respect of shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate
in effect at the opening of business on the day following the day upon
which such subdivision or split becomes effective shall be proportionately
increased, and, conversely, in case outstanding shares of Common Stock
shall each be combined into a smaller number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be
proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day
following the day upon which such subdivision, split or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness, shares of
capital stock, securities, cash or other property (but excluding any rights
or warrants referred to in paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and
51
any dividend or distribution referred to in paragraph (1) of this Section),
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 the determination of
stockholders entitled to receive such distribution by a fraction of which
(i) 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 filed with the Agent) on
such date of the portion of the evidences of indebtedness, shares of
capital stock, securities, cash or other property so distributed applicable
to one share of Common Stock and (ii) 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 (4) is applicable,
paragraphs (1) and (2) of this Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i) regular
quarterly cash distributions, (ii) any cash that is distributed in a
Reorganization Event to which Section 5.7(b) applies or (iii) cash that is
distributed as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (II) the
aggregate amount of any other distributions to all holders of its Common
Stock made exclusively in cash (excluding regular quarterly cash
distributions) within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has been made and (III) the
aggregate of any cash plus the fair market value, as of the expiration of
the applicable tender or exchange offer referred to below (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 (5)
or paragraph (6) of this Section has been made, exceeds 5% of the product
of the Current Market Price per share of the Common Stock on the date for
the determination of holders of shares of Common Stock entitled to receive
such distribution times the number of shares of Common Stock outstanding on
such date, then, and in each such case, immediately after the close of
business on such date for determination, the Settlement Rate shall be
increased so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to receive such
distribution by a fraction (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.
52
(6) In case (I) a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer)
of Purchased Shares) of an aggregate consideration having a fair market
value (as 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 (5) of this Section or
this paragraph (6) has been made and (III) the aggregate amount of any
distributions (other than regular quarterly cash distributions) to all
holders of the Company's Common Stock made exclusively in cash within the
12 months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to paragraph (5) of this Section or
this paragraph (6) has been made, exceeds 5% 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 as 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 as of the Expiration Time and (II) the number of shares of Common
Stock outstanding (including any tendered shares) as of 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 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").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.7(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
53
determination" within the meaning of paragraph (4) 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).
(8) 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 on
the applicable exchange or in the applicable market without the right to
receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent 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 (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.7(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
Purchase Contract Settlement Date. Such adjustment shall be made by
multiplying the Applicable Market Value by a fraction of which the
numerator shall be the Settlement Rate immediately after such adjustment
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this
Section 5.7(a) and the denominator shall be the Settlement Rate 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 (1), (2), (3), (4), (5), (7) or (10)
of this Section 5.7(a) during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary
adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable
in order to avoid or diminish any income tax to any holders of shares of
Common Stock resulting from any dividend or distribution of capital stock
or issuance of rights or warrants to purchase or subscribe for capital
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.
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(1) In the event of:
(i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the 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 described in clauses (i) to (iv) above, a
"Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof (or upon any Early Settlement pursuant
to Section 5.7(b)(2)), the kind and amount of securities, cash and other
property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which have
a record date that is prior to the Purchase Contract Settlement Date) by a
Holder of the number of shares of Common Stock issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event. The adjustment described in the
preceding sentence shall apply only to a Holder of Common Stock who is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as
the case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Stock held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise 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 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 or leases the
assets of the Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Outstanding Security shall have the rights
provided by this Section 5.7. Such supplemental agreement shall provide for
adjustments which, for events
55
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
(2) In the event of a consolidation or merger in which (i) the
Company merges with or into another Person, (ii) there is any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock, and
(iii) 30% or more of the total consideration paid to the Company's shareholders
for the outstanding shares of Common Stock consists of cash or cash equivalents
(a "Cash Merger"), then a Holder of a Security may settle his Purchase Contract
for cash as described in Section 5.10 hereof, as applicable, at the applicable
Settlement Rate.
Within five Business Days after the date of the consummation of a Cash
Merger (the "Cash Merger Date"), the Company shall provide written notice to
Holders of Securities of such consummation (the "Cash Merger Notice"), which
shall specify the deadline for submitting a notice of Early Settlement pursuant
to this Section 5.7(b)(2), the applicable Early Settlement Date, the applicable
Settlement Rate and the amount (per share of Common Stock) of cash, securities
and other consideration receivable by the Holder upon settlement.
In this Section 5.7(b)(2), the tenth Business Day after the date the
Cash Merger Notice is provided to the Holders by the Company shall be the
deadline for submitting the notice to settle early and the related cash payment
of the Purchase Price shall be 5:00 p.m. (New York City time) on the ninth
Business Day after the date the Cash Merger Notice is provided to the Holders by
the Company.
Treasury Unit Holders may only effect Early Settlement pursuant to
this Section 5.7(b)(2) in integral multiples of 20 Purchase Contracts. Other
than the provisions relating to timing of notice and settlement, which shall be
as set forth above, the provisions of Section 5.1 shall apply with respect to an
Early Settlement following a Cash Merger pursuant to this Section 5.7(b)(2).
Notwithstanding the foregoing, no Early Settlement will be permitted
pursuant to this Section 5.7(b)(2) unless, at the time such Early Settlement is
effected, there is an effective registration statement with respect to the
securities to be delivered in connection with such Early Settlement, if such a
registration statement is required (in the view of counsel, which need not be in
the form of a written opinion, for either the Company or the Agent) under the
Securities Act. If such a registration statement is so required, the Company
covenants and agrees to use its reasonable best efforts to (A) have in effect a
registration statement covering the securities to be delivered in respect of the
Purchase Contracts being settled and (B) provide a prospectus in connection
therewith, in each case in a form that the Agent may use in connection with such
Early Settlement.
(c) All calculations and determinations pursuant to this
Section 5.7 shall be made by the Company or its agent and the Agent shall have
no responsibility with respect thereto.
Section 5.8 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
56
(i) forthwith compute the Settlement Rate in accordance with
Section 5.7 hereof and prepare and transmit to the Agent an Officer's
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 5.7
hereof (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 the Company or 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 Purchase Contract; and the Agent
makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock pursuant to a Purchase Contract or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article.
Section 5.9 Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred.
Upon and after the occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
forming a part of such Securities in the case of Corporate Units, or Treasury
Securities in the case of Treasury Units, in accordance with the provisions of
Section 4.3 of the Pledge Agreement; provided, however, that, to the extent that
-------- -------
a Holder of Corporate Units or Treasury Units would otherwise be entitled to
receive less than $1,000 principal amount at maturity of the Treasury Portfolio
or the Treasury Securities, the Agent shall dispose of such securities for cash,
and transfer the appropriate amount of such cash to such Holder in accordance
with such Holder's written instructions. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Agent, the Collateral Agent and to the
Holders, at their addresses as they appear in the Register.
57
Section 5.10 Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.10, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount of $1,000 or integral multiples
thereof may effect early settlement ("Early Settlement") on or prior to 5:00
p.m. (New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date. Holders of Treasury Units may only effect
Early Settlement of the related Purchase Contracts in integral multiples of 20
Treasury Units, and if a Tax Event Redemption or a Successful Remarketing has
occurred and the Treasury Portfolio has become a component of the Corporate
Units, Purchase Contracts underlying the Securities may only be settled in
integral multiples of [ ] Corporate Units. In order to exercise the right to
effect Early Settlement with respect to any Purchase Contracts, the Holder of
the Certificate evidencing Securities shall deliver to the Agent at the
Corporate Trust Office or at the New York Office an "Election to Settle Early"
form (on the reverse side of the Certificate) and any other documents requested
by the Agent and accompanied by payment (payable to the Company in immediately
available funds) in an amount (the "Early Settlement Amount") equal to the
product of (i) (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Early Settlement, plus
(ii) if such delivery is made with respect to any 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
Purchase Contracts.
Except as provided in the immediately preceding sentence and subject
to Section 5.1 hereof, no payment shall be made upon Early Settlement of any
Purchase Contract on account of any Contract Adjustment Payments accrued on such
Purchase Contract or on account of dividends payable on the Common Stock issued
upon such Early Settlement, the record date for which payment occurs prior to
the Early Settlement Date. If the foregoing requirements are first satisfied
with respect to Purchase Contracts underlying any Securities prior to or at 5:00
p.m. (New York City time) on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Securities and if such requirements are
first satisfied after 5:00 p.m. (New York City time) on a Business Day or on a
day that is not a Business Day, the "Early Settlement Date" with respect to such
Securities shall be the next succeeding Business Day (so long as such next
succeeding Business Day is not later than the fifth Business Day immediately
preceding the Purchase Contract Settlement Date).
(b) No Early Settlement will be permitted under this Section 5.10
unless, at the time of delivery of the Election to Settle Early form or the time
the Early Settlement is effected, there is an effective registration statement
with respect to the shares of Common Stock to be issued and delivered in
connection with such Early Settlement, if such a registration statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for either the Company or the Agent) under the Securities Act. If such
a registration statement is so required, the Company covenants and agrees to use
its reasonable best efforts to (A) have in effect a registration statement
covering the shares of Common Stock to be delivered in respect of the Purchase
Contracts being settled and (B) provide a prospectus in connection therewith, in
each case in a form that the Agent may use in connection with such Early
Settlement.
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(c) Upon Early Settlement of Purchase Contracts by a Holder of
the related Securities, the Company shall issue, and the Holder shall be
entitled to receive [ ] shares of Common Stock on account of each Purchase
Contract as to which Early Settlement is effected (the "Early Settlement Rate").
The Early Settlement Rate shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted.
(d) Not 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
Purchase Contracts to be issued and delivered, together with payment in
lieu of any fraction of a share, as provided in Section 5.11 hereof; and
(ii) the related Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, in the case of Corporate 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.
(e) Upon Early Settlement of any Purchase Contracts, and subject
to receipt of shares of Common Stock from the Company and the Notes, the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, or Treasury Securities, as
the case may be, from the Securities Intermediary, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder thereof on the
Election to Settle Early form (on the reverse of the Certificate evidencing the
related Securities):
(i) transfer to the Holder the Notes, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio or Treasury Securities, as the case may be,
forming a part of such Securities;
(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 5.11 hereof; and
(iii) if so required under the Securities Act, deliver a prospectus
for the shares of Common Stock issuable upon such Early Settlement as
contemplated by Section 5.10(c).
(f) In the event that Early Settlement is effected with respect
to 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, execute on behalf of the Holder 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.
59
Section 5.11 No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.11 in a timely manner.
Section 5.12 Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts 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 Purchase Common Stock.
The Holder of any Corporate Units or Treasury Units shall have the
right, which is absolute and unconditional, (A) subject to the right of the
Company to defer payment thereof pursuant to Section 5.3 hereof, and to the
forfeiture of any Deferred Contract Adjustment Payments upon Early Settlement
pursuant to Section 5.10(c) hereof or upon the occurrence of a Termination
Event, to receive payment of each installment of the Contract Adjustment
Payments, if any, with respect to the Purchase Contract constituting a part of
such Security on the respective Payment Date for such Security, and (B) to
purchase Common Stock pursuant to such 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.
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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 hereof, no right or remedy herein conferred upon or
reserved to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 6.4 Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5 Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Corporate
Units or Treasury Units, by its acceptance of such Corporate 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 interest on any Notes on or after the respective Payment
Date therefor in respect of any Security held by such Holder, or for enforcement
of the right to purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
61
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) (1) 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 Pledge Agreement, and no implied covenants or obligations
shall be read into this Agreement and Pledge Agreement against the Agent; and
(2) 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, upon certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, 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, but need not confirm or investigate the
accuracy of mathematical calculations 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 or bad faith, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this 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.
62
(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 and directed to execute and deliver
the Pledge Agreement in its capacity as Agent and to perform its duties and
obligations thereunder.
Section 7.2 Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3 Certain Rights of Agent.
Subject to the provisions of Section 7.1 hereof:
(1) the Agent may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document (whether in its original or facsimile form)
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officer's Certificate, Issuer Order or
Issuer Request, and any resolution of the Board of Directors of the Company
may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officer's Certificate of the Company;
(4) 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;
(5) 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, Note, 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 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
63
examine the books, records and premises of the Company, personally or by
agent or attorney at the expense of the Company and shall incur no
liability of any kind by reason of such inquiry or investigation;
(6) the Agent may execute any of the powers, perform any duties
hereunder, or delegate any administrative functions either directly to, by
or through its employees, officers, agents or attorneys or an Affiliate
located in any state of the United States and the Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it hereunder;
(7) the Agent shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement solely 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, liabilities which might be
incurred by it in compliance with such request or direction;
(8) the Agent shall not be deemed to have notice of any default
unless a Responsible Officer of the Agent has actual knowledge thereof or
unless written notice of any event which is in fact such a default is
received by the Agent at the Corporate Trust Office of the Agent, and such
notice references the Securities and this Agreement and states that it is a
notice of default; and
(9) the Agent may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Agreement, which Officers' Certificate may be signed by any person
authorized to sign an Officer's Certificate, including any person specified
as so authorized in any such Certificate previously delivered and not
superseded.
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 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.
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
64
obligation to invest or pay interest on any money received by it hereunder
except as otherwise expressly provided herein or as otherwise agreed in writing
with the Company.
Section 7.7 Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such compensation for
all services rendered by it hereunder as the parties shall agree from time
to time in writing;
(2) except as otherwise expressly provided herein, to reimburse
the Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Agent in carrying out its duties under
this Agreement or the Pledge Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as shall be determined by
a court of competent jurisdiction to have been caused by its own
negligence, willful misconduct or bad faith;
(3) to fully indemnify the Agent, its directors, officers,
employees and agents and any predecessor Agent for, and to hold it harmless
against, any loss, claim, damage, liability or expense, including taxes
(other than taxes based upon, measured by or determined by the income of
the Agent) incurred without negligence, willful misconduct or bad faith on
its part, arising out of or in connection with the acceptance or
administration of its duties hereunder or under the Pledge Agreement,
including the reasonable costs and expenses of counsel selected by the
Agent to defend the Agent against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder; and
(4) to fully indemnify the Agent and any predecessor Agent from
and against any loss, claim, damage, liability or expense that may be
imposed on, incurred by, or asserted against the Agent for following
any written instructions or other directions by the Company pursuant to the
terms of this Agreement or the Pledge Agreement.
The provisions of this Section shall survive the termination of this
Agreement and the 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 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 subsidiary of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
an office in the Borough of Manhattan, The City of New York, if there be such a
corporation in the Borough of Manhattan, The City of New York, and qualified and
eligible under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of
65
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. The provisions of this Section shall
survive the termination of this Agreement.
Section 7.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10 hereof.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 30 days prior to the effective date of such resignation.
If the instrument of acceptance by a successor Agent required by Section 7.10
hereof 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 hereof 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.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, as
if the Agent were an indenture trustee under an indenture qualified under
the TIA, after written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section 7.8 hereof
and shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (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,
66
shall promptly appoint a successor Agent and shall comply with the applicable
requirements of Section 7.10 hereof. If no successor Agent shall have been so
appointed by the Company and accepted appointment in the manner required by
Section 7.10 hereof, 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 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 and New York
Office, if any.
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 corporation into which the Agent may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent 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.
67
Section 7.12 Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the Agent
in its capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Agent, and furnish to the Agent reasonable proof that
each such applicant has owned a 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 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 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 Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article V hereof.
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 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 or the
Notes. Such compliance shall include, without limitation, (i) preparing, timely
filing with the applicable taxing authority, and (to the extent required under
applicable tax laws) timely furnishing Holders with copies of, all tax reports
or statements with respect to payments on, or redemptions of, the Securities
which are required to be prepared, filed, and furnished under applicable tax
laws, (ii) withholding and paying over to the applicable taxing authorities any
tax withholdings that are required to be made with respect to payments on, or
redemptions of, the Securities under applicable tax laws, and (iii) making
reasonable efforts to obtain from Holders all IRS Forms (and similar forms under
applicable state, local, and foreign tax law) and other documentation required
under applicable tax laws in order to establish exemptions from or reductions in
withholding taxes.
(b) The Agent shall comply with any written direction received
from the Company with respect to the application of such requirements to
particular payments or Holders
68
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, until such time as all applicable periods of
limitation for assessing or collecting any taxes or penalties for failure to
comply fully with such requirements have expired, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.1 Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) 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
(2) 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
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.7(b) hereof; or
(5) 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 in any material respect.
Section 8.2 Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts or the provisions of this Agreement or the rights of the
Holders in respect of the Securities (other than the Notes, which may be
modified only in accordance with the applicable provisions of the Indenture);
provided, however, that, except as
-------- -------
69
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to
be Pledged to secure a Holder's obligations under any Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter the rights in
or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payment, or change any place where, or the
coin or currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract, any Contract Adjustment Payment, if any, or any
Deferred Contract Adjustment Payment, if any;
(5) reduce the number of shares of Common Stock (or the
amount of any other property) to be purchased pursuant to any Purchase
Contract, increase the price to purchase shares of Common Stock (or any
other property) upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or any Early Settlement Date or otherwise
adversely affect the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding 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 Corporate Units or the Treasury Units, then only the affected
class of Holders as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such affected class, as applicable.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3 Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1 hereof) 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 and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Agent
may,
70
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 and the Securities 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 Company or the Agent, bear a notation
in form approved by the Company and 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.
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 or consolidate with any
other Person (in a merger in which the Company in a Constituent 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 corporation, or the successor (if other than the Company) shall be a
corporation organized and existing under the laws of the United States of
America or a State thereof or the District of Columbia and such corporation
shall expressly assume all the obligations of the Company under the Purchase
Contracts, this Agreement, the Notes, the Indenture (including any supplemental
indenture) to the extent the Indenture relates to the Notes, the Remarketing
Agreement and the Pledge Agreement by one or more supplemental agreements in
form reasonably satisfactory to the Agent and the Collateral Agent, executed and
delivered to the Agent and the Collateral Agent by such corporation, and (ii)
the Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default of its payment obligations under
this Agreement or the Notes, or in default of its obligations to deliver Common
Stock (or other property) on the Purchase Contract Settlement Date or any Early
Settlement Date, or in material default in the performance of any other covenant
hereunder or under the Notes, the
71
Indenture (including any supplemental indenture), to the extent the Indenture
relates to the Notes, the Remarketing Agreement, the Purchase Contracts or the
Pledge Agreement.
Section 9.2 Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1 hereof, such successor corporation shall succeed to
and be substituted for the Company with the same effect as if it had been named
herein as the Company, and its predecessor shall, except in the case of a lease,
be released from its obligations under this Agreement. Such successor
corporation thereupon may cause to be signed, and may issue either in its own
name or in the name of ALLTEL Corporation any or all of the Certificates
evidencing Securities issuable hereunder which theretofore shall not have been
signed by the Company and delivered to the Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the 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 corporation 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 consolidation, merger, 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 hereof and 7.3 hereof, shall
receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, assignment, transfer, lease or conveyance, and any
such assumption, complies with the provisions of this Article and that all
conditions precedent hereunder to the consummation of any such consolidation,
merger, sale, assignment, transfer, lease or conveyance have been met.
ARTICLE X
COVENANTS
Section 10.1 Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
72
Section 10.2 Maintenance of Office or Agency.
The Company will maintain or cause to be maintained in the Borough of
Manhattan, The City of New York an office or agency (a "New York Office") where
Certificates may be presented or surrendered for payment and for acquisition of
shares of Common Stock (or other property) upon settlement of the Purchase
Contracts on the Purchase Contract Settlement Date or Early Settlement and for
transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or re-establishment of Corporate Units and where notices
and demands to or upon the Company in respect of the Securities and this
Agreement may be served. The Company will give prompt written notice to the
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 the Borough of Manhattan, The City of
New York, as the places of payment for the Securities, and hereby appoints the
Agent, acting through its New York Office as the registrar, paying agent and
transfer agent for the Corporate Units and the Treasury Units and for the other
purposes contemplated by this Section 10.2.
Section 10.3 Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4 Covenants as to Common Stock, Dividends and
Distributions.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The Company shall
comply with all applicable securities laws regulating the offer, issuance and
delivery of shares of Common Stock upon settlement of Purchase Contracts and
will endeavor to list such shares on each national securities exchange or
automated quotation
73
system on which the Common Stock is then listed. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in the treasury
of the Company.
Section 10.5 Tax Treatment.
The Company covenants and agrees to treat each Holder as the owner,
for United States federal income tax purposes, of the applicable interest in the
Collateral Account, including Notes and Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities.
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
ALLTEL CORPORATION
By: ____________________________
[Name]
[Title]
By: ____________________________
[Name]
[Title]
X. X. XXXXXX TRUST COMPANY, NATIONAL
ASSOCIATION
as Purchase Contract Agent
By: ____________________________
[Name]
[Title]
75
EXHIBIT A
(Form of Face of Corporate Unit Certificate)
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
No. ____ CUSIP No. [ ]
Number of Corporate Units _______
___________________________
* To be inserted in Global Certificates only.
A-1
[ ]% Corporate Units
This Corporate Unit Certificate certifies that ___________ is the
registered Holder of the number of Corporate Units set forth above. Each
Corporate Unit represents (i) either (a) beneficial ownership by the Holder of
$50 principal amount of senior notes due May 17, 2007 (the "Notes") of ALLTEL
Corporation, a Delaware corporation (the "Company", which term, as used herein,
includes its successors pursuant to the Purchase Contract Agreement), subject to
the Pledge of such Note by such Holder pursuant to the Pledge Agreement or (b)
upon the occurrence of a Tax Event Redemption prior to the Purchase Contract
Settlement Date or a Successful Initial Remarketing, the appropriate Applicable
Ownership Interest of the Treasury Portfolio, subject to the Pledge of such
Applicable Ownership Interest of the Treasury Portfolio by such Holder pursuant
to the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Purchase Contract with the Company. All capitalized terms used herein which
are defined in the Purchase Contract Agreement have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of each Corporate 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 Purchase Contract comprising a portion of such Corporate
Units.
The Pledge Agreement provides that all payments of principal on the
pledged Notes or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, or interest payments on any pledged Notes (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, constituting part of the Corporate Units received by the Collateral
Agent shall be paid by the Collateral Agent by wire transfer in same day funds
(i) in the case of (A) interest payments with respect to pledged Notes or the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, and (B)
any payments of principal or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such terms) of the Treasury
Portfolio, as the case may be, with respect to any Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
that have been released from the Pledge pursuant to the Pledge Agreement, to the
Agent to the account designated by the Agent, no later than 2:00 p.m., New York
City time, on the Business Day such payment is received by the Collateral Agent
(provided that in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day) and (ii) in the case of payments
of principal on any pledged Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio that has not been released from the Pledge pursuant to the
Pledge Agreement, as the case may be, to the Company on the 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 Corporate Units of which such pledged Notes or the Treasury Portfolio, as
the case may be, are a part under the Purchase Contracts forming a part of such
Corporate Units. Interest on any Notes or distributions on the appropriate
Applicable
A-2
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, forming part of a Corporate Unit
evidenced hereby which are payable quarterly in arrears on February 17, May 17,
August 17 and November 17 each year, commencing on August 17, 2002 (each a
"Payment Date"), shall, subject to receipt thereof from the Collateral Agent, be
paid to the Person in whose name this Corporate Unit Certificate (or a
Predecessor Corporate Unit Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Unit Certificate to purchase, and the Company to sell, on May 17, 2005
(the "Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of newly issued shares of common stock, $1.00 par value
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Corporate Units of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of (1) cash received from a
Holder or (2) payment received in respect of the Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, pledged to secure the
obligations under such Purchase Contract of the Holder of the Corporate Units of
which such Purchase Contract is a part.
Interest on the Notes or distributions on the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, will be payable at the Corporate
Trust Office of the Agent and at the New York 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 Corporate Units Register or by wire transfer to the
account designated by a prior written notice from such Person.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Corporate Unit evidenced hereby an amount (the
"Contract Adjustment Payments") equal to .[ ]% per year 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 Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Corporate Unit Certificate (or a Predecessor Corporate Unit Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the Corporate
Trust Office of the Agent and at the New York 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 Corporate Units Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
A-3
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Corporate Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ALLTEL CORPORATION
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By:X. X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION
not individually but solely as
attorney-in-fact of such Holder
By: _______________________________
Name:
Title:
Dated:
A-5
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Unit Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: X. X. XXXXXX TRUST COMPANY,
NATIONAL ASSOCIATION,
as Purchase Contract Agent
By: _______________________________
Authorized Signatory
Dated:
A-6
(Form of Reverse of Corporate Unit Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of May [ ], 2002 (as may be supplemented from time
to time, the "Purchase Contract Agreement"), between the Company and X. X.
Xxxxxx Trust Company, National Association, as Purchase Contract Agent
(including its successors thereunder, herein called the "Agent"), to which
Purchase Contract Agreement and supplemental agreements thereto reference is
hereby made for a description of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Agent, the Company and the
Holders and of the terms upon which the Corporate Unit Certificates are, and
are to be, executed and delivered. In the case of any inconsistency between
this Certificate and the terms of the Purchase Contract Agreement, the terms of
the Purchase Contract Agreement shall prevail.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Unit Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Purchase Price, a
number of newly issued shares of Common Stock of the Company equal to the
Settlement Rate, unless, on or prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Purchase Contract is a part. 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 Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $[ ],
(the "Reference Price"), the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Value is less than or equal to the Reference
Price, .[ ] shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby which is settled either
through Early Settlement or Cash Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the 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
(a) the third Trading Day immediately preceding the Purchase Contract Settlement
Date or (b) for purposes of determining cash payable in lieu of fractional
shares in connection with an Early Settlement pursuant to Section 5.11 of the
Purchase Contract Agreement, the third Trading Day immediately preceding the
relevant Early Settlement Date or (c) for the purposes of Section 5.7(b)(2) of
the Purchase Contract Agreement, the third Trading Day immediately preceding the
Cash Merger Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange (the "NYSE") on any such date; or, if the Common Stock is not
listed for trading on the NYSE on any such date, the closing sale price as
reported in the composite transactions for the principal United States national
or regional securities exchange on which the Common Stock is so listed; or if
the Common Stock is not so listed on a United States national or regional
securities exchange, the
A-7
last closing sale price of the Common Stock as reported by the Nasdaq National
Market; or, if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization; or, if such bid price is not
available, the Closing Price means the market value of the Common Stock on the
date determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on which
the Common Stock (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate Unit Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement or an Early Settlement or from the
Proceeds of a remarketing of the related pledged Notes of such Holders or of
the appropriate Applicable Ownership Interest of the Treasury Portfolio. Unless
a Tax Event Redemption or a Successful Initial Remarketing has occurred, a
Holder of Corporate Units who does not elect to make an effective (1) Cash
Settlement on or prior to 5:00 p.m., New York City time, on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, or (2) Early
Settlement on or prior to 5:00 p.m. New York City time, on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, shall pay the
Purchase Price for the shares of Common Stock to be issued under the related
Purchase Contract from the Proceeds of the sale of the related pledged Notes
held by the Collateral Agent. Unless a Tax Event Redemption or a Successful
Initial Remarketing has occurred, such sale will be made by the Remarketing
Agent pursuant to the terms of the Remarketing Agreement and any supplemental
remarketing agreement executed in connection therewith between the parties
thereto, on the third Business Day immediately preceding the Purchase Contract
Settlement Date. If a Tax Event Redemption or a Successful Initial Remarketing
has occurred, a Holder of Corporate Units who does not elect to make an
effective Early Settlement on or prior to 5:00 p.m. New York City time, on the
second Business Day immediately preceding the Purchase Contract Settlement Date
shall pay the Purchase Price with the Proceeds at maturity of the Applicable
Ownership Interest (as defined in clause (A) of the definition of such term) of
the Treasury Portfolio.
If, as provided in the Purchase Contract Agreement, (i) upon the
occurrence of a Failed Secondary Remarketing or (ii) if a Holder notifies the
Agent of its intention to effect a Cash Settlement but fails to deliver the
purchase price in cash on or prior to the Business Day immediately preceding
the Purchase Contract Settlement Date, the Collateral Agent, for the benefit of
the Company, exercises its rights as a secured creditor with respect to the
Pledged Notes related to this Corporate Unit Certificate, any accrued and
unpaid interest on such Pledged Notes will become payable by the Company to the
Holder of the Corporate Unit Certificate in the manner provided for in the
Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
A-8
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the pledged
Notes. Upon receipt of notice of any meeting at which holders of Notes are
entitled to vote or upon the solicitation of consents, waivers or proxies of
holders of Notes, the Agent shall, as soon as practicable thereafter, mail to
the Corporate Unit Holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Corporate 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 Notes entitled to vote) shall be entitled to instruct the Agent as to the
exercise of the voting rights pertaining to the Notes constituting a part of
such holder's Corporate Units and (c) stating the manner in which such
instructions may be given. Upon the written request of the Corporate 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 Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of a Corporate Unit, the Agent shall abstain from voting the Notes
evidenced by such Corporate Units.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply, out of the aggregate Redemption Price for the
Notes that are components of Corporate Units, an amount equal to the aggregate
Redemption Amount for the Notes that are components of Corporate Units to
purchase on behalf of the Holders of Corporate Units, the Treasury Portfolio
and promptly remit the remaining portion of such Redemption Price to the Agent
for payment to the Holders of such Corporate Units.
Upon the occurrence of a Successful Initial Remarketing, pursuant to
the terms of the Remarketing Agreement, the Remarketing Agent will apply an
amount equal to the Treasury Portfolio Purchase Price to purchase on behalf of
the Holders of Corporate Units, the Treasury Portfolio, and, after deducting
the Remarketing Fee to the extent permitted under the terms of the Remarketing
Agreement, promptly remit the remaining portion of such Proceeds of the
Successful Initial Remarketing to the Agent for payment to the Holders of such
Corporate Units.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date or following a Successful Initial
Remarketing, the Holders of Corporate Units and the Collateral Agent shall have
such security interests, rights and obligations with respect to the Treasury
Portfolio as the Holder of Corporate Units and the Collateral Agent had in
respect of the Notes, as the case may be, subject to the Pledge thereof as
provided in the Pledge Agreement and any reference herein to the Notes shall be
deemed to be a reference to such Treasury Portfolio and any reference herein or
in the Certificates to interest on the Notes shall be deemed to be a reference
to corresponding distributions on the Treasury Portfolio.
The Corporate Unit Certificates are issuable only in registered form
and only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Unit Certificate will be registered and
Corporate Unit Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Corporate Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
A-9
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Treasury Securities for Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, thereby creating Treasury Units,
shall be responsible for any fees or expenses payable in connection therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying a Corporate Unit remains in effect, such Corporate
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Corporate Unit in respect of Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, and the Purchase Contract constituting such Corporate Unit may be
transferred and exchanged only as a Corporate Unit. A Holder of a Corporate
Unit may create a Treasury Unit by delivering to the Collateral Agent Treasury
Securities in an aggregate principal amount equal to the aggregate principal
amount of the pledged Notes or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, in exchange for the release of such pledged
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such Collateral
Substitution, the Security for which such pledged Treasury Securities secures
the Holder's obligation under the Purchase Contract shall be referred to as a
"Treasury Units". A Holder may make such Collateral Substitution only in
integral multiples of 20 Corporate Units for the same multiple of 20 Treasury
Units; provided, however, that if a Tax Event Redemption or a Successful
-------- -------
Initial Remarketing has occurred and the Treasury Portfolio has become a
component of the Corporate Units, a Holder may make such Collateral
Substitutions only in integral multiples of [ ] Corporate Units for the same
multiple of [ ] Treasury Units.
A Holder of Treasury Units may recreate Corporate Units by delivering
to the Collateral Agent Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, with an aggregate principal amount, in the case of
such Notes, or with the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, in the
case of such appropriate Applicable Ownership Interest of the Treasury
Portfolio, equal to the aggregate principal amount of the pledged Treasury
Securities in exchange for the release of such pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such recreation of a Corporate Unit may be effected only in
multiples of 20 Treasury Units for the same multiple of 20 Corporate Units;
provided, however, that if a Tax Event Redemption or a Successful Initial
Remarketing has occurred and the Treasury Portfolio has become a component of
the Corporate Units, a Holder may make such substitution only in integral
multiples of [ ] Treasury Units for the same multiple of [ ] Corporate Units.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Corporate Unit
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment
Payments, if any, will be payable at the Corporate Trust Office of the Agent
and the New York Office or, at the option of the Company, by check mailed to
the address
A-10
of the Person entitled thereto at such address as it appears on the
Corporate Units Register or by wire transfer to the account designated by such
Person in writing.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, 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
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of [ ]% per year (computed on the basis
of a 360-day year of twelve 30-day months), compounded quarterly 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 Purchase Contract Agreement. No Contract
Adjustment Payments, if any, may be deferred to a date that is on or after the
Purchase Contract Settlement Date and no such deferral period may end other
than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Corporate Unit Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock equal to the Settlement Rate) equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Corporate
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, if any, 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 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 or directors 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; (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 such 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
A-11
repurchases, acquisitions or redemptions of capital stock in connection with
the issuance or exchange of capital stock (or securities convertible into or
exchangeable for shares of our capital stock); (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; or (vi) mandatory sinking fund payments with
respect to any series of preferred stock of the Company; provided that the
aggregate stated value of all such series outstanding at the time of such
payment does not exceed 5% of the aggregate of (1) the total principal amount
of all then outstanding bonds or other securities representing secured
indebtedness issued or assumed by the Company and (2) the Company's capital and
surplus to be stated on the Company's books of account after giving effect to
such payment; provided however that any moneys deposited into any sinking fund
and not in violation of this clause (vi) may thereafter be applied to the
purchase or redemption of such preferred stock in accordance with the terms of
such sinking fund without regard to the foregoing restrictions.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence
of a Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the Collateral
Agent and to the Holders, at their addresses as they appear in the Corporate
Units Register. Upon and after the occurrence of a Termination Event, the
Collateral Agent shall release the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from the
Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("Early Settlement") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Corporate
Unit Certificate, the Holder of this Corporate Unit Certificate shall deliver
to the Agent at the Corporate Trust Office an Election to Settle Early form set
forth below and any other documents requested by the Agent duly completed and
accompanied by payment in the form of immediately available funds payable to
the order of the Company in an amount (the "Early Settlement Amount") equal to
(i) the product of (A) $50 times (B) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early Settlement, plus (ii)
if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date for 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 Purchase
Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, underlying such Securities shall be released
from the Pledge as provided in the Pledge Agreement and the Holder
A-12
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract forming part of a Corporate Unit as to which Early
Settlement is effected equal to .[ ] share of Common Stock per Purchase
Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Corporate Unit Certificate in
accordance with the Purchase Contract Agreement, the transferee shall be bound
(without the necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant to the Purchase Contract
Agreement) under the terms of the Purchase Contract Agreement, the Pledge
Agreement and the Purchase Contracts evidenced hereby and the transferor shall
be released from the obligations under the Purchase Contract Agreement, the
Pledge Agreement and the Purchase Contracts evidenced by this Corporate 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 Corporate Unit Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Corporate Units evidenced hereby on his behalf as
his attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy Code,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact,
and consents to the Pledge of the Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this
Corporate Unit Certificate pursuant to the Pledge Agreement and to all other
provisions of the Pledge Agreement. The Holder further covenants and agrees,
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, Proceeds
of the pledged Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such Proceeds.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts then outstanding.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
Prior to due presentment of this Certificate for registration of
transfer, the Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Corporate Unit
Certificate is registered as the owner of the Corporate Units evidenced hereby
for the purpose of receiving payments of interest payable quarterly on
A-13
the Notes or on the maturing quarterly interest strips of the Treasury
Portfolio, as applicable, receiving payments of Contract Adjustment Payments,
if any, and any Deferred Contract Adjustment Payments, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
payments in respect thereof be overdue and notwithstanding any notice to the
contrary, and neither the Company, the Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
A-14
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 Corporate Unit Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
_______________________________________________________________________________
attorney to transfer said Corporate Unit Certificates on the books of ALLTEL
Corporation with full power of substitution in the premises.
Dated: _________________ _________________________________
Signature
A-15
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Corporate 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-16
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Corporate Units
evidenced by this Corporate 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 name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address REGISTERED
HOLDER 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-17
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate Unit Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Corporate Units evidenced by this Corporate
Unit Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Corporate Units
with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof; provided, however, that if a Tax Event Redemption or a Successful
-------- -------
Initial Remarketing has occurred and the Treasury Portfolio has become a
component of the Corporate Units, Holders may early settle Corporate Units only
in integral multiples of 20 Corporate Units. 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 Corporate Unit Certificate
representing any Corporate Units evidenced hereby as to which Early Settlement
of the related Purchase Contracts is not effected, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. Pledged Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated: _________________ _________________________________
Signature
Signature Guarantee
(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.
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Corporate Unit Certificates are to be
registered in the name of and delivered to and pledged Notes, or an
Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, are to be transferred to a Person other than the Holder,
please (i) print such Person's name and address and (ii) provide a
guarantee of your signature:
A-18
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
________________________________
REGISTERED HOLDER
Please print name and address of Registered Holder:
________________________________
Name
________________________________
Address
________________________________
________________________________
________________________________
________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
Transfer Instructions for pledged Notes, or the Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, Transferable Upon Early
Settlement or a Termination Event:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
A-19
[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:
Signature of authorized
Amount of Amount of Stated Amount of this signatory of Purchase
decrease in Stated increase in Stated Global Certificate Contract Agent or
Amount of the Global Amount of the Global following such decrease Securities Custodian
Date Certificate Certificate or increase Agent
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
__________________________________________________________________________________________________
X-00
XXXXXXX X
(Form of Face of Treasury Unit Certificate)
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
No. ____ CUSIP No. [ ]
Number of Treasury Units _______
___________________________
*To be inserted in Global Certificates only.
B-1
[ ]% Treasury Units
This Treasury Unit Certificate certifies that __________ is the
registered Holder of the number of Treasury Units set forth above. Each
Treasury Unit represents (i) a 1/20, or 5%, undivided beneficial ownership
interest in a Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder pursuant
to the Pledge Agreement, and (ii) the rights and obligations of the Holder
under one Purchase Contract with ALLTEL Corporation, a Delaware corporation
(the "Company", which term, as used herein, includes its successors pursuant to
the Purchase Contract Agreement). All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury 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 Purchase Contract comprising a portion of such Treasury Units.
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 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
Purchase Contracts forming a part of such Treasury Units.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Unit Certificate to purchase, and the Company to sell, on May 17, 2005
(the "Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of newly issued shares of class A common stock, par value
$1.00 ("Common Stock"), of the Company equal to the Settlement Rate, unless on
or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Treasury Units of
which such Purchase Contract is a part, all as provided in the Purchase
Contract Agreement and more fully described on the reverse hereof. The purchase
price (the "Purchase Price") for the shares of Common Stock purchased pursuant
to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid
on the Purchase Contract Settlement Date by application of the Proceeds from
the Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Treasury Unit evidenced hereby an amount (the
"Contract Adjustment
B-2
Payments") equal to .[ ]% per year 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 Purchase Contract Agreement and more fully
described on the reverse hereof. Such Contract Adjustment Payments, if any,
shall be payable to the Person in whose name this Treasury Unit Certificate (or
a Predecessor Treasury Unit Certificate) is registered at the close of business
on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the Corporate
Trust Office of the Agent and at the New York 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 Units Register or by wire transfer to the
account designated by such Person by prior written notice.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Treasury Unit Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ALLTEL CORPORATION
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [ ]
not individually but solely as
attorney-in-fact of such Holder
By: _______________________________
Name:
Title:
Dated:
B-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: [ ]
as Purchase Contract Agent
By: _____________________________________
Authorized Signatory
B-5
(Form of Reverse of
Treasury Unit Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of May [ ], 2002 (as may be supplemented from time
to time, the "Purchase Contract Agreement"), between the Company and [ ], as
Purchase Contract Agent (including its successors thereunder, herein called the
"Agent"), to which the Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the respective rights,
limitations of rights, obligations, duties and immunities thereunder of the
Agent, the Company and the Holders and of the terms upon which the Treasury Unit
Certificates are, and are to be, executed and delivered. In the case of any
inconsistency between this Certificate and the terms of the Purchase Contract
Agreement, the terms of the Purchase Contract Agreement shall prevail.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Unit Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at the Purchase Price, a number of newly issued shares
of Common Stock of the Company equal to the Settlement Rate, unless, on or prior
to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event or an Early Settlement with respect to the Security of which
such Purchase Contract is a part. 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 Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $[ ], (the "Reference Price"), the
number of shares of Common Stock per Purchase Contract equal to the Stated
Amount divided by the Applicable Market Value and (c) if the Applicable Market
Value is less than or equal to the Reference Price, .[ ] shares of Common Stock
per Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby which is settled through Early
Settlement shall obligate the Holder of the related Treasury Units to purchase
at the Purchase Price, and the Company to sell, a number of newly issued shares
of Common Stock equal to the Early Settlement Rate.
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
(a) the third Trading Day immediately preceding the Purchase Contract Settlement
Date or (b) for purposes of determining cash payable in lieu of fractional
shares in connection with an Early Settlement pursuant to Section 5.11 of the
Purchase Contract Agreement, the third Trading Day immediately preceding the
relevant Early Settlement Date or (c) for the purposes of Section 5.7(b)(2) of
the Purchase Contract Agreement, the third Trading Day immediately preceding the
Cash Merger Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing sale 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 composite transactions
for the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed on a United States
B-6
national or regional securities exchange, the last closing sales price on and
as reported as reported by the Nasdaq National Market or, if the Common Stock
is not so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the Closing Price means
the market value of the Common Stock on the date determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract
or by applying a principal amount of the pledged Treasury Securities underlying
such Holder's Treasury Units equal to the Stated Amount to the purchase of the
Common Stock. A Holder of Treasury Units who does not elect, on or prior to
5:00 p.m., New York City time, on the second Business Day immediately preceding
the Purchase Contract Settlement Date, to make an Early Settlement, shall pay
the Purchase Price for the shares of Common Stock to be issued on the related
Purchase Contract by applying a principal amount of the pledged Treasury
Securities as aforesaid.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
The 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 Purchase
Contract Agreement. The Treasury Units Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, for Treasury Securities, thereby
recreating Corporate
B-7
Units, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a 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 the Purchase Contract constituting such Treasury Unit may be
transferred and exchanged only as a Treasury Unit. A Holder of Treasury Units
may recreate Corporate Units by delivering to the Collateral Agent Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, with an
aggregate principal amount, in the case of such Notes, or with the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, in the case of such appropriate Applicable
Ownership Interest of the Treasury Portfolio, equal to the aggregate principal
amount of the pledged Treasury Securities in exchange for the release of such
pledged Treasury Securities in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Security for which such pledged Notes or appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, secures the Holder's
obligation under the Purchase Contract shall be referred to as an "Corporate
Units". A Holder may make such a substitution only in integral multiples of 20
Treasury Units for the same multiple of 20 Corporate Units; provided, however,
that if a Tax Event Redemption or a Successful Initial Remarketing has occurred
and the Treasury Portfolio has become a component of the Corporate Units, a
Holder may make such substitution only in integral multiples of [ ] Treasury
Units for the same multiple of [ ] Corporate Units.
A Holder of a Corporate Unit may create a Treasury Unit by delivering
to the Collateral Agent Treasury Securities in an aggregate principal amount of
the pledged Notes or the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, in exchange for the release of such pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement. Any such creation of a Treasury Unit may be effected only in
multiples of 20 Corporate Units for the same multiple of 20 Treasury Units;
provided, however, if a Tax Event Redemption or a Successful Initial Remarketing
has occurred and the Treasury Portfolio has become a component of the Corporate
Units, a Holder may make such Collateral Substitution only in integral multiples
of [ ] Corporate Units for the same multiple of [ ] Treasury Units.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Treasury Unit
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the Corporate Trust Office of the Agent and the New
York 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 Units
Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, 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
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
B-8
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of [ ]% per year (computed on the basis
of a 360-day year of twelve 30 day months), compounded quarterly 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 Purchase Contract Agreement. No Contract
Adjustment Payments, if any, may be deferred to a date that is on or after the
Purchase Contract Settlement Date and no such deferral period may end other
than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Treasury Unit Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock 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, if any, 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 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 or directors 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; (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 such 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, acquisitions or redemptions of
capital stock in connection with the issuance or exchange of capital stock (or
securities convertible into or exchangeable for shares of our capital stock);
(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; or (vi) mandatory
sinking fund payments with respect to any series of preferred stock of the
Company; provided that the aggregate stated value of all such series
outstanding at the time of such payment does not exceed 5% of the aggregate of
(1) the total principal amount of all then outstanding bonds or other
securities representing secured
B-9
indebtedness issued or assumed by the Company and (2) the Company's capital and
surplus to be stated on the Company's books of account after giving effect to
such payment; provided however that any moneys deposited into any sinking fund
and not in violation of this clause (vi) may thereafter be applied to the
purchase or redemption of such preferred stock in accordance with the terms of
such sinking fund without regard to the foregoing restrictions.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence
of a Termination Event, the Company shall promptly but in no event later than
two Business Days thereafter give written notice to the Agent, the Collateral
Agent and to the Holders, at their addresses as they appear in the Treasury
Units 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 Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("Early Settlement") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Corporate Unit Certificate, the Holder of this Treasury Unit Certificate shall
deliver to the Agent at the Corporate Trust Office an Election to Settle Early
form set forth below and any other documents requested by the Agent duly
completed and accompanied by payment in the form of immediately available funds
payable to the order of the Company in an amount (the "Early Settlement
Amount") equal to (i) the product of (A) $50 times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement, plus (ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date for
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 Purchase Contracts.
Upon Early Settlement of 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 to receive a number of shares of Common Stock on account of
each Purchase Contract forming part of a Treasury Unit as to which Early
Settlement is effected equal to .[ ] share of Common Stock per Purchase
Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this 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
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced
B-10
hereby and the transferor shall be released from the obligations under the
Purchase Contract Agreement, the Pledge Agreement and the Purchase Contracts
evidenced by this Treasury Unit Certificate. The Company covenants and agrees,
and the Holder, by his acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Treasury Unit Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Purchase
Contracts forming part of the Treasury Units evidenced hereby on his behalf as
its attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy Code,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on 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 and to all other provisions
of the Pledge Agreement. The Holder further covenants and agrees, that, to the
extent and in the manner provided in the Purchase Contract Agreement and the
Pledge Agreement, but subject to the terms thereof, Proceeds of the pledged
Treasury Securities on the Purchase Contract Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such Proceeds.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts then outstanding.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of laws.
Prior to due presentment of this Certificate for registration of
transfer, the Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Treasury Unit Certificate
is registered as the owner of the Treasury Units evidenced hereby for the
purpose of receiving payments on the Treasury Securities, receiving payments of
Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-11
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 Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
attorney to transfer said Treasury Unit Certificates on the books of ALLTEL
Corporation with full power of substitution in the premises.
Dated: _________________ _____________________________________
Signature
B-12
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-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Treasury 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: ____________
(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 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:
________________________________________________________________________________
Name
________________________________________________________________________________
Address
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Social Security or other
Taxpayer Identification
Number, if any__________________________________________________________________
B-14
REGISTERED HOLDER
Please print name and address of Registered Holder:
________________________________________________________________________________
Name
________________________________________________________________________________
Address
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
B-15
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 Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Treasury Units evidenced by this Treasury
Unit Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Treasury Units
with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered in the name
of, and delivered, together with a check in payment for any fractional share
and any Treasury Unit Certificate representing any Treasury Units evidenced
hereby as to which Early Settlement of the related Purchase Contracts is not
effected, to the undersigned at the address indicated below unless a different
name and address have been indicated below. Pledged Treasury Securities
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth below. If shares are to be registered in
the name of a Person other than the undersigned, the undersigned will pay any
transfer or similar 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.
B-16
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury 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 (i) print such Person's
name and address and (ii) provide a guarantee of your signature:
________________________________________________________________________________
Name
________________________________________________________________________________
Address
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Social Security or other
Taxpayer Identification
Number, if any__________________________________________________________________
Please print name and address of Registered Holder:
________________________________________________________________________________
Name
________________________________________________________________________________
Address
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Transfer Instructions for pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
B-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Amount of Amount of Stated Amount of this Signature of authorized
decrease in Stated increase in Stated Global Certificate signatory of Purchase
Amount of the Global Amount of the Global following such decrease Contract Agent or
Date Certificate Certificate or increase Securities Custodian Agent
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
________________________________________________________________________________________________________
B-18
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
[ ],
[ ]
[ ]
Attention: [ ]
Re: Equity Units of ALLTEL Corporation (the "Company")
We hereby notify you in accordance with Section 4.1 and 4.2 of the
Pledge Agreement, dated as of May [ ], 2002, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Corporate Units] [Treasury Units] from time to time, that
the holder of the Securities listed below (the "Holder") has elected to
substitute [$_____ aggregate principal amount of Treasury Securities] [$_______
aggregate principal amount of Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for an
equal VALUE of [Pledged Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]
held by you in accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury Securities] [Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be,] to you, as Collateral Agent. We hereby instruct you, upon
receipt of such [Pledged Treasury Securities] [Pledged Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such
[Corporate Units] [Treasury Units] to us in accordance with the Holder's
instructions. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Date:_____________ _____________________________________
By:______________________
Name:
Title:
Signature Guarantee:_____________
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities]:
_________________________ _____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_________________________
Address
C-1
_________________________
_________________________
C-2
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
[ ],
[ ]
[ ]
Attention: [ ]
Re: Equity Units of ALLTEL Corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
, as Collateral Agent, [$_______ aggregate principal amount of Treasury
Securities] [$ aggregate principal amount of Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
in exchange for an equal VALUE of [Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with Section
4.1 and 4.2 of the Pledge Agreement, dated May [ ], 2002 (the "Pledge
Agreement"), between you, the Company and the Collateral Agent. The
undersigned Holder has paid the Collateral Agent all applicable fees relating
to such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio] [Pledged Treasury Securities] related to such [Corporate Units]
[Treasury Units]. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.
Dated:________________ _____________________________________
Signature
Signature Guarantee:______________
Please print name and address of Registered Holder:
_________________________ _____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_________________________
Address
_________________________
_________________________
D-1
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
[ ],
[ ]
[ ]
Attention: [ ]
Re: Equity Units of ALLTEL Corporation (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.5 of the Purchase Contract Agreement dated as of May [ ], 2002
among the Company and yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder
has elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York
City time, on the Business Day immediately preceding the Purchase Contract
Settlement Date, (in lawful money of the United States by certified or cashiers
check or wire transfer, in each case in immediately available funds),
$_________ as the Purchase Price for the shares of Common Stock issuable to
such Holder by the Company under the related Purchase Contract on the Purchase
Contract Settlement Date. The undersigned Holder hereby instructs you to
notify promptly the Collateral Agent of the undersigned Holders election to
make such cash settlement with respect to the Purchase Contracts related to
such Holder's [Corporate 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
_________________________
_________________________
E-1
