EXHIBIT 4.5
================================================================================
PURCHASE CONTRACT AGREEMENT
BETWEEN
SIERRA PACIFIC RESOURCES
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
DATED AS OF __________________, 2005
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.................................................................................... 1
Section 1.2. Compliance Certificates and Opinions........................................................... 13
Section 1.3. Form of Documents Delivered to Purchase Contract Agent......................................... 13
Section 1.4. Acts of Holders; Record Dates.................................................................. 14
Section 1.5. Notices........................................................................................ 15
Section 1.6. Notice to Holders; Waiver...................................................................... 16
Section 1.7. Effect of Headings and Table of Contents....................................................... 16
Section 1.8. Successors and Assigns......................................................................... 16
Section 1.9. Severability................................................................................... 17
Section 1.10. Benefits of Agreement.......................................................................... 17
Section 1.11. Governing Law; Jurisdiction and Venue.......................................................... 17
Section 1.12. Legal Holidays................................................................................. 17
Section 1.13. Counterparts................................................................................... 18
Section 1.14. Inspection of Agreement........................................................................ 18
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally................................................................ 18
Section 2.2. Form of Purchase Contract Agent's Certificate of Authentication................................ 19
ARTICLE III
The PIES
Section 3.1. Amount; Form and Denominations................................................................. 19
Section 3.2. Rights and Obligations Evidenced by the Certificates........................................... 20
Section 3.3. Execution, Authentication, Delivery and Dating................................................. 20
Section 3.4. Temporary Certificates......................................................................... 21
Section 3.5. Registration; Registration of Transfer and Exchange............................................ 22
Section 3.6. Book-Entry Interests........................................................................... 23
Section 3.7. Notices to Holders............................................................................. 24
Section 3.8. Appointment of Successor Depositary............................................................ 24
Section 3.9. Definitive Certificates........................................................................ 24
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates............................................. 24
Section 3.11. Persons Deemed Owners.......................................................................... 25
Section 3.12. Cancellation................................................................................... 26
i
Page
----
Section 3.13. Creation of Treasury PIES by Substitution of Treasury Securities............................... 26
Section 3.14. Recreation of Corporate PIES................................................................... 28
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.................................... 29
Section 3.16. No Consent to Assumption....................................................................... 30
ARTICLE IV
The Senior Notes
Section 4.1. Interest Payments; Rights to Interest Preserved................................................ 30
Section 4.2. Interest Rate Reset; Reset of Other Terms...................................................... 31
Section 4.3. Notice and Voting.............................................................................. 31
ARTICLE V
The Purchase Contracts; The Remarketing
Section 5.1. Purchase of Shares of Common Stock............................................................. 32
Section 5.2. Purchase Contract Adjustment Payments.......................................................... 34
Section 5.3. Payment of Purchase Price; Remarketing......................................................... 36
Section 5.4. Issuance of Shares of Common Stock............................................................. 37
Section 5.5. Adjustment of Settlement Rate and Early Settlement Rate........................................ 38
Section 5.6. Notice of Adjustments and Certain Other Events................................................. 44
Section 5.7. Termination Event; Notice...................................................................... 45
Section 5.8. Cash Settlement................................................................................ 45
Section 5.9. Early Settlement............................................................................... 48
Section 5.10. Early Settlement Upon Merger................................................................... 50
Section 5.11. Optional Remarketing........................................................................... 51
Section 5.12. No Fractional Shares........................................................................... 52
Section 5.13. Charges and Taxes.............................................................................. 52
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Purchase Contract Adjustment Payments and to
Purchase Shares of Common Stock.............................................................. 53
Section 6.2. Restoration of Rights and Remedies............................................................. 53
Section 6.3. Rights and Remedies Cumulative................................................................. 53
Section 6.4. Delay or Omission Not Waiver................................................................... 53
Section 6.5. Undertaking for Costs.......................................................................... 53
Section 6.6. Waiver of Stay or Extension Laws............................................................... 54
ii
Page
----
ARTICLE VII
The Purchase Contract Agent
Section 7.1. Certain Duties and Responsibilities............................................................ 54
Section 7.2. Notice of Default.............................................................................. 55
Section 7.3. Certain Rights of Purchase Contract Agent...................................................... 55
Section 7.4. Not Responsible for Recitals or Issuance of PIES............................................... 57
Section 7.5. May Hold PIES.................................................................................. 57
Section 7.6. Money Held in Custody.......................................................................... 57
Section 7.7. Compensation and Reimbursement................................................................. 58
Section 7.8. Corporate Purchase Contract Agent Required; Eligibility........................................ 58
Section 7.9. Resignation and Removal; Appointment of Successor.............................................. 59
Section 7.10. Acceptance of Appointment by Successor......................................................... 60
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.................................... 60
Section 7.12. Preservation of Information; Communications to Holders......................................... 61
Section 7.13. No Obligations of Purchase Contract Agent...................................................... 61
Section 7.14. Tax Compliance................................................................................. 61
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders............................................. 62
Section 8.2. Supplemental Agreements With Consent of Holders................................................ 62
Section 8.3. Execution of Supplemental Agreements........................................................... 63
Section 8.4. Effect of Supplemental Agreements.............................................................. 64
Section 8.5. Reference to Supplemental Agreements........................................................... 64
ARTICLE IX
Merger, Consolidation Sale or Conveyance
Section 9.1. When Company May Merge, Etc.................................................................... 64
Section 9.2. Successor Corporation Substituted.............................................................. 65
Section 9.3. Limitation..................................................................................... 65
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts........................................................... 65
Section 10.2. Maintenance of Office or Agency................................................................ 66
Section 10.3. Company to Reserve Common Stock................................................................ 66
Section 10.4. Covenants as to Common Stock................................................................... 66
Section 10.5. Statements of Officers of the Company as to Default............................................ 67
Section 10.6. ERISA.......................................................................................... 67
iii
Page
----
EXHIBITS
EXHIBIT A Form of Face of Corporate PIES Certificate................................................. A-1
EXHIBIT B Form of Face of Treasury PIES Certificate ................................................. B-1
EXHIBIT C Notice from Holder to Purchase Contract Agent
(Election for Creation of Treasury PIES or Recreation of Corporate PIES)................... C-1
EXHIBIT D Instruction From Holder to Purchase Contract Agent
(Creation of Treasury PIES or Recreation of Corporate PIES)................................ D-1
EXHIBIT E Notice from Purchase Contract Agent to Holders
(Transfer of Collateral upon Occurrence of a Termination Event)............................ E-1
EXHIBIT F Notice to Settle by Cash................................................................... F-1
EXHIBIT G Notice from Purchase Contract Agent to Remarketing Agents, Collateral Agent, Trustee and
the Company (Initial, Subsequent or Final Remarketing)..................................... G-1
iv
PURCHASE CONTRACT AGREEMENT, dated as of ______ __, 2005, between
SIERRA PACIFIC RESOURCES, a Nevada corporation (the "Company"), and THE BANK OF
NEW YORK, a New York banking corporation, acting as purchase contract agent for
the Holders of PIES from time to time (the "Purchase Contract Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the PIES.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company, authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute this
Agreement a valid agreement of the Company, in accordance with its terms, have
been done.
For and in consideration of the premises and the purchase of the
PIES 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, Exhibit 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.
2
"Active Remarketing Period" has the meaning set forth in Section 1
of the Pledge Agreement.
"Adjusted Purchase Contract Adjustment Payment Rate" means, with
respect to any Reset Transaction, the rate per annum that is the arithmetic
average of the rates quoted by two Reference Dealers selected by the Company as
the rate at which Purchase Contract Adjustment Payments should accrue so that
the fair closing price, expressed in dollars, of a Corporate PIES immediately
after the later of (i) public announcement of such Reset Transaction or (ii)
public announcement of a change in dividend policy in connection with such Reset
Transaction will equal the average Trading Price of a Corporate PIES for the 20
Trading Days preceding the date of public announcement of such Reset
Transaction; provided that the Adjusted Purchase Contract Adjustment Payment
Rate shall not be less than 1.07% per annum.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliated Person" with respect to any specified Person means any
other Person that is an Affiliate of such specified Person.
"Agreement" means this Purchase Contract Agreement as the same may
be amended, modified or supplemented from time to time in accordance with the
terms hereof.
"Applicable Closing Price" has the meaning set forth in Section 5.1.
"applicants" has the meaning set forth in Section 7.12(b).
"Authorized Newspaper" means The Wall Street Journal, another daily
newspaper in the English language of general circulation in New York, New York
that is acceptable to the Remarketing Agents or, at the discretion of the
Remarketing Agents after consultation with the Company, a nationally recognized
quotation system that would be an effective medium of publicizing the event to
be publicized.
"Bankruptcy Code" means Title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"Board of Directors" means the board of directors of the Company or
a duly authorized committee of that board.
3
"Board Resolution" means one or more resolutions or unanimous
written consents of the Board of Directors, a copy each of which has been
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of such certification and delivered to the Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary as described in Section 3.6.
"Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"Cash Merger" has the meaning set forth in Section 5.10(a).
"Cash Merger Date" has the meaning set forth in Section 5.10(a).
"Cash Settlement" has the meaning set forth in Section 5.8(a)(i).
"Certificate" means a Corporate PIES Certificate or a Treasury PIES
Certificate.
"Closing Price" has the meaning set forth in Section 5.1.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Collateral" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Collateral Agent" means ▇▇▇▇▇ Fargo 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" means the substitution of Treasury
Securities, for a Holder's Senior Notes, pursuant to Section 3.13 of this
Agreement and Section 5.2 of the Pledge Agreement, and/or the substitution of a
Holder's Senior Notes for Treasury Securities, pursuant to Section 3.14 of this
Agreement and Section 5.3 of the Pledge Agreement, as the case may be.
"Common Stock" means the common stock, par value $1.00 per share, 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 provision of this Agreement, and thereafter "Company" shall
mean such successor.
4
"Constituent Person" has the meaning set forth in Section 5.5(b).
"Corporate PIES" means the collective rights and obligations of a
Holder of a Corporate PIES Certificate issued in substantially the form set
forth as Exhibit A hereto in the Stated Amount of $50, which represents
beneficial ownership by the Holder of either (1) a 1/20th, or 5%, undivided
beneficial ownership interest in $1,000 principal amount of Senior Notes, or (2)
if substituted therefor in connection with a Successful Remarketing, the Pledged
Treasury Portfolio Interest, which, in the case of each of clauses (1) and (2),
is subject to the Pledge by the Holder pursuant to the Pledge Agreement, and the
related Purchase Contract.
"Corporate PIES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Corporate PIES
specified on such certificate.
"Corporate PIES Register" and "Corporate PIES Registrar" have the
respective meanings specified in Section 3.5.
"Corporate Trust Office" means the office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Division -- Corporate Finance Unit.
"Coupon Rate" means the percentage rate per annum at which each
Senior Note will bear interest initially.
"Current Market Price" has the meaning specified in Section
5.5(a)(8).
"Depositary" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the PIES 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 PIES. Initially, DTC shall be the
Depositary.
"Depositary Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.
"Dividend Yield" means, with respect to any security for any period,
the dividends paid or proposed to be paid pursuant to an announced dividend
policy on such security for such period divided by, if with respect to dividends
paid on such security, the average Closing Price of such security during such
period and, if with respect to dividends so proposed to be paid on such
security, the Closing Price of such security on the effective date of the
related Reset Transaction.
"DTC" means The Depository Trust Company, the initial Depositary.
"Early Settlement" has the meaning set forth in Section 5.9(a).
"Early Settlement Amount" has the meaning set forth in Section
5.9(a).
5
"Early Settlement Date" has the meaning set forth in Section 5.9(a).
"Early Settlement Rate" has the meaning set forth in Section 5.9(b).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning set forth in Section 1.4(e).
"Expiration Time" has the meaning set forth in Section 5.5(a)(6).
"Failed Remarketing" has the meaning set forth in Section 2(f) of
the Remarketing Agreement.
"Final Remarketing" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Global Certificate" means a Certificate that is issued in global
form, evidencing all or part of the PIES, and is registered in the name of a
Depositary or a nominee thereof.
"Holder" means, with respect to a PIES, the Person in whose name the
PIES evidenced by a Corporate PIES Certificate and/or a Treasury PIES
Certificate is registered in the related Corporate PIES Register and/or the
Treasury PIES Register, as the case may be; provided, however, that in
determining whether the Holders of the requisite number of Corporate PIES and/or
Treasury PIES have Acted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the PIES
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the PIES are credited on the applicable record date, the term "Holder" shall
mean such Depositary Participant acting at the direction of the Beneficial
Owners.
"Indenture" means the Indenture, dated as of May 1, 2000, between
the Company and the Trustee (the "Original Indenture") and the Officers'
Certificate, dated as of ______________, 2005 establishing the terms and other
provisions of the Senior Notes pursuant to the Original Indenture (the
"Indenture Officers' Certificate" and together with the Original Indenture, the
"Indenture"), as the same may be amended, modified or supplemented from time to
time in accordance with the terms thereof including in connection with a
Successful Remarketing.
"Issuer Order" or "Issuer Request" means a written request or order
signed in the name of the Company by (i) either its Chief Executive Officer, its
President, Chief Financial Officer or one of its Vice Presidents and (ii) either
its Corporate Secretary or one of its Assistant Corporate Secretaries or its
Treasurer or one of its Assistant Treasurers, and delivered to the Purchase
Contract Agent.
6
"Merger Early Settlement" has the meaning set forth in Section 5.10.
"Merger Early Settlement Amount" has the meaning set forth in
Section 5.10(b).
"Merger Early Settlement Date" has the meaning set forth in Section
5.10(a)(i).
"non-electing share" has the meaning set forth in Section 5.5(b).
"NYSE" means the New York Stock Exchange, Inc.
"Officers' Certificate" means a certificate signed by (i) either the
Chief Executive Officer, the President, Chief Financial Officer, or one of the
Vice Presidents and (ii) either the Corporate Secretary or one of the Assistant
Corporate Secretaries or the Treasurer or one of the Assistant Treasurers, of
the Company, and delivered to the Purchase Contract Agent.
"Opinion of Counsel" means a written opinion of counsel, which may
be counsel for the Company (and who may be an employee of the Company), and
which shall be reasonably acceptable to the Purchase Contract Agent.
"Outstanding PIES" means, with respect to any Corporate PIES or
Treasury PIES and as of the date of determination, all Corporate PIES or
Treasury PIES evidenced by Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
(1) If a Termination Event has occurred, Corporate PIES and Treasury
PIES for which the related Senior Notes, the Treasury Portfolio or
Treasury Securities, as the case may be, have been theretofore deposited
with the Purchase Contract Agent in trust for the Holders of such
Corporate PIES or Treasury PIES, as the case may be;
(2) Corporate PIES and Treasury PIES evidenced by Certificates
theretofore cancelled by the Purchase Contract Agent or delivered to the
Purchase Contract Agent for cancellation or deemed cancelled pursuant to
the provisions of this Agreement; and
(3) Corporate PIES and Treasury PIES evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Purchase Contract Agent proof
satisfactory to it that such Certificate is held by a bona fide purchaser
in whose hands the Corporate PIES or Treasury PIES 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 PIES or Treasury PIES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Corporate PIES or
Treasury PIES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be Outstanding PIES, except that, in determining
whether the Purchase Contract Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Corporate PIES or Treasury PIES which a Responsible Officer of the Purchase
Contract Agent knows to be so owned shall be so disregarded. Corporate PIES or
Treasury PIES so owned
7
which have been pledged in good faith may be regarded as Outstanding PIES if the
pledgee establishes to the satisfaction of the Purchase Contract Agent the
pledgee's right so to act with respect to such Corporate PIES or Treasury PIES
and that the pledgee is not the Company or any Affiliate of the Company.
"Payment Date" means August 15, 2005 and November 15, 2005.
"Permitted Investments" has the meaning set forth in Section 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 organization or
government or any agency or political subdivision thereof or any other entity of
whatever nature.
"PIES" means a Corporate PIES, a Treasury PIES, or the collective
reference to the Corporate PIES and the Treasury PIES, as the case may be.
"Plan" means an employee benefit plan that is subject to ERISA, a
plan or individual retirement account that is subject to Section 4975 of the
Code or any entity whose assets are considered assets of any such plan.
"Pledge" means the pledge under the Pledge Agreement of the Senior
Notes, any Treasury Portfolio or any Treasury Securities, in each case,
constituting a part of the PIES.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact for the Holders from time to time of the PIES, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
"Pledged Senior Notes" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledged Treasury Portfolio Interest" has the meaning set forth in
Section 1 of the Pledge Agreement.
"Pledged Treasury Securities" has the meaning set forth in Section 1
of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Corporate PIES
Certificate or a Predecessor Treasury PIES Certificate.
"Predecessor Corporate PIES Certificate" of any particular Corporate
PIES Certificate means every previous Corporate PIES Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Corporate PIES evidenced thereby; and, for the purposes of this definition,
any Corporate PIES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or
8
stolen Corporate PIES 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 PIES Certificate.
"Predecessor Treasury PIES Certificate" of any particular Treasury
PIES Certificate means every previous Treasury PIES Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Treasury PIES evidenced thereby; and, for the purposes of this definition,
any Treasury PIES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury PIES
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 PIES
Certificate.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract" means, with respect to any PIES, the contract
contained in this Agreement and forming a part of such PIES and obligating (i)
the Company to sell, and the Holder of such PIES to purchase, shares of Common
Stock and (ii) the Company to pay to the Holder Purchase Contract Adjustment
Payments, in each case, on the terms and subject to the conditions set forth in
Article Five.
"Purchase Contract Adjustment Payments" means the quarterly payments
payable by the Company on the Payment Dates in respect of each Purchase
Contract, commencing on August 15, 2005 equal to (a) if a Reset Transaction has
not occurred, 1.07% per annum of the Stated Amount or (b) following the
occurrence of a Reset Transaction, the Adjusted Purchase Contract Adjustment
Payment Rate related to such Reset Transaction until any succeeding Reset
Transaction shall occur, in either case computed (i) for any full quarterly
period on the basis of a 360-day year of twelve 30-day months, (ii) for any
period shorter than a full quarterly period for which such payments are
calculated, on the basis of a 30-day month and (iii) for periods of less than a
month, the actual number of days elapsed per 30-day month.
"Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Purchase Contract Agent" shall
mean such Person.
"Purchase Contract Settlement Date" means November 15, 2005.
"Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.4.
"Purchase Price" has the meaning set forth in Section 5.1.
"Purchased Shares" has the meaning set forth in Section 5.5(a)(6).
"Record Date" for the Purchase Contract Adjustment Payments payable
on any Payment Date means the fifteenth Business Day prior to such Payment Date.
"Reference Dealer" means a dealer engaged in the trading of
convertible securities.
9
"Reference Price" has the meaning set forth in Section 5.1.
"Register" means the Corporate PIES Register and the Treasury PIES
Register.
"Registrar" means the Corporate PIES Registrar and the Treasury PIES
Registrar.
"Remarketing" means the remarketing of the Remarketing Senior Notes
pursuant to the Remarketing Procedures.
"Remarketing Agents" has the meaning set forth in Recitals of the
Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as of
the date hereof, between the Company and the Remarketing Agents, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
"Remarketing Fee" has the meaning set forth in Section 2(e) of the
Remarketing Agreement.
"Remarketing Procedures" means, collectively, the procedures and
requirements relating to the Remarketing and the determination of the Reset Rate
as set forth in the Indenture, this Agreement, the Pledge Agreement and the
Remarketing Agreement.
"Remarketing Senior Notes" has the meaning set forth in Section
19(i)(A) of the Officers' Certificate.
"Remarketing Settlement Date" means the date of the settlement of
any Successful Remarketing, which will be three Business Days after such
Remarketing.
"Remarketing Value" means the sum of
(a) if;
(i) the Remarketing Settlement Date occurs prior to August 15,
2005, with respect to the originally scheduled Payment Date that would
have occurred on August 15, 2005, such amount of Treasury Securities that
will pay on or prior to August 14, 2005, an aggregate amount equal to the
aggregate interest payment on the Remarketing Senior Notes from the
Remarketing Settlement Date to, but excluding, August 15, 2005 on the
principal amount of the Remarket Senior Note that would have been included
in the Corporate PIES assuming no remarketing and no reset of the interest
rate on the Senior Notes and assuming that the interest on the Senior
Notes accrued from the Remarketing Settlement Date to, but excluding,
August 15, 2005; and
(ii) the Remarketing Settlement Date occurs prior to November
15, 2005, with respect to the originally scheduled Payment Date that would
have occurred on November 15, 2005, such amount of Treasury Securities
that will pay on or prior to November 14, 2005 an aggregate amount equal
to the aggregate interest payment on the Remarketing Senior Notes from the
Remarketing Settlement Date to, but excluding,
10
November 15, 2005 on the principal amount of the Remarketed Senior Notes
that would have been included in the Corporate PIES assuming no
remarketing and no reset of the interest rate on the Senior Notes and
assuming that interest on the Senior Notes accrued from the later of the
Remarketing Settlement Date or August 15, 2005 to, but excluding, November
15, 2005;
(b) the value of such amount of Treasury securities that will pay,
on or prior to the Purchase Contract Settlement Date, an amount of cash
equal to $1,000 for each Remarketing Senior Notes; and
(c) the Remarketing Fee.
"Reorganization Event" has the meaning set forth in Section 5.5(b).
"Reset Rate" has the meaning set forth in the Indenture Officers'
Certificate.
"Reset Transaction" means a merger, consolidation or statutory share
exchange to which the Person that is the issuer of the shares of Common Stock
for which the Purchase Contracts are then to be settled is a party, a sale of
all or substantially all assets of such Person, a recapitalization of such
Common Stock or a distribution described in Section 5.5(a)(4) by such Person and
after the effective date of such transaction the Purchase Contracts are then to
be settled for shares of common stock of a Person (i) which had a Dividend Yield
for the four fiscal quarters immediately preceding the public announcement
thereof which was, or (ii) that announces a dividend policy prior to the
effective date thereof which policy, if implemented, would result in a Dividend
Yield on such shares of Common Stock for the next four fiscal quarters which
would be, more than 250 basis points higher than the Dividend Yield on the
shares of Common Stock for which the Purchase Contracts are to be settled prior
to such effective date for the four fiscal quarters immediately preceding such
public announcement.
"Responsible Officer," means, when used with respect to the Agent,
any officer within the Corporate Trust Division -- Corporate Finance Unit of the
Purchase Contract Agent (or any successor unit or department of the Agent)
located at the Corporate Trust Office of the Purchase Contract Agent who has
direct responsibility for the administration of this Agreement.
"Securities Intermediary" means ▇▇▇▇▇ Fargo Bank, National
Association, as Securities Intermediary under the Pledge Agreement until a
successor Securities Intermediary shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "Securities
Intermediary" shall mean such successor.
"Senior Notes" means the 7.93% Senior Notes due 2007 to be issued by
the Company under the Indenture, each having a minimum denomination of $1,000
and bearing interest accruing from May 15, 2005, payable on the Payment Dates,
initially at the Coupon Rate to, but excluding, the Remarketing Settlement Date
or the Purchase Contract Settlement Date, as applicable, and, thereafter, at the
Reset Rate, in each case pursuant to the Indenture. Any reference herein to "one
Senior Note," "a Senior Note" or "the Senior Note" or any phrase herein having a
similar meaning shall be a reference to a Senior Note in the principal amount of
$1,000.
11
"Separated Senior Notes" has the meaning set forth in Section 1 of
the Pledge Agreement.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means, with respect to any one PIES, $50 in cash.
"Stated Maturity" means, with respect to the Senior Notes, November
15, 2007.
"Successful Remarketing" has the meaning specified in Section 2(e)
of the Remarketing Agreement.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events:
(1) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief with respect to the Company under the Bankruptcy Code or any other
similar applicable Federal or state law, adjudicating the Company to be
insolvent, or approving as properly filed a petition seeking
reorganization or liquidation of the Company, 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;
(2) 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
(3) 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 of the Company 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 its
creditors, or shall admit in writing its inability to pay its debts
generally as they become due.
"Threshold Appreciation Price" has the meaning set forth in Section
5.1.
"Three-Day Remarketing Period" has the meaning set forth in Section
1 of the Pledge Agreement.
12
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation, and the rules and regulations promulgated
thereunder.
"Trading Day" has the meaning set forth in Section 5.1.
"Trading Price" of a security on any date of determination means:
(1) the closing sale price (or, if no closing price is reported, the
last reported sale price) of a security (regular way) on the NYSE on such
date;
(2) if such security 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 securities exchange on which
such security is so listed;
(3) if such security is not so listed on a United States national or
regional securities exchange, the closing sale price as reported by the
NASDAQ Stock Market;
(4) if such security is not so reported, the price quoted by
Interactive Data Corporation for such security or, if Interactive Data
Corporation is not quoting such price, a similar quotation service
selected by the Company;
(5) if such security is not so quoted, the average of the mid-point
of the last bid and ask prices for such security from at least two dealers
recognized as market-makers for such security; or
(6) if such security is not so quoted, the average of the last bid
and ask prices for such security from a Reference Dealer.
"Transfer" has the meaning specified in Section 1 of the Pledge
Agreement.
"Treasury PIES" means, following the substitution of Treasury
Securities for Senior Notes as collateral to secure a Holder's obligations under
a Purchase Contract, the collective rights and obligations of a Holder of a
Treasury PIES Certificate in respect of such Treasury Securities, subject to the
Pledge thereof, and the related Purchase Contract.
"Treasury PIES Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Treasury PIES
specified on such certificate.
"Treasury PIES Register" and "Treasury PIES Registrar" have the
respective meanings set forth in Section 3.5.
"Treasury Portfolio" has the meaning specified in Section 2(e) of
the Remarketing Agreement.
"Treasury Portfolio Interest" has the meaning specified in Section
2(e) of the Remarketing Agreement.
"Treasury Portfolio Return" has the meaning specified in Section
4.1.
13
"Treasury Security" means a zero-coupon U.S. Treasury Security that
has a principal amount at maturity of $1,000 and which matures on or prior to
the Business Day prior to the Purchase Contract Settlement Date or a Payment
Date, as the case may be.
"Trustee" means The Bank of New York, a New York corporation, as
trustee under the Indenture, or any successor thereto.
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 Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than pursuant to
Section 10.5) shall include:
(1) a statement that each individual 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 individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
14
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Purchase Contract Agent and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.1) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.
(c) The ownership of PIES shall be proved by the Corporate PIES
Register or the Treasury PIES 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 Purchase
Contract Agent or the Company in reliance thereon, whether or not notation of
such action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding PIES 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 PIES. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate PIES and the Outstanding Treasury
15
PIES, 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 PIES or the
Treasury PIES, 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 (as defined
below) by Holders of the requisite number of Outstanding PIES on such record
date. Nothing contained in this paragraph shall be construed to prevent the
Company from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and be of no effect), and nothing contained in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite number of
Outstanding PIES on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Company, at its own expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Purchase Contract Agent in writing
and to each Holder of PIES 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 Purchase Contract Agent in writing, and to each Holder of PIES
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 notice or communication is duly given if in writing and
delivered in Person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier (with receipt confirmed) or overnight air
courier guaranteeing next day delivery, to the others' address; provided that
notice shall be deemed given to the Purchase Contract Agent and the Trustee, as
the case may be, only upon receipt thereof:
If to the Company:
Sierra Pacific Resources
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Manager of Finance and Treasury
If to the Purchase Contract Agent:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Division -- Corporate Finance Unit
If to the Collateral Agent and Securities Intermediary:
▇▇▇▇▇ Fargo Bank, National Association
Sixth and Marquette
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Division -- Corporate Finance Unit
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 Purchase Contract Agent, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.
Section 1.7. 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.
17
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Severability.
If any provision in this Agreement is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions of this Agreement shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision of this Agreement in any
jurisdiction shall not in any way affect the validity or enforceability of such
provision in any other jurisdiction.
Section 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the PIES, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the PIES evidenced by
their Certificates by their acceptance of delivery of such Certificates.
Section 1.11. Governing Law; Jurisdiction and Venue.
This Agreement and the PIES shall be governed by, and construed in
accordance with, the laws of the State of New York.
The Company, the Purchase Contract Agent and the Holders from time
to time of the PIES, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company and the Holders from time to time of the PIES, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement, the Corporate PIES
Certificates or the Treasury PIES Certificates) payments by or owed from the
Company contemplated by this Agreement shall not be made on such date, but shall
be made on the next succeeding Business Day with the same force and effect as if
made on such Payment Date, provided that no interest shall accrue or be payable
by the Company or any Holder for the period from and after any such Payment
Date, except that, if such next succeeding Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
18
In any case where the Purchase Contract Settlement Date shall not be
a Business Day, notwithstanding any other provision of this Agreement, the
Corporate PIES Certificates or the Treasury PIES Certificates, Purchase
Contracts shall not be settled on such date, but the Purchase Contracts shall be
settled on the immediately following Business Day with the same force and effect
as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.
ARTICLE II
CERTIFICATE FORMS
Section 2.1. Forms of Certificates Generally.
The Corporate PIES Certificates (including the form of Purchase
Contract forming part of the Corporate PIES 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 PIES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Corporate PIES Certificates, as evidenced by their
execution of the Corporate PIES Certificates.
The definitive Corporate PIES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Corporate PIES evidenced by such Corporate PIES Certificates, consistent with
the provisions of this Agreement, as evidenced by their execution thereof.
The Treasury PIES Certificates (including the form of Purchase
Contracts forming part of the Treasury PIES 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 PIES may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury PIES Certificates, as evidenced by their
execution of the Treasury PIES Certificates.
19
The definitive Treasury PIES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury PIES evidenced by such Treasury PIES Certificates, consistent with the
provisions of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
"This Certificate is a Global Certificate within the meaning of the
Purchase Contract Agreement hereinafter referred to and is registered in
the name of The Depository Trust Company, a New York corporation (the
"Depositary"), or a nominee of the Depositary. This Certificate is
exchangeable for certificates registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances
described in the Purchase Contract Agreement and no transfer of this
Certificate (other than a transfer of this Certificate as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Certificate is presented by an authorized representative
of the Depositary to Sierra Pacific Resources 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 is requested
by an authorized representative of the Depositary (and any payment hereon
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
since the registered owner hereof, Cede & Co., has an interest herein."
Section 2.2. Form of Purchase Contract Agent's Certificate of Authentication.
The form of the Purchase Contract Agent's certificate of
authentication of the Corporate PIES shall be in substantially the form set
forth on the form of the Corporate PIES Certificates.
The form of the Purchase Contract Agent's certificate of
authentication of the Treasury PIES shall be in substantially the form set forth
on the form of the Treasury PIES Certificates.
ARTICLE III
THE PIES
Section 3.1. Amount; Form and Denominations.
The aggregate number of PIES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 4,704,350, except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Sections 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 5.10.
20
The Certificates shall be issuable only in registered form and only
in denominations of a single Corporate PIES or Treasury PIES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Corporate PIES Certificate shall evidence the number of
Corporate PIES specified therein, with each such Corporate PIES representing (1)
the ownership by the Holder thereof of (a) a 1/20th, or 5%, undivided beneficial
interest in a Senior Note with a principal amount at maturity of $1,000 or (b)
if substituted therefor, the Pledged Treasury Portfolio Interest, in either
case, subject to the Pledge of such Senior Note or such Pledged Treasury
Portfolio Interest, as the case may be, by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Purchase Contract Agent as
attorney-in-fact for, and on behalf of, the Holder of each Corporate PIES shall
pledge, pursuant to the Pledge Agreement, the Senior Note or, if substituted
therefor, the Treasury Portfolio Interest, forming a part of such Corporate
PIES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title and interest of such Holder in such Senior Note or
such Treasury Portfolio Interest, as the case may be, for the benefit of the
Company, to secure the obligation of the Holder under each Purchase Contract to
purchase shares of Common Stock pursuant to the Purchase Contract.
Upon the formation of Treasury PIES pursuant to Section 3.13, each
Treasury PIES Certificate shall evidence the number of Treasury PIES specified
therein, with each such Treasury PIES representing (1) the ownership by the
Holder thereof of a 1/20th undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such Treasury
Security by such Holder pursuant to the Pledge Agreement, and (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.
The Purchase Contract Agent as attorney-in-fact for, and on behalf of, the
Holder of each Treasury PIES shall pledge, pursuant to the Pledge Agreement, the
Treasury Security or Treasury Securities forming a part of such Treasury PIES,
to the Collateral Agent and grant to the Collateral Agent a security interest in
the right, title and interest of such Holder in such Treasury Security or
Treasury Securities for the benefit of the Company, to secure the obligation of
the Holder under each Purchase Contract to purchase shares of Common Stock
pursuant to this Agreement and the related Purchase Contract.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contract shall not entitle the Holder of a Corporate
PIES Certificate or a Treasury PIES Certificate to any of the rights of a holder
of shares of Common Stock, including, without limitation, the right to vote or
receive any dividends or other payments or to consent or to receive notice as a
shareholder in respect of the meetings of shareholders or for the election of
directors of the Company or for any other matter, or any other rights whatsoever
as a shareholder of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.1, 3.13 and 3.14 hereof,
upon the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the Company
to the Purchase Contract Agent for
21
authentication, execution on behalf of the Holders and delivery, together with
its Issuer Order for authentication of such Certificates, and the Purchase
Contract Agent in accordance with such Issuer Order shall authenticate, execute
on behalf of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President, Chief Financial Officer, one of its Vice
Presidents, Corporate Secretary or Treasurer. The signature of any of these
officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of an
individual who was at any time the proper officer of the Company shall bind the
Company, notwithstanding that such individual has ceased to hold such office
prior to the authentication and delivery of such Certificates or did not hold
such office 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 officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contract or 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 officer of the Purchase Contract Agent by
manual signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Purchase Contract Agent, and the Purchase
Contract Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary Certificates which
are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the
case may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Corporate PIES or Treasury PIES are or may be listed, or as may, consistently
herewith, be determined by the officers of the Company executing such
Certificates, as evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver
22
in exchange therefor, one or more definitive Certificates of like tenor and
denominations and evidencing a like aggregate number of Corporate PIES or
Treasury PIES, 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 PIES or Treasury PIES, as the case may be, evidenced thereby as
definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office
a register (the "Corporate PIES Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Corporate PIES Certificates and of transfers of Corporate
PIES Certificates (the Purchase Contract Agent, in such capacity, the "Corporate
PIES Registrar") and a register (the "Treasury PIES Register") in which, subject
to such reasonable regulations as it may prescribe, the Purchase Contract Agent
shall provide for the registration of the Treasury PIES Certificates and
transfers of Treasury PIES Certificates (the Purchase Contract Agent, in such
capacity, the "Treasury PIES Registrar").
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the designated transferee or transferees, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of any authorized denominations, like tenor, and evidencing a like
aggregate number of Corporate PIES or Treasury PIES, 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 PIES or Treasury PIES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same aggregate
number of Corporate PIES or Treasury PIES, as the case may be, and be entitled
to the same benefits and subject to the same obligations, under this Agreement
as the Corporate PIES or Treasury PIES, 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 Purchase Contract Agent)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the
23
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 and 8.5 not
involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the 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 Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred, deliver
the shares of Common Stock issuable in respect of the Purchase Contracts
forming a part of the PIES evidenced by such other Certificate; or
(2) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Senior Notes, 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.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form
of one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian 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 will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Purchase Contract Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until definitive, fully
registered Certificates have been issued to Beneficial Owners pursuant to
Section 3.9:
(1) the provisions of this Section 3.6 shall be in full force and
effect;
(2) the Company shall be entitled to deal with the Depositary for
all purposes of this Agreement (including making Purchase Contract
Adjustment Payments and receiving approvals, votes or consents hereunder)
as the Holder of the PIES and the sole holder of the Global Certificates
and shall have no obligation to the Beneficial Owners;
(3) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
24
(4) the rights of the Beneficial Owners shall be exercised only
through the Depositary and shall be limited to those established by law
and agreements between such Beneficial Owners and the Depositary and/or
the Depositary Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required
to be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any PIES
registered in the name of a Depositary or the nominee of a Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Depositary.
If any Depositary elects to discontinue its services as securities
depositary with respect to the PIES or ceases to be eligible as a "depositary"
under the Exchange Act, the Company may, in its sole discretion, appoint a
successor Depositary with respect to the PIES.
Section 3.9. Definitive Certificates.
If (a) the Depositary is at any time unwilling, unable or ineligible
to continue as a "clearing agency" registered under the Exchange Act and a
successor Depositary is not appointed by the Company pursuant to Section 3.8
within 90 days of the date the Company and the Purchase Contract Agent is so
informed in writing thereof, (b) the Company executes and delivers to the
Purchase Contract Agent a Company Order (as defined in the Indenture) to the
effect that the Global Certificates shall be exchangeable for Definitive
Certificates or (c) a default by the Company in respect of its obligations under
one or more Purchase Contracts has occurred and is continuing, then upon
surrender of the Global Certificates representing the PIES by the Depositary,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Depositary. The Company and the Purchase Contract Agent
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of Corporate PIES or Treasury PIES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or to a Responsible Officer of the Purchase Contract
Agent that such Certificate has been acquired by a bona fide purchaser, the
Company shall execute and deliver to the Purchase Contract Agent, and the
Purchase Contract
25
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 PIES or Treasury PIES, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the 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 Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred, deliver
the shares of Common Stock issuable in respect of the Purchase Contracts
forming a part of the PIES evidenced by such Certificate; or
(2) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Senior Notes, 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 Purchase Contract Agent may require the payment by the Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Purchase Contract Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the PIES
evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and
the PIES evidenced thereby) shall be at any time enforceable by anyone, and
shall be entitled to all the benefits and be subject to all the obligations of
this Agreement equally and proportionately with any and all other Certificates
delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Purchase Contract Agent, and any agent of the
Company or the Purchase Contract Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Corporate PIES or Treasury PIES
evidenced thereby, for the purpose of receiving interest payments on the Senior
Notes, receiving Purchase Contract Adjustment Payments, performance of the
Purchase Contracts and for all other purposes whatsoever, whether or not any
interest payments on the
26
Senior Notes or the Purchase Contract Adjustment Payments payable in respect of
the Purchase Contracts constituting a part of the Corporate PIES or Treasury
PIES evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Purchase Contract Agent, nor any agent
of the Company or the Purchase Contract Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing contained herein shall prevent the Company, the Purchase
Contract Agent or any agent of the Company or the Purchase Contract Agent, from
giving effect to any written certification, proxy or other authorization
furnished by any Depositary (or its nominee), as a Holder, with respect to such
Global Certificate or impair, as between such Depositary and owners of
beneficial interests in such Global Certificate, the operation of customary
practices governing the exercise of rights of such Depositary (or its nominee)
as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock
on or after the Purchase Contract Settlement Date, upon the transfer of Senior
Notes, 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 a
Collateral Substitution or the recreation of Corporate PIES or upon the
registration of a transfer or exchange of a PIES, shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by it.
The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the
Purchase Contract Agent. No Certificates shall be authenticated, executed on
behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Purchase
Contract Agent shall be disposed of by the Purchase Contract Agent in accordance
with its customary procedures.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
Section 3.13. Creation of Treasury PIES by Substitution of Treasury Securities.
A Holder may separate the Senior Notes from the related Purchase
Contracts in respect of such Holder's Corporate PIES by substituting Treasury
Securities or security entitlements thereto for such Senior Notes, pursuant to
the Pledge Agreement, in an aggregate principal amount equal to the aggregate
principal amount of such Senior Notes, at any time from and after the date of
this Agreement until 5:00 p.m. (New York City time) on any such date except
during an Active Remarketing Period by:
(1) providing notice to the Purchase Contract Agent, substantially
in the form of Exhibit C hereto, of such Holder's intention to create
Treasury PIES;
27
(2) transferring a Treasury Security for each group of 20 Corporate
PIES from which such Holder wishes to create Treasury PIES, to the
Securities Intermediary which shall then (y) deposit the Treasury Security
with the Collateral Agent in the Collateral Account under the Pledge
Agreement and instruct the Collateral Agent to hold such Treasury Security
as Collateral under the Pledge Agreement and (z) instruct the Collateral
Agent to release to the Purchase Contract Agent, on behalf of such Holder,
$1,000 principal amount of Senior Notes formerly subject to the Pledge;
(3) transferring the related Corporate PIES to the Purchase Contract
Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Treasury Securities to the Securities
Intermediary and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release the Senior Notes relating to such Corporate
PIES, whereupon the Purchase Contract Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit
A to the Pledge Agreement; and
(4) paying to the Collateral Agent any fees or expenses incurred in
connection with the Collateral Substitution;
provided that, Holders may make Collateral Substitutions only in integral
multiples of 20 Corporate PIES. Under no circumstances may a Holder of Corporate
PIES create Treasury PIES during an Active Remarketing Period.
The Holders' right to create Treasury PIES as set forth in this
Section and the limit of the preceding sentence shall in no way limit the
ability of the Purchase Contract Agent, the Collateral Agent, the Securities
Intermediary or the Remarketing Agents to substitute the Treasury Portfolio for
the Senior Notes then comprising a part of the Corporate PIES upon a Successful
Remarketing (other than the Senior Notes of Holders of Corporate PIES that have
elected not to participate in the Remarketing).
Upon receipt of the Treasury Securities described in clause (2)
above and the instruction described in clause (1) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent shall, under the Pledge
Agreement, cause the Securities Intermediary to effect the release of such
Senior Notes from the Pledge to the Purchase Contract Agent, free and clear of
the Company's security interest therein, and the transfer of such Senior Notes
to the Purchase Contract Agent on behalf of the Holder thereof. Upon receipt
thereof, the Purchase Contract Agent shall promptly:
(i) cancel the related Corporate PIES;
(ii) transfer the applicable aggregate principal amount of Senior
Notes to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury PIES Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate PIES.
28
Holders who elect to separate the Senior Notes from the related
Purchase Contracts and to substitute Treasury Securities for such Senior Notes
shall be responsible for any fees or expenses payable to the Collateral Agent
for its services as Collateral Agent in respect of the substitution, and the
Company shall not be responsible for any such fees or expenses.
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the Corporate PIES or
fails to deliver Corporate PIES Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Collateral Agent, then the Senior
Notes or Treasury Portfolio Interest, as the case may be, constituting a part of
such Corporate PIES, and any interest payments on such Senior Notes or the
Treasury Portfolio Interest, as the case may be, shall be held in the name of
the Purchase Contract Agent or its nominee in trust for the benefit of such
Holder, until such Corporate PIES are so transferred or the Corporate PIES
Certificates are so delivered, as the case may be, or, with respect to the
Corporate PIES Certificates, such Holder provides evidence satisfactory to the
Company and the Purchase Contract Agent that such Corporate PIES Certificates
have been destroyed, lost or stolen, together with any indemnity that may be
required by the Purchase Contract Agent and the Company.
Except as described in this Sections 3.13 and 5.3, for so long as
the Purchase Contract relating to a Corporate PIES remains in effect, such
Corporate PIES shall not be separable into its constituent parts, and the rights
and obligations of the Holder in respect of the Senior Note or the Treasury
Portfolio Interest, as the case may be, and the Purchase Contract comprising
such Corporate PIES may be acquired, and may be transferred and exchanged, only
as a Corporate PIES.
Section 3.14. Recreation of Corporate PIES.
A Holder of a Treasury PIES may recreate Corporate PIES at any time
until 5:00 p.m. (New York City time) on any such date except during an Active
Remarketing Period by:
(1) providing notice to the Purchase Contract Agent, substantially
in the form of Exhibit C hereto, of such Holder's intention to create
Corporate PIES;
(2) for each Treasury PIES such Holder wishes to substitute,
transferring $1,000 principal amount of Senior Notes to the Securities
Intermediary which shall then (y) deposit such Senior Notes in the
Collateral Account under the Pledge Agreement and instruct the Collateral
Agent to hold such Senior Notes as Collateral and (z) instruct the
Collateral Agent to release to such Holder the Treasury Security formerly
subject to the Pledge;
(3) transferring the related Treasury PIES to the Purchase Contract
Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit D hereto, (i) stating that the Holder
has transferred the relevant amount of Senior Notes to the Securities
Intermediary and (ii) requesting that the Purchase Contract Agent instruct
the Collateral Agent to release the Treasury Securities relating to such
Treasury PIES, whereupon the Purchase Contract Agent shall promptly give
such instruction to the Collateral Agent, substantially in the form of
Exhibit C to the Pledge Agreement; and
29
(4) paying to the Collateral Agent any fees or expenses incurred in
connection with the recreation of Corporate PIES;
provided that, Holders of Treasury PIES may recreate Corporate PIES only in
integral multiples of 20 Treasury PIES for 20 Corporate PIES. Under no
circumstance may a Holder of Treasury PIES recreate Corporate PIES during an
Active Remarketing Period.
Upon receipt of the Senior Notes described in clause (1) above and
the instruction described in clause (2) above, in accordance with the terms of
the Pledge Agreement, the Collateral Agent shall cause the Securities
Intermediary to effect the release of such Treasury Securities from the Pledge,
free and clear of the Company's security interest therein, and the transfer of
such Treasury Securities to the Holder thereof. Upon receipt thereof, the
Purchase Contract Agent shall promptly:
(i) cancel the related Treasury PIES; and
(ii) authenticate, execute on behalf of such Holder and deliver a
Corporate PIES Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Treasury PIES.
Holders who elect to recreate Corporate PIES 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.
Except as provided in this Section 3.14, for so long as the Purchase
Contract relating to a Treasury PIES remains in effect, such Treasury PIES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Treasury PIES in respect of the 1/20 of a Treasury Security
and the Purchase Contract comprising such Treasury PIES may be acquired, and may
be transferred and exchanged, only as a Treasury PIES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of Senior Notes, Treasury Portfolio Interest or Treasury
Securities, as the case may be, relating to the Corporate PIES and the Treasury
PIES, as the case may be, pursuant to the terms of the Pledge Agreement, the
Purchase Contract Agent shall request transfer instructions with respect to such
Senior Notes, Treasury Portfolio Interest or Treasury Securities, as the case
may be, from each Holder by written request, substantially in the form of
Exhibit E hereto, mailed to such Holder at its address as it appears in the
Corporate PIES Register or the Treasury PIES Register, as the case may be.
Upon book-entry transfer of the Corporate PIES or Treasury PIES or
delivery of a Corporate PIES Certificate or Treasury PIES Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer such Senior Notes, Treasury Portfolio Interest or Treasury
Securities, as the case may be, relating to such Corporate PIES or Treasury
PIES, as the case may be, to such Holder by book-entry transfer, or other
appropriate procedures, in accordance with such instructions. In the event a
Holder of Corporate PIES or Treasury PIES fails to effect such transfer or
delivery, such Senior Notes, Treasury
30
Portfolio Interest or Treasury Securities, as the case may be, relating to such
Corporate PIES or Treasury PIES, as the case may be, and any interest thereon,
shall be held in the name of the Purchase Contract Agent or its nominee in trust
for the benefit of such Holder, until the earlier of:
(1) such Corporate PIES or Treasury PIES are transferred or the
Corporate PIES Certificate or Treasury PIES Certificate is surrendered or
such Holder provides satisfactory evidence that such Corporate PIES
Certificate or Treasury PIES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Purchase
Contract Agent and the Company; and
(2) the expiration of the time period specified in the abandoned
property laws of the relevant State.
Section 3.16. No Consent to Assumption.
Each Holder of a PIES, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or federal law providing for reorganization or
liquidation.
ARTICLE IV
THE SENIOR NOTES
Section 4.1. Interest Payments; Rights to Interest Preserved.
Each Corporate PIES issued hereunder shall consist of the beneficial
ownership by the Holder of a 1/20th, or 5%, undivided beneficial interest in a
Senior Note issued pursuant to the Indenture or, if the Corporate PIES shall
have been remarketed by the Remarketing Agents pursuant to the Remarketing
Agreement, the Treasury Portfolio Interest, in each case, subject to the Pledge
thereof by such Holder under the Pledge Agreement.
Subject to receipt thereof by the Purchase Contract Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, (1) an
interest payment on any Senior Note which is paid on any Payment Date or (2) the
portion of the proceeds of a Treasury Portfolio Interest equal to (a) the
interest payable on a Senior Note on the Purchase Contract Settlement Date or
(b) following a Successful Remarketing, if the Remarketing Settlement Date is
not also a Payment Date, the interest payable on a Senior Note from the most
recent Payment Date to, but excluding, such Remarketing Settlement Date payable
on the Payment Date next following the Remarketing Settlement Date (such portion
of proceeds, the "Treasury Portfolio Return"), as the case may be, shall
promptly be paid to the Person in whose name the Corporate PIES Certificate (or
one or more Predecessor Corporate PIES Certificates) of which such Senior Note
or the Treasury Portfolio Interest, as the case may be, is a part is registered
at the close of business on the Record Date for such Payment Date or Purchase
Contract Settlement Date, as applicable.
31
Each Corporate PIES Certificate evidencing, in part, a 1/20th, or
5%, undivided beneficial interest in a Senior Note or the Treasury Portfolio
Interest delivered under this Agreement upon registration of, transfer of or in
exchange for or in lieu of any other Corporate PIES Certificate shall carry the
right to accrued and unpaid interest, and the right to accrue interest (and
accreted and accreting principal in the case of non-interest bearing components
of the Treasury Portfolio Interest), which rights were carried by such interest
in a Senior Note or the Treasury Portfolio Interest, as the case may be,
relating to such other Corporate PIES Certificate.
In the case of any Corporate PIES with respect to which (1) Cash
Settlement of the related Purchase Contract is effected on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, (2) Early
Settlement of the related Purchase Contract is effected on an Early Settlement
Date, (3) Merger Early Settlement of the related Purchase Contract is effected
on a Merger Early Settlement Date or (4) 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, the interest payment on the Senior Note or the
Treasury Portfolio Return, as the case may be, relating to such Corporate PIES
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement, Early Settlement, Merger Early Settlement
or Collateral Substitution, as the case may be, and such payment shall, subject
to receipt thereof by the Purchase Contract Agent, be payable to the Person in
whose name the Corporate PIES Certificate (or one or more Predecessor Corporate
PIES Certificates) was registered at the close of business on the corresponding
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Corporate PIES with respect to which Cash
Settlement, Early Settlement or Merger Early Settlement of the related Purchase
Contract is effected on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, on an Early Settlement Date or on a Merger
Early Settlement Date, respectively, or with respect to which a Collateral
Substitution has been effected, interest payments on the related Senior Notes or
the Treasury Portfolio Return, as the case may be, that would otherwise be
payable after the fifth Business Day preceding the Purchase Contract Settlement
Date, after the Early Settlement Date, after the Merger Early Settlement Date,
or after the Collateral Substitution, respectively, shall not be payable
hereunder to the Holder of such Corporate PIES; provided, however, that to the
extent that such Holder continues to hold the Separated Senior Note that
formerly comprised a part of such Holder's Corporate PIES, such Holder shall be
entitled to receive the interest payments on such Separated Senior Note, as
provided in the Indenture.
Section 4.2. Interest Rate Reset; Reset of Other Terms.
The applicable interest rate borne by the Senior Notes and the other
terms of the Senior Notes, whether or not part of Corporate PIES, shall be reset
pursuant to the Indenture, and will be effective with respect to all Senior
Notes, whether or not then constituting a component of Corporate PIES, as of the
Remarketing Settlement Date, in the case of a Successful Remarketing, or, solely
with respect to the interest rate (which shall be reset to the Reset Rate), as
of the Purchase Contract Settlement Date, in the event of a Failed Remarketing
or in the event there is no Remarketing pursuant to clause (c) of the definition
of Reset Rate in the Indenture Officers' Certificate.
Section 4.3. Notice and Voting.
32
The Purchase Contract Agent is entitled to exercise the voting and
any other consensual rights pertaining to the Pledged Senior Notes, but only to
the extent instructed in writing by the Holders as described below. Upon receipt
of notice of any meeting at which holders of Senior Notes are entitled to vote
or upon any solicitation of consents, waivers or proxies of holders of Senior
Notes, the Purchase Contract Agent shall, as soon as practicable thereafter,
mail to the Holders of Corporate PIES a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Holder on the record date set by the Purchase
Contract Agent therefor (which, to the extent possible, shall be the same
date as the record date for determining the holders of Senior Notes
entitled to vote) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting rights pertaining to such Senior
Notes relating to their Corporate PIES; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Holders of Corporate PIES on such
record date received by the Purchase Contract Agent at least six calendar days
prior to such meeting or by the expiration date of any such solicitation, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum principal amount of Senior Notes as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of Corporate PIES, the Purchase Contract Agent shall abstain from voting
the Senior Notes relating such Corporate PIES. The Company hereby agrees, if
applicable, to solicit Holders of Corporate PIES to timely instruct the Purchase
Contract Agent in order to enable the Purchase Contract Agent to vote such
Senior Notes.
ARTICLE V
THE PURCHASE CONTRACTS; THE REMARKETING
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless a Termination Event has
occurred as set forth in Section 5.7, an Early Settlement has occurred in
accordance with Section 5.9 or a Merger Early Settlement has occurred in
accordance with Section 5.10, obligate the Holder of the related PIES 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 then in effect. The
"Settlement Rate" is equal to:
(1) if the Applicable Closing Price per share is equal to or greater
than $16.62 (the "Threshold Appreciation Price"), 3.0084 shares of Common
Stock per Purchase Contract;
(2) if the Applicable Closing Price per share is less than the
Threshold Appreciation Price, but greater than $13.85 (the "Reference
Price"), the number of shares
33
of Common Stock determined by dividing the Stated Amount by the Applicable
Closing Price; and
(3) if the Applicable Closing Price per share is less than or equal
to the Reference Price, 3.6101 shares of Common Stock per Purchase
Contract,
in each case subject to adjustment as provided in Section 5.5 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).
Promptly after the calculation of the Settlement Rate and the
Applicable Closing Price, the Company shall give the Purchase Contract Agent
notice thereof. All calculations and determinations of the Settlement Rate and
the Applicable Closing Price shall be made by the Company or its agent based on
their good faith calculations, and the Purchase Contract Agent shall have no
responsibility with respect thereto.
As provided in Section 5.12, no fractional shares of Common Stock
will be issued upon settlement of Purchase Contracts.
The "Applicable Closing Price" means the average of the Closing
Prices per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date, or in the case of the exercise of a Merger Early Settlement
right, the Cash Merger Date.
The "Closing Price" per share of the Common Stock on any date of
determination means:
(1) the closing sale price (or, if no closing price is reported, the
last reported sale price) per share of the Common Stock on the NYSE on
such date;
(2) if the Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price per share as reported in the composite
transactions for the principal United States securities exchange on which
the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States national
or regional securities exchange, the closing sale price per share as
reported by The Nasdaq Stock Market;
(4) if the Common Stock is not so reported, the last quoted bid
price per share for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices per share of the Common Stock on such date
from at least three nationally recognized independent investment banking
firms retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter
34
market at the close of business and (2) has traded at least once on the national
or regional securities exchange or association or the over-the-counter market
that is the primary market for the trading of the Common Stock.
Each Holder of a Corporate PIES or a Treasury PIES, by its
acceptance thereof:
(1) irrevocably authorizes the Purchase Contract Agent to enter into
and perform the related Purchase Contract on its behalf as its
attorney-in-fact (including the execution of Certificates on behalf of
such Holder as such Holder's attorney-in-fact);
(2) agrees to be bound by the terms and provisions thereof;
(3) covenants and agrees to perform its obligations under such
Purchase Contracts;
(4) consents to the provisions hereof;
(5) irrevocably authorizes the Purchase Contract Agent to enter into
and perform this Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact;
(6) consents to and agrees to be bound by the Pledge of the Senior
Notes or the Treasury Securities pursuant to the Pledge Agreement; and
(7) agrees to treat itself as the owner of the related Senior Notes,
Treasury Portfolio Interest or Treasury securities, as the case may be, in
each case for U.S. Federal, state and local income and franchise tax
purposes;
provided that, upon a Termination Event, the rights of the Holder of such PIES
under the Purchase Contract may be enforced without regard to any other rights
or obligations. Each Holder of a Corporate PIES or a Treasury PIES, by its
acceptance thereof, further covenants and agrees, that to the extent and in the
manner provided in Section 5.3 and the Pledge Agreement, but subject to the
terms thereof, proceeds from the Remarketing of the Senior Notes (less the
Remarketing Fee payable to the Remarketing Agents pursuant to the Remarketing
Agreement), the Treasury Portfolio Interest or the Treasury Securities at
maturity, as the case may be, to be paid upon settlement of such Holder's
obligations to purchase Common Stock under the Purchase Contract, shall be paid
on the Purchase Contract Settlement Date by the Collateral Agent to the Company
in satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts relating to
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts relating to
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. Purchase Contract Adjustment Payments.
35
The Company shall pay, on each Payment Date, the Purchase Contract
Adjustment Payments 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 the payment of public and private debts. The
Purchase Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in The City of New York maintained for that purpose or,
at the option of the Company, by wire transfer or by check mailed to the address
of the Person entitled thereto at such Person's address as it appears on the
Corporate PIES Register or Treasury PIES Register.
Upon the occurrence of a Termination Event, the Company's obligation
to pay Purchase Contract Adjustment Payments (including any accrued Purchase
Contract Adjustment Payments) 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 recreation of Corporate PIES) any other
Certificate shall carry the right to accrued and unpaid Purchase Contract
Adjustment Payments, and the right to accrue Purchase Contract Adjustment
Payments, which rights were carried by the Purchase Contracts relating to such
other Certificates from the date of issuance to and excluding, the Purchase
Contract Settlement Date, unless such Purchase Contracts have been settled
earlier pursuant to this Agreement.
In the case of any PIES with respect to which (1) Cash Settlement of
the related Purchase Contract is effected on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, (2) Early Settlement of the
related Purchase Contract is effected on an Early Settlement Date or (3) Merger
Early Settlement of the related Purchase Contract is effected on a Merger Early
Settlement Date, in each case, on a date that is after any Record Date and on or
prior to the next succeeding Payment Date, Purchase Contract Adjustment Payments
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement, Early Settlement or Merger Early
Settlement, as the case may be, and such Purchase Contract Adjustment Payments
shall be paid to the Person in whose name the Certificate evidencing such PIES
(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 PIES with respect to which Cash
Settlement, Early Settlement or Merger Early Settlement of the related Purchase
Contract is effected on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, an Early Settlement Date or a Merger Early
Settlement Date, respectively, Purchase Contract Adjustment Payments that would
otherwise be payable after the fifth Business Day preceding the Purchase
Contract Settlement Date, after the Early Settlement Date or after the Merger
Early Settlement Date, respectively, with respect to such Purchase Contract
shall not be payable.
Promptly after the calculation of any adjustment to the Purchase
Contract Adjustment Payments arising from a Reset Transaction, the Company shall
give the Purchase Contract Agent notice thereof. All calculations and
determinations of the Adjusted Purchase Contract Adjustment Payment Rate shall
be made by the Company or its agent in good faith and the Purchase Contract
Agent shall have no responsibility with respect thereto. The Purchase Contract
Agent shall not at any time be under any duty or responsibility to any Holder of
PIES to
36
determine whether any facts exist which may require any adjustment to the
Purchase Contract Adjustment Payments, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same.
Section 5.3. Payment of Purchase Price; Remarketing.
(a) Unless a Termination Event has occurred or a Holder has settled
the related Purchase Contract through a Cash Settlement pursuant to Section 5.8,
an Early Settlement pursuant to Section 5.9 or a Merger Early Settlement
pursuant to Section 5.10, the settlement of the Purchase Contract relating to a
PIES will be made by Remarketing in accordance with Section 2 of the Remarketing
Agreement.
(b) With respect to any Pledged Senior Notes which are subject of a
Failed Remarketing, the Collateral Agent, for the benefit of the Company, and
upon written direction of the Company as provided in the Pledge Agreement,
reserves all of its rights as a secured party with respect thereto and, subject
to applicable law and paragraph (c) below, may (i) retain such Senior Notes in
full satisfaction of the Holders' obligations under the related Purchase
Contracts or (ii) sell such Senior Notes in one or more public or private sales.
(c) A Holder of Corporate PIES may elect not to participate in the
Remarketing by creating Treasury PIES at any time except during an Active
Remarketing Period or by notifying the Purchase Contract Agent of such election
and complying with the procedures for creating Treasury PIES set forth in
Section 3.13 until 5:00 p.m. (New York City time) on the Business Day
immediately preceding the first of the three sequential remarketing dates of any
Three-Day Remarketing Period. A Holder that does not so create Treasury PIES by
delivering the Treasury Security or Treasury Securities pursuant to this
paragraph and Section 3.13 shall be deemed to have elected to participate in any
Remarketing.
(d) In the event that all or any portion of the Pledged Treasury
Securities of Treasury PIES matures before the Purchase Contract Settlement
Date, the Collateral Agent shall invest the proceeds therefrom in Permitted
Investments in accordance with the Pledge Agreement.
Without receiving any instruction from any such Holder of Treasury
PIES, the Collateral Agent shall apply, on the Purchase Contract Settlement
Date, the proceeds of the maturing Pledged Treasury Securities and of the
investment earnings from the related investment in Permitted Investments, in
each case, in an amount equal to the aggregate Purchase Price applicable to such
Treasury PIES to satisfy in full such Holder's obligations to pay the Purchase
Price to purchase the shares of Common Stock under the related Purchase
Contracts on the Purchase Contract Settlement Date.
In the event the sum of the proceeds from the related Pledged
Treasury Securities and the investment earnings from the related investment in
Permitted Investments exceeds the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall instruct the
Securities Intermediary to distribute such excess, when received, to the
Purchase Contract Agent for distribution to the Holders whose Purchase Contracts
were settled with such proceeds, on a pro rata basis.
37
(e) Any distributions to Holders of excess funds and interest
pursuant to a Successful Remarketing or described in (d) above shall be payable
at the office of the Purchase Contract Agent in The City of New York maintained
for that purpose or, at the option of the Holder, or the holder of Separated
Senior Notes, as applicable, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Register or by wire
transfer to an account specified by the Holder, or the holder of Separated
Senior Notes, as applicable.
(f) The obligations of each Holder to pay the Purchase Price are
non-recourse obligations and except to the extent paid by Cash Settlement, Early
Settlement or Merger Early Settlement, are payable solely out of the proceeds of
any Collateral pledged to secure the obligations of the Holders, and in no event
shall Holders be liable for any deficiency between such payments and the
Purchase Price.
(g) Notwithstanding anything to the contrary herein, the Company
shall not be obligated to issue any Common Stock in respect of a Purchase
Contract or deliver any certificates therefor to the Holder of the related PIES
unless the Company shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder by such Holder
in the manner herein set forth, which payment, in the case of Corporate PIES
upon the occurrence of a Failed Remarketing, shall occur by the resale of
Pledged Senior Notes or foreclosure on and retention of such Pledged Senior
Notes.
Section 5.4. Issuance of Shares of Common Stock.
(a) Unless a Termination Event shall have occurred on or prior to
the Purchase Contract Settlement Date, the applicable Early Settlement Date or
the Merger Early Settlement Date, upon its receipt of payment in full of the
Purchase Price for the shares of Common Stock purchased by Holders pursuant to
the provisions of this Article and subject to Section 5.5(b), the Company shall
issue and deposit with the Company's transfer agent and registrar for its Common
Stock (the "Common Stock Transfer Agent"), for the benefit of the Holders of the
Outstanding PIES, one or more certificates representing the newly issued shares
of Common Stock registered in the name of the Purchase Contract Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which a record date and
payment date for such dividend or distribution has occurred after the applicable
Early Settlement Date, the Merger Early Settlement Date or the Purchase Contract
Settlement Date, as the case may be, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. The Company shall furnish to the Purchase Contract Agent the name and
address of the Common Stock Transfer Agent and of any change thereof.
(b) Upon surrender of a Certificate to the Purchase Contract Agent
on or after the applicable Early Settlement Date, the Merger Early Settlement
Date or the Purchase Contract Settlement Date, as the case may be, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive 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 PIES then held by such Holder), together with cash in
lieu of fractional shares as provided in Section 5.12 and any dividends or
distributions with respect to such shares
38
constituting part of the Purchase Contract Settlement Fund, but without any
interest thereon (or, if such Certificate is not surrendered to the Purchase
Contract Agent; or if no such instructions are given to the Purchase Contract
Agent by the Holder, the Common Stock Agent shall hold such certificate
representing shares of Common Stock, and the Purchase Contract Agent shall hold
such cash in lieu of fractional shares and dividends or distributions, as
applicable, in the name of the Purchase Contract Agent or its nominee in trust
for the benefit of such Holder until the expiration of the time period specified
in the abandoned property laws of the relevant state, following which the
Purchase Contract Agent shall cause such cash to be delivered to such Holders),
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered by the Common Stock Transfer Agent in the Company's register
for its Common Stock and in accordance with its customary procedures for
issuance of such Common Stock, in the name of the Holder or the Holder's
designee as specified in the settlement instructions provided by the Holder to
the Purchase Contract Agent and forwarded by the Purchase Contract Agent to the
Common Stock Transfer 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 5.5. Adjustment of Settlement Rate and Early 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 in
effect or the Early Settlement Rate, as applicable, in effect at the
opening of business on the Business Day following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a
fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination; and
(ii) and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
39
(2) In case the Company shall issue rights, options or warrants to all
holders of Common Stock (not being available on an equivalent basis to Holders
of the PIES upon settlement of the Purchase Contracts relating to such PIES)
entitling them, for a period expiring within 45 days after the record date for
the determination of shareholders 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 Common Stock on the date
fixed for the determination of shareholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend reinvestment plan), the
Settlement Rate or the Early Settlement Rate, as applicable, 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 or the Early Settlement
Rate, as applicable, by a fraction of which:
(i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price; and
(ii) the denominator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (2), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company 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 or
the Early Settlement Rate, as applicable, 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 or the Early Settlement Rate, as
applicable, 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 Common Stock evidences of its indebtedness or assets (including
securities, but excluding any rights, options or warrants referred to in
paragraph (2) of this Section
40
5.5(a), any dividend or distribution paid exclusively in cash and any dividend
or distribution referred to in paragraph (1) of this Section 5.5(a)), the
Settlement Rate or the Early Settlement Rate, as applicable, in effect, shall be
adjusted so that the same shall equal the rate determined by dividing the
Settlement Rate or the Early Settlement Rate, as applicable, in effect
immediately prior to the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution by a
fraction of which:
(i) the numerator shall be the Current Market Price per share of
Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution) of the portion of
the assets or evidences of indebtedness so distributed applicable to one
share of Common Stock; and
(ii) the denominator shall be such Current Market Price per share of
Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.5(a) shall not be applicable.
(5) In case the Company shall, by dividend or otherwise, distribute to all
holders of Common Stock (I) cash (excluding any cash that is distributed in a
Reorganization Event to which Section 5.5(b) applies or as part of a
distribution referred to in paragraph (4) of this Section 5.5(a)) in an
aggregate amount that, combined together with the aggregate amount of any other
distributions to all holders of Common Stock made exclusively in cash (other
than in connection with a Reorganization Event) 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 (II) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and described in
a Board Resolution) of consideration payable in respect of any tender or
exchange offer by the Company or any of its subsidiaries for all or any portion
of 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 (4) or paragraph (6) of
this Section 5.5(a) has been made, exceeds 15% of the product of the Current
Market Price per share of 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 or Early Settlement Rate, as applicable, in
effect, shall be increased so that the same shall equal the rate determined by
dividing the Settlement Rate or Early Settlement Rate, as applicable, in effect
immediately prior to the close of business on the date fixed for determination
of the shareholders entitled to receive such distribution by a fraction of
which:
41
(i) the numerator 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) and (II) above
divided by (y) the number of shares of Common Stock outstanding on such
date for determination; and
(ii) the denominator shall be equal to the Current Market Price per
share of Common Stock on such date for determination.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares) of
(I) 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 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, 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 5.5(a) or this
paragraph (6) has been made, and (II) the aggregate amount of any distributions
to all holders of Common Stock made exclusively in cash within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section 5.5(a) or this
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate or Early Settlement Rate, as
applicable, in effect, shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate or Early Settlement Rate, as
applicable, in effect immediately prior to the close of business on the date of
the Expiration Time by a fraction of which:
(i) the numerator shall be equal to (A) the product of (1) the
Current Market Price per share of Common Stock on the date of the
Expiration Time and (2) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the transactions
described in clauses (I) and (II) above (assuming in the case of clause
(I) the acceptance, up to any maximum specified in the terms of the tender
or exchange offer, of Purchased Shares), and
42
(ii) the denominator shall be equal to the product of (A) the
Current Market Price per share of Common Stock as of the Expiration Time
and (B) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred 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 5.5(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
shareholders entitled to receive such distribution" and the "date fixed
for such determination" within the meaning of paragraph (4) of this
Section 5.5(a)); 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 5.5(a)).
(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 such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate or the Early Settlement Rate,
as applicable, 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 or the Early
Settlement Rate, as applicable, shall be required unless such adjustment would
require an increase or decrease of at least one percent thereof; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate or the
Early Settlement Rate, as applicable, pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of this Section 5.5(a), an adjustment shall also be made
to the Applicable Closing Price solely to determine which of clauses (1), (2) or
(3) of the definition of Settlement Rate or the Early Settlement Rate, as
applicable, in Section 5.1 will apply on the Purchase
43
Contract Settlement Date. Such adjustment shall be made by multiplying the
Applicable Closing Price by a fraction of which the numerator shall be the
Settlement Rate or the Early Settlement Rate, as applicable, in effect
immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 5.5(a) and the denominator shall be the
Settlement Rate or the Early Settlement Rate, as applicable, in effect
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate or the Early Settlement Rate, as applicable, in effect,
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
5.5(a) during the period taken into consideration for determining the Applicable
Closing Price, appropriate and customary adjustments shall be made to the
Settlement Rate or the Early Settlement Rate, as applicable.
(10) The Company may make such increases in the Settlement Rate or the
Early Settlement Rate, as applicable, in addition to those required by this
Section 5.5(a), as it considers to be advisable in order to avoid or diminish
any income tax to any holders of shares of Common Stock resulting from any
dividend or distribution of stock or issuance of rights, options or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of:
(i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the shares of Common Stock outstanding
immediately prior to the merger or consolidation are not exchanged for
cash, securities or other property of the Company or another corporation);
(ii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an
entirety;
(iii) any statutory exchange of securities of the Company with
another Person (other than in connection with a merger or acquisition); or
(iv) any liquidation, dissolution or winding up of the Company other
than as a result of or after the occurrence of a Termination Event (any
such event, a "Reorganization Event"),
the Settlement Rate or Early Settlement Rate, as applicable, in effect, will be
adjusted to provide that each Holder of PIES will receive on the Purchase
Contract Settlement Date with respect to each Purchase Contract forming a part
thereof, the kind and amount of securities, cash and other property receivable
upon such Reorganization Event (without any interest thereon, and without any
right to dividends or distribution thereon which have a record date that is
prior to the Purchase Contract Settlement Date) by a Holder of the number of
shares of Common Stock issuable on account of each Purchase Contract if the
Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event, assuming such Holder of Common Stock is not a Person with
which the Company consolidated or into which the Company merged
44
or which merged into the Company or to which such sale or transfer was made, as
the case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Stock held by Affiliates of the Company and
non-Affiliates and such Holder failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is
not the same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a Constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares).
In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person which acquires the assets
of the Company or, in the event of a liquidation, dissolution or winding up of
the Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that the Holders of each Outstanding PIES shall
have the rights provided by this Section 5.5(b). Such supplemental agreement
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental agreement, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
(c) All calculations and determinations pursuant to this Section 5.5
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
Section 5.6. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate or Early Settlement Rate, as
applicable, and the Applicable Closing Price are adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate or Early
Settlement Rate, as applicable and Applicable Closing Price in accordance with
Section 5.5 and prepare and transmit to the Purchase Contract Agent an Officers'
Certificate setting forth the Settlement Rate or Early Settlement Rate, as
applicable and the Applicable Closing Price, 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 or Early Settlement Rate, as
applicable and the Applicable Closing Price pursuant to Section 5.5 (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 PIES of the occurrence
of such event and a statement in reasonable detail setting forth the method by
which the adjustment to the Settlement Rate then or Early Settlement Rate,
45
as applicable and the Applicable Closing Price was determined and setting forth
the adjusted Settlement Rate or Early Settlement Rate, as applicable and
Applicable Closing Price.
(b) The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of PIES to determine whether any facts
exist which may require any adjustment of the Settlement Rate or Early
Settlement Rate, as applicable or the Applicable Closing Price, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase Contract;
and the Purchase Contract Agent makes no representation with respect thereto.
The Purchase Contract Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 5.7. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive, and the obligations of the Company to pay, Purchase Contract
Adjustment Payments and the rights and obligations of Holders to purchase shares
of Common Stock, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, 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 PIES shall thereafter represent the right to receive the
Senior Notes or Treasury Portfolio Interest forming a part of such PIES in the
case of Corporate PIES, or Treasury Securities in the case of Treasury PIES, in
accordance with the provisions of Section 5.4 of the Pledge Agreement. Upon the
occurrence of a Termination Event, the Company shall promptly, but in no event
later than two Business Days thereafter, give written notice to the Purchase
Contract Agent and the Collateral Agent and shall cause written notice thereof
to be given to the Holders, at their addresses as they appear in the Register.
Section 5.8. Cash Settlement
(a) (i) Unless a Holder has effected an Early Settlement pursuant to
Section 5.9 or a Merger Early Settlement pursuant to Section 5.10, a Termination
Event shall have occurred pursuant to Section 5.7 or a Successful Remarketing
shall have occurred, Holders of Corporate PIES may settle their Purchase
Contracts in cash by delivering to the Purchase Contract Agent a notice in
substantially the form of Exhibit F hereto regarding its intention to pay in
cash ("Cash Settlement") the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract; provided that such notice
must be given by 11:00 a.m. (New York City time) on the sixth Business Day
immediately preceding the Purchase Contract Settlement Date.
(ii) A Holder of a Corporate PIES who has so notified the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (a) (i) above shall
46
pay the Purchase Price to the Securities Intermediary for deposit in the
Collateral Account prior to 11:00 a.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or upon the
order of the Securities Intermediary and the Securities Intermediary shall
instruct the Collateral Agent to release to the Purchase Contract Agent the
Pledged Senior Notes, for delivery to the Holders of the related Corporate PIES
who have complied with this Section. Any cash received by the Collateral Agent
shall be invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Securities
Intermediary in respect of the investment earnings from the investment in such
Permitted Investments shall be distributed to the Purchase Contract Agent when
received for payment, on a pro rata basis based on the number of Corporate PIES
formerly held by such Holder, to the Holders of the related Corporate PIES on
the Purchase Contract Settlement Date.
(iii) If a Holder of a Corporate PIES fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, or notifies the Purchase Contract 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 Holder
shall be deemed to have consented (A) to the disposition of the Pledged Senior
Notes on the third Business Day prior to the Purchase Contract Settlement Date
pursuant to the Final Remarketing or, (B) if a Failed Remarketing occurs, to the
Collateral Agent, for the benefit of the Company, and upon written direction of
the Company as provided in the Pledge Agreement, exercising all of its rights as
a secured party with respect to any Pledged Senior Notes under the Pledge
Agreement and, subject to applicable law and Section 5.3(g), by either (i)
retaining such Senior Notes in full satisfaction of such Holder's obligations
under the related Purchase Contracts or (ii) selling such Senior Notes in one or
more public or private sales.
(iv) By 11:00 a.m. (New York City time), on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent, based on notices received by the Purchase Contract Agent
pursuant to Section 5.8(a)(i) hereof and notice from the Securities Intermediary
regarding cash received by it prior to such time, shall notify the Remarketing
Agents, the Collateral Agent, the Trustee and the Company, by use of a notice
substantially in the form of Exhibit G hereto, of the aggregate principal amount
of Pledged Senior Notes to be remarketed in accordance with the remarketing
procedures set forth in Section 2 of the Remarketing Agreement.
(b) (i) Unless a Holder of a Treasury PIES has effected an Early
Settlement of the related Purchase Contract in the manner described in Section
5.9 or a Merger Early Settlement of the related Purchase Contract in the manner
described in Section 5.10, a Termination Event shall have occurred pursuant to
Section 5.7 or a Successful Remarketing shall have occurred, Holders of Treasury
PIES may settle their Purchase Contracts in cash. Each Holder of a Treasury PIES
who intends to pay in cash to satisfy such Holder's obligation under the
Purchase Contract shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit F hereto regarding its intention to pay in
cash the Purchase Price for the shares of Common Stock to be purchased pursuant
to the related Purchase Contract. To settle its
47
Purchase Contracts in cash pursuant to this Section, such notice must be given
prior to 5:00 p.m. (New York City time), on the second Business Day immediately
preceding the Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York
City time), on the next succeeding Business Day, the Purchase Contract Agent
shall notify the Collateral Agent of the receipt of such notices from such
Holders intending to make a Cash Settlement.
(ii) A Holder of a Treasury PIES who has so notified the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (b)(i) above shall pay the Purchase Price to the Securities
Intermediary for deposit in the Collateral Account prior to 11:00 a.m. (New York
City time), on the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or cashiers'
check or wire transfer, in each case, in immediately available funds payable to
or upon the order of the Securities Intermediary and the Securities Intermediary
shall instruct the Collateral Agent to release to the Purchase Contract Agent
the Pledged Treasury Securities for delivery to the Holders of the related
Treasury PIES who have complied with this Section. Any cash received by the
Collateral Agent shall be invested promptly by the Securities Intermediary in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds received by the
Securities Intermediary in respect of the investment earnings from the
investment in such Permitted Investments shall be distributed to the Purchase
Contract Agent when received for payment to the Holder of the related Treasury
PIES on the Purchase Contract Settlement Date.
(iii) If a Holder of a Treasury PIES fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance with
paragraph (b)(i) above, or does notify the Purchase Contract Agent as provided
in paragraph (b)(i) above of its intention to pay the Purchase Price in cash but
fails to make such payment as required by paragraph (b)(ii) above, then upon the
maturity of the Pledged Treasury Securities held by the Securities Intermediary,
the principal amount of the Treasury Securities received by the Securities
Intermediary shall be invested promptly in Permitted Investments. On the
Purchase Contract Settlement Date, an amount equal to the Purchase Price shall
be remitted to the Company as payment thereof without receiving any instructions
from the Holder of the related Treasury PIES. In the event the sum of the
Proceeds from the related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the aggregate Purchase
Price of the Purchase Contracts being settled thereby, the Collateral Agent
shall cause the Securities Intermediary to distribute such excess to the
Purchase Contract Agent for the benefit of the Holder of the related Treasury
PIES when received.
(c) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Senior Notes or the Pledged Treasury
Securities, as the case may be, relating to the relevant PIES to be released
from the Pledge, free and clear of any security interest of the Company, and
transferred to the Purchase Contract Agent for delivery to the Holder thereof or
its designee as soon as practicable;
48
(ii) subject to the receipt thereof, the Purchase Contract Agent
shall, by book-entry transfer or other appropriate procedures, in accordance
with written instructions provided by the Holder thereof, transfer such Senior
Notes or such Treasury Securities, as the case may be (or, if no such
instructions are given to the Purchase Contract Agent by the Holder, the
Purchase Contract Agent shall hold such Senior Notes or such Treasury
Securities, as the case may be, and any interest payment thereon, in the name of
the Purchase Contract Agent or its nominee in trust for the benefit of such
Holder until the expiration of the time period specified in the abandoned
property laws of the relevant State) and, in connection with such Senior Notes,
the Purchase Contract Agent shall have no responsibility to vote or take any
other consensual action with respect thereto; and
(iii) the Company shall cause the number of shares of Common Stock
issuable upon Cash Settlement of the related Purchase Contracts pursuant to
Section 5.4, together with any payment in lieu of any fraction of a share, as
provided in Section 5.12, to the Holder which has exercised its right to Cash
Settlement, in accordance with Section 5.4.
Section 5.9. Early Settlement.
(a) Unless a Holder has effected a Merger Early Settlement of the
related Purchase Contract pursuant to Section 5.10 or a Termination Event shall
have occurred pursuant to Section 5.7, subject to and upon compliance with the
provisions of this Section 5.9, at the option of the Holder thereof, Purchase
Contracts relating to PIES may be settled early ("Early Settlement") at any time
prior to the eighth Business Day preceding the Purchase Contract Settlement Date
except during an Active Remarketing Period. In order to exercise the right to
effect Early Settlement with respect to any Purchase Contracts, the Holder of
the Certificate evidencing PIES shall deliver such Certificate to the Purchase
Contract Agent at the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the Company in
immediately available funds) in an amount (the "Early Settlement Amount") equal
to:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement; plus
(2) 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 Purchase 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 the last
paragraph of Section 5.2, no payment shall be made upon Early Settlement of any
Purchase Contract on account of any Purchase Contract Adjustment Payments
accrued on such Purchase Contract or on account of any dividends on the Common
Stock issued upon such Early Settlement. If the foregoing requirements are first
satisfied with respect to Purchase Contracts relating to any PIES at or prior to
5:00 p.m. (New York City time), on a Business Day, such day shall be the "Early
Settlement Date" with respect to such PIES and if such requirements are first
satisfied after 5:00
49
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 PIES shall be the next
succeeding Business Day.
Upon the receipt of such Certificate and Early Settlement Amount
from the Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 5.6
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) the Purchase Contract Agent has received from such Holder, and
paid to the Company as confirmed in writing by the Company, the related Early
Settlement Amount and (C) all conditions to such Early Settlement have been
satisfied.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related PIES, the Company shall issue, and the Holder shall be entitled to
receive, for each 20 Corporate PIES or 20 Treasury PIES surrendered, 60.168
(which is the product of 3.0084 multiplied by 20) shares of Common Stock,
subject to adjustment in the same manner and at the same time as the Settlement
Rate is adjusted pursuant to Section 5.5, on account of each Purchase Contract
as to which Early Settlement is effected (the "Early Settlement Rate").
(c) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(1) the shares of Common Stock issuable upon Early Settlement of the
related Purchase Contracts to be issued and delivered pursuant to Section
5.4, together with payment in lieu of any fraction of a share, as provided
in Section 5.12; and
(2) the related Senior Notes, in the case of Corporate PIES, or the
related Treasury Securities, in the case of Treasury PIES, to be released
from the Pledge by the Collateral Agent and transferred, in each case, to
the Purchase Contract Agent for delivery to the Holder thereof or its
designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt by the Common Stock Transfer Agent of shares of Common Stock from the
Company and receipt by the Purchase Contract Agent of the related Senior Notes,
or Treasury Securities, as the case may be, from the Securities Intermediary, as
applicable, the Common Stock Transfer Agent shall, in accordance with the
instructions provided by the Holder thereof on the applicable form of Election
to Settle Early on the reverse of the Certificate evidencing the related PIES as
forwarded by the Purchase Contract Agent to the Common Stock Transfer Agent,
deliver to such Holder a certificate or certificates for the full number of
shares of Common Stock issuable upon such Early Settlement of the related
Purchase Contract, pursuant to Section 5.4 and the Purchase Contract Agent shall
transfer to such Holder the related Senior Notes or Treasury Securities, as the
case may be, forming a part of such PIES.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts relating to less than all the PIES evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf
50
of the Holder, authenticate and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the PIES as to which Early Settlement was
not effected.
(f) Notwithstanding anything to the contrary contained herein,
Holders may make effect Early Settlement of Corporate PIES or Treasury PIES only
in integral multiples of 20.
Section 5.10. Early Settlement Upon Merger.
(a) In the event of a merger or consolidation of the Company (which
for purposes of this Section 5.10 includes any successor company pursuant to a
Cash Merger (as defined below)) in which the Common Stock outstanding
immediately prior to such merger or consolidation is exchanged for consideration
consisting of at least 30% cash or cash equivalents (any such event a "Cash
Merger" and the date on which the Cash Merger takes place being referred to as a
"Cash Merger Date"), then the Company (or the successor to the Company
hereunder) shall be required to offer the Holder of each Outstanding PIES the
right to settle the Purchase Contract relating to such PIES prior to the
Purchase Contract Settlement Date (such early settlement, "Merger Early
Settlement") as provided herein. On or before the fifth Business Day after the
consummation of a Cash Merger, the Company or, at the request and expense of the
Company, the Purchase Contract Agent, shall give all Holders notice of the
occurrence of the Cash Merger and of the right of Merger Early Settlement
arising as a result thereof. The Company shall also deliver a copy of such
notice to the Purchase Contract Agent and the Collateral Agent.
Each such notice shall contain:
(i) the date, which shall be not less than 20 Business Days nor more
than 30 Business Days after the date of such notice, on which the Merger Early
Settlement may be effected (the "Merger Early Settlement Date");
(ii) the date, which shall be three Business Days prior to the
Merger Early Settlement Date, by which the Merger Early Settlement right must be
exercised by notice by the Holders to the Purchase Contract Agent and the
Company;
(iii) the Settlement Rate in effect as a result of such Cash Merger
and the kind and amount of securities, cash and other property receivable by the
Holder upon settlement of each Purchase Contract pursuant to Section 5.5(b);
(iv) a statement to the effect that all or a portion of the Purchase
Price payable by the Holder to settle the Purchase Contract will be offset
against the amount of cash so receivable upon exercise of Merger Early
Settlement, as applicable; and
(v) the instructions a Holder must follow to exercise the Merger
Early Settlement right.
(b) To exercise a Merger Early Settlement right, a Holder must (i)
deliver to the Purchase Contract Agent at the Corporate Trust Office at least
three Business Days before the Merger Settlement Date, at 5:00 p.m. (New York
City time), the Certificate(s) evidencing the PIES with respect to which the
Merger Early Settlement right is being exercised, duly endorsed
51
for transfer to the Company or in blank with the form of Election to Settle
Early on the reverse thereof duly completed and (ii) make payment (payable to
the Company in immediately available funds in an amount equal to the Early
Settlement Amount less the amount of cash that otherwise would be deliverable by
the Company upon settlement of the Purchase Contract in lieu of Common Stock
pursuant to Section 5.5(b) and as described in the notice to Holders (the
"Merger Early Settlement Amount").
(c) On the Merger Early Settlement Date, the Company shall cause to
be delivered (i) the net cash, securities and other property to be received by
such exercising Holder, equal to the Settlement Rate as adjusted pursuant to
Section 5.5, in respect of the number of Purchase Contracts for which such
Merger Early Settlement right was exercised pursuant to the applicable
instructions contained in Section 5.4(b), (ii) the Company shall cause the
number of shares of Common Stock issuable upon Merger Early Settlement, if any,
of the related Purchase Contracts pursuant to Section 5.4, together with any
payment in lieu of any fraction of a share, as provided in Section 5.12, to the
Holder which has exercised its right to Cash Settlement, in accordance with
Section 5.4 and (iii) the related Pledged Senior Notes, or if substituted
therefor, the Pledged Treasury Portfolio Interest, in the case of Corporate
PIES, or Pledged Treasury Securities, in the case of Treasury PIES, to be
released from the Pledge by the Collateral Agent and transferred, in each case,
to the Purchase Contract Agent for delivery to the Holder thereof or its
designee. In the event a Merger Early Settlement right shall be exercised by a
Holder in accordance with the terms hereof, all references herein to Purchase
Contract Settlement Date shall be deemed to refer to such Merger Early
Settlement Date.
(d) Upon Merger Early Settlement of any Purchase Contracts, and
subject to receipt of such net cash, securities or other property from the
Company and the Pledged Senior Notes, Pledged Treasury Portfolio Interest or
Pledged Treasury Securities, as the case may be, from the Collateral Agent, the
Purchase Contract Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related PIES, (i) transfer to the
Holder the Pledged Senior Notes, Pledged Treasury Portfolio Interest or Pledged
Treasury Securities, as the case may be, forming a part of such PIES, and (ii)
deliver to the Holder such net cash, securities or other property issuable upon
such Merger Early Settlement together with payment in lieu of any fraction of a
share, as provided in Section 5.12.
(e) In the event that Merger Early Settlement is effected with
respect to Purchase Contracts relating to less than all the PIES evidenced by a
Certificate, upon such Merger Early Settlement the Company (or the successor to
the Company hereunder) shall execute and the Purchase Contract Agent shall
authenticate, countersign and deliver to the Holder thereof, at the expense of
the Company, a Certificate evidencing the PIES as to which Merger Early
Settlement was not effected.
(f) Notwithstanding anything to the contrary contained herein,
Holders may effect Merger Early Settlement of Corporate PIES or Treasury PIES
only in integral multiples of 20.
Section 5.11. Optional Remarketing.
52
Pursuant to the Indenture and the Remarketing Agreement, holders of
Separated Senior Notes may elect to have such Separated Senior Note remarketed
if such holder, on or prior to the second Business Day, but no earlier than the
fifth Business Day, preceding the first of the three sequential remarketing
dates of any Three-Day Remarketing Period, delivers (a) to the Trustee and the
Collateral Agent a notice of that election, substantially in the form of Exhibit
B of the Indenture Officers' Certificate and Exhibit F of the Pledge Agreement,
respectively, specifying the aggregate principal amount of Senior Notes to be
remarketed, and (b) such Separated Senior Notes, by book-entry transfer or other
appropriate procedures, to the Collateral Agent for Remarketing, in each case,
pursuant to the Indenture. Once the holder of such Separated Senior Notes
delivers such notice and Separated Senior Notes as specified in the preceding
sentence, such election may not be withdrawn and may not be conditioned upon the
level at which the Reset Rate is established in the Remarketing; provided,
however, that if such a holder delivers only such a notice but not the Separated
Senior Notes subject to the notice, then none of such holder's Separated Senior
Notes shall be included in the Remarketing.
Section 5.12. 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 or Merger 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 or Merger Early Settlement, the Company, through the Purchase
Contract Agent, shall make a cash payment in respect of such fractional interest
in an amount equal to the value of such fractional shares times the Applicable
Closing Price. The Company shall provide the Purchase Contract Agent from time
to time with sufficient funds to permit the Purchase Contract Agent to make all
cash payments required by this Section 5.12 in a timely manner. Promptly after
the calculation of the Applicable Closing Price, the Company shall give the
Purchase Contract Agent notice thereof. All calculations and determinations of
the Applicable Closing Price shall be made by the Company or its agent and the
Purchase Contract Agent shall have no responsibility with respect thereto.
Section 5.13. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common Stock
pursuant to the Purchase Contracts; provided, however, that the Company shall
not be required to pay any such tax or taxes which may be payable in respect of
any exchange of or substitution for a Certificate evidencing a PIES 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 PIES evidenced thereby,
other than in the name of the Purchase Contract Agent, as custodian for such
Holder, and the Company shall not be required to issue or deliver such share
certificates or Certificates unless 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.
53
ARTICLE VI
REMEDIES
Section 6.1. Unconditional Right of Holders to Receive Purchase Contract
Adjustment Payments and to Purchase Shares of Common Stock.
Each Holder of Corporate PIES or Treasury PIES shall have the right,
which is absolute and unconditional, (1) (subject to the payment by such Holder
of Purchase Contract Adjustment Payments pursuant to Section 5.9(a)), to receive
each Purchase Contract Adjustment Payment with respect to the Purchase Contract
constituting a part of such PIES on the respective Payment Date for such PIES
and (2) to purchase shares of Common Stock pursuant to such Purchase Contract
and, in each such case, to institute suit for the enforcement of any such
Purchase Contract Adjustment Payment and right to purchase shares of Common
Stock, and such rights shall not be impaired without the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the 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
PIES or Treasury PIES, by its acceptance of such Corporate PIES or Treasury
PIES, shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any
54
right or remedy under this Agreement, or in any suit against the Purchase
Contract Agent for any action taken, suffered or omitted by it as Purchase
Contract Agent, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees and 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 Purchase Contract Agent, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% of the
Outstanding PIES, or to any suit instituted by any Holder for the enforcement of
interest payable on any Senior Notes or Purchase Contract Adjustment Payments on
any Purchase Contract on or after the respective Payment Date therefor in
respect of any PIES held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts constituting part
of any PIES held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company expressly waives (to the
extent that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Purchase Contract Agent or the Holders, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE VII
THE PURCHASE CONTRACT AGENT
Section 7.1. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the PIES, such duties and
only such duties as are specifically set forth in this Agreement and the
Pledge Agreement, and no implied covenants or obligations shall be read
into this Agreement or the Pledge Agreement against the Purchase Contract
Agent; and
(2) in the absence of bad faith on its part, may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Purchase
Contract Agent and conforming to the requirements of this Agreement or the
Pledge Agreement, as applicable, but in the case of any certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Purchase Contract Agent, the Purchase Contract Agent
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement or the Pledge Agreement, as
applicable, but shall have no duty to
55
confirm or investigate the accuracy of mathematical calculations or other
facts stated therein.
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Purchase Contract Agent was grossly negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement in its capacity as Purchase Contract Agent. The Purchase
Contract Agent shall be entitled to all of the rights, privileges, immunities
and indemnities contained in this Agreement with respect to any duties of the
Purchase Contract Agent under, or actions taken, omitted to be taken or suffered
by the Purchase Contract Agent pursuant to the Pledge Agreement.
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 Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of PIES, 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 Purchase Contract Agent.
Subject to the provisions of Section 7.1:
(1) the Purchase Contract Agent may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
56
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officers' Certificate, Issuer Order or
Issuer Request, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Purchase Contract Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its
part, conclusively rely upon an Officers' Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its
selection and the advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Purchase Contract Agent,
in its discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if the
Purchase Contract Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(6) the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the Purchase Contract Agent shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney or an Affiliate appointed with due care by it hereunder;
(7) the rights, privileges, protections, immunities and benefits
given to the Purchase Contract Agent, including, but not limited to, its
right to be indemnified, are extended to, and shall be enforceable by, the
Purchase Contract Agent in each of its capacities hereunder, and to each
Purchase Contract Agent, custodian and other Person employed to act
hereunder;
(8) the Purchase Contract Agent shall not be liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(9) the Purchase Contract Agent shall not be charged with knowledge
of any default by the Company hereunder unless a Responsible Officer of
the Purchase Contract Agent shall have received at the Corporate Trust
Office of the Purchase Contract Agent written notice of such default;
57
(10) the permissive right of the Purchase Contract Agent to do
things enumerated in this Agreement shall not be construed as a duty;
(11) in no event shall the Purchase Contract Agent be liable for any
consequential, punitive, indirect or special loss or damages of any kind
whatsoever (including but not limited to lost profit), even if the
Purchase Contract Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action;
(12) the Purchase Contract Agent shall not be responsible or liable
for any failure or delay in the performance of its obligations under this
Agreement arising out of or caused directly or indirectly, by
circumstances beyond its reasonable control, including without limitation,
acts of God; earthquake; fires; floods; wars; civil or military
disturbances; terrorist acts; sabotage; epidemics; riots; interruptions,
loss or malfunctions of utilities, computer (hardware or software) or
communications service; accidents; labor disputes; and acts of civil or
military authority or governmental actions; it being understood that the
Purchase Contract Agent shall use reasonable efforts which are consistent
with accepted practices in the banking industry to resume performance as
soon as practicable under the circumstances; and
(13) the Purchase Contract Agent may request that the Company
deliver a certificate setting forth the names of individuals and/or titles
of officers authorized at such time to take specified action pursuant to
this Agreement, which certificate may be signed by any person authorized
to sign an Officers' Certificate, including any person specified as so
authorized in any such certificate previously delivered and not
superseded.
Section 7.4. Not Responsible for Recitals or Issuance of PIES.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the PIES, or of the Pledge Agreement or the Pledge. The Purchase Contract Agent
shall not be accountable for the use or application by the Company of the
proceeds in respect of the PIES or the Purchase Contracts and shall not be
responsible for the perfection, priority or maintenance of any security interest
created or intended to be created under the Pledge Agreement.
Section 7.5. May Hold PIES.
Any Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of PIES 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 Purchase Contract Agent.
Section 7.6. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need
not be segregated from the other funds except to the extent required by law or
provided herein. The
58
Purchase Contract Agent shall be under no obligation to invest or pay interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the
Company and the Purchase Contact Agent shall from time to time agree;
(2) except as otherwise expressly provided for herein, to reimburse
the Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent
in accordance with any provision of this Agreement and the Pledge
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence or
willful misconduct; and
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense, including taxes (other than taxes based upon,
measured by or determined by the income of the Purchase Contract Agent),
incurred without gross negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of
its duties hereunder, including the costs and expenses of defending itself
against any such claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
For purposes of this Section 7.7, "Purchase Contract Agent" shall
include any predecessor Purchase Contract Agent; provided, however, that the
negligence, bad faith or willful misconduct of any Purchase Contract Agent
hereunder shall not affect the rights of any other Purchase Contract Agent
hereunder.
The provisions of this Section 7.7 shall survive the termination of
this Agreement, the satisfaction or discharge of the PIES and/or the Separated
Senior Notes and/or the resignation or removal of the Purchase Contract Agent.
Section 7.8. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder
which shall be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or being
a member of a bank holding company having) a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and having a corporate trust office in the Borough of Manhattan, The
City of New York, if there be such a corporation in the Borough of Manhattan,
The City of New York, 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
59
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Purchase Contract Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding PIES delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchaser Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after such removal, the
Purchase Contract Agent being removed may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent shall cease to be eligible under
Section 7.8 and shall fail to resign after written request therefor by the
Company or by any such Holder; or
(2) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public officer
shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
PIES for at least six months may, on behalf of himself and all others similarly
situated, petition, at the expense of the Company, any court of competent
jurisdiction for the removal of the Purchase Contract Agent and the appointment
of a successor Purchase Contract Agent.
60
(e) If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Purchase Contract Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Purchase Contract Agent
shall have been so appointed by the Company and accepted appointment in the
manner required by Section 7.10, any Holder who has been a bona fide Holder of a
PIES for at least six months may, on behalf of itself and all others similarly
situated, petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Purchase Contract
Agent and the address of its Corporate Trust Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and shall duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph (a) of this Section.
(c) No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Purchase Contract Agent, shall be the
61
successor of the Purchase Contract Agent hereunder, provided such Person shall
be otherwise 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 Purchase Contract Agent then in office, any
successor to such Purchase Contract Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with the
same effect as if such successor Purchase Contract Agent had itself
authenticated and executed such PIES.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Purchase Contract Agent shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a PIES 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 PIES and is by a
copy of the form of proxy or other communication which such applicants propose
to transmit, then the Purchase Contract Agent shall mail to all the Holders
copies of the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Purchase Contract
Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this Agreement,
the Purchase Contract Agent assumes no obligations and shall not be subject to
any liability under this Agreement, the Pledge Agreement or any Purchase
Contract in respect of the obligations of the Holder of any PIES thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution of
the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the Holders,
except to the extent expressly provided in Article Five hereof. Anything
contained in this Agreement to the contrary notwithstanding, in no event shall
the Purchase Contract Agent or its officers, employees or agents be liable for
indirect, special, punitive, or consequential loss or damage of any kind
whatsoever, including, but not limited to, lost profits, whether or not the
likelihood of such loss or damage was known to the Purchase Contract Agent and
regardless of the form of action.
Section 7.14. Tax Compliance.
(a) 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 PIES or (ii)
the issuance, delivery, holding, transfer, redemption or exercise of
62
rights under the PIES. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment of all
amounts required to be withheld to the appropriate taxing authority or its
designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any reasonable written direction received from the Company
with respect to the execution or certification of any required documentation and
the application of such requirements to particular payments or Holders or in
other particular circumstances, and may for purposes of this Agreement
conclusively rely on any such direction in accordance with the provisions of
Section 7.1(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Purchase Contract Agent, at any time and from time
to time, may enter into one or more agreements supplemental hereto, in form
satisfactory to the Company and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.5(b); or
(5) except as provided for in Section 5.5, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, or make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements With Consent of Holders.
63
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 Purchase Contract Agent, the Company,
when authorized by a Board Resolution, and the Purchase Contract Agent may enter
into an agreement or agreements supplemental hereto for the purpose of modifying
in any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the PIES; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby, other than as expressly contemplated by this
Agreement,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral or otherwise adversely affect the
Holder's rights in or to such Collateral;
(3) reduce Purchase Contract Adjustment Payments or change any place
where, or the coin or currency in which, Purchase Contract Adjustment
Payments are payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of Common Stock to be purchased
pursuant to any Purchase Contract, increase the price to purchase shares
of Common Stock upon settlement of any Purchase Contract, change the
Purchase Contract 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 PIES or the Treasury PIES after securities of such
class are created and remain Outstanding, then only the affected class of Holder
as of the record date, if any, for the Holders entitled to vote thereon or
consent thereto will be entitled to vote or consent on such amendment or
proposal, and such amendment or proposal shall not be effective except with the
vote or consent of Holders of not less than a majority of such class; and
provided, further, that the unanimous consent of the Holders of each outstanding
Purchase Contract of the related Corporate PIES or Treasury PIES, as the case
may be, shall be required to approve any amendment or proposal specified in
clauses (1) through (6) above.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental agreement, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
64
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
entitled to receive, and (subject to Section 7.1) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement. The
Purchase Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
Outstanding Certificates.
ARTICLE IX
MERGER, CONSOLIDATION SALE OR CONVEYANCE
Section 9.1. When Company May Merge, Etc.
The Company shall not consolidate with or merge into, or sell, lease
(for a term extending beyond the last stated maturity of the PIES and the Senior
Notes then Outstanding) or convey all or substantially all of its assets to, any
Person or group of Affiliated Persons in one transaction or a series of related
transactions, unless the Company shall be the continuing corporation, or the
successor or transferee Person expressly assumes by one or more supplemental
agreements, in form satisfactory to the Purchase Contract Agent, all the
obligations of the Company with respect to the PIES and this Agreement, and the
Company or the successor or transferee Person, as the case may be, (i) shall be
a Corporation organized and existing under the laws of one of the states in the
United States and (ii) shall not, immediately after such consolidation or merger
or sale, lease or conveyance, be in default in the performance or any covenant
or condition hereunder or under any of the PIES. The Company shall deliver to
the Purchase Contract Agent an Officers' Certificate (as defined in the Original
Indenture) and an Opinion of Counsel (as defined in the Original Indenture),
each stating that such consolidation,
65
merger sale, lease or conveyance and such supplemental agreement comply with
this Agreement and that all conditions precedent to the consummation of any such
consolidation, or merger, or any sale, lease or conveyance have been met.
Section 9.2. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, lease or conveyance
of all or substantially all of the assets of the Company in accordance with
Section 9.1, the successor corporation or the transferee corporation formed by
such consolidation or into which the Company is merged or to which such transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Agreement with the same effect as if such
successor corporation had been named as the Company herein.
Such successor or transferee Person thereupon may cause to be
signed, and may issue either in its own name or in the name of Sierra Pacific
Resources, any or all of the Certificates evidencing PIES issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Purchase Contract Agent; and, upon the order of such successor or such
transferee Person, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing PIES which such successor corporation
or transferee corporation thereafter shall cause to be signed and delivered to
the Purchase Contract Agent for that purpose. All the Certificates issued shall
in all respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing PIES
thereafter to be issued as may be appropriate.
Section 9.3. Limitation.
Nothing in this Agreement shall be deemed to prevent or restrict;
(a) any consolidation or merger after the consummation of which the Company
would be the surviving or resulting entity or any conveyance or other transfer
or lease of any part of the properties of the Company which does not constitute
the entirety, or substantially the entirety, thereof; or (b) the approval by the
Company of, or the consent by the Company to, any consolidation or merger to
which any Restricted Subsidiary (as defined in the Original Indenture) or any
other subsidiary or affiliate of the Company may be a party or any conveyance,
transfer or lease by any Subsidiary (as defined in the Original Indenture) or
any such other subsidiary or affiliate of any of its assets.
ARTICLE X
COVENANTS
Section 10.1. Performance Under Purchase Contracts.
66
The Company covenants and agrees for the benefit of the Holders from
time to time of the PIES that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The City of
New York an office or agency where Certificates may be:
(1) presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts on the Purchase Contract
Settlement Date or Early Settlement and for transfer of Collateral upon
occurrence of a Termination Event;
(2) surrendered for registration of transfer or exchange, for a
Collateral Substitution or re-establishment of a Corporate PIES; and
and where notices and demands to or upon the Company in respect of the PIES and
this Agreement may be served. The Company will give prompt written notice to the
Purchase Contract Agent of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Purchase Contract Agent
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Company hereby
appoints the Purchase Contract Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Purchase Contract Agent of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company hereby designates as the place of payment for the
PIES the Corporate Trust Office and appoints the Purchase Contract Agent at its
Corporate Trust Office as paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued shares of Common Stock the maximum number of shares
of Common Stock issuable against tender of payment in respect of all Purchase
Contracts constituting a part of the PIES evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which will be
issued against tender of payment in respect of Purchase Contracts constituting a
part of the Outstanding
67
PIES will, upon issuance as contemplated herein, be duly authorized, validly
issued, fully paid and nonassessable.
Section 10.5. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate
(one of the signers of which shall be the principal executive officer, principal
financial officer, treasurer or principal accounting officer of the Company),
stating whether or not to the best knowledge of the signers thereof the Company
is in default in the performance and observance of any of the terms, provisions
and conditions hereof, and if the Company shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge.
Section 10.6. ERISA.
Each Holder from time to time of the Corporate PIES which is a Plan
hereby represents that its acquisition of the Corporate PIES and the holding of
the same satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of ERISA
and the Code in accordance with one or more prohibited transaction exemptions or
otherwise will not result in a nonexempt prohibited transaction.
68
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
SIERRA PACIFIC RESOURCES
By: _______________________________
Name:
Title:
THE BANK OF NEW YORK,
as Purchase Contract Agent
By: _______________________________
Name:
Title:
EXHIBIT A
FORM OF FACE OF CORPORATE PIES CERTIFICATE
[This certificate is a global certificate within the meaning of the
Purchase Contract Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company, a New York corporation (the "Depositary"),
or a nominee of the Depositary. This certificate is exchangeable for
certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Purchase Contract
Agreement and no transfer of this certificate (other than a transfer of this
certificate as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this certificate is presented by an authorized representative
of the Depositary to Sierra Pacific Resources 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 is requested by an authorized
representative of the Depositary (and any payment hereon is made to Cede & Co.
or to such other entity as is requested by an authorized representative of the
Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.](1)
NO.: ________ CUSIP NO.
NUMBER OF CORPORATE PIES: _________
SIERRA PACIFIC RESOURCES
CORPORATE PIES
This Corporate PIES Certificate certifies that [Cede & Co.](2), or
registered assigns, is the registered Holder of the number of Corporate PIES set
forth above [or such other number as set forth in the Schedule of Increases and
Decreases in Global Certificate attached hereto] (3). Each Corporate PIES
consists of (i) the rights and obligations of the Holder under one Purchase
Contract with Sierra Pacific Resources, a Nevada corporation (the "Company"),
and (ii) either (a) a 1/20th, or 5%, undivided beneficial ownership by the
Holder of one 7.93% Senior Note due 2007 (the "Senior Note") of the Company,
having a principal amount of $1,000, subject to the Pledge of such Senior Note
by such Holder pursuant to the Pledge Agreement or (b) if the Corporate PIES has
been remarketed by the Remarketing Agents pursuant to the Remarketing
-------------------
(1) Insert in Global Certificates only.
(2) Insert in Global Certificates only.
(3) Insert in Global Certificates only.
Agreement, the Treasury Portfolio Interest, subject to the Pledge of such
Treasury Portfolio Interest by such Holder pursuant to the Pledge Agreement.
Pursuant to the Pledge Agreement, the Senior Note or the Treasury
Portfolio Interest, as the case may be, constituting part of each Corporate PIES
evidenced hereby has been pledged to the Collateral Agent, for the benefit of
the Company, to secure the obligations of the Holder under the Purchase Contract
comprising a portion of such Corporate PIES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date, at a price equal to $50 in cash (the "Stated Amount"),
a number of shares of Common Stock equal to the Settlement Rate then in effect,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event, an Early Settlement or a Merger Early Settlement
with respect to the Corporate PIES of which such Purchase Contract is a part,
all as provided in the Purchase Contract Agreement and more fully described on
the reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of payment received in respect of the principal amount with respect
to each Pledged Senior Note, pursuant to the Remarketing, or with respect to the
Pledged Treasury Portfolio Interest, as the case may be, in each case, pledged
pursuant to the Pledge Agreement to secure the obligations under such Purchase
Contract of the Holder of the Corporate PIES of which such Purchase Contract is
a part.
The Company shall pay on August 15, 2005 and November 15, 2005
(each, a "Payment Date") in respect of each Purchase Contract forming part of a
Corporate PIES evidenced hereby, an amount (the "Purchase Contract Adjustment
Payments") equal to (a) if a Reset Transaction has not occurred, 1.07% per annum
of the Stated Amount or (b) following the occurrence of a Reset Transaction, if
at all, the Adjusted Purchase Contract Adjustment Payment Rate related to such
Reset Transaction until any such succeeding Reset Transaction shall occur, in
either case, computed on the basis of (i) for any full quarterly period, a
360-day year of twelve 30-day months, (ii) for any period shorter than a full
quarterly period, a 30-day month and (iii) for periods less than a month, the
actual number of days elapsed per 30-day period. Such Purchase Contract
Adjustment Payments shall be payable to the Person in whose name this Corporate
PIES Certificate (or a Predecessor Corporate PIES Certificate) is registered at
the close of business on the Record Date for such Payment Date.
Interest on the Senior Notes, the beneficial ownership of which is
evidenced hereby until the later of the Remarketing Settlement Date and the
Purchase Contract Settlement Date, as applicable, is payable quarterly in
arrears on each Payment Date or as otherwise set forth in the Senior Notes. Such
interest payments shall be payable to the Person in whose name this Corporate
PIES Certificate (or a Predecessor Corporate PIES Certificate) is registered at
the close of business on the Record Date for such Payment Date.
If the Remarketing Settlement Date resulting from a Successful
Remarketing is not also a Payment Date, the Collateral Agent will receive on
behalf of the Holders of the Corporate PIES an interest payment from the Company
on such Remarketing Settlement Date on the Senior Notes from the most recent
Payment Date to, but excluding, such Remarketing
A-2
Settlement Date. On the Payment Date next following the Remarketing Settlement
Date, Holders of the Corporate PIES will receive a regular quarterly cash
distribution comprised of the interest payment payable on that date, (consisting
of the portion of the remarketed Treasury Portfolio that matures prior to that
Payment Date and the cash payment made to the Collateral Agent on the
Remarketing Settlement Date) and the Purchase Contract Adjustment Payment
payable on that date.
Purchase Contract Adjustment Payments and interest payments on the
Senior Notes will be payable at the office of the Purchase Contract Agent in The
City of New York or, at the option of the Company, by wire transfer or by check
mailed to the address of the Person entitled thereto as such address appears on
the Corporate PIES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Corporate PIES Certificate
shall not be entitled to any benefit under the Purchase Contract Agreement or
the Pledge Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
SIERRA PACIFIC RESOURCES
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK,
not individually but solely as Attorney-in-Fact of
such Holder
By:____________________________
Name:
Title:
A-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Corporate PIES Certificates referred to in the
within-mentioned Purchase Contract Agreement.
Dated: By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:____________________________
Authorized Signatory
A-4
(FORM OF REVERSE OF CORPORATE PIES CERTIFICATE)
1. Purchase Contract Agreement; Purchase Contracts.
Each Purchase Contract evidenced hereby is being issued under and
governed by a Purchase Contract Agreement, dated as of __________, 2005 (as may
be amended, modified or supplemented from time to time pursuant to the terms
thereof, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder, the
"Purchase Contract Agent"), which Purchase Contract Agreement and amended,
modified or supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Corporate PIES Certificates are, and are
to be, executed and delivered. The terms of this Corporate PIES Certificate
include those stated herein and in the Purchase Contract Agreement. To the
extent permitted by applicable law, in the event of an inconsistency between
this Corporate PIES Certificate and the Purchase Contract Agreement, the terms
of the Purchase Contract Agreement shall control. Capitalized terms used but not
defined herein have the meanings ascribed thereto in the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock equal to the Settlement Rate then in
effect unless on or prior to the Purchase Contract Settlement Date, there shall
have occurred a Termination Event, an Early Settlement or a Merger Early
Settlement with respect to the PIES of which such Purchase Contract is a part.
The "Settlement Rate" is equal to:
(1) if the Applicable Closing Price (as defined below) per share is
equal to or greater than $16.62 (the "Threshold Appreciation Price"),
3.0084 shares of Common Stock per Purchase Contract;
(2) if the Applicable Closing Price per share is less than the
Threshold Appreciation Price but greater than $13.85 (the "Reference
Price"), the number of shares of Common Stock determined by dividing the
Stated Amount by the Applicable Closing Price; and
(3) if the Applicable Closing Price per share is less than or equal
to the Reference Price, 3.6101 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.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate PIES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by (i) effecting a Cash Settlement, an Early Settlement or Merger Early
Settlement or (ii) application of payments
A-5
received in respect of the Pledged Treasury Portfolio Interest acquired from the
proceeds of a Remarketing of the related Pledged Senior Notes relating to the
Corporate PIES represented by this Corporate PIES Certificate. As provided in
the Purchase Contract Agreement, upon the occurrence of a Failed Remarketing and
upon written direction of the Company as provided in the Pledge Agreement, the
Collateral Agent shall exercise, for the benefit of the Company, its rights as a
secured creditor with respect to the Pledged Senior Notes related to this
Corporate PIES Certificate and, subject to applicable law, may (i) retain such
Pledged Senior Notes in full satisfaction of the Holders' obligations under the
Purchase Contracts or (ii) sell such Pledged Senior Notes in one or more public
or private sales, the proceeds, if any, of such sale to constitute full
satisfaction of the Holders' obligations under the Purchase Contracts. With
respect to such Pledged Senior Notes which are the subject of a Failed
Remarketing, any accrued and unpaid interest payments on such Pledged Senior
Notes will become payable by the Company to the Holder of this Corporate PIES
Certificate in the manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have received payment of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner set
forth in the Purchase Contract Agreement which payment, in the case of a Failed
Remarketing shall occur by the resale of Pledged Senior Notes or foreclosure on
and retention of such Pledged Senior Notes pursuant to the Purchase Contract
Agreement and the Pledge Agreement.
2. Termination Event; Early Settlement; Merger Early Settlement.
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, Purchase Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Corporate PIES
Register. Upon the occurrence of a Termination Event, the Collateral Agent shall
release the Senior Notes or Pledged Treasury Portfolio Interest, as the case may
be, from the Pledge in accordance with the provisions of the Pledge Agreement. A
Corporate PIES shall thereafter represent the right to receive the Senior Note
forming a part of such Corporate PIES in accordance with the terms of the
Purchase Contract Agreement and 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
relating to PIES 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
PIES Certificate, the Holder of this Corporate PIES Certificate shall deliver
this Corporate PIES Certificate to the Purchase Contract Agent at the Corporate
Trust Office duly endorsed for transfer to the Company or in blank with the form
of Election to Settle Early set
A-6
forth below 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:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(2) 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 Purchase 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 PIES, the
Pledged Senior Notes relating to such PIES 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 Corporate PIES as to which Early Settlement is effected equal to the
Early Settlement Rate. The Early Settlement Rate shall initially be, for each 20
Corporate PIES surrendered, 60.168 (which is the product of 3.0084 multiplied by
20) shares of Common Stock per Purchase Contract and 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.
3. Creation of Treasury PIES; Recreation of Corporate PIES.
A holder of a Corporate PIES may substitute for the Pledged Senior
Notes securing its obligation under the related Purchase Contract Treasury
Securities in an aggregate principal amount at maturity equal to the aggregate
principal amount of the Pledged Senior Notes in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the PIES for which such Pledged Treasury Securities
secures the Holder's obligation under the Purchase Contract shall be referred to
as a "Treasury PIES." A Holder may make such Collateral Substitution only in
integral multiples of 20 Corporate PIES for 20 Treasury PIES. Such Collateral
Substitution may cause the equivalent aggregate principal amount of this
Certificate to be increased or decreased; provided, however, this Corporate PIES
Certificate shall not represent more than 4,704,650 Corporate PIES, or if in the
form of a Global Certificate, such other maximum amount as shall at the time be
prescribed by the applicable Depositary. All such adjustments to the equivalent
aggregate principal amount of this Corporate PIES Certificate if a Global
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule as may be attached hereto.
A Holder of Treasury PIES may recreate Corporate PIES by delivering
to the Securities Intermediary Senior Notes with an aggregate principal amount
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Holders may recreate Corporate PIES only in integral multiples of 20
Corporate PIES.
A-7
4. Registered Form; Denomination; Registration, Transfer and
Exchange.
The Corporate PIES Certificates are issuable only in registered form
and only in denominations of a single Corporate PIES and any integral multiple
thereof. The transfer of any Corporate PIES Certificate will be registered and
Corporate PIES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Corporate PIES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company and
the Purchase Contract Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. A Holder who
elects to substitute a Treasury Security for Senior Notes, thereby creating
Treasury PIES, 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 relating to a Corporate PIES remains in effect,
such Corporate PIES shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Corporate PIES in respect of the
Senior Note or Treasury Portfolio Interest, as the case may be, and Purchase
Contract constituting such Corporate PIES may be transferred and exchanged only
as a Corporate PIES.
Upon registration of transfer of this Corporate PIES Certificate,
the transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Corporate PIES 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 Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Corporate PIES Certificate is registered as the owner of the
Corporate PIES evidenced hereby for the purpose of receiving payments of
interest payable quarterly on the Senior Notes or Treasury Portfolio Return, as
the case may be, receiving Purchase 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 Purchase Contract Agent nor any such
agent shall be affected by notice to the contrary.
5. Place and Method of Payment.
The Company shall pay, on each Payment Date, the Purchase Contract
Adjustment Payments payable in respect of each Purchase Contract to the Person
in whose name the Corporate PIES Certificate evidencing such Purchase Contract
is registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in The City of New York or, at the option of the Company
by wire transfer or by check mailed to the address of the Person entitled
thereto at such address as it appears on the Corporate PIES Register.
A-8
6. Authorization of Purchase Contract Agent.
The Holder of this Corporate PIES Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Corporate PIES evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Senior Notes or Treasury Portfolio Interest, as
the case may be, relating to this Corporate PIES Certificate pursuant to the
Pledge Agreement. The Holder further covenants and agrees that, to the extent
and in the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect of the
aggregate principal amount of the Pledged Senior Notes or Pledged Treasury
Portfolio Interest, as the case may be, shall be paid on the Purchase Contract
Settlement Date by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.
7. Amendment.
The provisions of the Purchase Contract Agreement and this Corporate
PIES Certificate may be amended only as provided in the Purchase Contract
Agreement.
8. Voting Rights.
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.
Upon settlement of the Purchase Contracts, the Holder will be entitled to all of
the rights of a holder of shares of Common Stock, including, without limitation,
the right to vote and receive dividends and other payments and to consent and
receive notice as a shareholder in respect of the meetings of shareholders and
for the election of directors of the Company and for all other matters, and all
other rights whatsoever as a shareholder of the Company. Under the terms of the
Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the
voting and any other consensual rights pertaining to the Pledged Senior Notes
upon behalf of and upon receipt of instructions from the beneficial owners of
such Pledged Senior Notes. Upon receipt of notice of any meeting at which
holders of Senior Notes are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Senior Notes, the Purchase Contract
Agent shall, as soon as practicable thereafter, mail to the Corporate PIES
Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Corporate PIES Holder on the record date set
by the Purchase Contract Agent therefor (which, to the extent possible,
shall be the same date as the record date for determining the holders of
Senior Notes entitled to vote) shall be
A-9
entitled to instruct the Purchase Contract Agent as to the exercise of the
voting rights pertaining to the Senior Notes constituting a part of such
Holder's Corporate PIES; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Corporate PIES Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or cause
to be voted, in accordance with the instructions set forth in such requests, the
maximum aggregate principal amount of Senior Notes as to which any particular
voting instructions are received. In the absence of specific instructions from
the Holder of a Corporate PIES, the Purchase Contract Agent shall abstain from
voting the Senior Notes evidenced by such Corporate PIES.
9. Severability.
If any provision in this Corporate PIES and the Senior Notes is
invalid or unenforceable in any jurisdiction, then, to the fullest extent
permitted by law, (i) the other provisions of Corporate PIES shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (ii) the invalidity or unenforceability of any provision of this
Corporate PIES in any jurisdiction shall not in any way affect the validity or
enforceability of such provision in any other jurisdiction.
10. Governing Law.
THIS CORPORATE PIES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11. Jurisdiction; Venue.
The Company hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to the Indenture and the Senior Notes or
the transactions contemplated hereby. The Company hereto irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
12. Copies of Purchase Contract Agreement.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent at its address set
forth in Section 1.5 of the Purchase Contract Agreement.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - As tenants in common
TEN ENT - As tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - (cust) Custodian (minor) _____________________
Under Uniform Gifts to Minors Act of _______________
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
________________________________________________________________________________
(insert name of assignee)
________________________________________________________________________________
(insert social security or taxpayer I.D. or other identifying number of
assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(insert address including zip code of assignee)
the within Corporate PIES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said Corporate PIES Certificates on the books of Sierra
Pacific Resources with full power of substitution in the premises.
Dated: ___________________ ______________________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as it appears upon
the face of the within Corporate PIES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee: ___________________________________
A-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon settlement on the Purchase Contract Settlement
Date of the Purchase Contracts relating to the number of Corporate PIES
evidenced by this Corporate PIES 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 agrees to pay any transfer
tax payable incident thereto.
Dated: _______________________ _____________________________________
Signature
Signature Guarantee:_________________
(if assigned to another person)
REGISTERED HOLDER
Please print name and address of Registered Holder:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
________________________________________________________________________________
________________________________________________________________________________
(insert social security or other taxpayer identification number, if any)
________________________________
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:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
________________________________________________________________________________
________________________________________________________________________________
(insert social security or other taxpayer identification number, if any)
A-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate PIES Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Merger Early
Settlement] in accordance with the terms of the Purchase Contract Agreement with
respect to the Purchase Contracts relating to the number of Corporate PIES
evidenced by this Corporate PIES Certificate specified below. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such [Early Settlement] [Merger Early Settlement] be registered in the name of,
and delivered, together with a check in payment for any fractional share and any
Corporate PIES Certificate representing any Corporate PIES evidenced hereby as
to which [Early Settlement] [Merger 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 Senior
Notes deliverable upon such [Early Settlement] [Merger 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 agrees to pay any transfer tax payable incident thereto.
________________________________________
Signature
Dated:__________________________________
Signature Guarantee:____________________
Number of PIES evidenced hereby as to which [Early Settlement]
[Merger Early Settlement] of the related Purchase Contracts is being elected:
REGISTERED HOLDER
Please print name and address of Registered Holder:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
________________________________________________________________________________
If shares of Common Stock or Corporate PIES Certificates are to be registered in
the name of and delivered to, and Pledged Senior Notes are to be transferred to,
a Person other than the Holder, please print such Person's name and address:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
________________________________________________________________________________
(insert social security or other taxpayer identification number, if any)
Transfer Instructions for Pledged Senior Notes Transferable Upon [Early
Settlement] [Merger Early Settlement]:
A-13
________________________________________________________________________________
A-14
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Number of Corporate PIES
Amount of decrease in Amount of increase in evidenced by this Signature of
Number of Corporate Number of Corporate Global Certificate authorized signatory
PIES evidenced by the PIES evidenced by the following such of Purchase Contract
Date Global Certificate Global Certificate decrease or increase Agent
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
--------------- --------------------- --------------------- ------------------------ -----------------------
A-15
EXHIBIT B
FORM OF FACE OF TREASURY PIES CERTIFICATE
[This certificate is a global certificate within the meaning of the
Purchase Contract Agreement hereinafter referred to and is registered in the
name of The Depository Trust Company, a New York corporation (the "Depositary"),
or a nominee of the Depositary. This certificate is exchangeable for
certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Purchase Contract
Agreement and no transfer of this certificate (other than a transfer of this
certificate as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this certificate is presented by an authorized representative
of the Depositary to Sierra Pacific Resources 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 is requested by an authorized
representative of the Depositary (and any payment hereon is made to Cede & Co.
or to such other entity as is requested by an authorized representative of the
Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has
an interest herein.](1)
NO.: __ CUSIP NO.
NUMBER OF TREASURY PIES: __
SIERRA PACIFIC RESOURCES
TREASURY PIES
This Treasury PIES Certificate certifies that [Cede & Co.](2), or
registered assigns, is the registered Holder of the number of Treasury PIES set
forth above [or such other number as set forth in the Schedule of Increases and
Decreases in Global Certificate attached hereto] (3). Each Treasury PIES
consists of (i) the rights and obligations of the Holder under one Purchase
Contract with Sierra Pacific Resources, a Nevada corporation (the "Company") and
(ii) a 1/20th undivided beneficial ownership interest of a Treasury Security
having a principal amount at maturity equal to $1,000 and maturing on or prior
to November 15, 2005.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Treasury PIES 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
PIES.
-------------------
(1) Insert in Global Certificates only.
(2) Insert in Global Certificates only.
(3) Insert in Global Certificates only.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PIES Certificate to purchase, and the Company, to sell, on the Purchase
Contract Settlement Date, at a price equal to $50 in cash (the "Stated Amount"),
a number of shares of Common Stock equal to the Settlement Rate then in effect,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Merger Early Settlement
with respect to the Treasury PIES of which such Purchase Contract is a part, all
as provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of the proceeds from the Treasury Securities at maturity pledged
pursuant to the Pledge Agreement to secure the obligations under such Purchase
Contract of the Holder of the Treasury PIES of which such Purchase Contract is a
part.
The Company shall pay on August 15, 2005 and November 15, 2005
(each, a "Payment Date") in respect of each Purchase Contract forming part of
Treasury PIES evidenced hereby, an amount (the "Purchase Contract Adjustment
Payments") equal to (a) if a Reset Transaction has not occurred, 1.07% per annum
of the Stated Amount or (b) following the occurrence of a Reset Transaction, if
at all, the Adjusted Purchase Contract Adjustment Payment Rate related to such
Reset Transaction until any such succeeding Reset Transaction shall occur, in
either case, computed on the basis of (i) for any full quarterly period, a
360-day year of twelve 30-day months, (ii) for any period shorter than a full
quarterly period, a 30-day month and (iii) for periods less than a month, the
actual number of days elapsed per 30-day period). Such Purchase Contract
Adjustment Payments shall be payable to the Person in whose name this Treasury
PIES Certificate (or a Predecessor Treasury PIES Certificate) is registered at
the close of business on the Record Date for such Payment Date.
Purchase Contract Adjustment Payments will be payable at the office
of the Purchase Contract Agent in The City of New York or, at the option of the
Company, by wire transfer or by check mailed to the address of the Person
entitled thereto as such address appears on the Treasury or PIES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Treasury PIES Certificate
shall not be entitled to any benefit under the Purchase Contract Agreement or
the Pledge Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
SIERRA PACIFIC RESOURCES
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK, not individually but
solely as Attorney-in-Fact of such Holder
By: _________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury PIES Certificates referred to in the
within-mentioned Purchase Contract Agreement.
Dated: By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:___________________________
Authorized Officer
B-3
(FORM OF REVERSE OF TREASURY PIES CERTIFICATE)
1. Purchase Contract Agreement; Purchase Contracts.
Each Purchase Contract evidenced hereby is being issued under and
governed by a Purchase Contract Agreement, dated as of __________, 2005 (as may
be amended, modified or supplemented from time to time pursuant to the terms
thereof, the "Purchase Contract Agreement") between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder, the
"Purchase Contract Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Purchase Contract Agent, the Company and the Holders and of
the terms upon which the Treasury PIES Certificates are, and are to be, executed
and delivered. The terms of this Treasury PIES Certificate include those stated
herein and in the Purchase Contract Agreement. To the extent permitted by
applicable law, in the event of an inconsistency between this Treasury PIES
Certificate and the Purchase Contract Agreement, the terms of the Purchase
Contract Agreement shall control. Capitalized terms used but not defined herein
have the meanings ascribed thereto in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury PIES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock equal to the Settlement Rate then in
effect unless on or prior to the Purchase Contract Settlement Date, there shall
have occurred a Termination Event, an Early Settlement or a Merger Early
Settlement with respect to the PIES of which such Purchase Contract is a part.
The "Settlement Rate" is equal to:
(1) if the Applicable Closing Price (as defined below) per share is
equal to or greater than $16.62 (the "Threshold Appreciation Price"),
3.0084 shares of Common Stock per Purchase Contract;
(2) if the Applicable Closing Price per share is less than the
Threshold Appreciation Price but greater than $13.85 (the "Reference
Price"), the number of shares of Common Stock determined by dividing the
Stated Amount by the Applicable Closing Price; and
(3) if the Applicable Closing Price per share is less than or equal
to the Reference Price, then 3.6101 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.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury PIES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by (i) effecting a Cash Settlement, an Early Settlement or Merger Early
Settlement or (ii) application of payments
B-4
received in respect of the Pledged Treasury Securities relating to the Treasury
PIES represented by this Treasury PIES Certificate.
The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates therefor to
the Holder unless it shall have received payment of the aggregate purchase price
for the shares of Common Stock to be purchased thereunder in the manner herein
set forth in the Purchase Contract Agreement.
2. Termination Event; Early Settlement; Merger Early Settlement.
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, Purchase Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Treasury PIES
Register. Upon the occurrence of a Termination Event, the Collateral Agent shall
release the Treasury Securities from the Pledge in accordance with the
provisions of the Pledge Agreement. A Treasury PIES shall thereafter represent
the right to receive the interest in the Treasury Security forming a part of
such Treasury PIES, in accordance with the terms of the Purchase Contract
Agreement and 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
relating to PIES 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 Treasury
PIES the Holder of this Treasury PIES Certificate shall deliver this Treasury
PIES Certificate to the Purchase Contract Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and 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:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(2) 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 Purchase 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 PIES, the
Pledged Treasury Securities relating to such PIES 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 PIES as to which Early Settlement is effected equal
to the Early Settlement Rate. The Early Settlement Rate shall initially be equal
to 3.0084 shares of Common Stock per Purchase Contract and shall be adjusted
B-5
in the same manner and at the same time as the Settlement Rate is adjusted as
provided in the Purchase Contract Agreement.
3. Recreation of Corporate PIES.
A Holder of Treasury PIES may recreate Corporate PIES by delivering
to the Collateral Agent Senior Notes with a principal amount equal to the
aggregate principal amount of maturity of the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such Collateral Substitution, the Holder's PIES shall be referred to as a
"Corporate PIES." Such Collateral Substitution may cause the equivalent
aggregate principal amount of this Certificate to be increased or decreased;
provided, however, this Treasury PIES Certificate shall not represent more than
4,704,350 Treasury PIES, or if in the form of a Global Certificate, such other
maximum amount as shall at the time be prescribed by the applicable Depositary.
All such adjustments to the equivalent aggregate principal amount of this
Treasury PIES Certificate if a Global Certificate, shall be duly recorded, by
placing an appropriate notation on the Schedule as may be attached hereto. A
Holder who elects to substitute Senior Notes for Treasury Securities, thereby
recreating Corporate PIES, shall be responsible for any fees or expenses
associated therewith.
4. Registered Form; Denominations; Registration, Transfer and
Exchange.
The Treasury PIES Certificates are issuable only in registered form
and only in denominations of a single Treasury PIES and any integral multiple
thereof. The transfer of any Treasury PIES Certificate will be registered and
Treasury PIES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury PIES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase Contract
Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes for a Treasury Security, thereby creating Corporate
PIES, 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 relating to a Treasury PIES remains in effect, such
Treasury PIES shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury PIES in respect of the Treasury
Security and the Purchase Contract constituting such Treasury PIES may be
transferred and exchanged only as a Treasury PIES.
Upon registration of transfer of this Treasury PIES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury PIES 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 Company, the Purchase Contract
Agent and its Affiliates and any agent of the Company or the Purchase Contract
Agent may treat the Person in whose name this Treasury PIES Certificate is
registered as the owner of the Treasury PIES evidenced hereby for the
B-6
purpose of receiving payments of Purchase 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 Purchase Contract Agent
nor any such agent shall be affected by notice to the contrary.]
5. Place and Method of Payment.
The Company shall pay, on each Payment Date, the Purchase Contract
Adjustment Payments payable in respect of each Purchase Contract to the Person
in whose name the Treasury PIES Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in The City of New York or, at the option of the
Company, by wire transfer or by check mailed to the address of the Person
entitled thereto at such address as it appears on the Treasury PIES Register.
6. Authorization of Purchase Contract Agent.
The Holder of this Treasury PIES Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Treasury PIES evidenced hereby on
its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities relating to this Treasury PIES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the aggregate principal amount of the Pledged Treasury Securities
at maturity shall be paid on the Purchase Contract Settlement Date by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
7. Amendment.
The provisions of the Purchase Contract Agreement and this Treasury
PIES Certificate may be amended only as provided in the Purchase Contract
Agreement.
8. Voting Rights.
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.
Upon settlement of the Purchase Contracts, the Holder will be entitled to all of
the rights of a holder of shares of Common Stock, including, without limitation,
the right to vote and receive dividends and other payments and to consent and
receive notice as a shareholder in respect of the meetings of shareholders and
for the election of directors of the Company and for all other matters, and all
other rights whatsoever as a shareholder of the Company.
B-7
9. Severability.
If any provision in this Treasury PIES is invalid or unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions of Treasury PIES shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision of this Treasury PIES in any
jurisdiction shall not in any way affect the validity or enforceability of such
provision in any other jurisdiction.
10. Governing Law.
THIS TREASURY PIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
11. Jurisdiction; Venue.
The Company hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to the Indenture and the Senior Notes or
the transactions contemplated hereby. The Company hereto irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
12. Copies of Purchase Contract Agreement.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent at its address set
forth in Section 1.5 of the Purchase Contract Agreement.
B-8
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
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - (cust) Custodian for ( minor) _____________________
Under Uniform Gifts to Minors Act of ______________
(State)
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
________________________________________________________________________________
(insert name of assignee)
________________________________________________________________________________
(insert social security or taxpayer I.D. or other identifying number of
assignee)
________________________________________________________________________________
(insert address including zip code of assignee)
the within Treasury PIES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _______________________________ attorney
to transfer said Treasury PIES Certificates on the books of Sierra Pacific
Resources with full power of substitution in the premises.
Dated: ___________________ _______________________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Treasury PIES Certificates
in every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ___________________________________
B-9
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 relating to the number of Treasury
PIES evidenced by this Treasury PIES 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 agrees to pay any transfer
tax payable incident thereto.
Dated: _______________________ __________________________________
Signature
Signature Guarantee: _________________
(if assigned to another person)
REGISTERED HOLDER
Please print name and address of Registered Holder:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(insert social security or other taxpayer identification number, if any)
________________________________
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:
________________________________________________________________________________
(insert name
________________________________________________________________________________
(insert address)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(insert social security or other taxpayer identification number, if any)
B-10
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury PIES Certificate irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts relating
to the number of Treasury PIES evidenced by this Treasury PIES Certificate
specified below. The undersigned Holder directs that a certificate for shares of
Common Stock deliverable upon such Early Settlement be registered in the name
of, and delivered, together with a check in payment for any fractional share and
any Treasury PIES Certificate representing any Treasury PIES 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 agrees to pay any transfer
tax payable incident thereto.
____________________________________
Signature
Dated: _____________________________
Signature Guarantee: ______________
Number of PIES evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
REGISTERED HOLDER
Please print name and address of Registered Holder:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
________________________________________________________________________________
If shares of Common Stock or Treasury PIES Certificates are to be registered in
the name of and delivered to, and Pledged Treasury Securities are to be
transferred to, a Person other than the Holder, please print such Person's name
and address:
________________________________________________________________________________
(insert name)
________________________________________________________________________________
(insert address)
_______________________________________________________________________________
(insert social security or other taxpayer identification number, if any)
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement:
________________________________________________________________________________
B-11
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Number of Treasury PIES
Amount of decrease in Amount of increase in evidenced by this
Number of Treasury Number of Treasury Global Certificate Signature of authorized
PIES evidenced by the PIES evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
------------------ --------------------- --------------------- ----------------------- -----------------------
B-12
EXHIBIT C
NOTICE FROM HOLDER TO PURCHASE CONTRACT AGENT
(Election for Creation of Treasury PIES or Recreation of Corporate PIES)
The Bank of New York, as Purchase Contract Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division - Corporate Finance Unit
Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources
Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.
The undersigned Holder hereby notifies you in accordance with
Section [3.13] [3.14] of the Purchase Contract Agreement, that such Holder has
elected to [create][recreate] ________ [Treasury PIES] [Corporate PIES] by
substitution of $__________ aggregate principal amount of [Treasury Securities
(CUSIP No. )] [Senior Notes] for the [Pledged Senior Notes] [Pledged Treasury
Securities] held in the Collateral Account, in accordance with the Pledge
Agreement.
The undersigned Holder hereby acknowledges that such Holder may
[create Treasury PIES] [recreate Corporate PIES] only in integral multiples of
20 [Corporate PIES] [Treasury PIES].
______________________________________
Name of Holder
______________________________________
DTC Participant No.
______________________________________
Signature
Signature Guarantee:__________________
Date: _______________________
Please print name and address of Registered Holder:
________________________________________________________________
Name
________________________________________________________________
Social Security or other Taxpayer Identification Number, if any
________________________________________________________________
Address
EXHIBIT D
INSTRUCTION FROM HOLDER
TO PURCHASE CONTRACT AGENT
The Bank of New York, as Purchase Contract Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division -- Corporate Finance Unit
Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources
Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.
The undersigned Holder hereby notifies you that in accordance with
Section [3.13] [3.14] of the Purchase Contract Agreement it has transferred to
▇▇▇▇▇ Fargo Bank, National Association, as Securities Intermediary, for credit
to the Collateral Account, $______ aggregate principal amount of [Treasury
Securities] [Senior Notes] in exchange for the [Pledged Senior Notes] [Pledged
Treasury Securities] held in the Collateral Account, in accordance with the
Purchase Contract Agreement and the Pledge Agreement. The undersigned Holder has
paid all applicable fees relating to such exchange. The undersigned Holder
hereby requests that you to instruct the Collateral Agent to release to [you on
behalf of the undersigned Holder][the undersigned] the equivalent principal
amount of [Pledged Senior Notes] [Pledged Treasury Securities] related to the
above-captioned [Corporate PIES] [Treasury PIES].
_________________________________
Name of Holder
_________________________________
Signature
Signature Guarantee:_____________
Date: _______________________
Please print name and address of Registered Holder:
_________________________________________________________________
Name
_________________________________________________________________
[TRADES Account No.]
_________________________________________________________________
Social Security or other Taxpayer Identification Number, if any
_________________________________________________________________
Address
EXHIBIT E
NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_________________________
_________________________
Attention:
Fax: __________
Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources
Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.
We hereby notify you that a Termination Event has occurred and that
[the Senior Notes][Treasury Portfolio Interest][the Treasury Securities]
relating to your ownership interest in _____ [Corporate PIES][Treasury Portfolio
Interest][Treasury PIES] have been released and are being held by us for your
account pending receipt of transfer instructions with respect to such [Senior
Notes][Treasury Portfolio Interest][Treasury Securities] (the "Released
Securities").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we
hereby request written transfer instructions with respect to the Released
Securities. Upon receipt of your instructions and upon transfer to us of your
[Corporate PIES][Treasury PIES] effected through book-entry transfer or by
delivery to us of your [Corporate PIES Certificate][Treasury PIES Certificate],
we shall transfer the Released Securities by book-entry transfer, or other
appropriate procedures, in accordance with your instructions. In the event you
fail to effect such transfer or delivery, the Released Securities and any
interest thereon, shall be held in our name or in the name of our nominee in
trust for your benefit, until the earlier of such time as (A) such [Corporate
PIES][Treasury PIES] are transferred or your [Corporate PIES
Certificate][Treasury PIES Certificate] is surrendered or satisfactory evidence
is provided that your [Corporate PIES Certificate][Treasury PIES Certificate]
has been destroyed, lost or stolen, together with any indemnification that we or
the Company may require and (B) the expiration of the time period specified in
the abandoned property laws of the relevant State.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
_________________________________
Name:
Title:
Date:
EXHIBIT F
NOTICE TO SETTLE BY CASH
The Bank of New York, as Purchase Contract Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Division -- Corporate Finance Unit
Re: [Corporate PIES] [Treasury PIES] of Sierra Pacific Resources
Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.8 of the Purchase Contract Agreement, that such Holder has
elected to pay to the Securities Intermediary for deposit in the Collateral
Account, prior to 11:00 a.m. (New York City time), on the [fifth Business
Day][Business Day] immediately preceding the Purchase Contract Settlement Date
(in lawful money of the United States by certified or cashiers' check or wire
transfer, in immediately available funds), $______ as the Purchase Price for the
shares of Common Stock issuable to such Holder by the Company under the related
Purchase Contract on the Purchase Contract Settlement Date. The undersigned
Holder hereby instructs you to notify promptly the Collateral Agent of the
undersigned Holder's election to make such cash settlement with respect to the
Purchase Contracts related to such Holder's [Corporate PIES] [Treasury PIES] and
to release the related [Senior Notes] [Treasury Securities] to such Holder upon
such Cash Settlement.
_________________________________
Signature
Date: _______________________
Signature Guarantee:_____________
Please print name and address of Registered Holder:
________________________________________________________________
Name
________________________________________________________________
Social Security or other Taxpayer Identification Number, if any
________________________________________________________________
Address
EXHIBIT G
NOTICE FROM PURCHASE CONTRACT AGENT TO REMARKETING AGENTS,
COLLATERAL AGENT, TRUSTEE AND THE COMPANY
(Initial, Subsequent or Final Remarketing)
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ Brothers Inc., as Remarketing Agent
▇▇▇▇▇ Incorporated., as Remarketing ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
[address] Attention: ___________________________
Attention: _______________________ Fax: _________________________________*
Fax: ____________________________*
The Bank of New York, as Trustee ▇▇▇▇▇ Fargo Bank, National Association, as
101 ▇▇▇▇▇▇▇ Street. 8W Collateral Agent
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Sixth and Marquette
Attention: Corporate Trust Division MAC N9303-120
-- Corporate Finance ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
Sierra Pacific Resources
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Manager of Finance and Treasury
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Re: Corporate PIES of Sierra Pacific Resources
Reference is made to the Purchase Contract Agreement, dated as of
__________, 2005 (the "Purchase Contract Agreement"), between Sierra Pacific
Resources (the "Company") and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts. All capitalized
terms that are used but not defined herein have the meanings assigned to them in
the Purchase Contract Agreement.
In accordance with Section [5.3(b)] [5.3(c)] of the Purchase
Contract Agreement and based on [(A) the instructions received from Holders of
Corporate PIES prior to 5:00 p.m. (New York City time), on or prior to the
second Business Day, but no earlier than the fifth Business Day, immediately
preceding the first of the three sequential remarketing dates of any Three- Day
Remarketing Period and notice from the Securities Intermediary regarding Cash
Settlements received prior to 11:00 a.m. (New York City time), on the Business
Day immediately preceding the first of the three sequential remarketing dates of
any Three-Day Remarketing Period pursuant to Section 5.8 of the Purchase
Contract Agreement and (B)] the notices regarding the election not to
participate in the Remarketing received from Holders of Corporate PIES who
complied with the procedures for creating Treasury PIES prior to 5:00 p.m. (New
York City time), on the on the Business Day immediately preceding the first of
the three sequential remarketing dates of any Three-Day Remarketing Period
pursuant to Section 5.3(e) of the Purchase Contract Agreement, we hereby notify
you that $___________ in aggregate principal amount of Pledged Senior Notes is
to be tendered for purchase in the Remarketing that is scheduled to take place
--------------------------
* Address and other information of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated and ▇▇▇▇▇▇ Brothers Inc. to be confirmed prior to use of this
form.
[on one or more occasions in the period commencing on __________, 2005 up to and
including November 1, 2005] [on November 9, 2005, which is the third Business
Day before the Purchase Contract Settlement Date].
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
_____________________________________
Name:
Title:
Date:
G-2