EXHIBIT (k)(3)
FORM OF FORWARD PURCHASE AGREEMENT
Between
[ ]
As Seller[s],
and
DECS TRUST IX, As Purchaser
Dated as of
[ ], 2002
FORWARD PURCHASE AGREEMENT
THIS AGREEMENT is made as of this February 8, 2002 between [ ], an
individual, ("SELLER") and DECS Trust IX, a business trust organized under the
laws of the State of Delaware under and by virtue of a Declaration of Trust
dated as of January 7, 2002, as amended and restated January 22, 2002 (the
"DECLARATION OF TRUST") (such trust and the trustees thereof acting in their
capacity as such being referred to herein as "PURCHASER").
WHEREAS, Seller owns shares of common stock, $.01 par value (the
"COMMON STOCK") of ▇▇▇▇▇▇▇▇▇ & Co. Inc., a Delaware corporation (including its
successors) (the "COMPANY");
WHEREAS, Purchaser has filed with the Securities and Exchange
Commission a registration statement contemplating the offering of up to
4,025,000 DECS (the "DECS"), the terms of which contemplate delivery by
Purchaser to the holders thereof of a number of shares of Common Stock (or, if
the Seller exercise their cash settlement option, cash in lieu thereof), on [ ],
2005 (as further defined herein, the "EXCHANGE DATE");
WHEREAS, in exchange for certain consideration to be paid by
Purchaser hereunder and under other related agreements, Purchaser and Seller
desire to provide for the future acquisition, sale and delivery of the aggregate
number of shares of Common Stock contemplated to be delivered by Purchaser in
respect of the DECS on the Exchange Date, at a price to be established under
this Agreement and such other agreements;
WHEREAS, Seller has agreed to enter into a Collateral Agreement (the
"COLLATERAL AGREEMENT") to be dated as of February 8, 2002, among Purchaser,
Seller and The Bank of New York, as collateral agent (the "COLLATERAL AGENT"),
to grant Purchaser a security interest in the shares of Common Stock specified
therein and in certain other circumstances certain other collateral to secure
the obligations of Seller hereunder;
WHEREAS, Purchaser has agreed, pursuant to an underwriting
agreement, dated February [4], 2002 (the "UNDERWRITING AGREEMENT"), among
Purchaser, Seller, the Company, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ABN AMRO Rothschild
LLC, and Jefferies & Co., Inc. (each an "UNDERWRITER", and collectively, the
"UNDERWRITERS"), to issue and sell to the Underwriters an aggregate of 3,500,000
DECS (together with the one DECS purchased by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. in
connection with the organization of the Purchaser, the "INITIAL DECS") and, at
the Underwriters' option, up to 525,000 additional DECS (the "ADDITIONAL DECS")
to cover over-allotments, if any.
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"ACCELERATION DATE" has the meaning provided in Article VII.
"ACCELERATION VALUE" has the meaning provided in Article VII.
"ACT" means the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"ADDITIONAL DECS" has the meaning provided in the recitals of this
Agreement.
"ADDITIONAL PURCHASE PRICE" has the meaning provided in Section
1.2(b).
"ADDITIONAL SHARE BASE AMOUNT" means a number equal to the product
of (x) [ ] multiplied by (y) the number of Additional DECS that the Underwriters
elect to purchase under the Underwriting Agreement.
"ADDITIONAL SHARES" has the meaning provided in Section 1.1(b).
"ADDITIONAL STRIPS" means the U.S. Treasury obligations purchased by
Purchaser for settlement on the Option Closing Date.
"ADJUSTMENT EVENT" has the meaning provided in Section 6.2.
"ADMINISTRATOR" means The Bank of New York, administrator for
Purchaser under the Administration Agreement to be dated as of [ ], 2002, or any
successor thereto.
"AFFILIATE" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with such
Person or is a partner in, or a trustee, settlor, beneficiary, member, manager,
director or officer of, such Person and, with respect to any Person that is a
natural person, further includes such Person's immediate family members,
including his father, mother, spouse and children, the spouses of his children,
his siblings and their spouses and children. For purposes of this definition,
"CONTROL" (including the terms "CONTROLLED BY" or "UNDER COMMON CONTROL WITH")
means, as to any Person, the possession, direct or indirect, of the power to
vote ten percent or more of the corporate or beneficial interests of such Person
(or of the securities having ordinary voting power for the election of directors
of such Person), or the power to direct or cause the direction of the management
and policies of such Person, whether through ownership of voting securities or
by contract or otherwise.
"BANKRUPTCY CODE" has the meaning provided in Section 8.7.
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a
day on which the NYSE or banking institutions or trust companies in The City of
New York are authorized or obligated by law or executive order to close.
"CALCULATION PERIOD" means any period of Trading Days for which an
average security price must be determined pursuant to this Agreement.
"CASH DELIVERY OPTION" has the meaning provided in Section 1.3(d).
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"CLOSING PRICE" means, for any security on any date of
determination, (i) the closing sale price (or, if no closing price is reported,
the last reported sale price) of such security (regular way) on the NYSE on such
date, (ii) if such security is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
national securities exchange on which such security is so listed, (iii) if such
security is not so listed on a United States national or regional securities
exchange, as reported by The NASDAQ Stock Market, (iv) if such security is not
so reported, as reported in the composite transactions for the principal United
States regional securities exchange on which such security is so listed, (v) if
such security is not so listed on a United States regional security exchange,
the last quoted bid price for such security in the over-the-counter market as
reported by the National Quotation Bureau or similar organization or (vi) 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 three nationally recognized
investment banking firms selected by the Administrator for such purpose. The
Closing Price as determined pursuant to the foregoing shall be subject to
adjustment in certain circumstances as provided in Section 6.1(c).
"COLLATERAL" has the meaning provided in the Collateral Agreement.
"COLLATERAL AGENT" has the meaning provided in the recitals of this
Agreement.
"COLLATERAL AGREEMENT" has the meaning provided in the recitals of
this Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" has the meaning provided in the recitals of this
Agreement.
"COMPANY" has the meaning provided in the recitals of this
Agreement.
"CONTRACT SHARES" has the meaning provided in Section 1.1.
"CUSTODIAN" means The Bank of New York, custodian for Purchaser
under the Custodian Agreement dated as of January 17, 2002, or any successor
thereto.
"DECLARATION OF TRUST" has the meaning provided in the introductory
paragraph of this Agreement.
"DECS" has the meaning provided in the recitals of this Agreement.
"DILUTION ADJUSTMENT" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 6.1(a) or (b) or by which
Closing Prices may be multiplied pursuant to Section 6.1(c).
"EVENT OF DEFAULT" has the meaning provided in Article VII.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
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"EXCHANGE DATE" means [ ], 2005, subject to (i) extension by Seller
pursuant to Section 1.3(f) and (ii) subsequent acceleration by Seller pursuant
to Section 1.3(g).
"EXCHANGE PRICE" means the average Closing Price per share of Common
Stock on the 20 Trading Days immediately prior to (but not including) the
Exchange Date; PROVIDED, HOWEVER, that if there are not 20 Trading Days for the
Common Stock occurring later than the 60th calendar day immediately prior to,
but not including, the Exchange Date, Exchange Price shall mean the market value
per share of the Common Stock as of the Exchange Date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Administrator; PROVIDED, FURTHER, that for purposes of
determining the payment required upon cash settlement of this Agreement in
connection with a Rollover Offering,1 "Exchange Price" means the Closing Price
per share of Common Stock on the Trading Day immediately preceding the date that
the Rollover Offering is priced (the "PRICING DATE") or, if the Rollover
Offering is priced after 4:00 p.m., New York City time, on the Pricing Date, the
Closing Price per share of Common Stock on the Pricing Date. The Exchange Price
as determined pursuant to the foregoing shall be subject to adjustment in
certain circumstances as provided in Section 6.1(c).
"EXCHANGE RATE" has the meaning provided in Section 1.1(c).
"EXTENSION AMOUNT" means the product of (i) $[ ] multiplied by (ii)
a fraction, the numerator of which is the sum of the number of Initial DECS and
Additional DECS and the denominator of which is the number of Initial DECS,
multiplied by (iii) a fraction, the numerator of which is the sum of the Firm
Share Base Amount and the Additional Share Base Amount and the denominator of
which is the number of Initial DECS and Additional DECS.
"FIRM PAYMENT DATE" has the meaning provided in Section 1.3(a).
"FIRM PURCHASE PRICE" has the meaning provided in Section 1.2(a).
"FIRM SHARE BASE AMOUNT" has the meaning provided in Section 1.1(a).
"FIRM SHARES" has the meaning provided in Section 1.1(a).
"FORWARD PURCHASE CONTRACT CHARACTERIZATION" has the meaning
provided in Section 5.2(a).
"INDEPENDENT DEALERS" has the meaning provided in Article VII.
"INITIAL DECS" has the meaning provided in the recitals of this
Agreement.
"INITIAL PRICE" has the meaning provided in Section 1.1(c).
"LIEN" has the meaning provided in the Collateral Agreement.
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(1) Seems we have to define this term.
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"MARKET PRICE" means, as of any date of determination, the average
Closing Price per share of Common Stock on the 20 Trading Days immediately prior
to (but not including) the date of determination; PROVIDED, HOWEVER, that if
there are not 20 Trading Days for the Common Stock occurring later than the 60th
calendar day immediately prior to, but not including, such date, the Market
Price shall mean the market value per share of Common Stock as of such date as
determined by a nationally recognized investment banking firm retained for such
purpose by the Administrator.
"NYSE" means the New York Stock Exchange Inc.
"OFFICER" shall mean the manager, trustee, president, any vice
president, the chief financial officer, the treasurer or the secretary of a
Person.
"OFFICER'S CERTIFICATE" means a certificate signed by an Officer of
a Person.
"OPINION OF COUNSEL" means a written opinion from legal counsel who
is acceptable to the Trust.
"OPTION CLOSING DATE" means the settlement dates for the Additional
DECS under Section 5 of the Underwriting Agreement.
"ORDINARY CASH DIVIDEND" means, with respect to any consecutive
365-day period, any dividend with respect to Common Stock paid in cash to the
extent that the amount of such dividend, together with the aggregate amount of
all other dividends on the Common Stock paid in cash during such 365-day period,
does not exceed on a per share basis 10% of the average of the Closing Prices of
the Common Stock over such 365-day period; PROVIDED that, for purposes of the
foregoing definition, the amount of cash dividends paid on a per share basis
shall be appropriately adjusted to reflect the occurrence during such period of
any event described in Article VI.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, limited
liability company, joint venture or other entity, or a government or any
political subdivision or agency thereof.
"PURCHASER" has the meaning provided in the introductory paragraph
of this Agreement.
"REIMBURSEMENT AGREEMENT" means the reimbursement agreement, to be
dated as of February 8, 2002 among ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and the Seller.
"REPORTED SECURITIES" has the meaning provided in Section 6.2.
"ROLLOVER OFFERING" means a reoffering or refinancing of the DECS
effected by the Seller not earlier than [ ], 2005 by means of a completed public
offering or offerings or another similar offering (which may include one or more
exchange offers), by or on behalf of such Seller.
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"ROLLOVER OFFERING ELECTION" means a written election made in
accordance with Section 1.3(e).
"SELLER" has the meaning provided in the introductory paragraph of
this Agreement.
"SHARE COMPONENTS" means the numbers of shares of Common Stock per
DECS specified in clauses (i), (ii) and (iii) of Section 1.1(c).
"SIGNIFICANT SUBSIDIARY" has the meaning provided in Section 7(a).
"THRESHOLD APPRECIATION PRICE" has the meaning provided in Section
1.1(c).
"TRADING DAY" means, with respect to any security the Closing Price
of which is being determined, a day on which such security (A) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of such
security.
"TRANSACTION VALUE" has the meaning provided in Section 6.2.
"UNDERWRITER" and "UNDERWRITERS" have the meaning provided in the
recitals of this Agreement.
"UNDERWRITING AGREEMENT" has the meaning provided in the recitals of
this Agreement.
ARTICLE I
SALE AND PURCHASE
1.1 SALE AND PURCHASE.
(a) FIRM SHARES. Upon the terms and subject to the conditions of
this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase and acquire from Seller, the number of shares of Common Stock (the
"FIRM SHARES") equal to the product of (x) [ ] (the "FIRM SHARE BASE AMOUNT")
multiplied by (y) the Exchange Rate (as defined in Section 1.1(c)).
(b) ADDITIONAL SHARES. Upon the terms and subject to the conditions
of this Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase and acquire from Seller, a number of additional shares of Common Stock
(the "ADDITIONAL SHARES") equal to the product of (x) the Additional Share Base
Amount multiplied by (y) the Exchange Rate. In addition to the other conditions
set forth herein, such purchase and sale shall be conditioned on the
Underwriters' purchase of the Additional Share Base Amount of Additional DECS
pursuant to the Underwriting Agreement on the Option Closing Date. Promptly
after receipt by Purchaser of notice that the Underwriters are exercising their
option to purchase Additional DECS,
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Purchaser will provide Seller with written notice of such exercise by the
Underwriters, stating the related Additional Share Base Amount and the date on
which Purchaser shall deliver the purchase price for the Additional Shares,
which shall be the Option Closing Date for the Additional DECS. The Firm Shares
and the Additional Shares (if any) are collectively referred to herein as the
"CONTRACT SHARES".
(c) EXCHANGE RATE. The "EXCHANGE RATE" shall be determined in
accordance with the following formula, subject to adjustment as a result of
certain events as provided in Article VI: (i) if the Exchange Price is greater
than $[ ] (the "THRESHOLD APPRECIATION PRICE"), 0.[ ], (ii) if the Exchange
Price is less than or equal to the Threshold Appreciation Price but greater than
$[ ] (the "INITIAL PRICE"), a fraction (rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next higher
1/10,000th) equal to the Initial Price divided by the Exchange Price and (iii)
if the Exchange Price is less than or equal to the Initial Price, 1.
1.2 PURCHASE PRICE.
(a) FIRM PURCHASE PRICE. The purchase price for the Firm Shares (the
"FIRM PURCHASE PRICE") shall be $[ ] in cash per Firm Share multiplied by the
Firm Share Base Amount.
(b) ADDITIONAL PURCHASE PRICE. The purchase price for the Additional
Shares (the "ADDITIONAL PURCHASE PRICE") shall be an amount equal to the product
of (x) 0.[ ] multiplied by (y) the difference between (1) the aggregate proceeds
to Purchaser from the sale of the Additional DECS and (2) the aggregate cost to
Purchaser, as notified by Purchaser to Seller on the Option Closing Date for the
Additional DECS, of the Additional STRIPS.
1.3 PAYMENT FOR AND DELIVERY OF CONTRACT SHARES.
(a) FIRM PAYMENT DATE. Upon the terms and subject to the conditions
of this Agreement, Purchaser shall deliver to Seller the Firm Purchase Price on
[February 4], 2002 (the "FIRM PAYMENT DATE") at the offices of [Fulbright &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇
▇▇▇▇▇, Esq.], or at such other place as shall be agreed upon by Purchaser and
Seller, paid by wire transfer of Federal (immediately available same-day) funds
to an account designated by Seller, against delivery by Seller to the Collateral
Agent of the number of shares of Common Stock and/or cash, securities and other
property necessary to comply with Seller's obligations under the Collateral
Agreement.
(b) OPTION CLOSING DATE. Upon the terms and subject to the
conditions of this Agreement, Purchaser shall deliver to Seller the Additional
Purchase Price on the Option Closing Date at the offices of [Fulbright &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇
▇▇▇▇▇, Esq.], or at such other place as shall be agreed upon by Purchaser and
Seller, paid by wire transfer of Federal (immediately available same-day) funds
to an account designated by Seller, against delivery by Seller to the Collateral
Agent of the additional number of shares of Common Stock and/or cash, securities
and other property necessary to comply with Seller's obligations under the
Collateral Agreement.
(c) DELIVERY OF CONTRACT SHARES.
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(i) Seller agrees to deliver the Contract Shares to Purchaser on the
Exchange Date. Seller shall be deemed to have instructed the Collateral
Agent to deliver to the Custodian, for the account of Purchaser, shares of
Common Stock then held by the Collateral Agent as collateral under the
Collateral Agreement, in an amount equal to the number of Contract Shares,
rounded down to the nearest whole number. Instead of any fractional shares
of Common Stock that would otherwise be deliverable (prior to rounding) to
Purchaser at the Exchange Date, Seller agrees to make a cash payment in
respect of such fractional shares of Common Stock in an amount equal to
the value thereof at the Exchange Price. Notwithstanding the foregoing, if
an Adjustment Event shall have occurred prior to the Exchange Date then,
in lieu of the foregoing, Seller shall be deemed to have instructed: (A)
in the case of any cash required to be delivered on the Exchange Date as
provided in Section 6.2, the Collateral Agent to wire transfer Federal
(immediately available same-day) funds to an account designated by
Purchaser; and (B) in the case of any Reported Securities required to be
delivered by Seller in lieu of cash as provided in Section 6.2, the
Collateral Agent to deliver to the Custodian, for the account of
Purchaser, a specified number of Reported Securities then held as
collateral under the Collateral Agreement, as provided in Section 6(g) of
the Collateral Agreement.
(ii) In the event that by the Exchange Date any substitute
collateral has not been replaced by shares of Common Stock (and/or, after
an Adjustment Event, cash or Reported Securities) sufficient to meet
Seller's obligations hereunder, delivery shall be effected by delivery by
the Collateral Agent to the Custodian, for the account of Purchaser, of
the market value of the shares of Common Stock required to be delivered
hereunder, in the form of any shares of Common Stock then pledged by
Seller plus cash generated from the liquidation of U.S. Government
obligations then pledged by Seller (and/or, after an Adjustment Event, the
market value of the alternative consideration required to be delivered
hereunder, in the form of any Reported Securities then pledged, plus any
cash then pledged, plus cash generated from the liquidation of U.S.
Government obligations then pledged). In such event, Seller shall be
deemed to have instructed the Collateral Agent to liquidate and turn into
cash the U.S. Government obligations then pledged by Seller to the extent
necessary to satisfy Seller's obligations hereunder.
(iii) Certificates representing Common Stock (or Reported
Securities) in registered form that are part of the Contract Shares shall
be registered in Purchaser's name or in the name of a depositary or a
nominee of a depositary as requested by Purchaser, unless such Common
Stock (and/or Reported Securities) is represented by one or more global
certificates registered in the name of a depositary or a nominee of a
depositary or are book entry securities, in which event Purchaser's
interest in such securities shall be noted in a manner satisfactory to
Purchaser and its counsel.
(iv) Seller's right to deliver (or cause to be delivered) to
Purchaser hereunder Common Stock and Reported Securities shall be
conditioned upon such Common Stock and Reported Securities to be so
delivered being transferable (i) by Seller to Purchaser in accordance with
the provisions hereof and in accordance with the terms of any agreement
among shareholders applicable to such Common Stock or Reported Securities,
and (ii) by Purchaser, following receipt from Seller, without any
restrictions not generally applicable to all holders of such Common Stock
or Reported Securities, as the case may be. If the
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conditions set forth in the preceding sentence shall not be satisfied with
respect to any Common Stock or Reported Securities to be delivered by
Seller, then, notwithstanding the provisions hereof, Seller shall exercise
the Cash Delivery Option.
(d) CASH DELIVERY OPTION. At its option, Seller may deliver to
Purchaser on the Exchange Date, in lieu of the Contract Shares, an amount in
cash equal to, subject to adjustment as provided in Section 6.2, the Exchange
Price of the Contract Shares (the "CASH DELIVERY OPTION"), paid by wire transfer
to an account designated by Purchaser, in Federal (immediately available
same-day) funds; PROVIDED that in connection with a Rollover Offering which is
consummated and as to which Seller has duly elected the Cash Delivery Option and
has duly made a Rollover Offering Election, such cash payment shall be made no
later than the fifth Business Day after the Exchange Date. Seller may elect the
Cash Delivery Option in respect of all, but not less than all, of the Contract
Shares and may do so by notice to Purchaser, the Collateral Agent and the
Custodian not less than 30 Business Days prior to the Exchange Date. If Seller
elects the Cash Delivery Option and so notifies Purchaser, Purchaser shall
promptly notify The Depository Trust Company and publish a notice in a daily
newspaper of national circulation stating whether the holders of DECS will
receive shares of Common Stock or cash (and specifying whether any such cash
settlement is being made in connection with a Rollover Offering).
(e) ROLLOVER OFFERING ELECTION. The provisions of Sections 1.3(f)
and (g) shall be applicable if the Seller has made a Rollover Offering Election
by written notice given to the Purchaser not earlier than [ ], 2005 and not
later than [ ], 2005. Any Rollover Offering Election (i) shall be irrevocable
once made, (ii) may be made only if the Seller has also elected, or
simultaneously elects, the Cash Delivery Option.
(f) EXTENSION OF EXCHANGE DATE. At its option, Seller may, by notice
given to Purchaser not earlier than [ ], 2005 and not later than [ ], 2005 elect
to extend the Exchange Date to [ ], 2005, provided that such extension shall be
effective (i) only in connection with a Rollover Offering as to which the Seller
shall have duly made a Rollover Offering Election and (ii) only if Seller shall
have delivered to the Collateral Agent, in pledge under the Collateral Agreement
direct obligations of the United States of America which through the scheduled
payment of principal and interest in accordance with their terms will provide,
not later than one Business Day before [ ], 2005, money in an amount equal to
not less than the Extension Amount (the "ADDITIONAL GOVERNMENT SECURITIES").
Unless Seller has duly elected, in connection with a Rollover Offering, to
accelerate the Exchange Date in accordance with Section 1.3(g) hereof, Seller
shall on such extended Exchange Date pay to Purchaser by wire transfer of
Federal (immediately available same-day) funds an amount equal to not less than
the Extension Amount.
In addition, Seller hereby covenants and agrees to take all other
actions necessary to cause Purchaser to be a protected purchaser of such
Additional Government Securities, within the meaning of Article 8 of the New
York Uniform Commercial Code, as amended.
If Seller elects to extend the Exchange Date and so notifies
Purchaser, Purchaser shall promptly notify the Depository Trust Company and
publish a notice in a daily newspaper of national circulation stating that the
Seller has elected to extend the Exchange Date.
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(g) ACCELERATION OF EXCHANGE DATE. At any time after the Exchange
Date has been extended pursuant to Section 1.3(f) hereof, Seller may, at its
option but only in connection with the consummation of a Rollover Offering,
accelerate the Exchange Date to any date on or after [ ], 2005, by notice to
Purchaser not later than 10:00 a.m. on the date to which the Exchange Date is
accelerated; PROVIDED that such acceleration shall be effective only if at or
prior to 10:00 a.m. on such accelerated Exchange Date, Seller has paid to
Purchaser, by wire transfer to an account designated by Purchaser, in Federal
(immediately available same-day) funds, an amount not less than (i) the
Extension Amount MULTIPLIED BY (ii) the number of days in the period from (and
including) [ ] to (but excluding) the Exchange Date as accelerated, calculated
on the basis of a 360 day year consisting of twelve 30-day months DIVIDED BY
(iii) 90.
If Seller elects to accelerate the Exchange Date and so notifies
Purchaser, Purchaser shall provide notice of such election to the holders of the
DECS not later than the accelerated Exchange Date.
(h) Seller represents, and Purchaser acknowledges, that it is
Seller's current intention to deliver Contract Shares to the Purchaser on the
Exchange Date and not to exercise the Cash Delivery Option; however, Seller
intends to consider all relevant economic, market and business factors in
ultimately determining whether to deliver Contract Shares on the Exchange Date
or to exercise the Cash Delivery Option.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each representation
and warranty made by Seller in Section 3 of the Underwriting Agreement is true
and correct on the date hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that:
(a) each representation and warranty made by Purchaser in Section 1
of the Underwriting Agreement is true and correct on the date hereof; and
(b) it acknowledges that the Common Stock delivered pursuant to this
Agreement and the Collateral Agreement may contain one or more of the type of
legends referred to in Section 3(e) of the Collateral Agreement (which legend
(i) will not be applicable to the delivery of any such Common Stock to the Trust
pursuant to this Agreement and the Collateral Agreement or to the delivery of
any such Common Stock by the Trust to the holders of DECS pursuant to the DECS
and (ii) will be removed at the request of the Collateral Agent to the
depository for the Common Stock prior to any such delivery to holders of DECS).
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ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
(a) The obligation of Purchaser to deliver the Firm Purchase Price
on the Firm Payment Date is subject to the satisfaction of the following
conditions:
(i) the purchase by the Underwriters of the Underwritten DECS
pursuant to the Underwriting Agreement shall have been consummated as
contemplated under the Underwriting Agreement;
(ii) the representations and warranties of the Seller contained in
Article II hereof shall be true and correct as of the Firm Payment Date;
(iii) the Collateral Agreement shall have been executed by the
Seller and the delivery of the Collateral thereunder shall have been made;
and
(iv) the Reimbursement Agreement shall have been executed by the
Seller.
(b) The obligation of Purchaser to deliver the Additional Purchase
Price on the Option Closing Date is subject to the satisfaction of the following
conditions:
(i) the purchase by the Underwriters of the Additional DECS pursuant
to the Underwriting Agreement shall have been consummated as contemplated
under the Underwriting Agreement;
(ii) the representations and warranties of the Seller contained in
Article II hereof shall be true and correct as of the Option Closing Date
(except to the extent that they refer to an earlier date, in which case
they shall be true and correct as of such earlier date); and
(iii) the delivery of any additional Collateral under the Collateral
Agreement shall have been made.
ARTICLE V
COVENANTS
5.1 TAXES. Seller shall pay any and all documentary, stamp, transfer
or similar taxes and charges that may be payable in respect of the entry into
this Agreement and the transfer and delivery of the Contract Shares, cash or
Reported Securities pursuant hereto.
5.2 FORWARD PURCHASE CONTRACT. Each of Purchaser and Seller hereby
agrees that:
(a) it will treat this Agreement in its entirety as a forward
purchase contract for the delivery of the Contract Shares on the Exchange Date
(including as a result of acceleration or otherwise) (the "FORWARD PURCHASE
CONTRACT CHARACTERIZATION"), under the terms
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of which contract (i) at the time of issuance of the DECS, Purchaser deposits
irrevocably with Seller a fixed amount of cash equal to the Firm Purchase Price
(plus, if the Underwriters exercise their option to purchase Additional DECS,
the Additional Purchase Price) to assure the fulfillment of Purchaser's purchase
obligation described in clause (ii) below, which deposit will unconditionally
and irrevocably be applied at the Exchange Date to satisfy such obligation and
(ii) at the Exchange Date such cash deposit unconditionally and irrevocably will
be applied by Seller in full satisfaction of Purchaser's obligation under the
forward purchase contract, and Seller will deliver to Purchaser the number of
Contract Shares that Purchaser is entitled to receive at that time pursuant to
the terms of this Agreement (subject to Seller's right to deliver cash and/or
other property as provided in this Agreement in lieu of the Contract Shares);
(b) it will treat, consistent with the above characterization,
amounts paid to Seller in respect of this Agreement as allocable in their
entirety to the amount of the cash deposit attributable to such Agreement;
(c) it will treat the sale of the Contract Shares as occurring on
the Exchange Date;
(d) it will not treat this Agreement, any portion of this Agreement
or any obligation hereunder as giving rise to any interest income or other
inclusions of ordinary income (in the case of Purchaser) or as giving rise to
any interest expense or other deductions of ordinary expense (in the case of
Seller);
(e) it will not treat the delivery of any portion of the Contract
Shares, cash or Reported Securities to be delivered pursuant to this Agreement
as the payment of interest or ordinary income; and
(f) it will not take any action (including filing any tax return or
form or taking any position in any tax proceeding) that is inconsistent with the
obligations contained in clauses (a) through (d), unless such action or position
is required by an applicable taxing authority or unless such action or position
is required by a change in statutory law or regulation or by a judicial or other
authoritative interpretation of the law enacted, promulgated or published after
the date of this Agreement.
5.3 LIMITATIONS ON TRADING DURING CERTAIN DAYS. Seller hereby agrees
that it will not, and will cause each of its Affiliates that is under its
control not to, buy or sell shares of Common Stock of the Company or Reported
Securities for its own account during the [ ] days prior to the Exchange Date.
5.4 NOTICES. Seller will cause to be delivered to Purchaser:
(a) immediately upon the occurrence of any Event of Default
hereunder or under the Collateral Agreement; and
(b) promptly after Seller receives notice, or otherwise obtains
knowledge, at any time prior to the Exchange Date that any event requiring
that an adjustment be effected pursuant to Article VI hereof shall have
occurred or be pending;
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a notice identifying such event and stating, if known to Seller, the date on
which such event is to occur and, if applicable, the record date relating to
such event. Seller shall cause further notices to be delivered to Purchaser if
Seller shall subsequently receive notice, or shall otherwise obtain knowledge,
of any further or revised information regarding the terms or timing of such
event or any record date relating thereto.
5.5 AFFIRMATIVE COVENANTS. During the term of this Agreement, Seller
covenants and agrees that it will:
(a) Comply in all material respects with all applicable laws, rules,
regulations and orders to the extent noncompliance would have a material adverse
effect on the ability of Seller to perform its obligations hereunder or under
the Collateral Agreement, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon Seller or upon Seller's property, including the collateral
pledged under the Collateral Agreement, except to the extent contested in good
faith.
(b) Furnish to Purchaser as soon as possible and in any event within
twenty calendar days after Seller shall become aware of the occurrence of any
failure by Seller to comply with or perform any agreement or obligation
contained in this Agreement or the Collateral Agreement, a statement of Seller
describing such failure and setting forth details of such failure and the action
which Seller has taken and proposes to take with respect thereto.
5.6 FURTHER ASSURANCES. From time to time on and after the date
hereof through the Exchange Date (or, if later, the date on which this Agreement
has been fully performed), each of the parties hereto shall use its best efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary, proper and advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement in
accordance with the terms and conditions hereof, including (i) using best
efforts to remove any legal impediment to the consummation of such transactions
and (ii) the execution and delivery of all such deeds, agreements, assignments
and further instruments of transfer and conveyance necessary, proper or
advisable to consummate and make effective the transactions contemplated by the
Agreement in accordance with the terms and conditions hereof.
ARTICLE VI
ADJUSTMENT OF EXCHANGE RATE, EXCHANGE PRICE AND CLOSING PRICE
6.1 DILUTION ADJUSTMENTS. The Exchange Rate, Exchange Price and
Closing Price shall be subject to adjustment successively from time to time as
follows:
(a) STOCK DIVIDENDS, SPLITS, RECLASSIFICATIONS, ETC. If the Company
shall, after the date hereof,
(i) pay a stock dividend or make a distribution, in either case,
with respect to Common Stock in shares of such stock;
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(ii) subdivide or split its outstanding shares of Common Stock into
a greater number of shares;
(iii) combine its outstanding shares of Common Stock into a smaller
number of shares; or
(iv) issue by reclassification (other than a reclassification
pursuant to clause (b), (c), (d) or (e) of the definition of Adjustment
Event) of its shares of Common Stock any other equity securities of the
Company,
then the Exchange Rate shall be multiplied by a Dilution Adjustment equal to the
number of shares of Common Stock (or the fraction thereof) that a holder who
held one share of Common Stock immediately prior to such event would be entitled
solely by reason of such event to hold immediately after such event.
In the case of the reclassification of any shares of Common Stock
into any other equity securities of the Company other than the Common Stock,
such other equity securities shall be deemed shares of Common Stock for all
purposes hereunder. The Exchange Price and Closing Price shall also be adjusted
in the manner described in paragraph (c) of this Section 6.1.
(b) RIGHT OR WARRANT ISSUANCES. If the Company shall, after the date
hereof, issue, or declare a record date in respect of an issuance of, rights or
warrants (other than rights to purchase Common Stock pursuant to a plan for the
reinvestment of dividends or interest) to all holders of Common Stock entitling
them to subscribe for or purchase shares of Common Stock at a price per share
less than the Market Price of the Common Stock on the Business Day next
following the record date for the determination of holders of Common Stock
entitled to receive such rights or warrants, then, in each such case, the
Exchange Rate shall be multiplied by the following Dilution Adjustment: a
fraction, of which the numerator shall be (A) the number of shares of Common
Stock outstanding on the record date for the issuance of such rights or warrants
plus (B) the number of additional shares of Common Stock offered for
subscription or purchase pursuant to such rights or warrants, and of which the
denominator shall be (x) the number of shares of Common Stock outstanding on the
record date for the issuance of such rights or warrants plus (y) the number
specified in clause (B) above multiplied by the quotient of the exercise price
of such rights or warrants divided by the Market Price of the Common Stock on
the Business Day next following the record date for the determination of holders
of Common Stock entitled to receive such rights or warrants. To the extent that
such rights or warrants expire prior to the Exchange Date and shares of Common
Stock are delivered with respect to less than all of such rights or warrants
prior to such expiration, the Exchange Rate shall be readjusted to the Exchange
Rate which would then be in effect had such adjustments for the issuance of such
rights or warrants been made upon the basis of delivery of only the number of
shares of Common Stock actually delivered pursuant to such rights or warrants.
For purposes of this Section 6.1(b), dividends will be deemed to be paid as of
the record date for such dividend. The Exchange Price and Closing Price shall
also be adjusted in the manner described in paragraph (c).
(c) CORRESPONDING ADJUSTMENTS TO EXCHANGE PRICE; ADJUSTMENT OF
CLOSING PRICE IN CERTAIN CIRCUMSTANCES.
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(i) If any adjustment is made to the Exchange Rate pursuant to
paragraph (a) or (b) of this Section 6.1, an adjustment shall also be made
to the Exchange Price as such term is used throughout the definition of
Exchange Rate. The required adjustment to the Exchange Price shall be made
at the Exchange Date by multiplying the Exchange Price by the cumulative
Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the
Exchange Price, the Market Price or the Transaction Value, there shall
occur any event requiring an adjustment to be effected pursuant to this
Section 6.1, then the Closing Price for each Trading Day in the
Calculation Period occurring prior to the day on which such adjustment is
effected shall be adjusted by being multiplied by the relevant Dilution
Adjustment.
(d) TIMING OF DILUTION ADJUSTMENTS. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution, or issuance of rights
or warrants, at the opening of business on the Business Day next following
the record date for determination of holders of Common Stock entitled to
receive such dividend, distribution or issuance or, if the announcement of
any such dividend, distribution or issuance is after such record date, at
the time such dividend, distribution or issuance shall be announced by the
Company; and
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction.
(e) GENERAL; FAILURE OF DILUTION EVENT TO OCCUR. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next higher 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; PROVIDED, HOWEVER, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
any announcement or declaration of a record date in respect of a dividend,
distribution or issuance requiring an adjustment pursuant to this Section 6.1
shall subsequently be canceled by the Company, or such dividend, distribution or
issuance shall fail to receive requisite approvals or shall fail to occur for
any other reason, then, upon such cancellation, failure of approval or failure
to occur, the Exchange Rate shall be readjusted to the Exchange Rate which would
then have been in effect had adjustment for such event not been made. If an
Adjustment Event shall occur after the occurrence of one or more events
requiring an adjustment pursuant to this Section 6.1, the Dilution Adjustments
previously applied to the Exchange Rate in respect of such events shall not be
rescinded but shall be applied to the new Exchange Rate provided for under
Section 6.2.
6.2 ADJUSTMENT FOR CONSOLIDATION, MERGER OR OTHER ADJUSTMENT EVENT.
In the event of (a) any dividend or distribution by the Company to all holders
of Common Stock of evidences of its indebtedness or other assets (excluding any
dividends or distributions referred to in Section 6.1(a)(i), any other equity
securities issued pursuant to a reclassification referred to in
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Section 6.1(a)(iv) and any Ordinary Cash Dividends) or any issuance by the
Company to all holders of Common Stock of rights or warrants to subscribe for or
purchase any of its securities (other than rights or warrants referred to in
Section 6.1(b)), (b) any consolidation or merger of the Company with or into
another entity (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (c) any sale, transfer,
lease or conveyance to another corporation of the property of the Company as an
entirety or substantially as an entirety, (d) any statutory exchange of
securities of the Company with another corporation (other than in connection
with a merger or acquisition) or (e) any liquidation, dissolution or winding up
of the Company (any such event described in clause (a), (b), (c), (d) or (e), an
"ADJUSTMENT EVENT"), the Exchange Rate shall be adjusted so that on the Exchange
Date Seller shall deliver to Purchaser, in lieu of or (in the case of an
Adjustment Event described in clause (a) above) in addition to, the Contract
Shares, cash in an amount equal to:
(A) if the Exchange Price is greater than the Threshold Appreciation
Price, 0.[ ] multiplied by the Transaction Value (as
defined below);
(B) if the Exchange Price is less than or equal to the Threshold
Appreciation Price but greater than the Initial Price, the product
of (x) the Initial Price divided by the Exchange Price multiplied by
(y) the Transaction Value; and
(C) if the Exchange Price is less than or equal to the Initial Price,
the Transaction Value;
PROVIDED, HOWEVER, that if the consideration received by all holders
of Common Stock in such Adjustment Event does not and may not at the option of
such holders include Reported Securities, then (except in the case of an
Adjustment Event solely of the type described in clause (a) above) (i) Seller's
delivery obligations hereunder will be accelerated and promptly upon
consummation of the Adjustment Event Seller will be required to deliver to
Purchaser cash in an amount equal to (x) if the Transaction Value is greater
than the Threshold Appreciation Price, 0.[ ] multiplied by the Transaction
Value, (y) if the Transaction Value is less than or equal to the Threshold
Appreciation Price but greater than Initial Price, the Initial Price of the
Contract Shares, and (z) if the Transaction Value is less than or equal to the
Initial Price, the Transaction Value of the Contract Shares.
If the consideration received by holders of Common Stock in an
Adjustment Event includes Reported Securities and, to any extent, consideration
other than Reported Securities, then (a) Seller's delivery obligations hereunder
will be accelerated to the extent that the value of the consideration received
in such Adjustment Event does not derive from Reported Securities and promptly
upon consummation of the Adjustment Event Seller will be required to deliver to
Purchaser cash in an amount equal to (x) if the Transaction Value is greater
than the Threshold Appreciation Price, 0.[ ] MULTIPLIED BY (i) the Transaction
Value and (ii) the percentage of the value of the consideration received in
connection with the Adjustment Event that does not derive from Reported
Securities, (y) if the Transaction Value is less than or equal to the Threshold
Appreciation Price but greater than the Initial Price, the Initial Price of the
Contract Shares MULTIPLIED by the percentage of the value of the consideration
received in
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connection with the Adjustment Event that does not derive from Reported
Securities, and (z) if the Transaction Value is less than or equal to the
Initial Price, the Transaction Value MULTIPLIED BY the percentage of the value
of the consideration received in connection with the Adjustment Event that does
not derive from Reported Securities.
Following the occurrence of an Adjustment Event, the Exchange Price,
as such term is used throughout the definition of Exchange Rate, shall be deemed
to equal (A) if shares of Common Stock are outstanding at the Exchange Date, the
Exchange Price of the Common Stock, as adjusted pursuant to Section 6.1(c),
otherwise zero, plus (B) the Transaction Value.
Notwithstanding the foregoing, with respect to any Reported
Securities (as defined below) received by holders of Common Stock in an
Adjustment Event, Seller shall, in lieu of delivering cash in respect of such
Reported Securities as described above, deliver a number of such Reported
Securities with a value, as determined in accordance with clause (ii) of the
definition of Transaction Value, equal to all cash amounts that would otherwise
be deliverable in respect of Reported Securities received in such Adjustment
Event, except to the extent Seller has made an election to exercise the Cash
Delivery Option or such Reported Securities have not yet been delivered to the
holders entitled thereto following such Adjustment Event or any record date with
respect thereto. If, following any Adjustment Event, any Reported Security
ceases to qualify as a Reported Security, then (x) Seller shall not deliver such
Reported Security but instead shall deliver of an equivalent amount of cash and
(y) notwithstanding clause (ii) of the definition of Transaction Value, the
Transaction Value of such Reported Security shall mean the fair market value of
such Reported Security on the date such security ceases to qualify as a Reported
Security, as determined by a nationally recognized investment banking firm
retained for this purpose by the Administrator.
"TRANSACTION VALUE" means (i) for any cash received in any
Adjustment Event, the amount of cash received per share of Common Stock, (ii)
for any Reported Securities received in any Adjustment Event, an amount equal to
(x) the average Closing Price per security of such Reported Securities on the 20
Trading Days immediately prior to (but not including) the Exchange Date (except
in the case of a Rollover Offering, in which case the Closing Price on the
Trading Day immediately preceding the Pricing Date or, if the Rollover Offering
is priced after 4:00 p.m. New York City time on the Pricing Date, the Closing
Price on the Pricing Date shall be used for purposes of this clause) multiplied
by (y) the number of such Reported Securities (as adjusted pursuant to the
definition thereof) received per share of Common Stock and (iii) for any
property received in any Adjustment Event other than cash or Reported
Securities, an amount equal to the fair market value of the property received
per share of Common Stock on the date such property is received, as determined
by a nationally recognized investment banking firm retained for this purpose by
the Administrator; PROVIDED, HOWEVER, that in the case of clause (ii), (x) with
respect to securities that are Reported Securities by virtue of only clause (iv)
of the definition of Reported Securities, Transaction Value with respect to any
such Reported Security means the average of the mid-point of the last bid and
ask prices for such Reported Security as of the Exchange Date from each of at
least three nationally recognized investment banking firms retained for such
purpose by the Administrator multiplied by the number of such Reported
Securities (as adjusted pursuant to the definition thereof) received per share
of Common Stock and (y) with respect to all Reported Securities other than
securities that are Reported Securities by virtue of only clause (iv) of the
definition of Reported Securities, if there are not 20 Trading
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Days for any particular Reported Security occurring after the 60th calendar day
immediately prior to, but not including, the Exchange Date, Transaction Value
with respect to such Reported Security means the fair market value per security
of such Reported Security as of the Exchange Date as determined by a nationally
recognized investment banking firm retained for such purpose by the
Administrator multiplied by the number of such Reported Securities (as adjusted
pursuant to the definition thereof) received per share of Common Stock. For
purposes of calculating the Transaction Value, any cash, Reported Securities or
other property receivable in an Adjustment Event shall be deemed to have been
received immediately prior to the close of business on the record date for such
Adjustment Event or, if there is no record date for such Adjustment Event,
immediately prior to the close of business on the effective date of such
Adjustment Event.
"REPORTED SECURITIES" means any securities received in an Adjustment
Event that (A) are (i) listed on a United States national securities exchange,
(ii) reported on a United States national securities system subject to last sale
reporting, (iii) traded in the over-the-counter market and reported on the
National Quotation Bureau or similar organization or (iv) for which bid and ask
prices are available from at least three nationally recognized investment
banking firms; and (B) are either (x) perpetual equity securities or (y)
non-perpetual equity or debt securities with a stated maturity after the
Exchange Date. The number of shares of any Reported Securities included in the
calculation of Transaction Value pursuant to clause (ii) of the definition
thereof shall be subject to adjustment if any event that would, had it occurred
with respect to the Common Stock or the Company, have required an adjustment
pursuant to Section 6.1 or 6.2, shall occur with respect to such Reported
Securities or the issuer thereof subsequent to the date the Adjustment Event is
consummated. Adjustment for such subsequent events shall be as nearly equivalent
as practicable to the adjustments provided for in Section 6.1 or 6.2, as
applicable.
ARTICLE VII
ACCELERATION
If one or more of the following events (each an "EVENT OF Default")
shall occur:
(a) Seller or any "significant subsidiary" of the Seller (as defined
in Rule 1-02(w) of Securities and Exchange Commission Rule S-X) (a "SIGNIFICANT
SUBSIDIARY") shall commence a voluntary case or other proceeding seeking a
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall take any action to authorize any of the foregoing;
(b) an involuntary case or other proceeding shall be commenced
against Seller or any Significant Subsidiary of the Seller seeking liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter
19
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property and, in the case of a proceeding against a Significant Subsidiary,
shall not have been dismissed within sixty days; or an order for relief shall be
entered against Seller or any Significant Subsidiary under any bankruptcy,
insolvency or other similar law as now or hereafter in effect; or
(c) a Collateral Event of Default within the meaning of the
Collateral Agreement;
then an "ACCELERATION DATE" shall occur, Seller's rights under Section 1.3(d),
(e) (f) and (g) shall terminate immediately and (i) in the case of clause (c),
Seller shall become obligated to the extent permitted by law to deliver to
Purchaser (and shall be deemed to instruct the Collateral Agent to deliver to
the Custodian, for the account of Purchaser, and to liquidate and turn into cash
the U.S. Government obligations then pledged by Seller to the extent necessary
to satisfy such obligation) the Contract Shares, in the form of the shares of
Common Stock then pledged by Seller, or cash generated from the liquidation of
U.S. Government obligations then pledged by Seller, or a combination thereof
(or, after an Adjustment Event, the alternate consideration to be delivered, in
the form of Reported Securities then pledged, cash then pledged, cash generated
from the liquidation of U.S. Government obligations then pledged, or a
combination thereof); or (ii) in the case of clauses (a) or (b), Seller shall
become obligated to the extent permitted by law to deliver to Purchaser (and
shall be deemed to instruct the Collateral Agent to deliver to the Custodian,
for the account of Purchaser, and to liquidate and turn into cash the U.S.
Government obligations then pledged by Seller to the extent necessary to satisfy
such obligation) a number of shares of Common Stock, in the form of the shares
of Common Stock then pledged by Seller, or cash generated from the liquidation
of U.S. Government obligations then pledged by Seller, or a combination thereof
(or, after an Adjustment Event, the alternate consideration to be delivered, in
the form of Reported Securities then pledged, cash then pledged, cash generated
from the liquidation of U.S. Government obligations then pledged, or a
combination thereof), with an aggregate value (based on the Closing Price on the
Acceleration Date) equal to the Acceleration Value (as defined below).
"ACCELERATION VALUE" means an amount determined by the Administrator
on the basis of quotations from Independent Dealers (as defined below). Each
quotation will be for an amount that would be paid to the relevant Independent
Dealer in consideration of an agreement between Purchaser and such Independent
Dealer that would have the effect of preserving for Purchaser the economic
equivalent of the payments and deliveries that Purchaser would, but for the
occurrence of the Acceleration Date, have been entitled to receive after the
Acceleration Date hereunder (taking into account any adjustments to the Exchange
Rate that may have been effected on or prior to the Acceleration Date). On or as
soon as reasonably practicable following the Acceleration Date, the
Administrator will request each Independent Dealer to provide its quotation as
soon as reasonably practicable, but in any event within two Business Days. The
Administrator shall compute the Acceleration Value upon receipt of each
Independent Dealer's quotation, provided that if, at the close of business on
the fourth Business Day following the Acceleration Date, the Administrator shall
have received quotations from fewer than four of the Independent Dealers, the
Administrator shall compute the Acceleration Value using the quotations, if any,
it shall have received at or prior to such time. If four quotations are
provided, the Acceleration Value will be the arithmetic mean of the two
quotations remaining after
20
disregarding the highest and lowest quotations. (For this purpose, if more than
one quotation has the same highest or lowest value, then one of such quotations
shall be disregarded.) If two or three quotations are provided, the Acceleration
Value will be the arithmetic mean of such quotations. If one quotation is
provided, the Acceleration Value will be equal to such quotation. If no
quotations are provided, the Acceleration Value will be the aggregate value
(based on the Closing Price on the Acceleration Date) of the number of shares of
Common Stock (or, after an Adjustment Event, Reported Securities, cash or a
combination thereof) that would be required to be delivered hereunder on the
Acceleration Date if the Exchange Date were redefined to be the Acceleration
Date.
"INDEPENDENT DEALERS" means four nationally recognized independent
investment banking firms selected in good faith by the Administrator.
As promptly as reasonably practicable after receipt of the
quotations on which the Acceleration Value is based (or, as the case may be,
after failure to receive any such quotations within the time period prescribed
above), Purchaser shall deliver to Seller and the Collateral Agent a notice
specifying the number of shares of Common Stock (or, after an Adjustment Event,
the alternate consideration) required to be delivered by Seller. Purchaser and
Seller agree that the obligations contained in clauses (i) and (ii) above are a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and Purchaser will not be entitled to recover additional
damage as a consequence of loss resulting from an Event of Default.
ARTICLE VIII
MISCELLANEOUS
8.1 ADJUSTMENTS; SELECTION OF INDEPENDENT INVESTMENT BANKING FIRM.
Purchaser shall be responsible for the effectuation and calculation of any
adjustment pursuant to Article VI hereof and shall furnish Seller notice of any
such adjustment and shall provide Seller reasonable opportunity to review the
calculations pertaining to any such adjustment. If, pursuant to the terms and
conditions hereof, the Administrator shall be required to retain a nationally
recognized independent investment banking firm for any purpose provided herein,
such nationally recognized independent investment banking firm shall be selected
and retained by the Administrator only after consultation with Seller; PROVIDED,
HOWEVER, that Seller shall be deemed to have waived his right to consult if
Seller fails to consult within five Business Days of notice being sent by the
Administrator to Seller seeking consultation. Purchaser may delegate the
effectuation and calculation of any such adjustments to its Administrator.
8.2 NOTICES. Notices to Purchaser shall be directed to it in care of
the Administrator for Purchaser, The Bank of New York, ▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇;
notices to Seller shall be directed to care of [Fulbright & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, fax no.: (▇▇▇) ▇▇▇-▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.], copy to [ ]. Notwithstanding the foregoing, notices to a
party shall be directed to such other address for such party as shall be
specified by such party in a like notice given pursuant to this Section 8.2. All
notices and other communications hereunder shall be in writing and shall be
deemed to have
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been duly given if either (i) personally delivered (including delivery by
courier service or by Federal Express or any other nationally recognized
overnight delivery service for next day delivery) to the offices specified in
the preceding sentence, in which case they shall be deemed received on the first
Business Day by which delivery shall have been made to said offices; or (ii)
sent by certified mail, return receipt requested, in accordance with the
preceding sentence, in which case they shall be deemed received when receipted
for unless acknowledgment is refused (in which case delivery shall be deemed to
have been received on the first Business Day on which such acknowledgment is
refused). Any notice, demand or other communication to be provided by or on
behalf of Purchaser pursuant to this Agreement shall be sent to the address of
Seller, provided in this Section 8.2. Any failure by Seller or any guardian,
conservator, executor, administrator or other similarly appointed person to
receive any such notice, demand or communication shall in no way abrogate,
invalidate or otherwise affect the validity or enforceability of the notice,
demand or communication or the matters set forth therein.
8.3 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
8.4 ENTIRE AGREEMENT. Except as expressly set forth herein, this
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, among the parties with respect to the
subject matter of this Agreement.
8.5 AMENDMENTS; WAIVERS. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and Seller, or, in the case of
a waiver, by the party or parties against whom the waiver is to be effective. No
failure or delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
8.6 NO THIRD PARTY RIGHTS; SUCCESSORS AND ASSIGNS. Except as
otherwise agreed in writing, this Agreement is not intended and shall not be
construed to create any rights in any person other than Seller and Purchaser and
their respective successors and assigns and no person shall assert any rights as
third party beneficiary hereunder. Whenever any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
permitted assigns of such party.
This Agreement will be binding on and enforceable against the Seller
despite the death or legal incapacity of any general partner of such Seller.
8.7 APPLICATION OF BANKRUPTCY CODE. The parties hereto acknowledge
and agree that the Collateral Agent is a "financial institution" within the
meaning of Section 101(22) of Title 11 of the United States Code (the
"BANKRUPTCY CODE") and is acting as agent and custodian for Purchaser in
connection with this Agreement and that Purchaser is a "customer" of the
Collateral Agent within the meaning of said Section 101(22). The parties hereto
further
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acknowledge and agree that this Agreement is a "securities contract", as such
term is defined in Section 741(7) of the Bankruptcy Code, entitled to the
protection of Section 555 of the Bankruptcy Code.
8.8 GOVERNING LAW; JURISDICTION; SEVERABILITY; WAIVER OF JURY TRIAL.
This Agreement shall be governed by and construed in accordance with the laws of
the State of New York. For the purpose of any suit, action or proceeding arising
out of or relating to this Agreement, the parties hereto hereby expressly and
irrevocably consent and submit to the non-exclusive jurisdiction of any United
States Federal or New York State court sitting in the Borough of Manhattan, City
and State of New York, and expressly and irrevocably waive, to the extent
permitted under applicable law, any immunity from the jurisdiction thereof and
any claim or defense in such suit, action or proceeding based on a claim of
improper venue, forum non conveniens or any similar basis to which it might
otherwise be entitled. To the extent permitted by law, the unenforceability or
invalidity of any provision or provisions of this Agreement shall not render any
other provision or provisions herein contained unenforceable or invalid. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND COVENANT
THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR
WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT
OR HE HAS BEEN INFORMED BY THE OTHER PARTY HERETO THAT THE PROVISIONS OF THIS
SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTY HERETO HAS
RELIED, IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY
DOCUMENT RELATED THERETO. EACH PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER
PARTY HERETO TO THE WAIVER OF ITS OR HIS RIGHTS TO TRIAL BY JURY.
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