Exhibit 4.2
================================================================================
TEEKAY SHIPPING CORPORATION
and
THE BANK OF NEW YORK,
as Purchase Contract Agent
------------------------------
PURCHASE CONTRACT AGREEMENT
------------------------------
Dated as of February __, 2003
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions..............................................................1
SECTION 1.02 Compliance Certificates and Opinions.....................................10
SECTION 1.03 Form of Documents Delivered to Purchase Contract Agent...................11
SECTION 1.04 Acts of Holders; Record Dates............................................11
SECTION 1.05 Notices..................................................................12
SECTION 1.06 Notice to Holders; Waiver................................................13
SECTION 1.07 Effect of Headings and Table of Contents.................................14
SECTION 1.08 Successors and Assigns...................................................14
SECTION 1.09 Separability Clause......................................................14
SECTION 1.10 Benefits of Agreement....................................................14
SECTION 1.11 Governing Law............................................................14
SECTION 1.12 Legal Holidays...........................................................14
SECTION 1.13 Counterparts.............................................................15
SECTION 1.14 Inspection of Agreement..................................................15
SECTION 1.15 Appointment of Financial Institution as Agent for the Company............15
SECTION 1.16 No Waiver................................................................15
ARTICLE II
CERTIFICATE FORMS
SECTION 2.01 Forms of Certificates Generally..........................................15
SECTION 2.02 Form of Purchase Contract Agent's Certificate of Authentication..........16
ARTICLE III
THE UNITS
SECTION 3.01 Amount; Form and Denominations...........................................16
SECTION 3.02 Rights and Obligations Evidenced by the Certificates.....................17
SECTION 3.03 Execution, Authentication, Delivery and Dating...........................17
SECTION 3.04 Temporary Certificates...................................................18
SECTION 3.05 Registration; Registration of Transfer and Exchange......................19
SECTION 3.06 Book-Entry Interests.....................................................20
SECTION 3.07 Notices to Holders.......................................................21
SECTION 3.08 Appointment of Successor Depositary......................................21
SECTION 3.09 Definitive Certificates..................................................21
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.......................21
SECTION 3.11 Persons Deemed Owners....................................................23
SECTION 3.12 Cancellation.............................................................23
SECTION 3.13 Creation of Treasury Units by Substitution of Treasury Securities........23
SECTION 3.14 Recreation of Corporate Units............................................25
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination Event..............26
SECTION 3.16 No Consent to Assumption.................................................27
i
Page
----
ARTICLE IV
THE NOTES
SECTION 4.01 Interest Payments; Rights to Interest Payments Preserved.................27
SECTION 4.02 Notice and Voting........................................................28
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.01 Purchase of Shares of Common Stock.......................................28
SECTION 5.02 Remarketing; Payment of Purchase Price...................................31
SECTION 5.03 Issuance of Shares of Common Stock.......................................35
SECTION 5.04 Adjustment of Settlement Rate............................................36
SECTION 5.05 Notice of Adjustments and Certain Other Events...........................44
SECTION 5.06 Termination Event; Notice................................................45
SECTION 5.07 Early Settlement.........................................................45
SECTION 5.08 Intentionally Omitted....................................................47
SECTION 5.09 No Fractional Shares.....................................................47
SECTION 5.10 Charges and Taxes........................................................48
SECTION 5.11 Contract Adjustment Payments.............................................48
SECTION 5.12 Deferral of Contract Adjustment Payments.................................53
SECTION 5.13 Additional Amounts.......................................................55
ARTICLE VI
REMEDIES
SECTION 6.01 Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Shares of Common Stock..........................57
SECTION 6.02 Restoration of Rights and Remedies.......................................57
SECTION 6.03 Rights and Remedies Cumulative...........................................57
SECTION 6.04 Delay or Omission Not Waiver.............................................57
SECTION 6.05 Undertaking for Costs....................................................57
SECTION 6.06 Waiver of Stay or Extension Laws.........................................58
ARTICLE VII
THE PURCHASE CONTRACT AGENT
SECTION 7.01 Certain Duties and Responsibilities......................................58
SECTION 7.02 Notice of Default........................................................59
SECTION 7.03 Certain Rights of Purchase Contract Agent................................59
SECTION 7.04 Not Responsible for Recitals or Issuance of Units........................61
SECTION 7.05 May Hold Units...........................................................61
SECTION 7.06 Money Held in Custody....................................................61
SECTION 7.07 Compensation and Reimbursement...........................................61
SECTION 7.08 Corporate Purchase Contract Agent Required; Eligibility..................62
SECTION 7.09 Resignation and Removal; Appointment of Successor........................62
SECTION 7.10 Acceptance of Appointment by Successor...................................63
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business..............64
SECTION 7.12 Preservation of Information; Communications to Holders...................64
SECTION 7.13 No Obligations of Purchase Contract Agent................................65
ii
Page
----
SECTION 7.14 Tax Compliance...........................................................65
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.01 Supplemental Agreements Without Consent of Holders.......................66
SECTION 8.02 Supplemental Agreements with Consent of Holders..........................66
SECTION 8.03 Execution of Supplemental Agreements.....................................67
SECTION 8.04 Effect of Supplemental Agreements........................................67
SECTION 8.05 Reference to Supplemental Agreements.....................................67
ARTICLE IX
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01 Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property
Except under Certain Conditions..........................................68
SECTION 9.02 Rights and Duties of Successor Person....................................68
ARTICLE X
COVENANTS
SECTION 10.01 Performance under Purchase Contracts.....................................69
SECTION 10.02 Maintenance of Office or Agency..........................................69
SECTION 10.03 Company to Reserve Common Stock..........................................70
SECTION 10.04 Covenants as to Common Stock.............................................70
SECTION 10.05 ERISA....................................................................70
SECTION 10.06 Tax Treatment............................................................70
EXHIBITS
Exhibit A - Form of Corporate Units Certificate
Exhibit B - Form of Treasury Units Certificate
Exhibit C - Instruction to Purchase Contract Agent
Exhibit D - Notice from Purchase Contract Agent to Holders
Exhibit E - Notice to Settle by Separate Cash
Exhibit F - Notice from Purchase Contract Agent to Collateral Agent
iii
PURCHASE CONTRACT AGREEMENT, dated as of February __, 2003, between
TEEKAY SHIPPING CORPORATION, a corporation duly incorporated and existing under
the laws of the Republic of The Marshall Islands (the "Company"), and THE BANK
OF NEW YORK, a banking corporation with trust powers, duly organized and
existing under the laws of the State of New York, acting as purchase contract
agent for the Holders of Units (as defined herein) from time to time (the
"Purchase Contract Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.
All things necessary to make the Purchase Contracts (as defined
herein), when the Certificates (as defined herein) are executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent, as provided in this Agreement, the valid obligations of
the Company, and to constitute these presents a valid agreement of the Company,
in accordance with its terms, have been done. For and in consideration of the
premises and the purchase of the Units by the Holders thereof, it is mutually
agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.01(d):
"Act" has the meaning, with respect to any Holder, set forth in Section
1.04.
"Additional Amounts" has the meaning set forth in Section 5.13.
"Adjusted Applicable Market Value" has the meaning set forth in Section
5.01.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning set forth in Section 5.01.
"Applicants" has the meaning set forth in Section 7.12(b).
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board authorized to act for it in respect
thereof.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Corporate Secretary or an
Assistant Secretary of the Company, to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification
and delivered to the Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.06.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions or trust companies in New York City, New York are
authorized or required by applicable law, regulation or executive order to
remain closed or a day on which the Indenture Trustee or the Collateral Agent is
closed for business; provided that for purposes of Section 1.12(b) only, the
term "Business Day" shall also be deemed to exclude any day on which DTC is
closed.
"Cash Merger" has the meaning set forth in Section 5.04(b)(2).
"Cash Merger Early Settlement" has the meaning set forth in Section
5.04(b)(2).
"Cash Merger Early Settlement Amount" has the meaning set forth in
Section 5.04(b)(2).
2
"Cash Merger Early Settlement Date" has the meaning set forth in
Section 5.04(b)(2).
"Cash Settlement" has the meaning set forth in Section 5.02(b)(i).
"Certificate" means a Corporate Units Certificate or a Treasury Units
Certificate.
"Closing Price" has the meaning set forth in Section 5.01(a).
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1.01(c) of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1.01(c) of
the Pledge Agreement.
"Collateral Agent" means The Bank of New York, a banking corporation
with trust powers, duly organized and existing under the laws of the State of
New York, 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 (i) with respect to a Corporate Unit,
the substitution for the Pledged Note included in such Corporate Unit by
Treasury Securities in an aggregate principal amount at maturity equal to the
aggregate principal amount of such Pledged Note, or (ii) with respect to a
Treasury Unit, the substitution for the Pledged Treasury Securities included in
such Treasury Unit by Notes in an aggregate principal amount equal to the
aggregate principal amount at stated maturity of the Pledged Treasury
Securities.
"Common Stock" means the common stock, par value $0.001 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.
"Constituent Person" has the meaning set forth in Section 5.04(b).
"Contract Adjustment Payments" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract, at a rate per
year of [____]% of the Stated Amount per Purchase Contract.
"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 101
Barclay Street, New York, New York, 10286, Phone: (212) 815-5915, Fax: (212)
815-5802/03, Attn: Corporate Trust Office.
"Corporate Unit" means the collective rights and obligations of a
Holder of a Corporate Units Certificate in respect of the Notes, subject to the
Pledge thereof, and the related Purchase Contract.
3
"Corporate Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"Current Market Price" has the meaning set forth in Section 5.04(a)(8).
"Custodial Agent" means The Bank of New York, a banking corporation
with trust powers, duly organized and existing under the laws of the State of
New York, as Custodial Agent under the Pledge Agreement until a successor
Custodial Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "Custodial Agent" shall mean the Person who
is then the Custodial Agent thereunder.
"Deferred Contract Adjustment Payments" has the meaning provided in
Section 5.12.
"Depositary" means a clearing agency registered under Section 17A of
the Exchange Act that is designated to act as Depositary for the Units as
contemplated by Sections 3.06 and 3.08.
"Depositary Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"DTC" means The Depository Trust Company.
"Early Settlement" has the meaning set forth in Section 5.07.
"Early Settlement Amount" has the meaning set forth in Section 5.07.
"Early Settlement Date" has the meaning set forth in Section 5.07.
"Early Settlement Rate" has the meaning set forth in Section 5.07.
"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.
"Excluded Additional Amounts" has the meaning set forth in Section
5.13.
"Expiration Date" has the meaning set forth in Section 1.04(e).
"Expiration Time" has the meaning set forth in Section 5.04(a)(6).
"Extension Period" has the meaning set forth in Section 5.12(a).
"Failed Remarketing" has the meaning set forth in Section 5.02(c).
"Global Certificate" means a Certificate that evidences all or part of
the Units and is registered in the name of the Depositary or a nominee thereof.
4
"Holder" means, with respect to a Unit, the Person in whose name the
Unit evidenced by a Certificate is registered in the Security Register;
provided, however, that solely for the purpose of determining whether the
Holders of the requisite number of Units have voted on any matter (and not for
any other purpose hereunder), if the Unit remains in the form of one or more
Global Certificates and if the Depositary that is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Units are credited on the record
date, the term "Holder" shall mean such Depositary Participant acting at the
direction of the Beneficial Owners.
"Indenture" means the Indenture, dated as of February __, 2003, between
the Company and the Indenture Trustee (including any provisions of the TIA that
are deemed incorporated therein), as supplemented by Supplemental Indenture No.
1 dated as of the date hereof, pursuant to which the Notes will be issued.
"Indenture Trustee" means The Bank of New York, as trustee under the
Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by (i) either its Chief Executive Officer, its
President or one of its Vice Presidents, and (ii) either its Chief Financial
Officer, Vice President-Finance, Treasurer, Assistant Treasurer, Corporate
Secretary or one of its Assistant Corporate Secretaries, and delivered to the
Purchase Contract Agent.
"Non-Electing Share" has the meaning set forth in Section 5.04(b).
"Notes" means the series of notes designated the [___]% Notes due May
18, 2006 to be issued by the Company under the Indenture.
"NYSE" has the meaning set forth in Section 5.01.
"Officers' Certificate" means a certificate signed by (i) either the
Company's Chairman, the President, the Chief Executive Officer, the Chief
Financial Officer, any Vice President, and (ii) either the Company's Treasurer,
Controller, an Assistant Treasurer, the Assistant Controller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Purchase Contract
Agent.
"Opinion Of Counsel" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee or other counsel of the
Company).
"Outstanding Units" means, with respect to any Unit and as of the date
of determination, all Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) if a Termination Event has occurred, (x) Corporate Units
for which the underlying Notes have been theretofore deposited with the
Purchase Contract Agent in trust for the Holders of such Corporate
Units and (y) Treasury Units for which the underlying Treasury
Securities have been theretofore deposited with the Purchase Contract
Agent in trust for the Holders of such Treasury Units;
5
(ii) Units evidenced by Certificates theretofore cancelled by
the Purchase Contract Agent or delivered to the Purchase Contract Agent
for cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Units evidenced by Certificates in exchange for or in
lieu of which other Certificates have been authenticated, executed on
behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been
presented to the Purchase Contract Agent proof satisfactory to it that
such Certificate is held by a bona fide purchaser in whose hands the
Units evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
number of the Units have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Units owned by the Company or any Affiliate
of the Company shall be disregarded and deemed not to be Outstanding Units,
except that, in determining whether the Purchase Contract Agent shall be
authorized and protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Units so owned that have been pledged in good faith may
be regarded as Outstanding Units if the pledgee establishes to the satisfaction
of the Purchase Contract Agent the pledgee's right so to act with respect to
such Units and that the pledgee is not the Company or any Affiliate of the
Company.
"Payment Date" means each February 16, May 16, August 16 and November
16 of each year, commencing May 16, 2003.
"Permitted Investments" has the meaning set forth in Section 1.01(c) of
the Pledge Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Plan" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the Code or
any entity whose assets are considered assets of any such plan.
"Pledge" means the pledge under the Pledge Agreement of the Notes or
the Treasury Securities constituting a part of the Units.
"Pledge Agreement" means the Pledge Agreement, dated as of February __,
2003, among the Company, the Collateral Agent, the Custodial 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 Units, as amended
from time to time.
"Pledged Notes" has the meaning set forth in Section 1.01(c) of the
Pledge Agreement.
6
"Pledged Treasury Securities" has the meaning set forth in Section
1.01(c) of the Pledge Agreement.
"Predecessor Corporate Units Certificate" of any particular Corporate
Units Certificate means every previous Corporate Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Corporate Units evidenced thereby; and, for the purposes of this
definition, any Corporate Units Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate Units Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate Units Certificate.
"Proceeds" has the meaning set forth in Section 1.01(c) of the Pledge
Agreement.
"Prospectus" means the prospectus relating to the delivery of shares of
any securities in connection with an Early Settlement pursuant to Section 5.07
or a Cash Merger Early Settlement of Purchase Contracts pursuant to Section
5.04(b)(2), in the form in which first filed, or transmitted for filing, with
the Securities and Exchange Commission after the effective date of the
Registration Statement pursuant to Rule 424(b) under the Securities Act,
including the documents incorporated by reference therein as of the date of such
Prospectus.
"Purchase Contract" means, with respect to any Unit, the contract
forming a part of such Unit and obligating the Company to (i) sell, and the
Holder of such Unit to purchase, shares of Common Stock and (ii) pay the Holder
thereof Contract Adjustment Payments, in each case on the terms and subject to
the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Purchase Contract Agent" shall
mean such Person or any subsequent successor who is appointed pursuant to this
Agreement.
"Purchase Contract Settlement Date" means February 16, 2006.
"Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.03.
"Purchase Price" has the meaning set forth in Section 5.01.
"Purchased Shares" has the meaning set forth in Section 5.04(a)(6)(ii).
"Put Right" has the meaning set forth in Section 705 of the
Supplemental Indenture No. 1.
"Record Date" for any distribution and Contract Adjustment Payment
payable on any Payment Date means, as to any Global Certificate or any other
Certificate, the first day of the month in which the relevant Payment Date
falls.
"Reference Price" has the meaning set forth in Section 5.01(a)(ii).
7
"Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of any securities in connection with an Early Settlement on the Early
Settlement Date or a Cash Merger Early Settlement of Purchase Contracts on the
Cash Merger Early Settlement Date under Section 5.04(b)(2), including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in such registration statement, and any post-effective amendments
thereto.
"Remarketing" means the remarketing of the Notes by the Remarketing
Agent pursuant to the Remarketing Agreement.
"Remarketing Agent" means Morgan Stanley & Co. Incorporated, or any
successor remarketing agent appointed by the Company pursuant to the Remarketing
Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as of
February __, 2003, among the Company, the Remarketing Agent and the Purchase
Contract Agent, as amended from time to time.
"Remarketing Date" means the third Business Day immediately preceding
the Purchase Contract Settlement Date.
"Remarketing Fee" has the meaning set forth in Section 5.02(a)(i).
"Reorganization Event" has the meaning set forth in Section 5.04(b).
"Reset Rate" has the meaning set forth in Section 102(e) of the
Supplemental Indenture No. 1.
"Responsible Officer" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer this Purchase Contract Agreement.
"Rights" has the meaning set forth in Section 5.04(a)(11).
"Rights Agreement" has the meaning set forth in Section 5.04(a)(11).
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Securities Intermediary" means The Bank of New York, a banking
corporation with trust powers, duly organized and existing under the laws of the
State of New York, 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 or any subsequent successor who is
appointed pursuant to the Pledge Agreement.
"Security Register" and "Security Registrar" have the respective
meanings set forth in Section 3.05(a).
8
"Senior Indebtedness" has the meaning set forth in Section 101(c) of
the Indenture.
"Separate Notes" means Notes that are no longer a component of
Corporate Units.
"Settlement Rate" has the meaning set forth in Section 5.01(a).
"Stated Amount" means $25.00.
"Successful Remarketing" has the meaning set forth in Section
5.02(a)(i).
"Supplemental Indenture No. 1" means the Supplemental Indenture No. 1
dated as of the date hereof between the Company and the Indenture Trustee.
"Taxes" has the meaning set forth in Section 5.13.
"Taxing Jurisdiction" has the meaning set forth in Section 5.13.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following
events:
(i) at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or court order shall have been
entered granting relief under the Bankruptcy Code, adjudicating the
Company to be insolvent, or approving as properly filed a petition
seeking reorganization or liquidation of the Company or any other
similar applicable Federal or state law and if such judgment, decree or
order shall have been entered more than 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;
(ii) at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the termination or
liquidation of its affairs, shall have been entered and if such
judgment, decree or order shall have been entered more than 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree
or order shall have continued undischarged and unstayed for a period of
60 days; or
(iii) at any time on or prior to the Purchase Contract
Settlement Date, the Company shall file a petition for relief under the
Bankruptcy Code, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any
other similar applicable Federal or State law, or shall consent to the
filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of it or of its property, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning set forth in Section
5.01(a)(i).
9
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"Trading Day" has the meaning set forth in Section 5.01.
"Treasury Securities" means zero-coupon U.S. treasury securities that
mature on February 15, 2006 (CUSIP No. 912803AJ2).
"Treasury Unit" means, following the substitution of Treasury
Securities for Pledged Notes as collateral to secure a Holder's obligations
under the Purchase Contract, the collective rights and obligations of a Holder
of a Treasury Units Certificate in respect of such Treasury Securities, subject
to the Pledge thereof, and the related Purchase Contract.
"Treasury Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Unit specified
on such certificate.
"Underwriters" means the underwriters identified in Schedule II to the
Underwriting Agreement.
"Underwriting Agreement" means the Underwriting Agreement, dated
February __, 2003, among the Company and the Underwriters.
"Unit" means a Corporate Unit or a Treasury Unit, as the case may be.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
SECTION 1.02 Compliance Certificates and Opinions. Except as
otherwise expressly provided by this Agreement, upon any application or request
by the Company to the Purchase Contract Agent to take any action in accordance
with any provision of this Agreement, the Company shall furnish to the Purchase
Contract Agent an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Agreement relating to the proposed action have been
complied with and, if requested by the Purchase Contract Agent, an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than the Officers'
Certificate provided for in Section 10.05) shall include:
(i) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
10
(ii) 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;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03 Form of Documents Delivered to Purchase Contract Agent.
(a) 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.
(b) 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 its 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 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.
(c) Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
SECTION 1.04 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Purchase Contract Agent and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.01) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
11
(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 Units shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Unit shall bind every future Holder of
the same Unit and the Holder of every Certificate evidencing such Unit issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Units 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 Units. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate Units and the Outstanding Treasury Units,
as the case may be, on such record date, and no other Holders, shall be entitled
to take the relevant action with respect to the Corporate Units or the Treasury
Units, as the case may be, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken prior to or on the applicable Expiration Date by Holders of the requisite
number of Outstanding Units 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 Units 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 Units in
the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section 1.04(e),
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
Units in the manner set forth in Section 1.06, prior to or on the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
SECTION 1.05 Notices. Any notice or communication is duly given if
in writing and delivered in person or mailed by first-class mail (registered or
certified, return receipt requested), telecopier (with receipt confirmed) or
overnight air courier guaranteeing next
12
day delivery, to the others' address; provided that notice shall be deemed given
to the Purchase Contract Agent only upon receipt thereof:
(a) If to the Purchase Contract Agent:
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division
(b) If to the Company:
Teekay Shipping Corporation
550 Burrard Street
Suite 2200, Bentall 5
Vancouver, British Columbia,
Canada
V6C 2K2
Fax: (604) 844-6600
Attention: General Counsel
(c) If to the Collateral Agent:
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division
(d) If to the Indenture Trustee:
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division
The Purchase Contract Agent shall send to the Indenture Trustee at the
telecopier number set forth above a copy of any notices in the form of Exhibits
C, D, E or F it sends or receives.
SECTION 1.06 Notice to Holders; Waiver.
(a) Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by
13
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.
(b) In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.
SECTION 1.07 Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 1.08 Successors and Assigns. All covenants and agreements in
this Agreement by the Company and the Purchase Contract Agent shall bind their
respective successors and assigns, whether so expressed or not.
SECTION 1.09 Separability Clause. In case any provision in this
Agreement or in the Units shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.
SECTION 1.10 Benefits of Agreement. Nothing contained in this
Agreement or in the Units, 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 Units evidenced by their Certificates by their
acceptance of delivery of such Certificates.
SECTION 1.11 Governing Law. This Agreement and the Units shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the conflicts of law provisions thereof.
SECTION 1.12 Legal Holidays.
(a) In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Units), Contract
Adjustment Payments or other distributions shall not be paid on such date, but
Contract Adjustment Payments or such other distributions shall be paid on the
next succeeding Business Day, unless such Business Day is in the next succeeding
calendar year, in which case such Contract Adjustment Payments or other
distributions shall be paid on the immediately preceding Business Day, in each
case with the same force and effect as if made on such scheduled Payment Date;
14
provided that no interest shall accrue or be payable by the Company to any
Holder in respect of such payment or distribution for the period from and after
any such scheduled Payment Date.
(b) In any case where the Purchase Contract Settlement Date or any
Early Settlement Date or Cash Merger Early Settlement Date shall not be a
Business Day (notwithstanding any other provision of this Agreement or the
Units), Purchase Contracts shall not be performed and Early Settlement and Cash
Merger Early Settlement shall not be effected on such date, but Purchase
Contracts shall be performed or Early Settlement or Cash Merger Early Settlement
shall be effected, as applicable, on the next succeeding Business Day with the
same force and effect as if made on such Purchase Contract Settlement Date,
Early Settlement Date or Cash Merger Early Settlement Date, as applicable.
SECTION 1.13 Counterparts. This Agreement, any supplements,
amendments, waivers or any other agreements called for in this Agreement may be
executed in any number of counterparts by the parties hereto on separate
counterparts, each of which, when so executed and delivered, shall be deemed an
original, but all such counterparts shall together constitute one and the same
instrument.
SECTION 1.14 Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times during normal business hours at the
Corporate Trust Office for inspection by any Holder or Beneficial Owner.
SECTION 1.15 Appointment of Financial Institution as Agent for the
Company. The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
SECTION 1.16 No Waiver. No failure on the part of the Company, the
Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or
any of their respective agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Company, the Collateral Agent, the Securities Intermediary or any of their
respective agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.01 Forms of Certificates Generally.
(a) The Certificates (including the form of Purchase Contract
forming part of each Unit evidenced thereby) shall be in substantially the form
set forth in Exhibit A hereto (in the case of Certificates evidencing Corporate
Units) or Exhibit B hereto (in the case of Certificates evidencing Treasury
Units), with such letters, numbers or other marks of
15
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 Units are listed or any depositary therefor, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
(b) The definitive Certificates shall be produced in any manner as
determined by the officers of the Company executing the Units evidenced by such
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
(c) 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 AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.02 Form of Purchase Contract Agent's Certificate of
Authentication. The form of the Purchase Contract Agent's certificate of
authentication of the Units shall be in substantially the form set forth on the
form of the applicable Certificates.
ARTICLE III
THE UNITS
SECTION 3.01 Amount; Form and Denominations. The aggregate number of
Units evidenced by Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to 5,000,000 (or 5,750,000 if the
over-allotment option granted to the Underwriters pursuant to the Underwriting
Agreement is exercised in full), except for Certificates authenticated, executed
and delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Sections 3.04, 3.05, 3.09, 3.10, 3.13, 3.14, 5.07
or 8.05.
16
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.02 Rights and Obligations Evidenced by the Certificates.
(a) Each Corporate Units Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing (1) the
ownership by the Holder thereof of a beneficial interest in a Note, subject to
the Pledge of such Note 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 is hereby authorized, as
attorney-in-fact for, and on behalf of, the Holder of each Corporate Unit, to
pledge, pursuant to the Pledge Agreement, the Note forming a part of such
Corporate Unit, to the Collateral Agent for the benefit of the Company, and to
grant to the Collateral Agent, for the benefit of the Company, a security
interest in the right, title and interest of such Holder in such Note to secure
the obligation of the Holder under each Purchase Contract to purchase shares of
Common Stock.
(b) Upon the formation of a Treasury Unit pursuant to Section 3.13,
each Treasury Unit Certificate shall evidence the number of Treasury Units
specified therein, with each such Treasury Unit representing (1) the ownership
by the Holder thereof of a 1/40th undivided beneficial interest in a Treasury
Security with a principal amount equal to $1,000, subject to the Pledge of such
interest 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 is hereby authorized, as attorney-in-fact for, and
on behalf of, the Holder of each Treasury Unit, to pledge, pursuant to the
Pledge Agreement, such Holder's interest in the Treasury Security forming a part
of such Treasury Unit to the Collateral Agent, for the benefit of the Company,
and to grant to the Collateral Agent, for the benefit of the Company, a security
interest in the right, title and interest of such Holder in such Treasury
Security to secure the obligation of the Holder under each Purchase Contract to
purchase shares of Common Stock.
(c) Prior to the purchase of shares of Common Stock under each
Purchase Contract, such Purchase Contracts shall not entitle the Holder of a
Unit to any of the rights of a holder of shares of Common Stock, including,
without limitation, the right to vote or receive any dividends or other payments
or to consent or to receive notice as a shareholder in respect of the meetings
of shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
SECTION 3.03 Execution, Authentication, Delivery and Dating. (a)
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution
and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
(b) The Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its President, its Chief
Financial Officer, its
17
Treasurer or one of its Vice Presidents. The signature of any of these officers
on the Certificates may be manual or facsimile.
(c) Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates.
(d) 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 Contracts evidenced by such
Certificate.
(e) Each Certificate shall be dated the date of its authentication.
(f) 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 3.04 Temporary Certificates. (a) 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 Units or Treasury Units, as the case
may be, are listed, or as may, consistently herewith, be determined by the
officers of the Company executing such Certificates, as evidenced by their
execution of the Certificates.
(b) If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Units 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 Units evidenced thereby as
definitive Certificates.
18
SECTION 3.05 Registration; Registration of Transfer and Exchange.
(a) The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "Security Registrar"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing Corporate Units and Treasury Units.
(b) Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the designated transferee or transferees, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of any authorized denominations, like tenor, and evidencing a like
number of Corporate Units or Treasury Units, as the case may be.
(c) At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a like number
of Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. 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.
(d) All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number of
Corporate Units or Treasury Units, as the case may be, and be entitled to the
same benefits and subject to the same obligations under this Agreement as the
Corporate Units or Treasury Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
(e) Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Purchase Contract Agent) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.
(f) No service charge shall be made for any registration of transfer
or exchange of a Certificate, but the Company and the Purchase Contract Agent
may require payment from the Holder of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Certificates, other than any exchanges
pursuant to Sections 3.04, 3.06, 3.09 and 8.05 not involving any transfer.
(g) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall not be obligated to authenticate, execute on
behalf of the Holder and deliver any Certificate in exchange for any other
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earliest to
occur of any Early Settlement Date with respect to such Certificate, any Cash
Merger Early Settlement Date with
19
respect to such Certificate, the Purchase Contract Settlement Date or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Purchase
Contract Agent shall:
(i) if the Purchase Contract Settlement Date (including upon
any Cash Settlement) or an Early Settlement Date or a Cash Merger Early
Settlement Date with respect to such other Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such other
Certificate; or
(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Notes or the Treasury
Securities evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Section
3.15 and Article Five hereof.
SECTION 3.06 Book-Entry Interests. (a) The Certificates, on original
issuance, will be issued in the form of one or more fully registered Global
Certificates, to be delivered to the Depositary or its custodian by, or on
behalf of, the Company. The Company hereby designates DTC as the initial
Depositary. Such Global Certificates shall initially be registered on the books
and records of the Company in the name of Cede & Co., the nominee of the
Depositary, and no Beneficial Owner will receive a definitive Certificate
representing such Beneficial Owner's interest in such Global Certificate, except
as provided in Section 3.09. The Purchase Contract Agent shall enter into an
agreement with the Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to Beneficial Owners
pursuant to Section 3.09:
(i) the provisions of this Section 3.06 shall be in full force
and effect;
(ii) the Company shall be entitled to deal with the Depositary
for all purposes of this Agreement (including, without limitation,
making Contract Adjustment Payments and receiving approvals, votes or
consents hereunder) as the Holder of the Units and the sole holder of
the Global Certificates and shall have no obligation to the Beneficial
Owners;
(iii) to the extent that the provisions of this Section 3.06
conflict with any other provisions of this Agreement, the provisions of
this Section 3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be exercised
only through the Depositary and shall be limited to those established
by law and agreements between such Beneficial Owners and the Depositary
or the Depositary Participants.
(b) Transfers of securities evidenced by Global Certificates shall
be made through the facilities of the Depositary, and any cancellation of, or
increase or decrease in the number of, such securities (including the creation
of Treasury Units and the recreation of Corporate Units pursuant to Sections
3.13 and 3.14 respectively) shall be accomplished by making appropriate
annotations on the Schedule of Increases and Decreases for such Global
Certificate.
20
SECTION 3.07 Notices to Holders. Whenever a notice or other
communication to the Holders is required to be given under this Agreement, the
Company or the Company's agent shall give such notices and communications to the
Holders and, with respect to any Units registered in the name of the Depositary
or the nominee of the Depositary, the Company or the Company's agent shall,
except as set forth herein, have no obligations to the Beneficial Owners.
SECTION 3.08 Appointment of Successor Depositary. If the Depositary
elects to discontinue its services as securities depositary with respect to the
Units, the Company may, in its sole discretion, appoint a successor Depositary
with respect to the Units.
SECTION 3.09 Definitive Certificates.
If:
(i) the Depositary notifies the Company that it is unwilling
or unable to continue its services as securities depositary with
respect to the Units and no successor Depositary has been appointed
pursuant to Section 3.08 within 90 days after such notice; or
(ii) the Depositary ceases to be a "clearing agency"
registered under Section 17A of the Exchange Act when the Depositary is
required to be so registered to act as the Depositary and so notifies
the Company, and no successor Depositary has been appointed pursuant to
Section 3.08 within 90 days after such notice; or
(iii) the Company determines in its sole discretion that the
Global Certificates shall be exchangeable for definitive Certificates,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Units and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Units 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 authorized and protected in relying on, such
instructions. Each definitive Certificate so delivered shall evidence Units of
the same kind and tenor as the Global Certificate so surrendered in respect
thereof.
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates. (a)
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 Units or Treasury Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
(b) 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
21
any of them harmless, then, in the absence of notice to the Company or the
Purchase Contract Agent that such Certificate has been acquired by a bona fide
purchaser, the Company shall execute and deliver to the Purchase Contract Agent,
and the Purchase Contract Agent shall authenticate, execute on behalf of the
Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
(c) Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Purchase Contract Agent, and the
Purchase Contract Agent shall not be obligated to authenticate, execute on
behalf of the Holder, and deliver to the Holder, a Certificate on or after the
Business Day immediately preceding the earliest of any Early Settlement Date
with respect to such lost or mutilated Certificate, any Cash Merger Early
Settlement Date with respect to such lost or mutilated Certificate, the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Purchase Contract Agent shall:
(i) if the Purchase Contract Settlement Date or Early
Settlement Date or Cash Merger Early Settlement Date with respect to
such lost, stolen, destroyed or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such Certificate; or
(ii) if a Cash Settlement with respect to such lost or
mutilated Certificate or if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Notes or
the Treasury Securities evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions
of Section 3.15 and Article Five hereof.
(d) 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 fees and expenses (including, without
limitation, the fees and expenses of the Purchase Contract Agent) connected
therewith.
(e) 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 Units evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Units 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.
(f) 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.
22
SECTION 3.11 Persons Deemed Owners. (a) 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 Units evidenced thereby for purposes of (subject to any applicable record
date) any payment or distribution on the Notes, payment of Contract Adjustment
Payments and performance of the Purchase Contracts and for all other purposes
whatsoever in connection with such Units, whether or not such payment,
distribution, or performance 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.
(b) 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 the Depositary (or its nominee), as a Holder, with respect to such
Global Certificate, or impair, as between such Depositary and the related
Beneficial Owner, the operation of customary practices governing the exercise of
rights of the Depositary (or its nominee) as Holder of such Global Certificate.
None of the Company, the Purchase Contract Agent or any agent of the Company or
the Purchase Contract Agent will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Certificate or maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.12 Cancellation. (a) All Certificates surrendered (i) for
delivery of shares of Common Stock on or after the Purchase Contract Settlement
Date, (ii) upon the transfer of Notes, or for delivery of the Treasury
Securities, after the occurrence of a Termination Event or pursuant to a Cash
Settlement, an Early Settlement or a Cash Merger Early Settlement, or (iii) upon
the registration of transfer or exchange of a Unit, or a Collateral Substitution
or the recreation of Corporate Units shall, if surrendered to any Person other
than the Purchase Contract Agent, be delivered to the Purchase Contract Agent
along with appropriate written instructions regarding the cancellation thereof
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 an Issuer Order, be promptly cancelled by the Purchase
Contract Agent. No Certificates shall be authenticated, executed on behalf of
the Holder and delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly permitted by this
Agreement. All cancelled Certificates held by the Purchase Contract Agent shall
be disposed of in accordance with its customary practices.
(b) 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 with appropriate written instructions regarding the
cancellation thereof.
SECTION 3.13 Creation of Treasury Units by Substitution of Treasury
Securities. (a) Subject to the conditions set forth in this Agreement, a Holder
may, at any time
23
from and after the date of this Agreement and prior to 5:00 p.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date, effect a Collateral Substitution and separate the Notes from
the related Purchase Contracts in respect of such Holder's Corporate Units by
substituting for such Notes, Treasury Securities in an aggregate principal
amount at maturity equal to the aggregate principal amount of such Notes;
provided that Holders may make Collateral Substitutions only in integral
multiples of 40 Corporate Units. To effect such substitution, the Holder must:
(1) deposit with the Securities Intermediary Treasury
Securities having an aggregate principal amount at maturity equal to
the aggregate principal amount of the Notes comprising part of such
Corporate Units, which shall be purchased in the open market at the
Holder's expense unless otherwise owned by such Holder; and
(2) transfer the related Corporate Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that the
Holder has deposited the relevant amount of Treasury Securities to the
Securities Intermediary and (ii) requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the Notes underlying
such Corporate Units, whereupon the Purchase Contract Agent shall
promptly provide an instruction to such effect to the Collateral Agent,
substantially in the form of Exhibit A to the Pledge Agreement.
(b) Upon receipt of the Treasury Securities described in clause (1)
above and the instruction described in clause (2) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Notes from the Pledge, free and clear
of the Company's security interest therein, and the transfer of such Notes to
the Purchase Contract Agent on behalf of the Holder. Upon receipt of such Notes,
the Purchase Contract Agent shall promptly:
(i) cancel the related Corporate Units;
(ii) transfer the Notes to the Holder (such Notes shall be
tradeable as a separate security, independent of the resulting Treasury
Units); and
(iii) authenticate, execute on behalf of such Holder and
deliver a Treasury Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Corporate Units. Holders
who elect to separate the Notes from the related Purchase Contracts and
to substitute Treasury Securities for such Notes shall be responsible
for any fees or expenses (including, without limitation, fees and
expenses payable to the Collateral Agent for its services as Collateral
Agent) in respect of the substitution, and neither the Company nor the
Purchase Contract Agent shall be responsible for any such fees or
expenses.
(c) In the event a Holder making a Collateral Substitution pursuant
to this Section 3.13 fails to effect a book-entry transfer of the Corporate
Units or fails to deliver
24
Corporate Units Certificates to the Purchase Contract Agent after depositing
Treasury Securities with the Collateral Agent, any distributions on the Notes
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 Units are so transferred or
the Corporate Units Certificate is so delivered, as the case may be, or, such
Holder provides evidence satisfactory to the Company and the Purchase Contract
Agent that such Corporate Units Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Purchase Contract Agent
and the Company.
(d) Except as described in Section 5.02 or in this Section 3.13 or
in connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Corporate Unit remains in effect, such Corporate Units shall not be
separable into their constituent parts, and the rights and obligations of the
Holder in respect of the Notes and the Purchase Contract comprising such
Corporate Units may be acquired, and may be transferred and exchanged, only as a
Corporate Unit.
SECTION 3.14 Recreation of Corporate Units. (a) Subject to the
conditions set forth in this Agreement, a Holder of Treasury Units may recreate
Corporate Units at any time on or prior to 5:00 p.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date;
provided that Holders of Treasury Units may only recreate Corporate Units in
integral multiples of 40 Treasury Units. To recreate Corporate Units, the Holder
must:
(1) transfer to the Securities Intermediary Notes having an
aggregate principal amount equal to the aggregate principal amount at
stated maturity of the Treasury Securities comprising part of the
Treasury Units, which shall be purchased in the open market at the
Holder's expense unless otherwise owned by the Holder; and
(2) transfer the related Treasury Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that the
Holder has transferred the relevant amount of Notes to the Securities
Intermediary and (ii) requesting that the Purchase Contract Agent
instruct the Collateral Agent to release the Treasury Securities
underlying such Treasury Units, whereupon the Purchase Contract Agent
shall promptly provide an instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit C to the Pledge Agreement.
(b) Upon receipt of the 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 will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer thereof to the Purchase Contract
Agent on behalf of the Holder. Upon receipt of such Treasury Securities, the
Purchase Contract Agent shall promptly:
(i) cancel the related Treasury Units;
25
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Corporate Unit Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Treasury Units.
(c) Holders who elect to recreate Corporate Units shall be
responsible for any fees or expenses (including, without limitation, fees and
expenses payable to the Collateral Agent for its services as Collateral Agent)
in respect of the recreation, and neither the Company nor the Purchase Contract
Agent shall be responsible for any such fees or expenses.
Except as provided in Section 5.02 or in this Section 3.14 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Treasury Unit remains in effect, such Treasury Unit shall not be
separable into its constituent parts and the rights and obligations of the
Holder of such Treasury Unit in respect of the 1/40th of a Treasury Security and
the Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged, only as a Treasury Unit.
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination
Event. (a) Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Notes or the Treasury Securities, as the case may
be, underlying the Corporate Units and the Treasury Units, as the case may be,
pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent shall
request transfer instructions with respect to such Notes or Treasury Securities,
as the case may be, from each Holder by written request, substantially in the
form of Exhibit D hereto, mailed to such Holder at its address as it appears in
the Security Register.
(b) Upon book-entry transfer of the Corporate Units or the Treasury
Units or delivery of a Corporate Units Certificate or Treasury Units Certificate
to the Purchase Contract Agent with such transfer instructions from such Holder,
the Purchase Contract Agent shall transfer the Notes or Treasury Securities, as
the case may be, underlying such Corporate Units or Treasury Units, as the case
may be, to such Holder by book-entry transfer, or other appropriate procedures,
in accordance with such instructions. In the event a Holder of Corporate Units
or Treasury Units fails to effect such transfer or delivery, the Notes or
Treasury Securities, as the case may be, underlying such Corporate Units or
Treasury Units, as the case may be, and any distributions thereon, shall be held
in the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until the earlier to occur of:
(i) the transfer of such Corporate Units or Treasury Units,
the surrender of the Corporate Units Certificate or Treasury Units
Certificate or the receipt by the Company and the Purchase Contract
Agent from such Holder of satisfactory evidence that such Corporate
Units Certificate or Treasury Units Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and
26
(ii) the expiration of the time period specified in the
abandoned property laws of the state in which the Purchase Contract
Agent holds such property.
SECTION 3.16 No Consent to Assumption. Each Holder of a Unit, 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 NOTES
SECTION 4.01 Interest Payments; Rights to Interest Payments
Preserved. (a) Any payment on any Note which is paid on any Payment Date shall,
subject to receipt thereof by the Purchase Contract Agent from the Collateral
Agent as provided by the terms of the Pledge Agreement, be paid to the Person in
whose name the Corporate Units Certificate (or one or more Predecessor Corporate
Units Certificates) of which such Note forms a part is registered at the close
of business on the Record Date for such Payment Date.
(b) Each Corporate Units Certificate evidencing Notes delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Corporate Units Certificate shall carry the right to receive
accrued and unpaid interest or distributions, and to accrue future interest or
distributions, which were carried by the Notes.
(c) In the case of any Corporate Unit with respect to which (A) Cash
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.02 hereof, (B) Early Settlement of the underlying Purchase Contract is
properly effected pursuant to Section 5.07 hereof, (C) Cash Merger Early
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.04(b)(2) hereof, or (D) a Collateral Substitution is properly effected
pursuant to Section 3.13, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, interest on the Notes
underlying such Corporate Unit otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement, Early
Settlement, Cash Merger Early Settlement or Collateral Substitution, and such
payment or distributions shall, subject to receipt thereof by the Purchase
Contract Agent, be payable to the Person in whose name the Corporate Units
Certificate (or one or more Predecessor Corporate Units Certificates) was
registered at the close of business on the Record Date.
(d) Except as otherwise expressly provided in the immediately
preceding paragraph, in the case of any Corporate Units with respect to which
Cash Settlement, Early Settlement or Cash Merger Early Settlement of the
underlying Purchase Contract is properly effected, or with respect to which a
Collateral Substitution has been effected, payments on the related Notes that
would otherwise be payable or made after the Purchase Contract Settlement Date,
Early Settlement Date, Cash Merger Early Settlement Date or the date of the
Collateral Substitution, as the case may be, shall not be payable hereunder to
the Holder of such Corporate Units; provided, however, that to the extent that
such Holder continues to hold Separate Notes
27
that formerly comprised a part of such Holder's Corporate Units, such Holder
shall be entitled to receive interest on such Separate Notes.
SECTION 4.02 Notice and Voting. (a) Under the terms of the Pledge
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Notes, but only to the
extent instructed in writing by the Holders as described below. Upon receipt of
notice of any meeting at which holders of Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of Corporate Units a notice:
(i) containing such information as is contained in the notice
or solicitation;
(ii) stating that each Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of
Notes, as the case may be, entitled to vote) shall be entitled to
instruct the Purchase Contract Agent as to the exercise of the voting
rights pertaining to such Notes underlying their Corporate Units; and
(iii) stating the manner in which such instructions may be
given.
(b) Upon the written request of the Holders of Corporate Units on
such record date received by the Purchase Contract Agent at least six days prior
to such meeting, the Purchase Contract Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Notes, as the case may be, as
to which any particular voting instructions are received. In the absence of
specific instructions from the Holder of a Corporate Unit, the Purchase Contract
Agent shall abstain from voting the Notes underlying such Corporate Unit. The
Company hereby agrees, if applicable, to solicit Holders of Corporate Units to
timely instruct the Purchase Contract Agent in order to enable the Purchase
Contract Agent to vote such Notes.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.01 Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall obligate the Holder of the related
Units 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 (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "Settlement Rate" is equal to:
(i) if the Adjusted Applicable Market Value (as defined below)
is greater than or equal to $[______] (the "Threshold Appreciation
Price"), [_____] shares of Common Stock per Purchase Contract;
28
(ii) if the Adjusted Applicable Market Value is less than the
Threshold Appreciation Price but greater than $[____] (the "Reference
Price"), the number of shares of Common Stock per Purchase Contact
having a value equal to the Stated Amount divided by the Adjusted
Applicable Market Value;
(iii) if the Adjusted Applicable Market Value is less than or
equal to the Reference Price, [____] shares of Common Stock per
Purchase Contract;
in each case subject to adjustment as provided in Section 5.04 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.
The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a), the Applicable Market Value, and (ii) at
the time of and after any adjustment of the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a), the
Applicable Market Value multiplied by a fraction of which the numerator shall be
the Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) and the denominator
shall be the Settlement Rate immediately prior to such adjustment; provided,
however, that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5), (6), (7) and (10) of Section 5.04(a) during the period taken
into consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
The "Closing Price" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(ii) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price (or, if no closing price is
reported, the last reported sale price) per share as reported in the
composite transactions for the principal United States national or
regional securities exchange on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the last closing sale price
per share as reported by the Nasdaq National Market, Inc.;
(iv) if the Common Stock is not so reported by the Nasdaq
National Market, Inc., the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation
Bureau or similar organization; or
29
(v) if the bid price referred to in clause (iv) is not
available, the market value of Common Stock on such date as determined
by a nationally recognized independent investment banking firm retained
by the Company for purposes of determining the Closing Price.
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and
(2) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary
market for the trading of the Common Stock.
(b) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance of such Unit, irrevocably:
(i) authorizes the Purchase Contract Agent to enter into and
perform the related Purchase Contract on its behalf as its
attorney-in-fact (including, without limitation, the execution of
Certificates on behalf of such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
(iii) covenants and agrees to perform its obligations under
such Purchase Contract for so long as such Holder remains a Holder of a
Corporate Unit or a Treasury Unit;
(iv) consents to the provisions hereof;
(v) authorizes the Purchase Contract Agent to enter into and
perform this Agreement and the Pledge Agreement on its behalf and in
its name as its attorney-in-fact; and
(vi) consents to, and agrees to be bound by, the Pledge of
such Holder's right, title and interest in and to the Collateral
Account, including the Notes or the Treasury Securities pursuant to the
Pledge Agreement,
provided that upon a Termination Event, the rights of the Holder of such Units
under the Purchase Contract may be enforced without regard to any other rights
or obligations.
(c) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees that to the extent and in the
manner provided in Section 5.02 hereof and the Pledge Agreement, but subject to
the terms thereof, Proceeds of the Notes or the Treasury Securities on the
Purchase Contract Settlement Date, shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
Proceeds.
(d) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase
30
Contracts underlying the Certificate 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 5.02 Remarketing; Payment of Purchase Price.
(a) (i) The Company shall engage the Remarketing Agent
pursuant to the Remarketing Agreement for Remarketing the Notes. By
11:00 a.m. (New York City time) on the Business Day immediately
preceding the Remarketing Date, the Purchase Contract Agent shall
notify the Remarketing Agent of the aggregate principal amount of
Pledged Notes, and the Custodial Agent shall notify the Remarketing
Agent of the aggregate principal amount of Separate Notes (if any) that
are to be remarketed pursuant to clause (ii) below. Concurrently, the
Custodial Agent, pursuant to clause (ii) below, will present for
Remarketing the Separate Notes, to the Remarketing Agent. Upon receipt
of such notice from the Purchase Contract Agent and Custodial Agent and
the Pledged Notes and Separate Notes (if any) from the Collateral Agent
and Custodial Agent, the Remarketing Agent will, on the Remarketing
Date, use its reasonable efforts to remarket (based on the Reset Rate)
(the "Remarketing") such Pledged Notes and Separate Notes on such date
at a price of approximately 100.25% (or, if the Remarketing Agent is
unable to remarket the Pledged Notes and Separate Notes at such price,
at a price below 100.25% in the discretion of the Remarketing Agent,
but in no event less than 100%, net of any Remarketing Fee and any
other fees and commissions) of the aggregate principal amount of the
Notes and Separate Notes being remarketed in such Remarketing.
If the Remarketing Agent is able to remarket the Notes and
Separate Notes at a price equal to or greater than 100% (net of the
Remarketing Fee and any other fees and commissions) of the aggregate
principal amount of the Notes and Separate Notes (if any) (a
"Successful Remarketing"), the Remarketing Agent will remit the
proceeds attributable to the Remarketing of the Pledged Notes from such
Successful Remarketing to the Collateral Agent. The Remarketing Agent
shall deduct as a remarketing fee (the "Remarketing Fee") an amount
equal to the lesser of (i) 25 basis points (0.25%) of the aggregate
principal amount of the Pledged Notes and Separate Notes remarketed and
(ii) the amount of the proceeds of such Remarketing in excess of the
aggregate principal amount of the Pledged Notes and Separate Notes
remarketed. Upon receipt of the proceeds attributable to the
Remarketing, the Collateral Agent shall cause the Securities
Intermediary to transfer the Pledged Notes to the Purchase Contract
Agent for disposition in accordance with instructions from the
Remarketing Agent.
None of the Company, the Purchase Contract Agent, or any
Holders of Corporate Units or holders of Separate Notes whose Notes or
Separate Notes are so remarketed will otherwise be responsible for the
payment of any Remarketing Fee in connection therewith. With respect to
Separate Notes, any proceeds of the Remarketing in excess of the
Remarketing Fee attributable to the Separate Notes will be remitted to
the Custodial Agent for payment to the holders of Separate Notes. The
proceeds from the Remarketing remitted to the Collateral Agent shall be
invested by the Collateral Agent in Permitted Investments, in
accordance with the Pledge Agreement, and then applied to satisfy in
full the obligations of such Holders of Corporate Units to pay the
Purchase Price for the
31
shares of Common Stock under the related Purchase Contracts, less the
amount of any Deferred Contract Adjustment Payments payable to such
Holders, on the Purchase Contract Settlement Date. Any proceeds in
excess of those required to pay the Purchase Price and the Remarketing
Fee will be remitted to the Purchase Contract Agent for payment to the
Holders of the related Corporate Units. With respect to Pledged Notes,
any proceeds of the Remarketing in excess of the Remarketing Fee will
be remitted to the Purchase Contract Agent for payment to the Holders
of the related Corporate Units.
(ii) Prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Remarketing Date, but no earlier
than the Payment Date immediately preceding such date, Holders of
Separate Notes may elect to have their Separate Notes remarketed under
the Remarketing Agreement by delivering their Separate Notes, along
with a notice of such election, substantially in the form of Exhibit F
to the Pledge Agreement, to the Custodial Agent. After such time, such
election shall become an irrevocable election to have such Separate
Notes remarketed in such Remarketing. The Custodial Agent shall hold
Separate Notes in an account separate from the Collateral Account in
which the Pledged Notes (as defined in the Pledge Agreement) shall be
held. Holders of Separate Notes electing to have their Separate Notes
remarketed will also have the right to withdraw that election by
written notice to the Custodial Agent, substantially in the form of
Exhibit G to the Pledge Agreement, on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day immediately preceding the
Remarketing Date, upon which notice the Custodial Agent shall return
such Separate Notes to such Holder. Promptly after 11:00 a.m. on the
Business Day immediately preceding the Remarketing Date, the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal
amount of the Separate Notes to be remarketed and will deliver to the
Remarketing Agent for remarketing all such Separate Notes delivered to
the Custodial Agent pursuant to Section 5.07(c) of the Pledge Agreement
and not validly withdrawn prior to such date.
(iii) Not later than seven calendar days nor more than 15
calendar days prior to the Remarketing Date, the Company shall request
the Depositary or its nominee to notify the Beneficial Owners or
Depositary Participants holding Units of the procedures to be followed
in such Remarketing, including, in the case of a Failed Remarketing,
the procedures to be followed if a Holder wishes to exercise its Put
Right.
(iv) The Company agrees to use its best efforts to ensure
that, if required by applicable law, a registration statement with
regard to the full amount of the Notes to be remarketed in the
Remarketing shall be effective with the Securities and Exchange
Commission in a form that will enable the Remarketing Agent to rely on
it in connection with such Remarketing.
(b) (i) Unless an Early Settlement or a Cash Merger Early
Settlement has occurred, each Holder of Corporate Units shall have the
right to satisfy such Holder's obligations under the Purchase Contract
on the Purchase Contract Settlement Date in cash by notifying the
Purchase Contract Agent by use of a notice in substantially the form of
Exhibit E hereto of its intention to pay in cash ("Cash Settlement")
prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date. Promptly
following 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase
32
Contract Settlement Date, the Purchase Contract Agent shall notify the
Collateral Agent and the Indenture Trustee of the receipt of such
notices from Holders intending to make a Cash Settlement.
(ii) A Holder of a Corporate Unit who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement
shall pay the Purchase Price to the Collateral Agent for deposit in the
Collateral Account prior to 5:00 p.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract
Settlement Date, in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in immediately available
funds payable to or upon the order of the Securities Intermediary. Any
cash received by the Collateral Agent shall be invested promptly by the
Securities Intermediary in Permitted Investments pursuant to written
instructions received from the Company and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase
Contracts in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in respect
of the investment earnings from such Permitted Investments in excess of
the Purchase Price for the shares of Common Stock to be purchased by
such Holder shall be distributed to the Purchase Contract Agent when
received for payment to the Holder.
(iii) If a Holder of a Corporate Unit does not notify the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with paragraph 5.02(b)(i) above, or does notify the Purchase
Contract Agent in accordance with paragraph 5.02(b)(i) above but fails
to make such payment as required by paragraph 5.02(b)(ii) above, such
Holder shall be deemed to have consented to the disposition of the
Pledged Notes pursuant to the Remarketing as described in paragraph
5.02(a) above.
(iv) Promptly after 5:00 p.m. (New York City time) on the
fourth Business Day preceding the Purchase Contract Settlement Date,
the Collateral Agent, based on cash payments received by the Collateral
Agent pursuant to Section 5.02(b)(ii) hereof, shall promptly notify the
Purchase Contract Agent and the Indenture Trustee of the aggregate
principal amount of Notes to be tendered for purchase in the
Remarketing in a notice pursuant to the terms of the Pledge Agreement.
(c) If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket all of the Pledged Notes and Separate Notes (if any) at a
price not less than 100% (net of the Remarketing Fee and any other fees and
commissions) of the aggregate principal amount of the Pledged Notes and Separate
Notes to be remarketed in the Remarketing or a condition precedent set forth in
the Remarketing Agreement is not fulfilled, the remarketing will be deemed to
have failed (a "Failed Remarketing"). The Company shall cause a notice of a
Failed Remarketing to be published (with a copy of such notice to be provided to
the Purchase Contract Agent) on the Business Day immediately following the
Remarketing Date, in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall Street
Journal and on Bloomberg News. Following a Failed Remarketing, as of the
Purchase Contract Settlement Date, each Holder of any Pledged Notes that are
subject to a Failed Remarketing, and any Notes that are a component of a
Corporate Unit with respect to which the
33
Holder has notified the Purchase Contract Agent of an intent to effect Cash
Settlement pursuant to Section 5.02(b)(i) or Section 5.02(d)(i) and failed to
deliver the Purchase Price pursuant to Section 5.02(b)(ii) or Section
5.02(d)(ii), shall be deemed to have exercised such Holder's Put Right with
respect to such Notes and to have authorized the Collateral Agent to pay, in the
manner provided for in the Pledge Agreement, the Purchase Price for the shares
of Common Stock to be issued under the related Purchase Contract from a portion
of the Proceeds of the Put Right in full satisfaction of such Holder's
obligations under the related Purchase Contracts, provided that if the Company
shall fail to pay the Put Price when due, the Company shall be deemed to have
netted such Holder's obligation to pay the Company the Purchase Price under the
Purchase Contracts against the Company's obligation to pay the Put Price, in
full satisfaction of such Holder's obligation under the Purchase Contracts.
(d) (i) Each Holder of a Corporate Unit who intends to effect a Cash
Settlement of the underlying Purchase Contract following a Failed Remarketing
shall so notify the Purchase Contract Agent by use of a notice in substantially
the form of Exhibit E hereto prior to 11:00 a.m. (New York City time) on the
second Business Day immediately preceding the Purchase Contract Settlement Date.
Promptly following 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the Purchase Contract Settlement Date, the Purchase
Contract Agent shall notify the Collateral Agent and the Indenture Trustee of
the receipt of such notices from Holders intending to make a Cash Settlement.
(ii) A Holder of a Corporate Unit who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement
shall pay the Purchase Price to the Collateral Agent 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 Collateral Agent.
(iii) If a Holder of a Corporate Unit does not notify the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with Section 5.02(d)(i) above, or does notify the Purchase
Contract Agent in accordance with Section 5.02(d)(i) above but fails to
make such payment as required by Section 5.02(d)(ii) above, such Holder
shall be deemed to have automatically exercised such Holder's Put Right
following a Failed Remarketing as described in paragraph Section
5.02(c) above.
(e) Any distribution to Holders of any payments described above
shall be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Security Register or by wire transfer to an account specified by the Holder.
(f) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the terms of
the Pledge Agreement cause the Pledged Notes underlying the relevant
Corporate Units to be released from the Pledge, free and clear of any
security interest of the Company, and
34
transferred to the Purchase Contract Agent for delivery to the Holder
thereof or its designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase Contract
Agent shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Notes or, if no such instructions are given to the
Purchase Contract Agent by the Holder, the Purchase Contract Agent
shall hold such Notes, 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 where such property is
held).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement, Cash Merger Early Settlement or Cash Settlement, are payable solely
out of the proceeds of any Collateral pledged to secure the obligations of the
Holders, and in no event will Holders be liable for any deficiency between the
proceeds of the disposition of Collateral and the Purchase Price.
(h) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates thereof to
the Holder of the related Units unless the Company shall have received payment
for the Common Stock to be purchased thereunder in the manner herein set forth.
SECTION 5.03 Issuance of Shares of Common Stock. Unless a
Termination Event, an Early Settlement or a Cash Merger Early Settlement shall
have occurred, subject to Section 5.04(b), on the Purchase Contract Settlement
Date upon receipt of the aggregate Purchase Price payable on all Outstanding
Units, the Company shall issue and deposit with the Purchase Contract Agent, for
the benefit of the Holders of the Outstanding Units, one or more certificates
representing newly issued shares of Common Stock registered in the name of the
Purchase Contract Agent (or its nominee) as custodian for the Holders (such
certificates for shares of Common Stock, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the "Purchase Contract Settlement Fund") to which the
Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date, Early
Settlement Date or Cash Merger Early Settlement Date, as the case may be,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith in exchange
therefor a certificate representing that number of newly issued whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Units then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.09 and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, but without any interest thereon,
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Purchase
Contract Agent. If any shares of Common
35
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 (but excluding any Depositary or nominee thereof), no
such registration shall be made unless the Person requesting such registration
has paid any transfer and other taxes required by reason of such registration in
a name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
SECTION 5.04 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) Stock Dividends. In case the Company shall pay or make a dividend
or other distribution on Common Stock in Common Stock, the Settlement Rate in
effect at the close of business on the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination; and
(ii) the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately at 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
agrees that it shall not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
(2) Stock Purchase Rights. In case the Company shall issue rights,
warrants or options, other than pursuant to any dividend reinvestment plans,
share purchase plans or the Rights Agreement, to all holders of its Common Stock
(not being available on an equivalent basis to Holders of the Units upon
settlement of the Purchase Contracts underlying such Units) entitling them, for
a period expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, warrants or options, 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 of announcement of
such issuance, the Settlement Rate in effect at the close of business on the
date of such announcement 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 of such
announcement 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
36
(ii) the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date of such
announcement 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 Business Day following the date of such announcement.
The Company agrees that it shall notify the Purchase Contract Agent if any
issuance of such rights, warrants or options is cancelled or not completed
following the announcement thereof and the Settlement Rate shall thereupon be
readjusted to the Settlement Rate in effect immediately prior to the date of
such announcement. For the purposes of this subparagraph (ii), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company agrees that it shall not issue any such rights, warrants or options
in respect of shares of Common Stock held in the treasury of the Company.
(3) Stock Splits; Reverse Splits. In case outstanding shares of Common
Stock shall be subdivided or split into a greater number of shares of Common
Stock, the Settlement Rate in effect at the close of business on the day
preceding the day upon which such subdivision or split becomes effective shall
be proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of Common
Stock, the Settlement Rate in effect at the close of business on the day
preceding 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 at the opening of business on the day following the
day upon which such subdivision, split or combination becomes effective.
(4) Debt or Asset Distributions. In case the Company shall, by dividend
or otherwise, distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including shares of capital stock, securities, cash and
property but excluding any rights, warrants or options referred to in Section
5.04(a)(2), any dividend or distribution paid exclusively in cash and any
dividend or distribution referred to in Section 5.04(a)(1)), the Settlement Rate
in effect at the close of business on the date fixed for the determination of
shareholders entitled to receive such distribution shall be adjusted by dividing
such rate by a fraction of which:
(i) the numerator shall be the Current Market Price per share
of Common Stock on the date fixed for such determination less the then
fair market value (as reasonably determined by the Board of Directors,
whose determination shall be conclusive and the basis for which shall
be described in a Board Resolution) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of
Common Stock; and
(ii) the denominator shall be such Current Market Price per
share of Common Stock,
such adjustment to become effective at 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
37
which this paragraph (4) is applicable, paragraph (2) of this Section 5.04(a)
shall not be applicable. In the event that such dividend or distribution is not
so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or distribution
had not been declared.
(5) Cash Distributions. In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock exclusively cash
(excluding cash that is distributed in a Reorganization Event to which Section
5.04(b) applies) to the extent that the aggregate cash distribution pursuant to
this Section 5.04(a)(5) plus (1) all other cash distributions made exclusively
in cash within twelve months preceding the date of such cash distribution and in
which no prior adjustment pursuant to this Section or Section 5.04(a)(6) has
been made and (2) any cash and fair market value (as reasonably determined by
the Board of Directors, whose determination shall be conclusive and the basis
for which shall be described in a Board Resolution), calculated as of the
expiration of the tender or exchange referred to in Section 5.04(a)(6), of
consideration payable in respect of any tender or exchange offer (other than
consideration payable in respect of an odd-lot tender offer) by the Company or
any subsidiary of the Company for all or any portion of Common Stock expiring
within twelve months preceding the expiration of such tender or exchange offer
and in respect of which no adjustment pursuant to this Section 5.04(a)(5) has
been made, exceeds the product of $1.00 (appropriately adjusted from time to
time for any stock dividends on or subdivisions or combinations of Common Stock)
multiplied by the number of shares of Common Stock outstanding on the Record
Date for such distribution, then, in such case, the Settlement Rate shall be
increased so that the same shall equal the rate determined by dividing the
Settlement Rate in effect immediately prior to the close of business on such
record date by a fraction of which:
(i) the numerator shall be the Current Market Price of Common
Stock on such record date less the amount of cash so distributed (and
not excluded as provided above) applicable to one share of Common
Stock; and
(ii) the denominator shall be the Current Market Price of
Common Stock,
such increase to be effective immediately prior to the opening of business on
the day following the record date; provided, however, that in the event the
portion of cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price per share of Common Stock on the
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Unit shall have the right to receive upon
settlement of the Units the amount of cash such Holder would have received had
such Holder settled each Unit on the record date. In the event that such
dividend or distribution is not so paid or made, the Settlement Rate shall again
be adjusted to be the Settlement Rate which would then be in effect if such
dividend or distribution had not been declared.
(6) Tender Offers. If the Company or any subsidiary of the Company
shall make a tender or exchange offer (other than any odd-lot tender offer) for
all or any portion of the Common Stock and upon expiration of such tender or
exchange offer (as amended upon the expiration thereof) the Company or its
subsidiary shall be required to pay to shareholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as herein defined) any consideration, then if the sum of (I)
the fair market
38
value of the aggregate consideration to be paid in such tender offer or exchange
offer (as reasonably determined by the Board of Directors, whose determination
shall be conclusive and the basis for which shall be described in a Board
Resolution) plus (II) the aggregate of the cash plus the fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution), as
of the expiration of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer (other than consideration payable
in respect of any odd-lot tender offer), by the Company or any subsidiary of the
Company for all or any portion of Common Stock expiring within the twelve months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to this paragraph (6) has been made, plus (III) the
aggregate amount of any distributions to all holders of Common Stock made
exclusively in cash within the twelve months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
Section 5.04(a)(5) has been made, exceeds the product of $1.00 (appropriately
adjusted from time to time for any stock dividends on or subdivisions or
combinations of Common Stock) multiplied by the number of shares of Common Stock
outstanding (including any tendered shares) as of the last time tenders could
have been made pursuant to such tender or exchange offer (as it may be amended)
("the Expiration Time"), then, the Settlement Rate in effect at the close of
business on the day of the Expiration Time shall be adjusted by dividing it by a
fraction:
(i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per share of Common Stock on the date
of the Expiration Time and (II) the number of shares of Common Stock
outstanding (including any tendered shares) on the date of 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), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up
to any maximum specified in the terms of the tender or exchange offer,
of Purchased Shares); and
(ii) the denominator of which shall be equal to the product of
(A) the Current Market Price per share of 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"),
such adjustment to become effective at the opening of business on the date
following the date of the Expiration Time.
(7) Reclassification. The reclassification of Common Stock into
securities including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.04(b) applies)
shall be deemed to involve:
(i) a distribution of such securities other than Common Stock
to all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution"
and the "date fixed for such determination" within the meaning of
Section 5.04(a)(4)); and
39
(ii) a subdivision, split or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior
to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon
which such subdivision, split or combination becomes effective" within
the meaning of Section 5.04(a)(3)).
(8) Current Market Price. The "Current Market Price" per share of
Common Stock on any date of determination means the average of the daily Closing
Prices for the five consecutive Trading Days ending on the earlier of such date
of determination and the day before the "ex date" with respect to the issuance
or distribution requiring such computation. For purposes of this Section
5.04(a)(8), the term "ex date," when used with respect to any issuance or
distribution, shall mean the first date on which Common Stock trades regular way
on such exchange or in such market without the right to receive such issuance or
distribution.
(9) Calculation of Adjustments. All adjustments to the Settlement Rate
shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if
there is not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
thereof; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(10) Increase of Settlement Rate. The Company may, but shall not be
required to, make such increases in the Settlement Rate, in addition to those
required by this Section, as the Board of Directors considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reason.
(11) Rights Agreement. The Company has entered into a Rights Agreement
dated as of September 8, 2000 (the "Rights Agreement") with The Bank of New York
pursuant to which share purchase rights (the "Rights") have been, and may in the
future be, issued in respect of shares of Common Stock. Each share of Common
Stock issued upon settlement of any Purchase Contract pursuant to this Article
Five shall be entitled to receive the appropriate number of Rights, if any, and
the certificates representing the Common Stock issued upon such settlement shall
bear such legends, if any, in each case as provided by and subject to the terms
of the Rights Agreement as in effect at the time of such settlement. If after
the date of this Agreement the Rights separate from the Common Stock in
accordance with the provisions of the Rights Agreement so that a Holder would
not be entitled to receive any Rights in respect of the Common Stock issuable
upon settlement of such Purchase Contract, the Settlement Rate will be adjusted
as provided in Section 5.04(a)(4) on the separation date, subject to
readjustment in the event of the expiration, termination or redemption of the
Rights. In lieu of any such adjustment, the Company may amend the Rights
Agreement to provide that, on the Purchase Contract Settlement Date, Holders
will receive, in addition to the Common Stock issuable upon such settlement, the
Rights that would have attached to such shares of Common Stock if the Rights
40
had not become separated from the Common Stock pursuant to the provisions of the
Rights Agreement. If the Company hereafter adopts any stockholder rights plan
similar to the Rights Agreement, a Holder shall be entitled to receive on the
Purchase Contract Settlement Date, in addition to the shares of Common Stock
issuable upon settlement, the related rights of the Common Stock under the
future rights plan, whether or not the rights under the future stockholder
rights plan have separated from the Common Stock on the Purchase Contract
Settlement Date, but otherwise subject to the generally applicable terms of such
plan, and no additional adjustment to the Settlement Rate shall be made for the
future stockholder rights plan under Section 5.04(a)(4).
(b) Adjustment for Consolidation, Merger, Conversion or Other
Reorganization Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the shares of Common
Stock outstanding immediately prior to the merger or consolidation are
not exchanged for cash, securities or other property of the Company or
another corporation);
(ii) any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition); or
(iii) any liquidation, dissolution or termination of the
Company other than as a result of or after the occurrence of a
Termination Event
(any event described in clauses (i), (ii) and (iii) a "Reorganization Event"),
each Purchase Contract shall become, without the consent of the Holder of the
Unit representing such Purchase Contract, an agreement to purchase only the kind
of securities, cash and other property receivable upon consummation of such
Reorganization Event by a holder of Common Stock immediately prior to the
closing date of such Reorganization Event.
The amount of such securities, cash and other property receivable upon
settlement of each such Purchase Contract after the consummation of the
Reorganization Event shall be the 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. In determining the kind and amount of such securities,
cash and other property pursuant to the foregoing, it will be assumed that such
holder of Common Stock is not a Person with which the Company consolidated or
into which the Company merged or which merged into the Company or to which such
sale or transfer was made, as the case may be (any such Person, a "Constituent
Person"), or an Affiliate of a Constituent Person to the extent such
Reorganization Event provides for different treatment of Common Stock held by
Affiliates of the Company and non-affiliates and such Holder failed to exercise
its rights of election, if any, as to the kind or
41
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 5.04 the kind and amount of
securities, cash and other property receivable upon such Reorganization Event by
each Non-Electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-Electing Shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Unit shall have
the rights provided by this Section 5.04(b). Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 5.04. The above provisions of
this Section 5.04 shall similarly apply to successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with or
into another Person or any merger of another Person into the Company (other than
a merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), in each case in which 30%
or more of the total consideration paid to the Company's shareholders consists
of cash or cash equivalents (a "Cash Merger"), a Holder of a Unit may settle
("Cash Merger Early Settlement") its Purchase Contract, upon the conditions set
forth below, at the Settlement Rate in effect immediately prior to the closing
of the Cash Merger; provided that (i) the Cash Merger Early Settlement Date (as
defined below) is no later than the fifth Business Day immediately preceding the
Purchase Contract Settlement Date and (ii) no Cash Merger Early Settlement will
be permitted pursuant to this Section 5.04(b)(2) unless, at the time such Cash
Merger Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Cash Merger Early Settlement, if such a Registration
Statement is required (in the view of counsel, which need not be in the form of
a written opinion, for the Company) under the Securities Act. If such a
Registration Statement is so required, the Company covenants and agrees to use
its best efforts to (A) have in effect a Registration Statement covering any
securities to be delivered in respect of the Purchase Contracts being settled
and (B) provide a Prospectus in connection therewith, in each case in a form
that may be used in connection with such Cash Merger Early Settlement. If a
Holder effects a Cash Merger Early Settlement of some or all of its Purchase
Contracts, such Holder shall be entitled to receive, on the Cash Merger Early
Settlement Date, the aggregate amount of any Deferred Contract Adjustment
Payments and any accrued and unpaid Contract Adjustment Payments since the
immediately preceding Payment Date with respect to such Purchase Contracts. The
Company shall pay such amount as a credit against the amount otherwise payable
by the Holders to effect such Cash Merger Early Settlement.
42
Within five Business Days of the completion of a Cash Merger, the
Company shall provide written notice to Holders of Units of such completion of a
Cash Merger, which shall specify the deadline for submitting the notice to
settle early in cash pursuant to this Section 5.04(b)(2), the date on which such
Cash Merger Early Settlement shall occur (which date shall be at least five days
but not more than 20 days after the date of such written notice by the Company,
but which shall in no event be later than the fifth Business Day immediately
preceding the Purchase Contract Settlement Date) (the "Cash Merger Early
Settlement Date"), the applicable Settlement Rate and the amount (per share of
Common Stock) of cash, securities and other consideration receivable by the
Holder, including the amount of Contract Adjustment Payments receivable, upon
settlement.
Treasury Units Holders may only effect Cash Merger Early Settlement
pursuant to this Section 5.04(b)(2) in integral multiples of 40 Treasury Units.
Other than the provisions relating to timing of notice and settlement, which
shall be as set forth above, the provisions of Section 5.01(a) shall apply with
respect to a Cash Merger Early Settlement pursuant to this Section 5.04(b)(2).
In order to exercise the right to effect Cash Merger Early Settlement
with respect to any Purchase Contracts, a Holder of the Certificate evidencing
Units shall deliver, no later than 5:00 p.m. (New York City time) on the third
Business Day immediately preceding the Cash Merger Early Settlement Date, 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 "Cash
Merger Early Settlement Amount") equal to the product of (A) the Stated Amount
times (B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Cash Merger Early Settlement, less the amount of any Contract
Adjustment Payments (including, for the avoidance of doubt, any accrued and
unpaid Contract Adjustment Payments and any Deferred Contract Adjustment
Payments) payable to such Holder on the next succeeding Payment Date as a result
of such Cash Merger Early Settlement; provided that, no amount shall be deducted
for which a Record Date establishing entitlement to such amount has passed, but
before the Payment Date with respect to such amount.
If a Holder properly effects an effective Cash Merger Early Settlement
in accordance with the provisions of this Section 5.04(b)(2), the Company will
deliver (or will cause the Collateral Agent to deliver) to the Holder on the
Cash Merger Early Settlement Date:
(i) the kind and amount of securities, cash and other property
receivable upon such Cash Merger 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 Cash Merger (based on the Settlement Rate in effect at such time),
assuming such Holder of Common Stock is not a Constituent Person or an
Affiliate of a Constituent Person to the extent such Cash Merger
provides for different treatment of Common Stock held by Affiliates of
the Company and non-affiliates and such Holder failed to exercise its
rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Cash Merger (provided that
if the kind or amount of securities, cash and other property receivable
upon such Cash Merger is not
43
the same for each Non-Electing Share, then for the purpose of this
Section 5.04(b)(2), the kind and amount of securities, cash and other
property receivable upon such Cash Merger 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), plus accrued and unpaid Contract
Adjustment Payments. For the avoidance of doubt, for the purposes of
determining the Adjusted Applicable Market Value (in connection with
determining the appropriate Settlement Rate to be applied in the
foregoing sentence), the date of the closing of the Cash Merger shall
be deemed to be the Purchase Contract Settlement Date;
(ii) the Notes or Treasury Securities, as the case may be,
related to the Purchase Contracts with respect to which the Holder is
effecting a Cash Merger Early Settlement; and
(iii) if so required under the Securities Act, a Prospectus as
contemplated by this Section 5.04(b)(2).
(c) All calculations and determinations pursuant to this Section
5.04 shall be made by the Company or its agent and the Purchase Contract Agent
shall have no responsibility with respect thereto.
(d) The Units of the Holders who do not elect Cash Merger Early
Settlement in accordance with the foregoing will continue to remain outstanding
and be subject to settlement on the Purchase Contract Settlement Date in
accordance with the terms hereof.
SECTION 5.05 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.04 (or if
the Company is not aware of such occurrence, as soon as practicable after
becoming so aware):
(i) compute the adjusted Settlement Rate in accordance with
Section 5.04 and prepare and transmit to the Purchase Contract Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) provide a written notice to the Holders of the Units of
the occurrence of such event and a statement in reasonable detail
setting forth the method by which the adjustment to the Settlement Rate
was determined and setting forth the adjusted Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of Units to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall be fully authorized and protected in relying on any Officers' Certificate
delivered pursuant to Section 5.05(a)(i) and any adjustment contained therein
and the Purchase Contract Agent shall not be deemed to have knowledge of any
adjustment unless and
44
until it has received such certificate. The Purchase Contract Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Purchase Contract; and the Purchase
Contract Agent makes no representation with respect thereto. The Purchase
Contract Agent shall not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a Purchase Contract
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article.
SECTION 5.06 Termination Event; Notice. (a) The Purchase Contracts
and all obligations and rights of the Company and the Holders thereunder,
including, without limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment Payments (including any
accrued and unpaid Contract Adjustment Payments and any Deferred Contract
Adjustment Payments), if the Company shall have such obligation, and the rights
and obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Purchase Contract Agent or the Company, if, prior to or on the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon and after the occurrence of a Termination Event, the Units shall
thereafter represent the right to receive the Notes or the Treasury Securities,
as the case may be, forming part of such Units, in accordance with the
provisions of Section 5.04 of the Pledge Agreement.
(b) Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice of such event to the Purchase Contract Agent, the Collateral Agent and
the Holders, at their addresses as they appear in the Security Register.
SECTION 5.07 Early Settlement. (a) Subject to and upon compliance
with the provisions of this Section 5.07, at the option of the Holder thereof,
Purchase Contracts underlying Units may be settled early ("Early Settlement") at
any time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that no
Early Settlement will be permitted pursuant to this Section 5.07 unless, at the
time such Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration
Statement is so required, the Company covenants and agrees to use its best
efforts to (A) have in effect a Registration Statement covering any securities
to be delivered in respect of the Purchase Contracts being settled and (B)
provide a Prospectus in connection therewith, in each case in a form that may be
used in connection with such Early Settlement.
(b) In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, at any time prior to 5:00 p.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
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
45
(payable to the Company in immediately available funds) in an amount (the "Early
Settlement Amount") equal to the sum of (A) the product of (I) the Stated Amount
times (II) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (B) if such delivery is made with
respect to any Purchase Contracts during the period from the close of business
on any Record Date next preceding any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments
(including any Deferred Contract Adjustment Payments) payable on such Payment
Date with respect to such Purchase Contracts.
Except as contemplated in the immediately preceding sentence, no
payment shall be made upon Early Settlement of any Purchase Contract on account
of any Contract Adjustment Payments accrued on such Purchase Contract since the
immediately preceding Payment Date or on account of any dividends on the Common
Stock issued upon such Early Settlement. However, a Holder effecting an Early
Settlement of some or all of its Purchase Contracts shall be entitled to
receive, on the date it receives the shares of Common Stock referred to in
Section 5.07(d), the amount of any Deferred Contract Adjustment Payments with
respect to such Purchase Contracts, calculated as of the immediately preceding
Payment Date. The amount of such Deferred Contract Adjustment Payments shall be
credited against the amount otherwise payable by the Holder to effect such Early
Settlement as set forth in Section 5.07(b) above. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying any Units 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 Units and if such requirements
are first satisfied after 5:00 p.m. (New York City time) on a Business Day or on
a day that is not a Business Day, the "Early Settlement Date" with respect to
such Units 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 5.06
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.
Holders of Treasury Units may only effect Early Settlement pursuant to
this Section 5.07 in integral multiples of 40 Treasury Units.
Upon Early Settlement of the Purchase Contracts, the rights of the
Holders to receive and the obligation of the Company to pay any accrued and
unpaid Contract Adjustment Payments since the immediately preceding Payment Date
and any future Contract Adjustment Payments with respect to such Purchase
Contracts shall immediately and automatically terminate.
(c) Upon Early Settlement of Purchase Contracts by a Holder of the
related Units, the Company shall issue, and the Holder shall be entitled to
receive, [_____] shares of Common Stock on account of each Purchase Contract as
to which Early Settlement is effected
46
(the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in
the same manner and at the same time as the Settlement Rate is adjusted pursuant
to Section 5.04.
(d) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(i) the shares of Common Stock issuable upon Early Settlement
of Purchase Contracts to be issued and delivered, together with payment
in lieu of any fraction of a share, as provided in Section 5.09; and
(ii) the related Notes in the case of Corporate Units, or the
related Treasury Securities, in the case of Treasury Units, to be
released from the Pledge by the Collateral Agent and transferred, in
each case, to the Purchase Contract Agent for delivery to the Holder
thereof or its designee.
(e) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Notes or Treasury
Securities, as the case may be, from the Securities Intermediary, as applicable,
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 Units:
(i) transfer to the Holder the Notes or Treasury Securities,
as the case may be, forming a part of such Units,
(ii) deliver to the Holder a certificate or certificates for
the full number of shares of Common Stock issuable upon such Early
Settlement, together with payment in lieu of any fraction of a share,
as provided in Section 5.09, and
(iii) if so required under the Securities Act, deliver a
Prospectus for the shares of Common Stock issuable upon such Early
Settlement as contemplated by Section 5.07(a).
(f) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(g) A Holder of a Unit who effects Early Settlement may elect to
have the Notes no longer a part of a Corporate Unit remarketed in accordance
with the provisions of Section 5.02.
SECTION 5.08 Intentionally Omitted.
SECTION 5.09 No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued or delivered upon
settlement on the Purchase Contract Settlement Date, or upon Early Settlement or
Cash Merger Early Settlement of any Purchase Contracts. If Certificates
evidencing more than one Purchase
47
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 Cash 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 percentage of such fractional share times the
Applicable Market Value calculated as if the date of such settlement were the
Purchase Contract Settlement Date. The Company shall provide the Purchase
Contract Agent from time to time with sufficient funds to permit the Purchase
Contract Agent to make all cash payments required by this Section 5.09 in a
timely manner.
SECTION 5.10 Charges and Taxes. The Company will pay all stock
transfer and similar taxes attributable to the initial issuance and delivery of
the shares of Common Stock pursuant to the Purchase Contracts; provided,
however, that the Company shall not be required to pay any such tax or taxes
which may be payable in respect of any exchange of or substitution for a
Certificate evidencing a Unit 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 Units evidenced thereby, other than in the name of the Purchase
Contract Agent, as custodian for such Holder, and the Company shall not be
required to issue or deliver such share certificates or Certificates unless or
until the Person or Persons requesting the transfer or issuance thereof shall
have paid to the Company the amount of such tax or shall have established to the
satisfaction of the Company that such tax has been paid.
SECTION 5.11 Contract Adjustment Payments.
(a) Subject to Section 5.11(d), the Company shall pay, on each
Payment Date, the Contract Adjustment Payments payable in respect of each
Purchase Contract to the Person in whose name a Certificate is registered at the
close of business on the Record Date relating to such Payment Date. The Contract
Adjustment Payments will be payable at the office of the Purchase Contract Agent
in the Borough of Manhattan, New York City maintained for that purpose. If the
book-entry system for the Units has been terminated, the Contract Adjustment
Payments will be payable, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address as it appears on
the Security Register, or by wire transfer to the account designated by such
Person by a prior written notice to the Purchase Contract Agent. If any date on
which Contract Adjustment Payments are to be made is not a Business Day, then
payment of the Contract Adjustment Payments payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest in
respect of any such delay); provided that if such Business Day is in the next
succeeding calendar year, then payment of the Contract Adjustment Payments will
be made on the Business Day immediately preceding such Business Day. Contract
Adjustment Payments payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. The Contract Adjustment Payments will
accrue from the date of issuance of the Purchase Contracts.
48
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay future Contract Adjustment Payments (including any accrued
Contract Adjustment Payments and any Deferred Contract Adjustment Payments)
shall cease.
(c) Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including as a
result of a Collateral Substitution or the recreation of Corporate Units) any
other Certificate shall carry the right to accrued and unpaid Contract
Adjustment Payments and Deferred Contract Adjustment Payments, which right was
carried by the Purchase Contracts underlying such other Certificates.
(d) In the case of any Unit with respect to which Early Settlement
or Cash Merger Early Settlement of the underlying Purchase Contract is effected
on a date that is after any Record Date and prior to or on the next succeeding
Payment Date, Contract Adjustment Payments otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such Early Settlement
or Cash Merger Early Settlement, and such Contract Adjustment Payments shall be
paid to the Person in whose name the Certificate evidencing such Unit 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
Unit with respect to which Early Settlement or Cash Merger Early Settlement of
the underlying Purchase Contract is effected, future Contract Adjustment
Payments that would otherwise be payable after the Early Settlement Date or Cash
Merger Early Settlement Date with respect to such Purchase Contract shall not be
payable.
(e) The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.
(f) In the event (x) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject to the
provisions of Section 5.11(h) below, that (i) a default shall have occurred and
be continuing with respect to the payment of principal, interest or any other
monetary amounts due and payable on any Senior Indebtedness and such default
shall have continued beyond the period of grace, if any, specified in the
instrument evidencing such Senior Indebtedness (and the Purchase Contract Agent
shall have received written notice thereof from the Company or one or more
holders of Senior Indebtedness or their representative or representatives or the
trustee or trustees under any indenture pursuant to which any such Senior
Indebtedness may have been issued), or (ii) the maturity of any Senior
Indebtedness shall have been accelerated because of a default in respect of such
Senior Indebtedness (and the Purchase Contract Agent shall have received written
notice thereof from the Company or one or more holders of Senior Indebtedness or
their representative or representatives or the trustee or trustees under any
indenture pursuant to which any such Senior Indebtedness may have been issued),
then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of clause (x) above, payment of all
amounts due or to become due upon all Senior Indebtedness and, in the
case of subclauses (i) and (ii) of clause (y) above,
49
payment of all amounts due thereon, or provision shall be made for such
payment in money or money's worth, before the Holders of any of the
Units are entitled to receive any Contract Adjustment Payments on the
Purchase Contracts underlying the Units;
(ii) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities, to
which the Holders of any of the Units would be entitled except for the
provisions of Section 5.11(e) through (q), including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated to
the payment of such Contract Adjustment Payments on the Purchase
Contracts underlying the Units, shall be paid or delivered by the
Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the representative or representatives of the holders of Senior
Indebtedness or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness, before any payment or distribution is made of such
Contract Adjustment Payments to the Holders of such Units; and
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being
subordinated to the payment of Contract Adjustment Payments on the
Purchase Contracts underlying the Units, shall be received by the
Purchase Contract Agent or the Holders of any of the Units when such
payment or distribution is prohibited pursuant to Section 5.11(e)
through (q), such payment or distribution shall be paid over to the
representative or representatives of the holders of Senior Indebtedness
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
(g) For purposes of Section 5.11(e) through (q), the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
Person provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in Section 5.11(e) through
(q) with respect to such Contract Adjustment Payments on the Units to the
payment of all Senior Indebtedness which may at the time be outstanding;
provided that (i) the indebtedness or guarantee of indebtedness, as the case may
be, that constitutes Senior Indebtedness is assumed by the Person, if any,
resulting from any such reorganization or readjustment, and (ii) the rights of
the holders of the Senior Indebtedness are
50
not, without the consent of each such holder adversely affected thereby, altered
by such reorganization or readjustment;
(h) Any failure by the Company to make any payment on or perform any
other obligation under Senior Indebtedness, other than any indebtedness incurred
by the Company or assumed or guaranteed, directly or indirectly, by the Company
for money borrowed (or any deferral, renewal, extension or refunding thereof) or
any indebtedness or obligation as to which the provisions of Section 5.11(e)
through (g) shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed, guaranteed or otherwise
created such indebtedness or obligation, shall not be deemed a default or event
of default if (i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Company which is in
full force and effect and is not subject to further review, including a judgment
that has become final by reason of the expiration of the time within which a
party may seek further appeal or review, and (B) in the event a judgment that is
subject to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay of
execution shall have been obtained pending such appeal or review.
(i) Subject to the irrevocable payment in full of all Senior
Indebtedness, the Holders of the Units shall be subrogated (equally and ratably
with the holders of all obligations of the Company which by their express terms
are subordinated to Senior Indebtedness of the Company to the same extent as
payment of the Contract Adjustment Payments in respect of the Purchase Contracts
underlying the Units is subordinated and which are entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all such Contract Adjustment
Payments owing on the Units shall be paid in full, and as between the Company,
its creditors other than holders of such Senior Indebtedness and the Holders, no
such payment or distribution made to the holders of Senior Indebtedness by
virtue of Section 5.11(e) through (q) that otherwise would have been made to the
Holders shall be deemed to be a payment by the Company on account of such Senior
Indebtedness, it being understood that the provisions of Section 5.11(e) through
(q) are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
(j) Nothing contained in Section 5.11(e) through (q) or elsewhere in
this Agreement or in the Units is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders such Contract Adjustment Payments on the Units as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other than the holders of Senior Indebtedness, nor shall anything
herein or therein prevent the Purchase Contract Agent or any Holder from
exercising all remedies otherwise permitted by applicable law upon default under
this Agreement, subject to the rights, if any, under Section 5.11(e) through
(q), of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
51
(k) Upon payment or distribution of assets of the Company referred
to in Section 5.11(e) through (q), the Purchase Contract Agent and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or Purchase Contract Agent or other
person making any payment or distribution, delivered to the Purchase Contract
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to these Section 5.11(e) through (q).
(l) The Purchase Contract Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Purchase Contract Agent determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to Section 5.11(e) through (q), the Purchase Contract Agent may request
such Person to furnish evidence to the reasonable satisfaction of the Purchase
Contract Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
Section 5.11(e) through (q), and, if such evidence is not furnished, the
Purchase Contract Agent may defer payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
(m) Nothing contained in Section 5.11(e) through (q) shall affect
the obligations of the Company to make, or prevent the Company from making,
payment of the Contract Adjustment Payments, except as otherwise provided in
these Section 5.11(e) through (q).
(n) Each Holder of Units, by its acceptance thereof, authorizes and
directs the Purchase Contract Agent on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in Section
5.11 (e) through (q) and appoints the Purchase Contract Agent its
attorney-in-fact, as the case may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Purchase
Contract Agent of any fact known to the Company that would prohibit the making
of any payment of moneys to or by the Purchase Contract Agent in respect of the
Units pursuant to the provisions of this Section. Notwithstanding the provisions
of Section 5.11(e) through (q) or any other provisions of this Agreement, the
Purchase Contract Agent shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of moneys to or by the
Purchase Contract Agent, or the taking of any other action by the Purchase
Contract Agent, unless and until the Purchase Contract Agent shall have received
written notice thereof mailed or delivered to the Purchase Contract Agent at its
Corporate Trust Office from the Company, any Holder, or the holder or
representative of any Senior Indebtedness; provided that if at least two
Business Days prior to the date upon which by the terms hereof any such moneys
may become
52
payable for any purpose, the Purchase Contract Agent shall not have received
with respect to such moneys the notice provided for in this Section, then,
anything herein contained to the contrary notwithstanding, the Purchase Contract
Agent shall have full power and authority to receive such moneys and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to or on or after such date.
(p) The Purchase Contract Agent in its individual capacity shall be
entitled to all the rights set forth in this Section with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness and nothing in this Agreement shall deprive the Purchase
Contract Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
(r) Nothing in this Section 5.11 shall apply to claims of, or
payments to, the Purchase Contract Agent under or pursuant to Section 7.07.
(s) With respect to the holders of Senior Indebtedness, (i) the
duties and obligations of the Purchase Contract Agent shall be determined solely
by the express provisions of this Agreement; (ii) the Purchase Contract Agent
shall not be liable to any such holders if it shall, acting in good faith,
mistakenly pay over or distribute to the Holders or to the Company or any other
Person cash, property or securities to which any holders of Senior Indebtedness
shall be entitled by virtue of this Section 5.11 or otherwise; (iii) no implied
covenants or obligations shall be read into this Agreement against the Purchase
Contract Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a
fiduciary as to such holders.
SECTION 5.12 Deferral of Contract Adjustment Payments. (a) The
Company has the right at any time, and from time to time, to defer payment of
all or part of the Contract Adjustment Payments in respect of each Purchase
Contract by extending the period for payment of Contract Adjustment Payments to
any subsequent Payment Date (an "Extension Period"), but not beyond the Purchase
Contract Settlement Date (or, with respect to Purchase Contracts for which an
effective Early Settlement or Cash Merger Early Settlement has occurred, the
Early Settlement Date or Cash Merger Early Settlement Date, as the case may be).
Prior to the expiration of any Extension Period, the Company may further extend
such Extension Period to any subsequent Payment Date, but not beyond the
Purchase Contract Settlement Date (or any applicable Early Settlement Date or
Cash Merger Early Settlement Date).
If the Company so elects to defer Contract Adjustment Payments, the
Company shall pay additional Contract Adjustment Payments on such deferred
installments of Contract Adjustment Payments at a rate equal to [__]% per annum,
compounding on each succeeding Payment Date, until such deferred installments
are paid in full (such deferred installments of Contract Adjustment Payments
together with the accrued additional Contract Adjustment Payments thereon, being
referred to herein as the "Deferred Contract Adjustment Payments").
53
At the end of each Extension Period, including as the same may be
extended as provided above, or, in the event of an effective Early Settlement or
Cash Merger Early Settlement, on the Early Settlement Date or Cash Merger Early
Settlement Date, as the case may be, the Company shall pay all Deferred Contract
Adjustment Payments then due in the manner set forth in Section 5.11(a) (in the
case of the end of an Extension Period), in the manner set forth in Section
5.07(b) (in the case of an Early Settlement) or in the manner set forth in
Section 5.04(b)(2) (in the case of a Cash Merger Early Settlement) to the extent
such amounts are not deducted from the amount otherwise payable by the Holder in
the case of a Cash Settlement, any Early Settlement or any Cash Merger Early
Settlement. In the event of an Early Settlement, the Company shall pay all
Deferred Contract Adjustment Payments due on the Purchase Contracts being
settled early through the Payment Date immediately preceding the applicable
Early Settlement Date. In the event of a Cash Merger Early Settlement, the
Company shall pay all Deferred Contract Adjustment Payments due on the Purchase
Contracts being settled on the Cash Merger Early Settlement Date to but
excluding such Cash Merger Early Settlement Date.
Upon termination of any Extension Period and the payment of all
Deferred Contract Adjustment Payments and all accrued and unpaid Contract
Adjustment Payments then due, the Company may commence a new Extension Period,
provided that such Extension Period, together with all extensions thereof, may
not extend beyond the Purchase Contract Settlement Date (or any applicable Early
Settlement Date or Cash Merger Early Settlement Date). Except in the case of an
Early Settlement or Cash Merger Early Settlement, no Contract Adjustment
Payments shall be due and payable during an Extension Period except at the end
thereof, except that prior to the end of such Extension Period, the Company, at
its option, may prepay on any Payment Date all or any portion of the Deferred
Contract Adjustment Payments accrued during the then elapsed portion of such
Extension Period.
(b) The Company shall give written notice to the Purchase Contract
Agent (and the Purchase Contract Agent shall give notice thereof to Holders of
Purchase Contracts) of its election to extend any period for the payment of
Contract Adjustment Payments, the expected length of any such Extension Period
and any extension of any Extension Period, at least five Business Days before
the earlier of (i) the Record Date for the Payment Date on which Contract
Adjustment Payments would have been payable except for the election to begin or
extend the Extension Period or (ii) the date the Purchase Contract Agent is
required to give notice to any securities exchange or to Holders of Purchase
Contracts of such Record Date or such Payment Date.
(c) The Company shall give written notice to the Purchase Contract
Agent (and the Purchase Contract Agent shall give notice thereof to Holders of
Purchase Contracts) of the end of an Extension Period or its election to pay any
portion of the Deferred Contract Adjustment Payments on a payment date prior to
the end of an Extension Period, at least five Business Days before the earlier
of (i) the Record Date for the Payment Date on which such Extension Period shall
end or such payment of Deferred Contract Adjustment Payments shall be made or
(ii) the date the Purchase Contract Agent is required to give notice to any
securities exchange or to Holders of Purchase Contracts of such Record Date or
such Payment Date.
(d) In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until all Deferred Contract
Adjustment Payments have
54
been paid, the Company shall not, and shall not permit any of its subsidiaries
to, declare or pay dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect to, any of its
capital stock or their capital stock; provided that the Company's subsidiaries
will not be restricted from declaring or paying such dividends, or making such
distributions, to the Company or any of the Company's other subsidiaries as a
result of the foregoing.
SECTION 5.13 Additional Amounts. (a) All payments made by the
Company under or with respect to the Units (including interest payments payable
on the Notes and Contract Adjustment Payments on the Purchase Contracts that
form such Units) shall be made free and clear of and without withholding or
deduction for or an account of any present or future tax, duty, levy, impost,
assessment or other governmental charge (hereinafter "Taxes") imposed or levied
by or on behalf of the Republic of The Marshall Islands or any jurisdiction from
or through which payment on the Units is made, or any political subdivision
thereof, or by any authority or agency therein or thereof having power to tax (a
"Taxing Jurisdiction"), unless the Company is required to withhold or deduct
Taxes by law or by the interpretation or administration thereof. If the Company
is so required to withhold or deduct any amount of interest for or on account of
Taxes from any payment made under or with respect to the Units, the Company
shall pay such additional amounts of interest ("Additional Amounts") as may be
necessary so that the net amount received by each Holder (including Additional
Amounts) after such withholding or deduction shall not be less than the amount
the Holder would have received if such Taxes had not been withheld or deducted;
provided that the Company shall not pay Additional Amounts in connection with
any Taxes that are imposed due to any of the following ("Excluded Additional
Amounts"):
(i) the Holder or Beneficial Owner has some connection with
the Taxing Jurisdiction other than merely holding the Units or
receiving payments on the Units (such as citizenship, nationality,
residence, domicile, or existence of a business, a permanent
establishment, a dependent agent, a place of business or a place of
management present or deemed present within the taxing jurisdiction);
(ii) any Tax imposed on or measured by net income;
(iii) the Holder or Beneficial Owner fails to comply with any
certification, identification or other reporting requirements
concerning its nationality, residence, identity or connection with the
Taxing Jurisdiction, if (A) such compliance is required by applicable
law, regulation, administrative practice or treaty as a precondition to
exemption from all or a part of the Tax, (B) the Holder or Beneficial
Owner is able to comply with such requirements without undue hardship
and (C) at least 30 calendar days prior to the first payment date with
respect to which such requirements under the applicable law,
regulation, administrative practice or treaty shall apply, the Company
notified such Holder that such Holder shall be required to comply with
such requirements;
(iv) the Holder fails to present (where presentation is
required) its Unit within 30 calendar days after we have made available
to the Holder a payment, provided that the Company shall pay Additional
Amounts which a Holder would have been entitled to had
55
the Unit owned by such Holder been present on any day (including the
last day) within such 30-day period;
(v) any estate, inheritance, gift, value added, use or sales
Taxes or any similar Taxes;
(vi) where any Additional Amounts are imposed on a payment on
the Units to an individual and are required to be made pursuant to any
European Union Directive on the taxation of savings implementing the
conclusions of the ECOFIN Council meeting of November 26-27, 2000 or
any law implementing or complying with, or introduced in order to
conform, to such Directive; or
(vii) where the Holder or Beneficial Owner could avoid any
Additional Amounts by requesting that a payment on the Units be made
by, or presenting the relevant Units for payment to, another paying
agent located in a Member State of the European Union.
The Company shall also (1) make such withholding or deduction and (2)
remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Company shall furnish to the holders of the
Units, within 30 calendar days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company.
(b) The Company shall indemnify and hold harmless each Holder for the
amount (other than Excluded Additional Amounts) of (1) any Taxes not withheld or
deducted by the Company and levied or imposed by a Taxing Jurisdiction and paid
by such Holder as a result of payments made under or with respect to the Units,
(2) any liability (including penalties, interest and expenses) arising therefrom
or with respect thereto, and (3) any Taxes imposed by a Taxing Jurisdiction with
respect to any reimbursement under clause (1) or (2) of this paragraph.
At least 30 calendar days prior to each date on which any payment under
or with respect to the Units is due and payable, if the Company is aware that it
will be obligated to pay Additional Amounts with respect to such payment, the
Company shall deliver to the Indenture Trustee and the Purchase Contract Agent
an Officers' Certificate stating the fact that such Additional Amounts shall be
payable, the amounts so payable and such other information necessary to enable
the Indenture Trustee or the Purchase Contract Agent to pay such Additional
Amounts to Holders on the Payment Date. Whenever in the Indenture or the
Purchase Contract Agreement there is mentioned, in any context, the payment of
any amount payable under or with respect to any Unit, such mention shall be
deemed to include mention of the payment of Additional Amounts provided for in
this section to the extent that, in such context, Additional Amounts are, were
or would be payable in respect thereof.
The Company shall pay any stamp, administrative, court, documentary,
excise or property taxes arising in a Taxing Jurisdiction in connection with the
Additional Amounts and shall indemnify the Holders of the Units for any such
taxes paid by the Holders of the Units.
ARTICLE VI
REMEDIES
56
SECTION 6.01 Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock. Each Holder of a
Unit shall have the right, which is absolute and unconditional, (i) subject to
Article Five, to receive each Contract Adjustment Payment due hereunder with
respect to the Purchase Contract comprising part of such Unit on the respective
Payment Date for such Unit and (ii) except upon and following a Termination
Event, to purchase shares of Common Stock pursuant to such Purchase Contract
and, in each such case, to institute suit for the enforcement of any such right
to receive Contract Adjustment Payments and the right to purchase shares of
Common Stock, and such rights shall not be impaired without the consent of such
Holder.
SECTION 6.02 Restoration of Rights and Remedies. If any Holder has
instituted any proceeding to enforce any right or remedy under this Agreement
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to such Holder, then and in every such case, subject
to any determination in such proceeding, the Company and such Holder shall be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of such Holder shall continue as though no
such proceeding had been instituted.
SECTION 6.03 Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Certificates in Section 3.10(f), no right or remedy herein
conferred upon or reserved to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.04 Delay or Omission Not Waiver. No delay or omission of
any Holder to exercise any right upon a default or remedy upon a default shall
impair any such right or remedy or constitute a waiver of any such right. Every
right and remedy given by this Article or by law to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by such Holders.
SECTION 6.05 Undertaking for Costs. All parties to this Agreement
agree, and each Holder of a Unit, by its acceptance of such Unit shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Agreement, or in any suit
against the Purchase Contract Agent for any action taken, suffered or omitted by
it as Purchase Contract Agent, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
costs against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; provided
that the provisions of this Section shall not apply to any suit instituted by
the Purchase Contract Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Units, or to
any suit instituted by any Holder for the enforcement of interest on any Notes
or Contract Adjustment Payments on or after the respective Payment Date therefor
in respect of any Unit held by such Holder, or for enforcement
57
of the right to purchase shares of Common Stock under the Purchase Contracts
constituting part of any Unit held by such Holder.
SECTION 6.06 Waiver of Stay or Extension Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Agreement; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Purchase Contract Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
THE PURCHASE CONTRACT AGENT
SECTION 7.01 Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Units, such duties and
only such duties as are specifically set forth in this Agreement, the
Pledge Agreement and the Remarketing Agreement and no implied covenants
or obligations shall be read into this Agreement, the Pledge Agreement
or the Remarketing Agreement against the Purchase Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part, may,
with respect to the Units, 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 or the Remarketing 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, the Pledge Agreement or the Remarketing Agreement, as
applicable (but need not confirm or investigate the accuracy of the
mathematical calculations or other facts stated therein).
(b) No provision of this Agreement, the Pledge Agreement or the
Remarketing 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 Section 7.01(b) shall not be construed to limit the effect of
Section 7.01(a);
(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 conclusively determined by a court of competent jurisdiction that
the Purchase Contract Agent was grossly negligent in ascertaining the
pertinent facts; and
58
(3) no provision of this Agreement or the Pledge Agreement or the
Remarketing Agreement shall require the Purchase Contract Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement, the Pledge Agreement and the Remarketing 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 and the Remarketing Agreement in its capacity as Purchase
Contract Agent.
SECTION 7.02 Notice of Default. Within 30 days after the occurrence
of any default by the Company hereunder of which a Responsible Officer of the
Purchase Contract Agent has actual knowledge, the Purchase Contract Agent shall
transmit by mail to the Company and the Holders of Units, as their names and
addresses appear in the Security Register, notice of such default hereunder,
unless such default shall have been cured or waived.
SECTION 7.03 Certain Rights of Purchase Contract Agent. Subject to
the provisions of Section 7.01:
(1) the Purchase Contract Agent may, in the absence of bad faith,
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;
(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 or the Remarketing Agreement, the Purchase Contract Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting to take any action hereunder or
thereunder, the Purchase Contract Agent (unless other evidence be
herein specifically prescribed in this Agreement) may, in the absence
of bad faith on its part, conclusively rely upon an Officers'
Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder and the advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
59
(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 entitled to examine the
relevant 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, attorneys, custodians or nominees or an Affiliate of the
Purchase Contract Agent and the Purchase Contract Agent shall not be
responsible for any misconduct or negligence on the part of any agent,
attorney, custodian or nominee or an Affiliate of the Purchase Contract
Agent appointed with due care by it hereunder; provided that the
appointment of agents pursuant to this paragraph (6) are subject to the
prior written consent of the Company, which consent shall not be
unreasonably withheld;
(7) the Purchase Contract Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at
the request or direction of any of the Holders pursuant to this
Agreement, unless such Holders shall have offered to the Purchase
Contract Agent security or indemnity satisfactory to the Purchase
Contract Agent against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(8) the Purchase Contract Agent shall not be liable for any action
taken, suffered, or omitted to be taken by it in the absence of bad
faith or gross negligence by it;
(9) the Purchase Contract Agent shall not be deemed to have notice of
any adjustment to the Settlement Rate, the occurrence of a Termination
Event or any default hereunder unless a Responsible Officer of the
Purchase Contract Agent has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by a
Responsible Officer at the Corporate Trust Office of the Purchase
Contract Agent, and such notice references the Units and this
Agreement;
(10) the Purchase Contract Agent may request that the Company deliver
an Officers' Certificate setting forth the names of individuals and/or
titles of officers authorized at such time to take specified actions
pursuant to this Agreement, which Officers' Certificate may be signed
by any person authorized to sign an Officers' Certificate, including
any person specified as so authorized in any such certificate
previously delivered and not superseded;
(11) the rights, privileges, protections, immunities and benefits given
to the Purchase Contract Agent, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by,
the Purchase Contract Agent in each of its capacities hereunder, and to
each officer, director, employee of the Purchase Contract Agent and
each agent, custodian and other Person employed, in any capacity
whatsoever, by the Purchase
60
Contract Agent to act hereunder and shall survive the resignation or
removal of the Purchase Contract Agent and the termination of this
Agreement; and
(12) The Purchase Contract Agent shall not be required to initiate or
conduct any litigation or collection proceedings hereunder and shall
have no responsibilities with respect to any default hereunder except
as expressly set forth herein.
SECTION 7.04 Not Responsible for Recitals or Issuance of Units. The
recitals contained herein, in the Pledge Agreement, the Remarketing Agreement
and in the Certificates shall be taken as the statements of the Company, and the
Purchase Contract Agent assumes no responsibility for their accuracy or
validity. The Purchase Contract Agent makes no representations as to the
validity or sufficiency of either this Agreement or of the Units, or of the
Pledge Agreement or the Pledge or the Collateral and shall have no
responsibility for perfecting or maintaining the perfection of any security
interest in the Collateral. The Purchase Contract Agent shall not be accountable
for the use or application by the Company of the proceeds in respect of the
Purchase Contracts.
SECTION 7.05 May Hold Units. Any Security Registrar or any other
agent of the Company, or the Purchase Contract Agent and its Affiliates, in
their individual or any other capacity, may become the owner or pledgee of Units
and may otherwise deal with the Company, the Collateral Agent or any other
Person with the same rights it would have if it were not Security Registrar or
such other agent, or the Purchase Contract Agent. The Company may become the
owner or pledgee of Units.
SECTION 7.06 Money Held in Custody. Money held by the Purchase
Contract Agent in custody hereunder need not be segregated from the Purchase
Contract Agent's other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder or agreed in writing with the Company.
SECTION 7.07 Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all services
rendered by it hereunder, under the Pledge Agreement and under the
Remarketing Agreement as the Company and the Purchase Contract Agent
shall from time to time agree in writing;
(2) except as otherwise expressly provided for herein, to reimburse the
Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract
Agent in accordance with any provision of this Agreement, the Pledge
Agreement and the Remarketing Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel) in connection with the negotiation, preparation, execution and
delivery and performance of this Agreement, the Pledge Agreement and
the Remarketing Agreement and any modification, supplement or waiver of
any of the terms thereof, except any such expense, disbursement or
advance as may be attributable to its negligence, willful misconduct or
bad faith; and
61
(3) to indemnify and defend the Purchase Contract Agent and any
predecessor Purchase Contract Agent (and each of its directors,
officers, agents and employees, collectively, the "Indemnitees") for,
and to hold each Indemnitee harmless against, any loss, claim, damage,
fine, penalty, liability or expense (including reasonable fees and
expenses of counsel) incurred without negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the
acceptance or administration of its duties hereunder and under the
Pledge Agreement and the Remarketing Agreement, including the
Indemnitees' reasonable costs and expenses of defending themselves
against any claim (whether asserted by the Company, a Holder or any
other person) or liability in connection with the exercise or
performance of any of the Purchase Contract Agent's powers or duties
hereunder or thereunder.
The provisions of this Section shall survive the resignation and
removal of the Purchase Contract Agent and the termination of this Agreement.
SECTION 7.08 Corporate Purchase Contract Agent Required;
Eligibility. There shall at all times be a Purchase Contract Agent hereunder
which shall be a Person organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or being
a member of a bank holding company having) a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal or State
authority and having a corporate trust office in the Borough of Manhattan, New
York City, if there be such a Person in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such Person publishes or files reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published or filed. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.09 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.
62
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Units delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after such Act, the
Purchase Contract Agent being removed may petition any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section 310(b) of
the TIA, as if the Purchase Contract Agent were an indenture trustee
under an indenture qualified under the TIA, and shall fail to resign
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Unit for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible under
Section 7.08 and shall fail to resign after written request therefor by
the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public
officer shall take charge or control of the Purchase Contract Agent or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Unit for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Purchase Contract Agent and the appointment of a successor Purchase Contract
Agent.
(e) If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Purchase Contract Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Purchase Contract Agent
shall have been so appointed by the Company and accepted appointment in the
manner required by Section 7.10, any Holder who has been a bona fide Holder of a
Unit for at least six months, on behalf of itself and all others similarly
situated, or the Purchase Contract Agent may petition at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Security 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.
63
(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 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 Section 7.10(a).
(c) No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be qualified and eligible under this Article Seven.
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 successor of the
Purchase Contract Agent hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract Agent
may adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Purchase
Contract Agent had itself authenticated and executed such Units.
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 Security Registrar.
(b) If three or more Holders (herein referred to as "Applicants")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a Unit 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 Units and is
64
accompanied by a copy of the form of proxy or other communication which such
Applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Purchase Contract Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
SECTION 7.13 No Obligations of Purchase Contract Agent. Except to
the extent otherwise expressly provided in this Agreement, the Purchase Contract
Agent assumes no obligations and shall not be subject to any liability under
this Agreement, the Pledge Agreement, the Remarketing Agreement or any Purchase
Contract in respect of the obligations of the Holder of any Unit thereunder. The
Company agrees, and each Holder of a Certificate, by its 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, directors, employees or agents be
liable under this Agreement, the Pledge Agreement or the Remarketing Agreement
to any third party for indirect, incidental, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Purchase Contract Agent
and regardless of the form of action.
SECTION 7.14 Tax Compliance.
(a) The Purchase Contract Agent, on its own behalf and on behalf of
the Company, will comply with all applicable certification, information
reporting and withholding (including "backup" withholding) requirements imposed
by applicable tax laws, regulations or administrative practice with respect to
(i) any payments made with respect to the Units or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Units. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any written direction received from the Company with respect
to the execution or certification of any required documentation and the
application of such requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement conclusively
rely on any such direction in accordance with the provisions of Section
7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
65
SECTION 8.01 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 surrender any right or power herein conferred upon the Company;
(4) make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.04(b); or
(5) except as provided for in Section 5.04, cure any ambiguity, correct
or supplement any provisions herein which may be inconsistent with any
other provisions herein, or make any other provisions with respect to
such matters or questions arising under this Agreement, provided that
such action shall not adversely affect the interests of the Holders in
any material respect.
SECTION 8.02 Supplemental Agreements with Consent of Holders. (a)
With the consent of the Holders of not less than a majority of the Outstanding
Units voting together as one class, including without limitation the consent of
the Holders obtained in connection with a tender or an exchange offer, 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 Units;
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,
(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, unless
such change is not adverse to the Holders, impair the right of the
Holder of any Purchase Contract to receive distributions on the related
Collateral or otherwise adversely affect the Holder's rights in or to
such Collateral or adversely alter the rights in or to such Collateral;
(3) impair the Holders' right to institute suit for the enforcement of
any Purchase Contract or any Contract Adjustment Payments;
(4) reduce the number of shares of Common Stock or the amount of any
other property to be purchased pursuant to any Purchase Contract,
increase the price to purchase
66
shares of Common Stock or any other property upon settlement of any
Purchase Contract or change the Purchase Contract Settlement Date or
the right to Early Settlement or Cash Merger Early Settlement or
otherwise adversely affect the Holder's rights under the Purchase
Contract;
(5) reduce any Contract Adjustment Payments or change any place where,
or the coin or currency in which, any Contract Adjustment Payment is
payable; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any modification or amendment
to the provisions of this Agreement, the Purchase Contracts or the
Pledge Agreement;
provided that if any amendment or proposal referred to above would
adversely affect only the Corporate Units or the Treasury Units, then
only the affected class of Holders as of the record date for the
Holders entitled to vote thereon will be entitled to vote on such
amendment or proposal, and such amendment or proposal shall not be
effective except with the consent of Holders of not less than a
majority of such class; and provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such
class affected thereby shall be required to approve any amendment or
proposal specified in clauses (1) through (6) above.
(b) It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 8.03 Execution of Supplemental Agreements. In executing, or
accepting the additional agencies created by, any supplemental agreement
permitted by this Article or the modifications thereby of the agencies created
by this Agreement, the Purchase Contract Agent shall be entitled to receive, and
(subject to Sections 7.01 and 7.03) shall be fully authorized and protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such supplemental agreement is authorized or permitted by this
Agreement and that any and all conditions precedent to the execution and
delivery of such supplemental agreement have been satisfied. The Purchase
Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties, privileges, protections, indemnities, liabilities or immunities under
this Agreement or otherwise.
SECTION 8.04 Effect of Supplemental Agreements. Upon the execution
of any supplemental agreement under this Article, this Agreement shall be
modified in accordance therewith, and such supplemental agreement shall form a
part of this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of the Holders and
delivered hereunder, shall be bound thereby.
SECTION 8.05 Reference to Supplemental Agreements. Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any supplemental agreement pursuant to this Article may, and shall
if required by the Purchase Contract Agent, bear a notation in form approved by
the Purchase Contract Agent as to any
67
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
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01 Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions. The Company covenants that it
will not, in a single transaction or series of related transactions,
(a) consolidate with, convert into, or merge with or into, any other
Person or permit any other Person to consolidate with, convert into, or merge
with or into the Company or
(b) directly or indirectly sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any Person,
unless in the case of clauses (a) and (b) of this covenant:
(1) in a transaction in which the Company does not survive or in
which the Company sells, assigns, transfers, leases, conveys or otherwise
disposes of all or substantially all of its assets, the successor entity to the
Company is organized under (i) the laws of the United States or any State
thereof or the District of Columbia or (ii) the laws of the Republic of The
Marshall Islands and which, in the case of any of the events under subclause (i)
or (ii) shall expressly assume, by a supplemental agreement executed and
delivered to the Purchase Contract Agent, in a form reasonably satisfactory to
the Purchase Contract Agent, all of the Company's obligations, as modified
pursuant to Section 9.02 hereof, under the Purchase Contracts, the Purchase
Contract Agreement, the Pledge Agreement and the Remarketing Agreement;
(2) immediately before and after giving effect to such transaction,
neither the Company nor any successor entity shall be in default of payment
obligations under the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement and the Remarketing Agreement or in material default in the
performance of any other covenants under such agreements; and
(3) the Company and the successor Person have delivered to the
Purchase Contract Agent an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger, conveyance, lease, acquisition or
transfer and such supplemental agreement comply with this Article Nine and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
SECTION 9.02 Rights and Duties of Successor Person. In case of any
such merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance and upon any such assumption by a successor Person in accordance with
Section 9.01, such successor Person shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as the Company. Such
successor Person thereupon may cause to be signed, and
68
may issue either in its own name or in the name of the Company, any or all of
the Certificates evidencing Units 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 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 Units
which such successor Person 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 Units
thereafter to be issued as may be appropriate.
ARTICLE X
COVENANTS
SECTION 10.01 Performance under Purchase Contracts. The Company
covenants and agrees for the benefit of the Holders from time to time of the
Units that it will duly and punctually perform its obligations under the
Purchase Contracts in accordance with the terms of the Purchase Contracts and
this Agreement.
SECTION 10.02 Maintenance of Office or Agency. (a) The Company will
maintain in the Borough of Manhattan, New York City an office or agency where
Certificates may be presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts on the Purchase Contract
Settlement Date or upon Early Settlement or Cash Merger Early Settlement and for
transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or recreation of Corporate Units and where notices and
demands to or upon the Company in respect of the Units 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.
The Company initially designates the Corporate Trust Office of the Purchase
Contract Agent as such office of the Company. 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.
(b) The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such
69
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
Units the Corporate Trust Office and appoints the Purchase Contract Agent at its
Corporate Trust Office as paying agent in such city.
SECTION 10.03 Company to Reserve Common Stock. The Company shall at
all times prior to the Purchase Contract Settlement Date reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock the full number of shares of Common Stock issuable against tender
of payment in respect of all Purchase Contracts constituting a part of the Units
evidenced by Outstanding Certificates.
SECTION 10.04 Covenants as to Common Stock. The Company covenants
that all shares of Common Stock which may be issued against tender of payment in
respect of any Purchase Contract constituting a part of the Outstanding Units
will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable.
SECTION 10.05 Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120 days after
the end of each fiscal year of the Company (which as of the date hereof is
December 31) ending after the date hereof, an Officers' Certificate, stating
whether or not to the knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
SECTION 10.06 ERISA. Each Holder from time to time of the Units that
is a Plan or who used assets of a Plan to purchase Units hereby represents that
either (i) no portion of the assets used by such Holder to acquire the Corporate
Units constitutes assets of the Plan or (ii) the purchase or holding of the
Corporate Units by such purchaser or transferee will not constitute a non-exempt
prohibited transaction under Section 406 of ERISA or Section 4973 of the Code or
similar violation under any applicable laws.
SECTION 10.07 Tax Treatment. The Company covenants and agrees, and
by purchasing a Treasury Unit or a Corporate Unit each Holder agrees, for United
States federal, state and local income and franchise tax purposes, to (i) treat
a Holder's acquisition of the Treasury Units or Corporate Units as the
acquisition of the Treasury Securities or Notes, as the case may be, and
Purchase Contracts constituting the Treasury Units or the Corporate Units, as
the case may be, (ii) treat each Holder as the owner of the applicable interest
in the Collateral Account, including the Notes or the Treasury Securities and
(iii) treat each Note as indebtedness of the Company.
[SIGNATURES ON THE FOLLOWING PAGE]
70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
TEEKAY SHIPPING CORPORATION
By:
--------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
EXHIBIT A
(FORM OF FACE OF CORPORATE UNIT CERTIFICATE)
[IF THIS CERTIFICATE IS TO BE A GLOBAL CERTIFICATE, INSERT:]
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 1 CUSIP No. [ ]
Number of Corporate Units: [ ]
TEEKAY SHIPPING CORPORATION
Corporate Units
This Corporate Units Certificate certifies that [Cede & Co.] [_______] is the
registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only - or such other number of Corporate Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto], which number shall not exceed [5,000,000]. Each Corporate Unit
consists of (i) the beneficial ownership by the Holder of one $25.00 principal
amount Note due May 16, 2006 (the "Note") of Teekay Shipping Corporation, a
corporation duly incorporated and existing under the laws of the Republic of The
Marshall Islands (the "Company"), subject to the Pledge of such Note by such
Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with the Company. All capitalized terms
used herein which are defined in the Purchase Contract Agreement (as defined on
the reverse hereof) have the meaning set forth therein.
A-1
Pursuant to the Pledge Agreement, the Note constituting part of each
Corporate Unit evidenced hereby has been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract comprising part of such Corporate Unit.
The Purchase Contract Agreement and Pledge Agreement provide that all
payments with respect to any of the Pledged Notes constituting part of the
Corporate Units received by the Securities Intermediary shall be paid by wire
transfer in same day funds (i) in the case of (A) interest on Pledged Notes and
(B) any payments of the principal amount of any Notes that have been released
from the Pledge pursuant to the Pledge Agreement, to the Purchase Contract at an
account designated by the Purchase Contract Agent, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Securities
Intermediary (provided that in the event such payment is received by the
Securities Intermediary on a day that is not a Business Day or after 12:30 p.m.,
New York City time, on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding Business Day) and
(ii) in the case of payments with respect to the principal amount of the Notes,
to the Company on the Purchase Contract Settlement Date (as described herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the Corporate Units of which such
Pledged Notes are a part under the Purchase Contracts forming a part of such
Corporate Units. Interest on the Notes forming part of a Corporate Units
evidenced hereby, which are payable quarterly in arrears on February 16, May 16,
August 16 and November 16 of each year, commencing May 16, 2003 a ("Payment
Date"), shall, subject to receipt thereof by the Purchase Contract Agent from
the Securities Intermediary, be paid to the Person in whose name this Corporate
Units Certificate (or a Predecessor Corporate Units Certificate) is registered
at the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on February
16, 2006 (the "Purchase Contract Settlement Date"), at a price equal to $25.00
(the "Stated Amount"), a number of newly issued shares of common stock, par
value $0.001 per share ("Common Stock"), of the Company, equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract, 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 (i) cash
received from a Holder or (ii) payment received in respect of the Notes pledged
to secure the obligations under such Purchase Contract of the Holder of the
Corporate Units of which such Purchase Contract is a part.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Corporate Units as an acquisition of the Notes
and Purchase Contracts constituting the Corporate Units, (ii) treat itself as
owner of the applicable interest in the Collateral Account, including the Notes
and (iii) treat each Note as indebtedness of the Company.
A-2
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Corporate Unit evidenced hereby, an amount
(the "Contract Adjustment Payments") equal to [___]% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Corporate Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.
Interest on the Notes and the Contract Adjustment Payments will be
payable at the office of the Purchase Contract Agent in New York City. If the
book-entry system for the Corporate Units has been terminated, the Contract
Adjustment Payments will be payable, at the option of the Company, by check
mailed to the address of the Person entitled thereto at such Person's address as
it appears on the Security Register, or by wire transfer to the account
designated by such Person by a prior written notice to the Purchase Contract
Agent.
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 Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
TEEKAY SHIPPING CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts)
By: THE BANK OF NEW YORK,
not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Dated:
A-4
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Corporate Units Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK, as
Purchase Contract Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Dated:
A-5
(FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of February [_], 2003 (as may be supplemented from
time to time, the ("Purchase Contract Agreement"), between the Company and The
Bank of New York, as Purchase Contract Agent (including its successors
hereunder, the ("Purchase Contract Agent"), to which Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Corporate Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock equal to the Settlement
Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The ("Settlement Rate") is equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is
greater than or equal to $[_____] (the "Threshold Appreciation Price"),
[_____] shares of Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than the Threshold
Appreciation Price but greater than $[_____] (the "Reference Price"),
the number of shares of Common Stock per Purchase Contact having a
value equal to the Stated Amount divided by the Adjusted Applicable
Market Value; and
(3) if the Adjusted Applicable Market Value is less than or equal to
the Reference Price, [_____] shares of Common Stock per Purchase
Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date subject to adjustments set forth under Section 5.04 of the Purchase
Contract Agreement.
A-6
The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "Closing Price" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the close of the principal trading
session (or, if no closing price is reported, the last reported sale
price) per share on the New York Stock Exchange, Inc. (the "NYSE") on
such date;
(2) if Common Stock is not listed for trading on the NYSE on any such
date, the closing sale price (or, if no closing price is reported, the
last reported sale price) per share as reported in the composite
transactions for the principal United States national or regional
securities exchange on which Common Stock is so listed;
(3) if Common Stock is not so listed on a United States national or
regional securities exchange, the last closing sale price per share as
reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid price for
Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization; or
(5) if such bid price is not available, the market value of Common
Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate Units Certificate may pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby, by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement or from the proceeds of the
A-7
Remarketing of the related Pledged Notes or the automatic Put Right. A Holder of
Corporate Units who (1) does not, on or prior to 5:00 p.m. (New York City time)
on the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, notify the Purchase Contract Agent of its intention to effect a Cash
Settlement, or who does so notify the Purchase Contract Agent but fails to make
an effective Cash Settlement prior to 5:00 p.m. (New York City time) on the
fourth Business Day immediately preceding the Purchase Contract Settlement Date,
or (2) on or prior to 5:00 p.m. (New York City time) on the fifth Business Day
prior to the Purchase Contract Settlement Date, does not make an effective Early
Settlement, shall pay the Purchase Price, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder, for the shares of Common
Stock to be delivered under the related Purchase Contract from the proceeds of
the sale of the related Pledged Notes held by the Collateral Agent unless the
Holder has previously made a Cash Merger Early Settlement. Such sale will be
made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement
on the Remarketing Date.
As provided in the Purchase Contract Agreement, upon the occurrence of
a Failed Remarketing, unless a Holder of a Pledged Note has notified the
Purchase Contract Agent of its intent to effect a Cash Settlement of the
Purchase Contract and delivered the Purchase Price to the Collateral Agent
pursuant to the Purchase Contract Agreement, such Holder shall be deemed to have
exercised such Holder's Put Right and to have elected to pay the Purchase Price
under the Purchase Contract out of a portion of the proceeds from the Put Right
in full satisfaction of such Holder's obligations under the Purchase Contract.
In the event of the Company's failure to pay the Put Price when due, the Company
shall be deemed to have netted such Holder's obligation to pay the Company the
Purchase Price under the Purchase Contracts against the Company's obligations to
pay the Put Price, in full satisfaction of such Holder's obligation under the
Purchase Contracts.
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.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Notes. A
Corporate Unit shall thereafter represent the right to receive the Note in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Under the terms of the Pledge Agreement and the Purchase Contract
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Notes, but only to the
extent instructed in writing by the Holders. Upon receipt of notice of any
meeting at which holders of Notes are entitled to vote or upon the solicitation
of consents, waivers or proxies of holders of Notes, the Purchase Contract Agent
shall, as soon as practicable thereafter, mail to the Corporate Units Holders a
notice:
A-8
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Corporate Units Holder on the record date set by
the Purchase Contract Agent therefor (which, to the extent possible,
shall be the same date as the record date for determining the holders
of Notes entitled to vote) shall be entitled to instruct the Purchase
Contract Agent as to the exercise of the voting rights pertaining to
the Notes constituting a part of such Holder's Corporate Units; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Corporate Units Holders on such record
date, received by the Purchase Contract Agent at least six days prior to such
meeting, the Purchase Contract Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum aggregate principal amount of Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Purchase Contract Agent
shall abstain from voting the Note evidenced by such Corporate Unit.
The Corporate Units Certificates are issuable only in registered form
and only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Units Certificate will be registered and
Corporate Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute a Treasury Security for a Note, thereby creating Treasury Units,
shall be responsible for any fees or expenses payable in connection therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying a Corporate Units remains in effect, such Corporate
Units shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Corporate Units in respect of the Notes and
Purchase Contract constituting such Corporate Units may be transferred and
exchanged only as a Corporate Unit.
Subject to the conditions set forth in the Purchase Contract Agreement,
the Holder of corporate Units may substitute, at anytime prior to 5:00 p.m. (New
York city time) on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, for the Pledged Notes securing such Holder's
obligations under the related Purchase Contracts, Treasury Securities in an
aggregate principal amount at maturity equal to the aggregate principal amount
of the Pledged Notes in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral Substitution,
each Unit for which such Pledged Treasury Securities secures the Holder's
obligation under the Purchase Contract shall be referred to as a ("Treasury
Unit"). A Holder may make such Collateral Substitution only in integral
multiples of 40 Corporate Units for 40 Treasury Units.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Corporate Units
A-9
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments
will be payable at the office of the Purchase Contract Agent in New York City.
If the book-entry system for the Corporate Units has been terminated, the
Contract Adjustment Payments will be payable, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Security Register, or by wire transfer to the
account designated by such Person by a prior written notice to the Purchase
Contract Agent.
The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be) as set forth in the
Purchase Contract Agreement. If the Company so elects to defer Contract
Adjustment Payments, the Company shall pay additional Contract Adjustment
Payments on such deferred installments of Contract Adjustment Payments at a rate
equal to [___]% per annum, compounding on each succeeding Payment Date, until
such deferred installments are paid. In the event that the Company elects to
defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be), each Holder will receive
on the Purchase Contract Settlement Date, Early Settlement Date or Cash Merger
Early Settlement Date, as applicable, the Deferred Contract Adjustment Payments
to the extent such fees are not deducted from the Settlement Price in the case
of a Cash Settlement or any Early Settlement or Cash Merger Early Settlement as
set forth in the Purchase Contract Agreement.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any 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 of the Termination Event to the Purchase Contract
Agent, the Collateral Agent and the Holders, at their addresses as they appear
in the Security Register. Upon and after the occurrence of a Termination Event,
the Collateral Agent shall release the Notes from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Units may be settled early at any time prior to 5:00 p.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date ("Early Settlement") as provided in the Purchase Contract
Agreement. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contract evidenced by this Certificate, the Holder of
this Corporate Units Certificate shall deliver to the Purchase Contract Agent at
the Corporate Trust Office an Election to Settle Early form 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:
A-10
(i) the sum of (A) the product of (I) the Stated Amount times
(II) the number of Purchase Contracts with respect to which the Holder
has elected to effect Early Settlement, plus (B) if such delivery is
made with respect to any Purchase Contracts during the period from the
close of business on any Record Date next preceding any Payment Date
to the opening of business on such Payment Date, an amount equal to
the Contract Adjustment Payments (including any Deferred 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
Units, the Pledged Notes 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
Unit as to which Early Settlement is effected equal to [_____] shares of Common
Stock per Purchase Contract (the "Early Settlement Rate"). The Early Settlement
Rate shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Corporate Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Corporate Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Corporate Units, the Pledged Notes shall be released from
the Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Corporate Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Corporate Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Corporate Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Corporate Units evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Purchase Contract Agent to enter into and perform the Purchase
Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Notes 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 with respect to the aggregate
principal amount of the Pledged Notes on the Purchase Contract Settlement Date
shall be paid by the Collateral Agent to the Company in satisfaction of such
Holder's obligations under such Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.
A-11
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflicts of law provisions thereof.
Prior to due presentment of this Certificate for registration of
transfer, 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 Units Certificate is registered as the owner of the
Corporate Units evidenced hereby for the purpose of receiving payments of
interest payable on the Notes, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
A-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT:___________________ Custodian _______________________
(cust) (minor)
Under Uniform Gifts to Minors Act of ________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in
common Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Corporate Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Corporate Units Certificates on the books of Teekay Shipping Corporation,
with full power of substitution in the premises.
Dated: _______________ Signature: _______________________________
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Corporate Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature: _______________________________
Guarantee: _______________________________
A-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon settlement on or after the Purchase Contract Settlement Date of
the Purchase Contracts underlying the number of Corporate Units evidenced by
this Corporate Units Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: ________
----------------------------------------
Signature
Signature Guarantee:
----------------------------------------
(if assigned to another person)
If shares are to be registered in the name
of and delivered to a Registered Holder
Person other than the Holder, please (i)
print such Person's name and address and
(ii) provide a guarantee of your
signature:
Please print name and address of Registered Holder:
Name: Name:
------------------------------ -----------------------------------
Address: Address:
--------------------------- -------------------------------
Social Security or other
Taxpayer Identification
Number, if any__________________________________________
A-14
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Corporate Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement following a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts underlying the number
of Corporate Units evidenced by this Corporate Units Certificate specified
below. The undersigned Holder directs that a certificate for shares of Common
Stock or other securities deliverable upon such [Early Settlement] [Cash Merger
Early Settlement] be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Corporate Units Certificate
representing any Corporate Units evidenced hereby as to which [Early Settlement]
[Cash 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 Notes deliverable upon such
[Early Settlement] [Cash 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
will pay any transfer tax payable incident thereto.
Dated:
--------------- ----------------------------------------
Signature
Signature Guarantee: ____________________________
Number of Units evidenced hereby as to which [Early Settlement] [Cash Merger
Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Corporate
Units Certificates are to be registered in
the name of and delivered to and Pledged
Notes are to be transferred to a Person
other than the Holder, please print such
Person's name and address:
Registered Holder:
Name: Name:
-------------------------------- --------------------------------
Address: Address:
----------------------------- -----------------------------
Social Security or other
Taxpayer Identification
Number, if any _______________________________________
Transfer Instructions for Pledged Notes transferable upon [Early Settlement]
[Cash Merger Early Settlement] or a Termination Event:
A-15
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Corporate Units of this Global Certificate is [______].
The following increase or decreases in this Global Certificate have been made:
Amount of increase in Amount of decrease in Number of Corporate Units
Number of corporate Units Number of Corporate evidenced by this Global Signature of authorized
evidenced by the Global Units evidenced by the Certificate following such Signatory of Purchase
Certificate Global Certificate decrease or increase Contract Agent
- ------------------------- ---------------------- -------------------------- ------------------------
A-16
EXHIBIT B
(FORM OF FACE OF TREASURY UNIT CERTIFICATE)
[IF THIS CERTIFICATE IS TO BE A GLOBAL CERTIFICATE, INSERT:]
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, 55 WATER STREET, NEW YORK, NEW YORK 10004, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO., AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL BECAUSE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 1 CUSIP No. ______________
Number of Treasury Units: 0
Teekay Shipping Corporation
Treasury Units
This Treasury Units Certificate certifies that [Cede & Co.]
[__________________] is the registered Holder of the number of Treasury Units
set forth above [For inclusion in Global Certificates only - or such other
number of Treasury Units as is reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto], which number shall not exceed
[________]. Each Treasury Unit consists of (i) a 1/40th undivided beneficial
ownership interest of a Treasury Security having a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Teekay Shipping Corporation, a
corporation duly organized and existing under the laws of the Republic of The
Marshall Islands (the "Company"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement (as defined on the reverse hereof)
have the meaning set forth therein.
B-1
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising part of such Treasury Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Treasury Units
Certificate to purchase, and the Company, to sell, on February 16, 2006 (the
"Purchase Contract Settlement Date"), at a price equal to $25.00 (the "Stated
Amount"), a number of newly issued shares of common stock, par value $0.001 per
share ("Common Stock"), of the Company, equal to the Settlement Rate, unless
prior to or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event, an Early Settlement or a Cash Merger Early Settlement with
respect to such Purchase Contract, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of the proceeds from the
Treasury Securities at maturity pledged to secure the obligations of the Holder
under such Purchase Contract of the Treasury Units of which such Purchase
Contract is a part.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Treasury Units as an acquisition of the Treasury
Securities and Purchase Contracts constituting the Treasury Units and (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Treasury Securities.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Treasury Unit evidenced hereby, an amount
(the "Contract Adjustment Payments") equal to [____]% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Treasury Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.
Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the
Corporate Units has been terminated, the Contract Adjustment Payments will be
payable, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Security
Register, or by wire transfer to the account designated by such Person by a
prior written notice to the Purchase Contract Agent.
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 Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company and the Holder specified above have caused this
instrument to be duly executed.
Teekay Shipping Corporation
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase
Contracts)
By: THE BANK OF NEW YORK,
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Authorized Officer
Dated:
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned Purchase
Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
------------------------------------
Authorized Officer
Dated:
B-4
(REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of February __, 2003 (as such may be supplemented
from time to time, the "Purchase Contract Agreement") between the Company and
The Bank of New York, as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of newly issued shares of Common Stock equal to the Settlement
Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "Settlement Rate" is equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is
greater than or equal to $[______] (the "Threshold Appreciation
Price"), [_____] shares of Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than the Threshold
Appreciation Price but greater than $[_____] (the "Reference Price"),
the number of shares of Common Stock per Purchase Contact having a
value equal to the Stated Amount divided by the Adjusted Applicable
Market Value; and
(3) if the Adjusted Applicable Market Value is less than or equal to
the Reference Price, [______] shares of Common Stock per Purchase
Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby that is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.
B-5
The "Adjusted Applicable Market Value" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "Closing Price" per share of Common Stock on any date of
determination means the:
(1) closing sale price as of the close of the principal trading session
(or, if no closing price is reported, the last reported sale price) per
share on the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price (or, if no closing price is reported,
the last reported sale price) per share as reported in the composite
transactions for the principal United States national or regional
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 last closing sale price per share as
reported by The Nasdaq Stock Market, Inc.;
(4) if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the market value of the Common
Stock on such date as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and
(2) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary
market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Purchase Price for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement of each such Purchase
B-6
Contract or by applying a principal amount of the Pledged Treasury Securities
underlying such Holder's Treasury Unit equal to the Stated Amount of such
Purchase Contract to the purchase of the Common Stock. A Holder of Treasury
Units who on or prior to 5:00 p.m. (New York City time) on the fifth Business
Day prior to the Purchase Contract Settlement Date, does not make an effective
Early Settlement shall pay the Purchase Price, less the amount of any Deferred
Contract Adjustment Payments payable to such Holder, for the shares of Common
Stock to be issued under the related Purchase Contract from the proceeds of the
Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have 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.
The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be) as set forth in the
Purchase Contract Agreement. If the Company so elects to defer Contract
Adjustment Payments, the Company shall pay additional Contract Adjustment
Payments on such deferred installments of Contract Adjustment Payments at a rate
equal to [ ]% per annum, compounding on each succeeding Payment Date, until such
deferred installments are paid. In the event that the Company elects to defer
the payment of Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date (or, in the event of an effective Early
Settlement or Cash Merger Early Settlement, the Early Settlement Date or Cash
Merger Early Settlement Date, as the case may be), each Holder will receive on
the Purchase Contract Settlement Date, Early Settlement Date or Cash Merger
Early Settlement Date, as applicable, the aggregate amount of Deferred Contract
Adjustment Payments to the extent such fees are not deducted from the Settlement
Price in the case of a Cash Settlement or any Early Settlement or Cash Merger
Early Settlement as set forth in the Purchase Contract Agreement.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any 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 Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Treasury Unit. A Treasury Unit shall
thereafter represent the right to receive the Proceeds of the Treasury Security
forming a part of such Treasury Unit, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.
The Treasury Units Certificates are issuable only in registered form
and only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged
B-7
as provided in the Purchase Contract Agreement. The Security Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents permitted by the Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange, but
the Company and the Purchase Contract Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. A Holder who elects to substitute Notes, for Treasury Securities,
thereby recreating Corporate Units, shall be responsible for any fees or
expenses associated therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a Treasury Unit
remains in effect, such Treasury Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Treasury
Unit in respect of the Treasury Security and the Purchase Contract constituting
such Treasury Unit may be transferred and exchanged only as a Treasury Unit.
A Holder of Treasury Units may recreate, at any time prior to 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, Corporate Units by delivering to the
Securities Intermediary Notes with an aggregate principal amount, equal to the
aggregate principal amount at maturity of the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such substitution, the Holder's Units shall be referred to as a "Corporate
Unit". Any such creation of Corporate Units may be effected only in multiples of
40 Treasury Units for 40 Corporate Units.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Holder, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Security Register.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Treasury Unit shall thereafter
represent the right to receive the interest in the Treasury Security forming a
part of such Treasury Unit, 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
underlying Units 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 Contract evidenced by this
B-8
Certificate, the Holder of this Treasury Units Certificate shall deliver to the
Purchase Contract Agent at the Corporate Trust Office an Election to Settle
Early form 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:
(ii) the sum of (A) the product of (I) the Stated Amount times
(II) the number of Purchase Contracts with respect to which the Holder
has elected to effect Early Settlement, plus (B) if such delivery is
made with respect to any Purchase Contracts during the period from the
close of business on any Record Date next preceding any Payment Date
to the opening of business on such Payment Date, an amount equal to
the Contract Adjustment Payments (including any Deferred 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
Units, the Pledged Treasury Securities underlying such Units shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive a number of shares of Common Stock on account of each
Purchase Contract forming part of a Treasury Unit as to which Early Settlement
is effected equal to [ ] shares of Common Stock per Purchase Contract (the
"Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Treasury Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Treasury Units, the Pledged Treasury Securities underlying
such Treasury Units shall be released from the Pledge as provided in the Pledge
Agreement.
Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Treasury Units evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Purchase Contract Agent to enter into and perform the Purchase
Contract
B-9
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying this Treasury Units
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged Treasury Securities
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law provisions thereof.
Prior to due presentment of this Certificate for registration or
transfer, 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 Units Certificate is registered as the owner of the
Treasury Units evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
B-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this
instrument, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: __________________________ Custodian ________________________
(cust) (minor)
Under Uniform Gifts to Minors Act of _______________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
(Please insert Social Security or Taxpayer I.D.
or other Identifying Number of Assignee)
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________ attorney to transfer said
Treasury Units Certificates on the books of Teekay Shipping Corporation, with
full power of substitution in the premises.
Dated:
--------------- ----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Treasury Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
-------------------
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon settlement on or after the Purchase Contract Settlement Date of
the Purchase Contracts underlying the number of Treasury Units evidenced by this
Treasury Units Certificate be registered in the name of, and delivered, together
with a check in payment for any fractional share, to the undersigned at the
address indicated below unless a different name and address have been indicated
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident thereto.
Dated:
--------------- ----------------------------------------
Signature
Signature Guarantee:
----------------------------------------
(if assigned to another person)
If shares are to be registered in the name
of and delivered to a Person other than
the Holder, please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name: Name:
-------------------------------- --------------------------------
Address: Address:
----------------------------- -----------------------------
Social Security or other
Taxpayer Identification
Number, if any
-----------------------
B-12
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury Units Certificate hereby irrevocably
exercises the option to effect [Early Settlement] [Cash Merger Early Settlement
upon a Cash Merger] in accordance with the terms of the Purchase Contract
Agreement with respect to the Purchase Contracts underlying the number of
Treasury Units evidenced by this Treasury Units Certificate specified below. The
option to effect [Early Settlement] [Cash Merger Early Settlement] may be
exercised only with respect to Purchase Contracts underlying Treasury Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock or
other securities deliverable upon such [Early Settlement] [Cash Merger Early
Settlement] be registered in the name of, and delivered, together with a check
in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which Cash 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 Treasury Securities deliverable upon such [Early
Settlement] [Cash 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 will pay any
transfer tax payable incident thereto.
Dated:
--------------- ----------------------------------------
Signature
Signature Guarantee:
--------------------
Number of Units evidenced hereby as to which [Early Settlement] [Cash Merger
Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury
Units Certificates are to be registered in
the name of and delivered to and Pledged
Treasury Securities are to be transferred
to a Person other than the Holder, please
print such Person's name and address:
REGISTERED HOLDER Please print name and
address of Registered Holder:
Name: Name:
-------------------------------- --------------------------------
Address: Address:
----------------------------- -----------------------------
Social Security or other
Taxpayer Identification
B-13
Number, if any
-----------------------
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
B-14
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Treasury Units of this Global Certificate is 0. The
following increases or decreases in this Global Certificate have been made:
Amount of increase in Amount of decrease in Number of Treasury Units
Number of Treasury Units Number of Treasury Units evidenced by this Global Signature of authorized
evidenced by the Global evidenced by the Global Certificate following such Signatory of Purchase
Certificate Certificate decrease or increase Contract Agent
- ------------------------ ------------------------ -------------------------- ------------------------
B-15
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
The Purchase Contract Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division
Re: [_______ Corporate Units] [_______ Treasury Units] of Teekay Shipping
Corporation, a corporation duly incorporated and existing under the laws of the
Republic of The Marshall Islands (the "Company").
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate principal amount of [Notes] [Treasury Securities] in
exchange for the [Pledged Notes] [Pledged Treasury Securities] held in the
Collateral Account, in accordance with the Pledge Agreement, dated as of
February __, 2003 (the "Pledge Agreement"; unless otherwise defined herein,
terms defined in the Pledge Agreement are used herein as defined therein),
between you, the Company, the Collateral Agent, the Custodial Agent and the
Securities Intermediary. The undersigned Holder has paid all applicable fees and
expenses relating to such exchange. The undersigned Holder hereby instructs you
to instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Notes] [Pledged Treasury Securities] related to such
[Corporate Units] [Treasury Units].
Date:
Signature
------------------------------
Signature Guarantee:
-------------------
Please print name and address of
Registered Holder:
Name: Name:
-------------------------------- --------------------------------
Address: Address:
----------------------------- -----------------------------
Social Security or other
Taxpayer Identification
Number, if any
-----------------------
C-1
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
Attention:
Telecopy:
---------------
Re: [__________ Corporate Units] [______ Treasury Units] of Teekay Shipping
Corporation, a corporation duly incorporated and existing under the laws of the
Republic of The Marshall Islands (the "Company")
Please refer to the Purchase Contract Agreement, dated as of February
__, 2003 (the "Purchase Contract Agreement"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the holders of Corporate Units and Treasury Units
from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Notes] [the Treasury Securities] compromising a portion of your ownership
interest in _____ [Corporate Units] [Treasury Units] have been released and are
being held by us for your account pending receipt of transfer instructions with
respect to such [Notes][Treasury Securities] (the "Released Securities").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [Corporate
Units][Treasury Units] effected through book-entry or by delivery to us of your
[Corporate Units Certificate][Treasury Units Certificate], we shall transfer the
Released Securities by book-entry transfer or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any distributions thereon, shall be
held in our name, or a nominee in trust for your benefit, until such time as
such [Corporate Units][Treasury Units] are transferred or your [Corporate Units
Certificate] [Treasury Units Certificate] is surrendered or satisfactory
evidence is provided that such [Corporate Units Certificate][Treasury Units
Certificate] has been destroyed, lost or stolen, together with any
indemnification that we or the Company may require.
Date: By: THE BANK OF NEW YORK,
as the Purchase Contract Agent
Name:
----------------------------------
Title: Authorized Signatory
D-1
EXHIBIT E
NOTICE TO SETTLE BY CASH
The Bank of New York
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division
Re: _______ Corporate Units of Teekay Shipping Corporation a corporation duly
incorporated and existing under the laws of the Republic of The Marshall Islands
(the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Purchase Contract Agreement, dated as of February __,
2003 (the "Purchase Contract Agreement"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 5:00 p.m. (New York City time) on the fourth 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 with respect to _____ Purchase Contracts
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 Units.
Date:
----------------------------------------
Signature
Signature Guarantee:
-------------------
Please print name and address of Registered Holder:
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Purchase Contract through Remarketing)
The Bank of New York
The Collateral Agent
101 Barclay Street
New York, New York 10286
Fax: (212) 815-5802/03
Attn: Corporate Trust Division
Re: __________ Corporate Units of Teekay Shipping Corporation, a corporation
duly incorporated and existing under the laws of the Republic of The Marshall
Islands (the "Company")
Please refer to the Purchase Contract Agreement, dated as of February
__, 2003 (the "Purchase Contract Agreement"; unless otherwise defined herein,
terms defined in the Purchase Contract Agreement are used herein as defined
therein), between the Company and the undersigned, as Purchase Contract Agent
and as attorney-in-fact for the Holders of Corporate Units from time to time.
In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on notices of [Early Settlements][Cash Settlements] received from Holders
of Corporate Units as of 5:00 p.m. (New York City time), on the fifth Business
Day immediately preceding the ______ Remarketing Date, we hereby notify you that
an aggregate principal amount of $______ Notes is to be tendered for purchase in
the Remarketing.
Date: By: THE BANK OF NEW YORK,
as the Purchase Contract Agent
Name:
----------------------------------
Title: Authorized Signatory
F-1