Exhibit 4.22
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PROVIDIAN FINANCIAL CORPORATION
AND
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as Unit Agent
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MASTER UNIT AGREEMENT
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Dated as of ___________, 19__
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TABLE OF CONTENTS
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PAGE
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1. Definitions and Other Provisions of General Application...............................1
1.1 Definitions..................................................................1
1.2 Compliance Certificates and Opinions.........................................8
1.3 Form of Documents Delivered to Unit Agent....................................8
1.4 Acts of Holders; Record Dates................................................9
1.5 Notices, etc............................................................... 10
1.6 Notice to Holders; Waiver.................................................. 11
1.7 Effect of Headings and Table of Contents................................... 11
1.8 Successors and Assigns..................................................... 11
1.9 Separability Clause........................................................ 11
1.10 Benefits of Agreement...................................................... 11
1.11 Governing Law.............................................................. 11
1.12 Legal Holidays............................................................. 11
1.13 Counterparts............................................................... 12
1.14 Inspection of Agreement.................................................... 12
2. Unit Certificate Forms.............................................................. 12
2.1 Forms of Unit Certificates Generally....................................... 12
2.2 Form of Agent's Certificate of Authentication.............................. 13
3. The Units........................................................................... 13
3.1 Title and Terms; Denominations............................................. 13
3.2 Rights and Obligations Evidenced by the Unit Certificates.................. 13
3.3 Execution, Authentication, Delivery and Dating............................. 13
3.4 Temporary Unit Certificates................................................ 14
3.5 Registration; Registration of Transfer and Exchange........................ 14
3.6 Mutilated, Destroyed, Lost and Stolen Unit Certificates.................... 16
3.7 Persons Deemed Owners...................................................... 17
3.8 Cancellation............................................................... 18
3.9 Substitution of Pledged Securities and Creation of Stripped Units; Units
Not Otherwise Separable.................................................... 18
3.10 Payments on the Units...................................................... 20
4. The Pledged Securities.............................................................. 20
4.1 Payments on the Pledged Securities......................................... 20
4.2 Transfer of Pledged Securities Upon Occurrence of Termination Event........ 21
5. The Purchase Contracts..................................................... 22
5.1 Purchase of Shares of Common Stock......................................... 22
5.2 Contract Fees.............................................................. 23
5.3 Deferral of Payment Dates For Contract Fee................................. 24
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5.4 Payment of Purchase Price.................................................. 25
5.5 Issuance of Shares of Common Stock......................................... 26
5.6 Adjustment of Settlement Rate.............................................. 27
5.7 Notice of Adjustments and Certain Other Events............................. 32
5.8 No Fractional Shares....................................................... 33
5.9 Charges and Taxes.......................................................... 33
5.10 Termination Event; Notice.................................................. 34
6. Remedies............................................................................ 34
6.1 Unconditional Rights of Holders............................................ 34
6.2 Restoration of Rights and Remedies......................................... 34
6.3 Rights and Remedies Cumulative............................................. 34
6.4 Delay or Omission Not Waiver............................................... 34
6.5 Undertaking for Costs...................................................... 35
6.6 Waiver of Stay or Extension Laws........................................... 35
7. The Unit Agent...................................................................... 35
7.1 Certain Duties and Responsibilities........................................ 35
7.2 Notice of Default.......................................................... 36
7.3 Certain Rights of Unit Agent............................................... 36
7.4 Not Responsible for Recitals or Issuance of Units.......................... 37
7.5 May Hold Units............................................................. 37
7.6 Money Held in Trust........................................................ 37
7.7 Compensation and Reimbursement............................................. 37
7.8 Corporate Unit Agent Required; Eligibility................................. 38
7.9 Resignation and Removal; Appointment of Successor.......................... 38
7.10 Acceptance of Appointment by Successor..................................... 39
7.11 Merger, Conversion, Consolidation or Succession to Business................ 40
7.13 No Obligations of Unit Agent............................................... 40
7.14 Tax Compliance............................................................. 41
8. Supplemental Agreements............................................................. 41
8.1 Supplemental Agreements Without Consent of Holders......................... 41
8.2 Supplemental Agreements with Consent of Holders............................ 42
8.3 Execution of Supplemental Agreements....................................... 43
8.4 Effect of Supplemental Agreements.......................................... 43
8.5 Reference to Supplemental Agreements....................................... 43
9. Consolidation, Merger, Sale or Conveyance........................................... 43
9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions................................................... 43
9.2 Rights and Duties of Successor Corporation................................. 44
9.3 Opinion of Counsel to Unit Agent........................................... 44
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10. Covenants........................................................................... 44
10.1 Performance Under Purchase Contracts....................................... 44
10.2 Maintenance of Office or Agency............................................ 44
10.3 Company to Reserve Common Stock............................................ 45
10.4 Covenants as to Common Stock............................................... 45
10.5 Statements of Officers of the Company as to Default........................ 45
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MASTER UNIT AGREEMENT
THIS MASTER UNIT AGREEMENT, dated as of __________, 199__, between
PROVIDIAN FINANCIAL CORPORATION, a Delaware corporation (the "Company"), and
_________________, a New York banking corporation, acting as unit agent for the
Holders of Units from time to time (the "Unit Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Unit Certificates evidencing the Units.
All things necessary to make the Company's obligations under the Units,
when the Unit Certificates are executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Unit Agent, as in this
Agreement provided, 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.
W I T N E S S E T H :
For and in consideration of the premises and the purchase of the Units
by the Holders thereof, it is mutually agreed as follows:
1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.
1.1 DEFINITIONS. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and
(b) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 1.4.
"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.
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"Unit Agent" means the Person named as the "Unit Agent" in the first
paragraph of this instrument until a successor Unit Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter "Unit
Agent" shall mean the Person who is then the Unit Agent hereunder.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Unit Agent.
"Business Day" means any day that is not a Saturday, Sunday or a day on
which banking institutions or trust companies in The City of New York are
authorized or obligated by law or executive order to be closed.
"Call Option" means an option entitling the Call Option Holder to
acquire the QUIPS or Junior Subordinated Debentures underlying the related
Normal Unit on the terms and subject to the conditions set forth in the Call
Option Agreement.
"Call Option Agreement" means the Call Option Agreement, dated as of
the date hereof, between the Call Option Holder named therein and the Unit
Agent, on its own behalf and as attorney-in-fact for the Holders from time to
time of the Normal Units, the form of which is attached hereto as Exhibit C, as
the same may be amended from time to time in accordance with the terms hereof
and thereof.
"Call Option Holder" means the Person named as the Call Option Holder
in the Call Option Agreement.
"Call Settlement Date" means the date on which the Call Options are
settled pursuant to the Call Option Agreement.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral Agent" means __________________, as Collateral Agent under
the Pledge Agreement, until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
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"Common Stock" means the Common Stock, par value $.01 per share, of the
Company.
"Company" means the Person designated as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"Contract Fee" means, with respect to each Purchase Contract, a fee
payable [TO] [BY] the Company [BY] [TO] the Holder of the related Unit, accruing
on the Stated Amount of such Unit from and including the date of first issuance
of any Units to but excluding the Stock Purchase Date and payable quarterly in
arrears on each Quarterly Payment Date to and including the Stock Purchase Date
at a rate per annum equal to the Contract Fee Rate (and computed on the basis of
a 360-day year of twelve 30-day months), plus any additional fees accrued
thereon pursuant to Section 5.3.
"Contract Fee Rate" means ____%.
"Corporate Trust Office" means the principal office of the Unit Agent
in the Borough of Manhattan, The City of New York, at which at any particular
time its corporate trust business shall be administered, which office at the
date hereof is located at _______________, New York, New York _______.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Declaration" means the Declaration of Trust, dated as of February 10,
1998 and amended and restated as of the date hereof, executed by the Company and
certain trustees of the Trust, as the same may be amended or supplemented from
time to time in accordance with the terms thereof.
"Depositary" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Units as contemplated by Section
3.5.
"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Excess Treasury Securities" has the meaning specified in Section 4.2.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Unit Certificate" means a Unit Certificate that evidences all
or part of the Normal Units or a Unit Certificate that evidences all or a part
of the Stripped Units and is registered in the name of the Depositary or a
nominee thereof.
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"Holder" means a Person in whose name a Unit Certificate is registered
in the Unit Register; "Holder", when used with respect to any particular Unit
Certificate (or Unit), means a Person in whose name such Unit Certificate (or
the Unit Certificate evidencing such Unit) is registered in the relevant Unit
Register.
"Indenture" means the Indenture, dated as of the date hereof, between
the Company and _________________, as Trustee, as the same may be amended or
supplemented from time to time in accordance with the terms thereof.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, any Vice
Chairman, its President or a Vice President and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the Unit
Agent.
"Junior Subordinated Debenture Put Option" has the meaning specified
for the term "Put Option" in the Indenture.
"Junior Subordinated Debentures" means the ___% Junior Subordinated
Deferrable Interest Debentures due [________________, 2003] of the Company
issued under the Indenture.
"Normal Unit" means the rights to purchase Common Stock under a
Purchase Contract, together with ownership of the QUIPS or other Pledged
Securities pledged to secure the obligations referred to in (a) and (b) below,
subject to (a) the obligations owed to the Company under such Purchase Contract,
(b) for so long as any Call Options remain exercisable, the obligations owed to
the Call Option Holder under a Call Option and (c) the pledge arrangements
securing the foregoing obligations; provided, however, that the term "Normal
Unit" will not include any Stripped Unit.
"NYSE" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, any Vice Chairman, the President or any Vice President and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company and delivered to the Unit Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.
"Outstanding Unit Certificates" means, as of the date of determination,
all Unit Certificates theretofore authenticated, executed and delivered pursuant
to this Agreement, except:
(a) Unit Certificates theretofore canceled by the Unit Agent or
delivered to the Unit Agent for cancellation; and
(b) Unit Certificates in exchange for or in lieu of which other Unit
Certificates have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other
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than any such Unit Certificate in respect of which there shall have been
presented to the Unit Agent proof satisfactory to it that such Unit Certificate
is held by a bona fide purchaser in whose hands the Units evidenced by such Unit
Certificate are valid obligations of the Company.
"Outstanding Units" means, as of the date of determination, all Units
evidenced by then Outstanding Unit Certificates, except, if the Termination Date
or Stock Purchase Date has passed, Units for which the underlying Pledged
Securities or the Common Stock purchasable upon settlement of the underlying
Purchase Contracts, as the case may be, have been theretofore deposited with the
Unit Agent in trust for the Holders of such Units; provided, however, that in
determining whether the Holders of the requisite number of 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, except that, in determining whether the Unit
Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units which the Unit
Agent knows to be so owned shall be so disregarded. Units so owned which have
been pledged in good faith may be regarded as Outstanding Units if the pledges
establishes to the satisfaction of the Unit 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.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge" means the pledge of the Pledged Securities under the Pledge
Agreement.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, among the Company, the Call Option Holder, the Collateral Agent and the
Unit Agent, on its own behalf and as attorney-in-fact for the Holders from time
to time of the Units, the form of which is attached hereto as Exhibit D, as the
same may be amended from time to time in accordance with the terms hereof and
thereof.
"Pledged Securities" means the securities pledged to the Collateral
Agent pursuant to the Pledge and constituting a part of the Units.
"Predecessor Unit Certificate" of any particular Unit Certificate means
every previous Unit Certificate evidencing all or a portion of the rights and
obligations of the Holder under the Units evidenced thereby; and, for the
purposes of this definition, any Unit Certificate authenticated and delivered
under Section 3.6 in exchange for or in lieu of a mutilated, destroyed lost or
stolen Unit Certificate shall be deemed to evidence the same rights and
obligations of the Holder as the mutilated, destroyed, lost or stolen Unit
Certificate.
"Principal Agreements" means this Agreement, the Pledge Agreement and
the Call Option Agreement.
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"Purchase Contract" means a contract obligating-the Company to sell and
the Holder of the related Unit to purchase Common Stock on the terms and subject
to the conditions set forth in Article Five hereof.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quarterly Payment Date" means each ___________, ___________,
___________, and ___________, commencing __________, 199__.
"QUIPS"(sm)* means ____% Quarterly Income Preferred Securities of the
Trust issued under the Declaration, which term may refer to a single security or
more than one security as the context may require.
"Record Date", when used with respect to any payment date, means the
Business Day next preceding such payment date; provided, however, that if any
Units are no longer evidenced by a Global Unit Certificate, "Record Date", when
used with respect to any payment date for such Units, means the [FIRST DAY
OF][THE FIFTEENTH DAY OF][THE FIFTEENTH DAY OF THE MONTH PRECEDING] the month in
which such payment date falls; and provided further, that if payments are in
respect of QUIPS or Junior Subordinated Debentures underlying Normal Units,
"Record Date", when used with respect to such payments, means the record date
for such payments determined as provided under the Declaration or the Indenture,
as the case may be.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Responsible Officer", when used with respect to the Unit Agent, means
any officer of the Unit Agent assigned by the Unit Agent to administer its
corporate trust matters.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $__________ per Unit.
"Stock Purchase Date" means [___________, 2001.]
"Stripped Unit" means the rights to purchase Common Stock under a
Purchase Contract, together with ownership of the Treasury Securities pledged to
secure the obligations referred to in (a) below, subject to (a) the obligations
owed to the Company under such Purchase Contract and (b) the pledge arrangements
securing the foregoing obligations; provided, however, that the term "Stripped
Unit" will only include Units issued as a result of a Stripped Unit Creation as
contemplated by Section 3.9.
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* QUIPS is a servicemark of Goldman, Sachs & Co.
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"Stripped Unit Creation" has the meaning specified in Section 3.9(a).
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events
at any time on or prior to the Stock Purchase Date: (a) a decree or order of a
court having jurisdiction in the premises shall have been entered adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company under the United States Bankruptcy Code or
any other similar applicable Federal or State law, and, unless such decree or
order shall have been entered within 60 days prior to the Stock Purchase Date,
such decree or order shall have continued undischarged and unstayed for a period
of 60 days, or (b) a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding up or liquidation of its affairs, shall have been entered, and, unless
such decree or order shall have been entered within 60 days prior to the Stock
Purchase Date, such decree or order shall have continued undischarged and
unstated for a period of 60 days, or (c) the Company shall institute proceedings
to be adjudicated a bankrupt, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent seeking
reorganization under the United States Bankruptcy Code or any other similar
applicable Federal or State law, or shall consent to the filing of any such
petition, or shall consent to the appointment of a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939 or any statute successor
thereto, in each case as amended from time to time.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Securities" means United States Treasury Securities.
"Trust" means [PROVIDIAN FINANCING __________], a statutory business
trust created under the laws of the State of Delaware.
"Underwriting Agreement" means the Underwriting Agreement dated
__________, 199_ among the Company, the Trust and ___________________________,
as the Underwriters named therein.
"Unit Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Normal Units or Stripped
Units, as the case may be, specified on such certificate.
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"Unit Register" and "Unit Registrar" have the respective meanings
specified in Section 3.5.
"Units" means the Normal Units and, if any are issued, the Stripped
Units. The Purchase Contracts, Call Options and/or Pledged Securities
constituting a part of any Units are sometimes referred to herein as
"underlying" such Units and are sometimes herein said to "underlie" such Units.
"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."
1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly
provided by this Agreement, upon any application or request by the Company to
the Unit Agent to take any action under any provision of this Agreement, the
Company shall furnish to the Unit 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 an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
1.3 FORM OF DOCUMENTS DELIVERED TO UNIT AGENT. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
1.4 ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Unit Agent and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Unit Agent and
the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Unit Agent deems sufficient.
(c) The ownership of Units shall be proved by the Unit 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 Unit 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
Unit Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Unit Certificate.
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(e) The Company may set any day 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 Outstanding Units on such record date, and no other Holders, shall be
entitled to take the relevant action, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite number of Outstanding Units on such record date. Nothing in
this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be canceled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding 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 Unit Agent in writing and to each Holder of Units in the manner set
forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Unit Agent in writing, and to each Holder of Units in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
1.5 NOTICES, ETC. TO UNIT AGENT AND THE COMPANY. Any request, demand,
authorization, direction, notice, consent, waiver or other Act of Holders or
other document provided or permitted by this Agreement to be made upon, given or
furnished to, or filed with,
(a) the Unit Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Unit Agent at _________________, Attention:
______________, or at any other address previously furnished in writing by the
Unit Agent to the Holders and the Company, or
(b) the Company by the Unit Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Company at 201 Mission Street, 28th Floor,
San Francisco, California 94105, Attention: ____________, or at any other
address previously furnished in writing by the Company to the Unit Agent and the
Holders.
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1.6 NOTICE TO HOLDERS; WAIVER. Where this Agreement provides for notice
to Holders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Unit Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Unit Agent, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Unit Agent
shall constitute a sufficient notification for every purpose hereunder.
1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
1.8 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Agreement by the Company shall bind its successors and assigns, whether so
expressed or not.
1.9 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.
1.10 BENEFITS OF AGREEMENT. Nothing in this Agreement or in the Unit
Certificates, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and 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 Unit
Certificates by their acceptance of delivery thereof.
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.
1.12 LEGAL HOLIDAYS. In any case where any Quarterly Payment Date or
the Stock Purchase Date shall not be a Business Day, then (notwithstanding any
other provision of this Agreement or of the Units) payment in respect of
distributions or interest on or principal of Pledged Securities or Contract Fees
shall not be made, Purchase Contracts shall not be performed and other actions
described herein shall not occur, but such payments shall be made, the Purchase
Contracts shall be performed and such other actions shall occur, as applicable,
on the next
-11-
succeeding Business Day with the same force and effect as if made on such
Quarterly Payment Date or Stock Purchase Date, as the case may be; provided,
that no distributions or interest shall accrue or be payable by the Company or
any Holder for the period from and after any such Quarterly Payment Date or
Stock Purchase Date, as the case may be, to the date of payment or performance;
except that if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made or the Purchase Contracts shall be
performed on the immediately preceding Business Day with the same force and
effect as if made on such Quarterly Payment Date or the Stock Purchase Date.
1.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when so executed, shall be deemed an original, but
all such counterparts shall together constitute one and the same instrument.
1.14 INSPECTION OF AGREEMENT. A copy of this Agreement shall be
available at all reasonable times at the Corporate Trust Office for inspection
by any Holder.
2. UNIT CERTIFICATE FORMS.
2.1 FORMS OF UNIT CERTIFICATES GENERALLY. Unit Certificates evidencing
Normal Units shall be in substantially the form set forth in Exhibit A hereto
and Unit Certificates evidencing the Stripped Units shall be in substantially
the form of Exhibit B hereto, in each case 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 Units are listed or Depositary therefor, or as
may, consistently herewith, be determined by the officers of the Company
executing such Unit Certificates, as evidenced by their execution of the Unit
Certificates.
The definitive Unit Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers of the Company executing the Unit Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Unit Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS UNIT CERTIFICATE IS A GLOBAL UNIT CERTIFICATE WITHIN THE MEANING
OF THE MASTER UNIT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS UNIT CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A UNIT CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS UNIT 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 MASTER UNIT AGREEMENT.
-12-
2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION. The form of the
Agent's certificate of authentication of the Units shall be in substantially the
form set forth on the form of the Unit Certificates.
3. THE UNITS.
3.1 TITLE AND TERMS; DENOMINATIONS. The aggregate number of Units
evidenced by Unit Certificates authenticated, executed on behalf of the Holders
and delivered hereunder is limited to [1,500,000 (SUBJECT TO INCREASE UP TO A
MAXIMUM OF 225,000 TO THE EXTENT THE OVER-ALLOTMENT OPTION OF THE UNDERWRITERS
UNDER THE UNDERWRITING AGREEMENT IS EXERCISED)], except for Unit Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Unit Certificates pursuant to Section 3.4,
3.5, 3.6 or 8.5.
All of the Unit Certificates authenticated, executed and delivered
hereunder shall be Normal Units except for any Unit Certificates evidencing
Stripped Units issued in connection with a Stripped Unit Creation pursuant to
Section 3.9 and Unit Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Unit
Certificates evidencing Stripped Units pursuant to Section 3.4, 3.5, 3.6 or 8.5.
Unit Certificates shall be issuable only in registered form and only in
denominations of a single Unit and any integral multiple thereof.
3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE UNIT CERTIFICATES. Each
Unit Certificate shall evidence the number of Units specified therein. Prior to
the purchase, if any, of shares of Common Stock under the Purchase Contracts,
the Units shall not entitle the Holders to any of the rights or privileges of a
holder of shares of Common Stock, including, without limitation, the right to
vote or receive any dividends or other distributions or to consent or to receive
notice as stockholders in respect of the meetings of stockholders or for the
election of directors of the Company or for any other matter.
3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Subject to the
provisions of Section 3.9 hereof, upon the execution and delivery of this
Agreement, and at any time and from time to time thereafter, the Company may
deliver Unit Certificates executed by the Company to the Unit Agent for
authentication, execution on behalf of the Holders and delivery, together with
its Issuer Order for authentication of such Unit Certificates, and the Unit
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Unit Certificates.
The Unit Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Unit Certificates may be manual or facsimile.
Unit 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
-13-
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Unit Certificates or did not hold such
offices at the date of such Unit Certificates.
Each Unit Certificate shall be dated the date of its authentication.
No Purchase Contract or Call Option underlying a Unit evidenced by a
Unit Certificate shall be valid until such Unit Certificate has been executed on
behalf of the Holder by the manual signature of an authorized signatory of the
Unit Agent, as such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Unit Agent shall be conclusive evidence that the Holder of such
Unit Certificate has entered into the Purchase Contracts and Call Options
underlying the Units evidenced by such Unit Certificate.
No Unit Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Unit Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Unit Agent by
manual signature, and such certificate upon any Unit Certificate shall be
conclusive evidence, and the only evidence, that such Unit Certificate has been
duly authenticated and delivered hereunder.
3.4 TEMPORARY UNIT CERTIFICATES. Pending the preparation of definitive
Unit Certificates, the Company shall execute and deliver to the Unit Agent, and
the Unit Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Unit Certificates, temporary Unit
Certificates which are in substantially the form set forth in Exhibit A or
Exhibit B hereto, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Units are listed or Depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Unit Certificates, as
evidenced by their execution of the Unit Certificates.
If temporary Unit Certificates are issued, the Company will cause
definitive Unit Certificates to be prepared without unreasonable delay. After
the preparation of definitive Unit Certificates, the temporary Unit Certificates
shall be exchangeable for definitive Unit Certificates upon surrender of the
temporary Unit 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 Unit Certificates, the Company shall execute and deliver
to the Unit Agent, and the Unit Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive Unit
Certificates of authorized denominations and evidencing a like number of Normal
Units or Stripped Units, as the case may be, as the temporary Unit Certificate
or Unit Certificates so surrendered. Until so exchanged, the temporary Unit
Certificates shall in all respects evidence the same benefits and the same
obligations with respect to the Units evidenced thereby as definitive Unit
Certificates.
3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Unit Agent
shall keep at the Corporate Trust Office registers (the registers maintained in
such office being herein referred
-14-
to as the "Unit Registers") in which, subject to such reasonable regulations as
it may prescribe, the Unit Agent shall provide for the registration of Unit
Certificates evidencing the Normal Units and the Stripped Units and of transfers
of Unit Certificates evidencing the Normal Units and the Stripped Units (the
Unit Agent, in such capacity, the "Unit Registrar").
Upon surrender for registration of transfer of any Unit Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the Unit
Agent, and the Unit 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 Unit Certificates evidencing a like
number of Normal Units or Stripped Units, as the case may be.
At the option of the Holder, Unit Certificates may be exchanged for
other Unit Certificates evidencing a like number of Normal Units or Stripped
Units, as the case may be, upon surrender of the Unit Certificates to be
exchanged at the Corporate Trust Office. Whenever any Unit Certificates are so
surrendered for exchange, the Company shall execute and deliver to the Unit
Agent, and the Unit Agent shall authenticate, execute on behalf of the Holder,
and deliver the Unit Certificates which the Holder making the exchange is
entitled to receive.
All Unit Certificates issued upon any registration of transfer or
exchange of a Unit Certificate shall evidence the ownership of the same number
of Normal Units or Stripped Units, as the case may be, and be entitled to the
same benefits and subject to the same obligations, under the Principal
Agreements as the Normal Units or Stripped Units, as the case may be, evidenced
by the Unit Certificate surrendered upon such registration of transfer or
exchange.
Every Unit Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Unit Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Unit Agent duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Unit Certificate, but the Company and the Unit 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 Unit Certificates (which, for these purposes, includes a
Stripped Unit Creation or a transfer of Pledged Securities as contemplated by
Section 5.4(a)), other than any exchanges pursuant to Sections 3.6 and 8.5 not
involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated
to authenticate, execute on behalf of the Holder and deliver any Unit
Certificate in respect of a Unit Certificate presented or surrendered for
registration of transfer or for exchange on or after the Stock Purchase Date or
the Termination Date. In lieu of delivery of a new Unit Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Unit Agent shall (a) if the Stock Purchase Date has occurred, deliver the
shares of Common Stock issuable in respect of the Purchase Contracts
-15-
forming a part of the Units evidenced by such Unit Certificate, or (b) if a
Termination Event shall have occurred on or prior to the Stock Purchase Date,
transfer the liquidation or principal amount of the Pledged Securities evidenced
thereby, in each case subject to the applicable conditions and in accordance
with the applicable provisions of Article Five hereof.
The provisions of Clauses (a), (b), (c) and (d) below shall apply only
to Global Unit Certificates:
(a) Each Global Unit Certificate authenticated and executed on behalf
of the Holders under this Agreement shall be registered in the name of the
Depositary designated for such Global Unit Certificate or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Unit Certificate shall constitute a single Unit Certificate for
all purposes of this Agreement.
(b) Notwithstanding any other provision in this Agreement, no Global
Unit Certificate may be exchanged in whole or in part for Unit Certificates
registered, and no transfer of a Global Unit Certificate in whole or in part may
be registered, in the name of any Person other than the Depositary for such
Global Unit Certificate or a nominee thereof unless (i) such Depositary (x) has
notified the Company that it is unwilling or unable to continue as Depositary
for such Global Unit Certificate or (y) has ceased to be a clearing agency
registered under the Exchange Act or (ii) there shall have occurred and be
continuing a default by the Company in respect of its obligations under one or
more Principal Agreements.
(c) Subject to Clause (b) above, any exchange of a Global Unit
Certificate for other Unit Certificates may be made in whole or in part, and all
Unit Certificates issued in exchange for a Global Unit Certificate or any
portion thereof shall be registered in such names as the Depositary for such
Global Unit Certificate shall direct.
(d) Every Unit Certificate authenticated and delivered upon
registration of transfer of, in exchange for or in lieu of a Global Unit
Certificate or any portion thereof, whether pursuant to this Section, Section
3.4, 3.6 or 8.5 or otherwise, shall be authenticated, executed on behalf of the
Holders and delivered in the form of, and shall be, a Global Unit Certificate,
unless such Unit Certificate is registered in the name of a Person other than
the Depositary for such Global Unit Certificate or a nominee thereof.
3.6 MUTILATED, DESTROYED, LOST AND STOLEN UNIT CERTIFICATES. If any
mutilated Unit Certificate is surrendered to the Unit Agent, the Company shall
execute and deliver to the Unit Agent, and the Unit Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new Unit
Certificate, evidencing the same number of Normal Units or Stripped Units, as
the case may be, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Unit Agent (a)
evidence to their satisfaction of the destruction, loss or theft of any Unit
Certificate, and (b) such security or indemnity as may be required by them to
save each of them and any agent of any of them harmless, then, in the absence of
notice to the Company or the Unit Agent that such Unit
-16-
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and deliver to the Unit Agent, and the Unit Agent shall authenticate,
execute on behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Unit Certificate, a new Unit Certificate, evidencing
the same number of Normal Units or Stripped Units, as the case may be, and
bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Unit Agent, and the Unit Agent shall not be obligated
to authenticate, execute on behalf of the Holder, and deliver to the Holder, on
or after the Stock Purchase Date or the Termination Date, a Unit Certificate in
respect of any mutilated, destroyed, lost or stolen Unit Certificate. In lieu of
delivery of a new Unit Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Unit Agent shall (a)
if the Stock Purchase Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Units
evidenced by such Unit Certificate, or (b) if a Termination Event shall have
occurred on or prior to the Stock Purchase Date, transfer the liquidation or
principal amount of the Pledged Securities evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Article Five hereof.
Upon the issuance of any new Unit Certificate under this Section, the
Company and the Unit Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Unit Agent) connected therewith.
Every new Unit Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Unit Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder, whether or
not the destroyed, lost or stolen Unit Certificate shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of the Principal Agreements equally and proportionately
with any and all other Unit Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
settlement of mutilated, destroyed, lost or stolen Unit Certificates.
3.7 PERSONS DEEMED OWNERS. Prior to due presentment of a Unit
Certificate for registration of transfer, the Company and the Unit Agent, and
any agent of the Company or the Unit Agent, may treat the Person in whose name
such Unit Certificate is registered as the owner of the Units evidenced thereby,
for the purpose of receiving payments of distributions or interest on the
Pledged Securities, receiving or making payments of Contract Fees and
performance of the underlying Purchase Contracts and Call Options and for all
other purposes whatsoever, whether or not the payment of distributions or
interest on the Pledged Securities or any Contract Fee payable in respect of the
Purchase Contracts constituting a part of the Units evidenced thereby shall be
overdue and notwithstanding any notice to the contrary, and neither the Company
-17-
nor the Unit Agent, nor any agent of the Company or the Unit Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Unit
Certificate, nothing herein shall prevent the Company, the Unit Agent or any
agent of the Company or the Unit Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Depositary (or its
nominee), as a Holder, with respect to such Global Unit Certificate or impair,
as between such Depositary and owners of beneficial interests in such Global
Unit Certificate, the operation of customary practices governing the exercise of
rights of such Depositary (or its nominee) as Holder of such Global Unit
Certificate.
3.8 CANCELLATION. All Unit Certificates surrendered for delivery of
shares of Common Stock on or after the Stock Purchase Date, transfer of Pledged
Securities after the occurrence of a Termination Event or registration of
transfer or exchange shall, if surrendered to any Person other than the Unit
Agent, be delivered to the Unit Agent and, if not already canceled, shall be
promptly canceled by it. The Company may at any time deliver to the Unit Agent
for cancellation any Unit Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Unit Certificates so delivered shall, upon Issuer Order, be
promptly canceled by the Unit Agent. No Unit Certificates shall be
authenticated, executed on behalf of the Holder and delivered upon transfer of,
in exchange for or in lieu of any Unit Certificates canceled as provided in this
Section, except as expressly permitted by this Agreement. All canceled Unit
Certificates held by the Unit Agent shall be disposed of as directed by Issuer
Order.
If the Company or any Affiliate of the Company shall acquire any Unit
Certificate, such acquisition shall not operate as a cancellation of such Unit
Certificate unless and until such Unit Certificate is delivered to the Unit
Agent canceled or for cancellation.
3.9 SUBSTITUTION OF PLEDGED SECURITIES AND CREATION OF STRIPPED UNITS;
UNITS NOT OTHERWISE SEPARABLE.
(a) A Holder of Normal Units may obtain the release from the Pledge of
such Holder's Pledged Securities underlying such Normal Units, free and clear of
the Company's and the Call Option Holder's security interests therein, and
convert such Normal Units into Stripped Units (collectively, a "Stripped Unit
Creation") at any time after the original issuance of such Normal Units and on
or prior to the second Business Day immediately preceding the Stock Purchase
Date by:
(i) delivering to the Collateral Agent: (w) Treasury
Securities that through their scheduled payments will generate not
later than the Stock Purchase Date an amount of cash that is at least
equal to the aggregate Stated Amount of such Normal Units, (x) if any
Contract Fees are or will be payable by the Holders to the Company,
Treasury Securities that through their scheduled payments will generate
not later than each Quarterly Payment Date falling after the date on
which the requirements for such Stripped Unit Creation contained in
this
-18-
Section 3.9(a) are satisfied and on or before the Stock Purchase Date
an amount of cash that is at least equal to the aggregate Contract Fees
that are scheduled to be payable in respect of the Purchase Contracts
underlying such Normal Units on such Quarterly Payment Date (assuming
for this purpose that no Contract Fees will then have been deferred
under Section 5.3); (y) if there are any deferred Contract Fees payable
by such Holder to the Company on the date on which the requirements for
such Stripped Unit Creation contained in this Section 3.9(a) are
satisfied, an amount of cash equal to (1) the aggregate unpaid amount
of such Contract Fees accrued to such date, if such date is a Quarterly
Payment Date, and (2) the aggregate unpaid amount of such Contract Fees
accrued to the Quarterly Payment Date immediately preceding such date
plus interest thereon at a rate per annum equal to the Contract Fee
Rate for the period from and including such Quarterly Payment Date to
but excluding such date (calculated on the basis of a 360-day year of
twelve 30-day months), if such date is not a Quarterly Payment Date;
and (z) if the Call Options underlying such Normal Units remain
exercisable on the date on which the requirements contained in this
Section 3.9(a) for such Stripped Unit Creation are satisfied, an
instrument from the Call Option Holder releasing its security interest
in the Pledged Securities securing such Call Options and agreeing that
such Call Options no longer underlie such Normal Units (or the Stripped
Units they become); and
(ii) surrendering the Unit Certificate evidencing such Normal
Units, with the form of Request to Create Stripped Units thereon duly
completed and executed, to the Unit Agent, whereupon the Unit Agent
shall promptly request the Collateral Agent to release the Pledged
Securities underlying such Normal Units;
provided, however, that if Treasury Securities are the Pledged Securities
underlying such Normal Units, a Stripped Unit Creation may only be effected with
respect to a number of Normal Units that will result in the release from the
Pledge of Treasury Securities in denominations of $1,000 or integral multiples
thereof.
(b) Upon receipt of the items described in clause (i) of Section 3.9(a)
above and the request from the Unit Agent described in clause (ii) of Section
3.9(a) above, the Collateral Agent will, in accordance with the terms of the
Pledge Agreement, release to the Unit Agent, on behalf of the Holder, from the
Pledge, free and clear of the Company's and the Call Option Holders's security
interests therein, the securities that theretofore had been the Pledged
Securities underlying such Normal Units, and upon receipt thereof the Unit Agent
shall promptly:
(i) cancel the Unit Certificate for such Normal Units;
(ii) transfer such released Pledged Securities to the Holder
or, subject to Section 3.5, the Holder's designee;
(iii) authenticate, execute on behalf of such Holder and
deliver to the Holder or, subject to Section 3.5, the Holder's designee
a Unit Certificate executed
-19-
by the Company in accordance with Section 3.3 evidencing a number of
Stripped Units equal to the number of such Normal Units.
Concurrently with the release of the securities that theretofore had been the
Pledged Securities underlying such Normal Units as contemplated by the preceding
sentence, the Treasury Securities delivered to the Collateral Agent as
contemplated by clause (i) of Section 3.9(a) above shall thereupon be
substituted for such securities as Pledged Securities underlying the Stripped
Units created from such Normal Units.
(c) Except for a Stripped Unit Creation effected in compliance with
this Section 3.9, for so long as the Purchase Contract underlying a Normal Unit
remains in effect such Normal Unit shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Normal Unit in
respect of the Pledged Securities, Purchase Contract and Call Option underlying
such Normal Unit may be acquired, and may be transferred and exchanged, only as
an integrated Normal Unit. For so long as the Purchase Contract underlying a
Stripped Unit remains in effect such Stripped Unit shall not be separable into
its constituent parts, and the rights and obligations of the Holder of such
Stripped Unit in respect of the Pledged Securities and Purchase Contract
underlying such Stripped Unit may be acquired, and may be transferred and
exchanged, only as an integrated Stripped Unit. Other than a Unit Certificate,
no Holder of a Unit, nor any transferee thereof, shall be entitled to receive a
certificate evidencing the ownership of Pledged Securities or any other rights
or obligations underlying such Unit for so long as the Purchase Contract
underlying such Unit remains in effect.
3.10 PAYMENTS ON THE UNITS. Contract Fees (if any) payable by the
Company to the Holders, and all amounts payable to Holders as required by
Section 4.1 or 5.4(b), will be payable at the office of the Unit Agent in The
City of New York maintained for that purpose or, at the option of the Company,
by check mailed to the address of the Person entitled thereto at such address as
it appears on the relevant Unit Register; provided, however, that for so long as
any Units are evidenced by Global Certificates, the Unit Agent will pay each
such amount payable in respect of such Units by wire transfer in same-day funds,
no later than 2:00 p.m., New York City time, on the Business Day such amount is
received by the Unit Agent (or, if such amount is received by the Unit Agent
after 1:00 p.m., New York City time, on a Business Day or on a day that is not a
Business Day, no later than 10:00 a.m., New York City time, on the next
succeeding Business Day), to the Depositary, to the account or accounts
designated by it for such purpose.
4. THE PLEDGED SECURITIES.
4.1 PAYMENTS ON THE PLEDGED SECURITIES. As provided by the terms of the
Pledge Agreement, on each Quarterly Payment Date, subject to receipt by the
Collateral Agent of the relevant payments in respect of the Pledged Securities
underlying any Holder's Units, (a) the Collateral Agent (i) shall, on behalf of
such Holder, pay to the Company the Contract Fees, if any, then payable by such
Holder to the Company and (ii) shall, subject to Section 5.4(b), remit to the
Unit Agent the amount of such payments remaining after the payment referred to
in clause (i) and (b) the amount referred to in clause (a)(ii) above shall,
subject to receipt thereof by the
-20-
Unit Agent from the Collateral Agent, be paid to the Person in whose name the
Unit Certificate (or one or more Predecessor Unit Certificates) evidencing such
Units is registered at the close of business on the Record Date next preceding
such Quarterly Payment Date.
In addition, in the event that (a) the Call Options are exercised and
the Aggregate Consideration Deliverable on Exercise of the Call Options includes
a cash amount in respect of deferred distributions on the QUIPS or deferred
interest payments on the Junior Subordinated Debentures and (b) the Call
Settlement Date is not a Quarterly Payment Date, pursuant to the Pledge
Agreement the Collateral Agent shall, on behalf of the Holders of the Normal
Units, pay to the Company on the Call Settlement Date an amount equal to the
Contract Fees, if any, then payable by such Holders to the Company.
4.2 TRANSFER OF PLEDGED SECURITIES UPON OCCURRENCE OF TERMINATION
EVENT. Upon the occurrence of a Termination Event and the transfer to the Unit
Agent of the Pledged Securities underlying each Holder's Units pursuant to the
terms of the Pledge Agreement, the Unit Agent shall request transfer
instructions with respect to such Pledged Securities from such Holder by written
request mailed to such Holder at his address as it appears in the relevant Unit
Register. Thereafter, upon surrender to the Unit Agent of a Unit Certificate
evidencing a Holder's Units, with transfer instructions in proper form for
transfer of the underlying Pledged Securities, the Unit Agent shall transfer the
Pledged Securities evidenced by such Unit Certificate to such Holder in
accordance with such instructions; provided, however, that if the Pledged
Securities are to be transferred to a Person other than the Person in whose name
such Unit Certificate is registered, no such transfer shall be made unless the
Person requesting the transfer has paid any transfer and other taxes required by
reason of such transfer to a Person other than the registered Holder of such
Unit Certificate or has established to the satisfaction of the Company that such
tax either has been paid or is not payable. Until the foregoing conditions to
transfer any of the Pledged Securities underlying any Units has been met, the
Unit Agent shall hold such Pledged Securities as custodian for the Holder of
such Units.
If upon a Termination Event any Holder of Units would, after satisfying
the foregoing conditions, otherwise be entitled to receive (or have transferred
to such Holder's designee) Treasury Securities of any series having a principal
amount that is not an integral multiple of $1,000, such Holder shall instead be
entitled to receive (or have transferred to such Holder's designee) Treasury
Securities of such series in a principal amount equal to the next lower integral
multiple of $1,000 plus a portion of the net proceeds from the sale of Treasury
Securities of such series contemplated by the succeeding sentence representing
such Holder's interest therein. As soon as practicable after transfer to the
Unit Agent of the Pledged Securities as provided in the Pledge Agreement, the
Unit Agent shall, on behalf of all Holders who, by virtue of the preceding
sentence, will not be entitled to a portion of the Treasury Securities of any
series to which they would otherwise be entitled aggregate and sell the Treasury
Securities of such series representing such portion to or through one or more
U.S. government securities dealers at then prevailing prices, deduct from the
proceeds of such sales all commissions and other out-of-pocket transaction costs
incurred in connection with such sales and, until the net proceeds therefrom
have been distributed to the Holders entitled thereto or their designees, hold
such proceeds in trust for such Holders.
-21-
5. THE PURCHASE CONTRACTS.
5.1 PURCHASE OF SHARES OF COMMON STOCK. Each Purchase Contract
underlying a Unit shall obligate the Holder of such Unit to purchase, and the
Company to sell, on the Stock Purchase Date, at a price equal to the Stated
Amount, a number of shares of Common Stock equal to the Settlement Rate, unless,
on or prior to the Stock Purchase Date, there shall have occurred a Termination
Event. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is greater than or equal to $________ (the "Threshold
Appreciation Price"), _______________ of a share of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than the Stated Amount, a fractional share of
Common Stock per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value (rounded upward or downward to the nearest 1/10,000th of
a share or, if there is not a nearest 1/10,000th of a share, to the next lower
1/10,000th of a share) and (c) if the Applicable Market Value is less than or
equal to the Stated Amount, one share of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in Section 5.6. As provided in
Section 5.9, no fractional shares of Common Stock will be issued upon settlement
of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Prices
per share of Common Stock on each of the twenty consecutive Trading Days ending
on the last Trading Day immediately preceding the Stock Purchase Date. The
"Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if the Common
Stock is not so listed on a United States national or regional securities
exchange, as reported by The NASDAQ Stock Market, or, if the Common Stock is not
so reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization, or, if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized investment
banking firm retained for this purpose by the Company. A "Trading Day" means a
day on which the Common Stock (A) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
Each Holder of a Unit Certificate evidencing Normal Units, by his
acceptance thereof, irrevocably authorizes the Unit Agent to enter into and
perform the underlying Purchase Contracts and Call Options on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts
and Call Options, consents to the provisions of the Principal Agreements,
irrevocably authorizes the Unit Agent to enter into and perform the Call Option
Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Securities
underlying such Normal Units pursuant to the Pledge
-22-
Agreement. Each Holder of a Unit Certificate evidencing Stripped Units, by his
acceptance thereof, irrevocably authorizes the Unit Agent to enter into and
perform the underlying Purchase Contracts on his behalf as his attorney-in-fact,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to
perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents
to and agrees to be bound by the Pledge of the Pledged Securities underlying
such Stripped Units pursuant to the Pledge Agreement. Each Holder of Units, by
his acceptance thereof, further irrevocably covenants and agrees that, unless
such Holder satisfies its obligations to the Company under the Purchase
Contracts underlying such Units as provided in Section 5.4(a), then to the
extent and in the manner provided in Section 5.4(b) and the Pledge Agreement,
but subject to the terms thereof, payments in respect of all or a portion of the
principal of or proceeds from the Pledged Securities on the Stock Purchase 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.
Upon registration of transfer of a Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts and any Call Options
evidenced thereby and by the Pledge Agreement and the transferor shall be
released from all such obligations evidenced by the Unit Certificate so
transferred. The Company covenants and agrees, and each Holder of a Unit
Certificate, by his acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
5.2 CONTRACT FEES. Subject to Section 5.3, if any Contract Fees are or
will be payable by the Company to the Holders, the Company shall pay, prior to
2:00 p.m., New York City time, on each Quarterly Payment Date to and including
the Stock Purchase Date, the Contract Fees payable in respect of each Purchase
Contract to the Person in whose name the Unit Certificate (or one or more
Predecessor Unit Certificates) evidencing such Purchase Contract is registered
at the close of business on the Record Date next preceding such Quarterly
Payment Date. The Company's obligations with respect to such Contract Fees
[SUBORDINATION LANGUAGE FROM INDENTURE TO BE INSERTED].
Subject to Section 5.3, if any Contract Fees are or will be payable by
the Holders to the Company, the Collateral Agent, on behalf of the Holders,
shall pay, on each Quarterly Payment Date to and including the Stock Purchase
Date, the Contract Fees payable in respect of each Purchase Contract to the
Company. Such payment will be funded out of payments received by the Collateral
Agent in respect of Pledged Securities.
Each Unit Certificate delivered under this Agreement upon registration
of transfer of, in exchange for or in lieu of any other Unit Certificate shall
carry the rights to receive and obligations to pay Contract Fees accrued and
unpaid, and to accrue, which were carried by the Purchase Contracts evidenced by
such other Unit Certificate.
-23-
5.3 DEFERRAL OF PAYMENT DATES FOR CONTRACT FEE. So long as no default
in the Company's obligations under the Principal Agreements has occurred and is
continuing, the Company shall have the right, at any time prior to the Stock
Purchase Date, to defer the payment of any or all of the Contract Fees, if any,
otherwise payable by the Company on any Quarterly Payment Date, but only if the
Company shall give the Holders and the Unit Agent written notice of its election
to defer such payment (specifying the amount to be deferred) at least five
Business Days prior to the earlier of (a) the next succeeding Quarterly Payment
Date or (b) the date the Company is required to give notice of the Record Date
or Quarterly Payment Date with respect to payment of such Contract Fee to the
NYSE or other applicable self-regulatory organization or to Holders, or (c) the
Record Date for such Quarterly Payment Date. Any Contract Fees so deferred shall
bear additional Contract Fees thereon at a rate per annum equal to the Contract
Fee Rate (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Quarterly Payment Date, until paid in full.
Deferred Contract Fees (and additional Contract Fees accrued thereon) shall be
due on the next succeeding Quarterly Payment Date except to the extent that
payment is deferred pursuant to this Section. No Contract Fees may be deferred
to a date that is after the Stock Purchase Date.
In the event the Company exercises its option to defer the payment of
Contract Fees (if any) payable by it, then, until all deferred Contract Fees
(including additional Contract Fees accrued thereon) have been paid in full, the
Company shall not (a) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock, (b) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank part passu with or junior in right of payment to the Contract
Fees or (c) make any guarantee payments with respect to any guarantee by the
Company of any securities of any subsidiary of the Company if such guarantee
ranks pari passu or junior in right of payment to the Contract Fees (other than,
in the case of clauses (a), (b) and (c), (i) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Company, (ii) any declaration of a dividend in
connection with the implementation of a stockholder's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (iii) payments under the
Company's guarantee of the QUIPS, (iv) as a result of a reclassification of the
Company's capital stock solely into shares of one or more classes or series of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock, (v) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the securities being converted or exchanged and (vi)
purchases of common stock in connection with the satisfaction by the Company of
its obligations under any of the Company's benefit plans for its and its
subsidiaries' directors, officers or employees or any of the company's dividend
reinvestment plans).
If any Contract Fees are payable by a Holder to the Company and
payments made in respect of Pledged Securities underlying such Holder's Units
are insufficient to cover such Holder's obligation to pay such Contract Fees,
such obligation shall be deferred until the earlier of the date sufficient cash
is available and the Stock Purchase Date. Any such Contract Fees so deferred
shall bear additional Contract Fees thereon at a rate per annum equal to the
Contract Fee
-24-
Rate (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Quarterly Payment Date, until paid in full.
5.4 PAYMENT OF PURCHASE PRICE.
(a) A Holder of Units shall, by no later than 10:00 a.m., New York City
time, on the Stock Purchase Date, deliver to the Unit Agent payment of the
purchase price for the shares of Common Stock to be purchased pursuant to the
Purchase Contracts underlying such Units, which payment shall be made in lawful
money of the United States by certified or cashier's check payable to the order
of the Company in immediately available funds in an amount equal to the
aggregate Stated Amount of such Holder's Units, plus, if there are unpaid
Contract Fees accrued and payable by such Holder to the Company on the Stock
Purchase Date and the cash received by the Collateral Agent on such date in
respect of the Pledged Securities underlying such Units is less than the amount
of such unpaid Contract Fees, an amount sufficient to cover such shortfall.
By 11:00 a.m., New York City time, on the Stock Purchase Date, the Unit
Agent shall (i) transfer to the Company all of the payments the Company shall
have received as contemplated by the preceding sentence, (ii) notify the
Collateral Agent and the Company as to the number of Normal Units and the number
of Stripped Units, respectively, with respect to which payment has been received
as aforesaid (such Units being collectively referred to as "Paid Units") and the
number of Normal Units and the number of Stripped Units, respectively, with
respect to which payment has not been received as aforesaid (such Units being
collectively referred to as "Unpaid Units"), and (iii) request the Collateral
Agent to release the Pledged Securities underlying the Paid Units (or, in the
case of Treasury Securities, the cash payments received thereon) from the Pledge
to the Unit Agent (for delivery to the Holders of such Units entitled thereto),
free and clear of the Company's security interest therein.
By 1:00 p.m., New York City time, on the Stock Purchase Date, the
Collateral Agent shall, as provided by the terms of the Pledge Agreement, comply
with the request referred to in clause (iii) of the preceding sentence (subject
to the Company's right to prevent the Collateral Agent from doing so to the
extent the aggregate amount the Company has received as contemplated by clause
(i) of the preceding sentence is less than the aggregate amount payable with
respect to the Units referred to in such request). The Unit Agent shall
thereupon, subject to its receipt from the Collateral Agent of the Pledged
Securities (or cash) referred to in such request and subject to Section 3.5,
transfer such released Pledged Securities (or cash) to the respective Holders
entitled thereto in accordance with the settlement instructions specified in the
form of Settlement Instructions appearing on the Unit Certificates evidencing
the Paid Units; provided, however, that if any such Unit Certificate is not
surrendered to the Unit Agent with the form of Settlement Instructions thereon
duly completed and executed, the Unit Agent shall hold such Pledged Securities
(or cash), and any distributions or interest received on such Pledged
Securities, as custodian for the Holder entitled thereto, to be delivered to
such Holder (without any interest thereon and subject to Section 3.5) upon
surrender of such Unit Certificate to the Unit Agent (with the form of
Settlement Instructions thereon duly completed and executed).
-25-
(b) With respect to each Holder's Unpaid Units, pursuant to the terms
of the Pledge Agreement,
(i) (x) if QUIPS underlie such Unpaid Units, the Collateral
Agent, on behalf of such Holder, shall exercise such Holder's right
under the Declaration to require the Trust to distribute Junior
Subordinated Debentures having an aggregate principal amount equal to
the aggregate liquidation amount of such QUIPS, in exchange for such
QUIPS, and, upon receiving such Junior Subordinated Debentures, shall
thereupon, as Put Agent, exercise the Junior Subordinated Debenture Put
Option with respect thereto and (y) if Junior Subordinated Debentures
underlie such Unpaid Units, the Collateral Agent, on behalf of such
Holder, shall, as Put Agent, exercise the Junior Subordinated Debenture
Put Option with respect thereto;
(ii) the Collateral Agent shall deliver to the Company, out of
the proceeds from the exercise of such Junior Subordinated Debenture
Put Option or, if Treasury Securities underlie such Unpaid Units, the
proceeds from the payment of such Treasury Securities at maturity, an
amount equal to the aggregate Stated Amount of such Unpaid Units plus
the Unpaid Contract Fees, if any, payable by such Holder to the Company
in respect of such Unpaid Units to satisfy in full such Holder's
obligations under such Unpaid Units; and
(iii) the Collateral Agent shall remit to the Unit Agent, on
behalf of such Holder, the remainder of the proceeds, if any, from the
Pledged Securities underlying such Unpaid Units for distribution to
such Holder.
The amount referred to in clause (iii) above shall, subject to receipt thereof
by the Unit Agent from the Collateral Agent, be paid to the Person in whose name
the Unit Certificate (or one or more Predecessor Unit Certificates) evidencing
such Unpaid Units is registered at the close of Business on the Record Date next
preceding the Stock Purchase Date.
(c) Each Holder will be entitled to apply any unpaid amounts owing by
the Company to such Holder as a set-off to reduce, dollar-for-dollar, any
amounts then owing by such Holder to the Company in respect of such Holder's
Units, and such set-off amounts will be treated for all purposes as having been
paid in full by such Holder as required hereby.
(d) 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 of the related Unit unless the Company shall have received payment in
full of the aggregate purchase price for the shares of Common Stock to be
purchased thereunder in the manner herein set forth (either directly or by
operation of set-off as contemplated by the preceding sentence).
5.5 ISSUANCE OF SHARES OF COMMON STOCK. On the Stock Purchase Date,
upon receipt by the Company of payment in full of the aggregate purchase price
for the shares of Common Stock purchased by the Holders pursuant to the
foregoing provisions of this Article, and subject to
-26-
Section 5.6(b), the Company shall deposit with the Unit Agent, for the benefit
of the Holders of the Units, one or more certificates representing the shares of
Common Stock registered in the name of the Unit Agent (or its nominee) as
custodian for the Holders (such certificates for shares of Common Stock,
together with any dividends or distributions with respect thereto, 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
Unit Certificate to the Unit Agent on or after the Stock Purchase Date, with the
form of Settlement Instructions thereon duly completed and executed, the Holder
of such Unit Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of Common Stock which such
Holder is entitled to receive pursuant to the provisions of this Article Five
(after taking into account all Units then held by such Holder) together with
cash in lieu of fractional shares as provided in Section 5.9 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 Unit
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 form of Settlement Instructions appearing on the surrendered Unit
Certificate.
If any shares of Common Stock issued in respect of a Purchase Contract
are to be registered to a Person other than the Person in whose name the Unit
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Unit 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.
5.6 ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Common Stock of the Company in Common
Stock, the Settlement Rate in effect at the opening of business on the
day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution shall be
increased by dividing such Settlement Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
increase to become effective immediately after the opening of business
on the day following the date fixed for such determination. For the
purposes of this paragraph (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 shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The
Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company.
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(2) In case the Company shall issue rights, options or
warrants 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
stockholders entitled to receive such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Market Price per share of the Common Stock on the
date fixed for the determination of stockholders entitled to receive
such rights, options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening of
business on the day following the date fixed for such determination
shall be increased by dividing such Settlement Rate by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this paragraph (2),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company shall not issue any
such rights, options or warrants in respect of shares of Common Stock
held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, in case outstanding
shares of Common Stock shall each be combined into a smaller number of
shares of Common Stock, the Settlement Rate in effect at the opening of
business on the day following the day upon which such combination
becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any rights
or warrants referred to in paragraph (2) of this Section, any dividend
or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section), the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior
to the close of business on the date
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fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the Unit Agent) of the
portion of the assets or evidences of indebtedness so distributed
applicable to one share of Common Stock and the denominator shall all
be such Current Market Price per share of the Common Stock, such
adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in
which this paragraph (4) is applicable, paragraph (2) of this Section
shall not be applicable.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed in a Reorganization Event to which Section 5.6(b)
applies or as part of a distribution referred to in paragraph (4) of
this Section) in an aggregate amount that, combined together with (I)
the aggregate amount of any other distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (II) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration
payable in respect of any tender or exchange offer by the Company or
any of its subsidiaries for all or any portion of the Common Stock
expiring within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has been made, exceeds
12.5% of the product of the Current Market Price per share of the
Common Stock on the date for the determination of holders of shares of
Common Stock entitled to receive such distribution times the number of
shares of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Settlement Rate shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution
by a fraction (i) the numerator of which shall be equal to the Current
Market Price peer share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the excess of
such combined amount over such 12.5% and (y) the number of shares of
Common Stock outstanding on such date for determination and (ii) the
denominator of which shall be equal to the Current Market Price per
share of the Common Stock on such date for determination.
-29-
(6) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended upon
the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) that, combined together with (I) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange
offer, of consideration payable in respect of any other tender or
exchange offer by the Company or any of its subsidiaries for all or any
portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this paragraph
(6) has been made and (II) the aggregate amount of any distributions to
all holders of the Company's Common Stock made exclusively in cash
within 12 months preceding the expiration of such tender or exchange
offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made, exceeds 12.5% of
the product of the Current Market Price per share of the Common Stock
as of the last time (the "Expiration Time") tenders could have been
made pursuant to such tender or exchange offer (as it may be amended)
times the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time, then, and in each such case,
immediately prior to the opening of business on the day after the date
of the Expiration Time, the Settlement Rate shall be adjusted so that
the same shall equal the rate determined by dividing the Settlement
Rate immediately prior to the close of business on the date of the
Expiration Time by a fraction (i) the numerator of which shall be equal
to (A) the product of (I) the Current Market Price per share of the
Common Stock on the date of the Expiration Time and (II) the number of
shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time less (B) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of Purchased Shares, and
(ii) the denominator of which shall be equal to the product of (A) the
Current Market Price per share of the Common Stock as of the Expiration
Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the
number of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.6(b)
applies) shall be deemed to involve (i) a distribution of such
securities other than Common Stock to all holders of
-30-
Common Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of stockholders
entitled to receive such distribution" and the "date fixed for such
determination" within the meaning of paragraph (4) of this Section),
and (ii) a subdivision 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 becomes
effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or
combination becomes effective" within the meaning of paragraph (3) of
this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5
consecutive Trading Days selected by the Company commencing not more
than 20 Trading Days before, and ending not later than, the earlier of
the day in question and the day before the "ex" date with respect to
the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "'ex' date," when used with respect to any
issuance or distribution, shall mean the first date on which the Common
Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated
to the nearest 1/10,000th of a share of Common Stock (or, if there is
not a nearest 1/10,000th of a share, to the next lower 1/10,000th of a
share). No adjustment in the Settlement Rate shall be required unless
such adjustment would require an increase or decrease of at least one
percent therein; provided, however, that any adjustments which by
reason of this subparagraph are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of
Settlement Rate in Section 5.1 will apply on the Stock Purchase Date.
Such adjustment shall be made by multiplying the Applicable Market
Value by a fraction of which the numerator shall be the Settlement Rate
immediately after such adjustment pursuant to paragraph (l), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator
shall be the Settlement Rate immediately before such adjustment.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to
be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons.
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(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company (any such event, a "Reorganization Event"), the Settlement Rate will be
adjusted to provide that each Holder of Units will receive on the Stock Purchase
Date with respect to each Purchase Contract forming a part thereof, the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event by a Holder of the number of shares of Common Stock
issuable on account of each Purchase Contract if the Stock Purchase Date had
occurred immediately prior to such Reorganization Event, assuming such Holder of
Common Stock is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("constituent Person"), or an Affiliate of
a constituent Person, and failed to exercise his rights of election, if any, as
to the kind or amount of securities, cash and other property receivable upon
such Reorganization Event (provided that if the kind or amount of securities,
cash and other property receivable upon such Reorganization Event is not the
same for each share of Common Stock held immediately prior to such
Reorganization Event by other than a constituent Person or an Affiliate thereof
and in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and amount
of securities, cash and other property receivable upon such Reorganization Event
by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). In the event of
such a Reorganization Event, the Person formed by such consolidation, merger or
exchange or the Person which acquires the assets of the Company or, in the event
of a liquidation or dissolution of the Company, the Company or a liquidating
trust created in connection therewith, shall execute and deliver to the Unit
Agent an agreement supplemental hereto providing that the Holders of each
Outstanding Unit shall have the rights provided by this Section 5.6. Such
supplemental agreement shall provide for adjustments which, for events
subsequent to the effective date of such supplemental agreement, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section. The above provisions of this Section shall similarly apply to
successive Reorganization Events.
5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the Unit 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
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(ii) within 10 Business Days following the occurrence of an
event that permits or requires an adjustment to the Settlement Rate
pursuant to Section 5.6 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware), provide a
written notice to the Holders of the 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 Unit 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 Unit 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 Unit Agent makes no
representation with respect thereto. The Unit 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.
5.8 NO FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares of Common Stock shall be issued or delivered upon settlement
on the Stock Purchase Date. If Unit Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time by the same
Holder, the number of full shares of Common Stock which shall be delivered upon
settlement shall be computed on the basis of the aggregate number of Purchase
Contracts evidenced by the Unit Certificates so surrendered. Instead of any
fractional share of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Stock Purchase Date, the Company,
through the Unit Agent, shall make a cash payment in respect of such fractional
interest in an amount equal to such fraction times the Applicable Market Value.
The Company shall provide the Unit Agent from time to time with sufficient funds
to permit the Unit Agent to make all cash payments required by this Section 5.8
in a timely manner.
5.9 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 Unit Certificate evidencing
a Purchase Contract or any issuance of a share of Common Stock in a name other
than that of the registered Holder of a Unit Certificate surrendered in respect
of the Purchase Contracts evidenced thereby, other than in the name of the Unit
Agent, as custodian for such Holder, and the Company shall not be required to
issue or deliver such share certificates or Unit 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.
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5.10 TERMINATION EVENT; NOTICE. The Purchase Contracts and the
obligations and rights of the Company and the Holders thereunder, including,
without limitation, all obligations and rights to pay or receive any accrued or
deferred Contract Fees or to settle such Purchase Contracts pursuant to this
Article Five, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Unit Agent or the Company,
if, on or prior to the Stock Purchase Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Unit Agent, the Collateral Agent and the Holders, at their
addresses as they appear in the Unit Registers. Upon and after the occurrence of
a Termination Event, the provisions of this Article Five (other than this
Section 5.10) shall automatically terminate and be of no further force or
effect, and the Unit Certificates shall thereafter represent only the right to
receive the Pledged Securities forming a part of the Units theretofore evidenced
thereby in accordance with the provisions of Section 4.2 and the Pledge
Agreement.
6. REMEDIES.
6.1 UNCONDITIONAL RIGHTS OF HOLDERS. Notwithstanding any other
provision in this Agreement, the Holder of any Unit shall have the right, which
is absolute and unconditional, to purchase Common Stock pursuant to the Purchase
Contract underlying such Unit and to receive payment of Contract Fees, if any,
payable by the Company to such Holder with respect to such Purchase Contract
and, in each such case, to institute suit for the enforcement of any such right,
and such rights shall not be impaired without the consent of such Holder.
6.2 RESTORATION OF RIGHTS AND REMEDIES. If any Holder of Units 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.
6.3 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with
respect to the replacement of mutilated, destroyed, lost or stolen Unit
Certificates in the last paragraph of Section 3.6, no right or remedy herein
conferred upon or reserved to the Holders of Units 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.
6.4 DELAY OR OMISSION NOT WAIVER. No delay or omission of any Holder to
exercise any right or remedy 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.
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6.5 UNDERTAKING FOR COSTS. All parties to this Agreement agree, and
each Holder of any Unit by his acceptance of the Unit Certificate evidencing
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 Unit Agent for any action taken, suffered
or omitted by it as Unit 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,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Unit Agent, to any suit instituted by any
Holder of Units, or group of Holders, holding in the aggregate more than 10% of
the Outstanding Units, or to any suit instituted by any Holder of Units for the
enforcement of payments due in respect of Pledged Securities or Contract Fees on
Purchase Contracts underlying such Units on or after the respective due dates
therefor, or for enforcement of the right to purchase shares of Common Stock
under the Purchase Contracts constituting a part of such Units.
6.6 WAIVER OF STAY OR EXTENSION LAWS. The Company covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Agreement; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Unit Agent or
the Holders, but will suffer and permit the execution of every such power as
though no such law had been enacted.
7. THE UNIT AGENT.
7.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) (i) The Unit Agent undertakes to perform, with respect to
the Units, such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations shall
be read into this Agreement against the Unit Agent; and
(ii) in the absence of bad faith or negligence on its part,
the Unit Agent 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 Unit
Agent and conforming to the requirements of this Agreement, but in the
case of any certificates or opinions which by any provision hereof are
specifically required to be furnished to the Unit Agent, the Unit Agent
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Agreement.
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(b) No provision of this Agreement shall be construed to relieve the
Unit Agent from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
(i) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(ii) the Unit Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Unit Agent was negligent in ascertaining the
pertinent facts; and
(iii) no provision of this Agreement shall require the Unit
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 relating to the conduct or affecting the liability of or
affording protection to the Unit Agent shall be subject to the provisions of
this Section.
7.2 NOTICE OF DEFAULT. Within 90 days after the occurrence of any
default by the Company hereunder, of which a Responsible Officer of the Unit
Agent has actual knowledge, the Unit Agent shall transmit by mail to all Holders
of Units, as their names and addresses appear in the Unit Registers, notice of
such default hereunder, unless such default shall have been cured or waived.
7.3 CERTAIN RIGHTS OF UNIT AGENT. Subject to the provisions of Section
7.1:
(a) the Unit Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by 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;
(c) whenever in the administration of this Agreement the Unit Agent
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any-action-hereunder, the Unit Agent (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate of the Company;
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(d) the Unit Agent may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Unit 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 Unit Agent, in its discretion, may make reasonable further inquiry or
investigation into such facts or matters related to the issuance of the Units
and the execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Unit Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and promises
of the Company, personally or by agent or attorney; and
(f) the Unit Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Unit Agent shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder.
7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF UNITS. The recitals
contained herein and in the Unit Certificates shall be taken as the statements
of the Company and the Unit Agent assumes no responsibility for their
correctness. The Unit Agent makes no representations as to the validity or
sufficiency of this Agreement or of the Units. The Unit Agent shall not be
accountable for the use or application by the Company of the proceeds in respect
of the QUIPS or Purchase Contracts.
7.5 MAY HOLD UNITS. Any Unit Registrar or any other agent of the
Company, or the Unit Agent, in its individual or any other capacity, may become
the owner or pledges of Units and may otherwise deal with the Company with the
same rights it would have if it were not Unit Registrar or such other agent, or
the Unit Agent.
7.6 MONEY HELD IN TRUST. Money held by the Unit Agent in trust
hereunder need not be segregated from the other funds except to the extent
required by law. The Unit Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as otherwise agreed with
the Company.
7.7 COMPENSATION AND REIMBURSEMENT. The Company agrees:
(i) to pay to the Unit Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(ii) except as otherwise expressly provided herein, to
reimburse the Unit Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Unit Agent in
accordance with any provision of this Agreement (including the
reasonable compensation and the expenses and
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disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(iii) to indemnify the Unit Agent and any predecessor Unit
Agent for, and to hold each of them harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
7.8 CORPORATE UNIT AGENT REQUIRED; ELIGIBILITY. There shall at all
times be an Unit Agent hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
its Corporate Trust Office in the Borough of Manhattan, The City of New York, if
there be such a corporation in the Borough of Manhattan, The City of New York
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Unit 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.
7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Unit Agent and no appointment of a
successor Unit Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Unit Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Unit 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 Unit Agent required by Section
7.10 shall not have been delivered to the Unit Agent within 30 days after the
giving of such notice of resignation, the resigning Unit Agent may petition any
court of competent jurisdiction for the appointment of a successor Unit Agent.
(c) The Unit Agent may be removed at any time by Act of the Holders of
a majority in number of the Outstanding Units delivered to the Unit Agent and
the Company.
(d) If at any time
(i) the Unit Agent fails to comply with Section 3.10(b) of the
TIA, as if the Unit Agent were an indenture trustee under an indenture
qualified under the
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TIA, 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, or
(ii) the Unit Agent shall cease to be eligible under Section
7.8 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(iii) the Unit Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Unit Agent or
of its property shall be appointed or any public officer shall take
charge or control of the Unit Agent or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (x) the Company by a Board Resolution may remove the
Unit Agent, or (y) 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 Unit Agent
and the appointment of a successor Unit Agent.
(e) If the Unit Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Unit Agent for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Unit
Agent and shall comply with the applicable requirements of Section 7.10. If no
successor Unit 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 may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Unit Agent.
(f) The Company shall give, or shall cause such successor Unit Agent to
give, notice of each resignation and each removal of the Unit Agent and each
appointment of a successor Unit Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders of Units as their names and
addresses appear in the Unit Registers. Each notice shall include the name of
the successor Unit Agent and the address of its Corporate Trust Office.
7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Unit Agent,
every such successor Unit Agent so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Unit Agent an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring Unit
Agent shall become effective and such successor Unit Agent, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Unit Agent; but, on the request of the
Company or the successor Unit Agent, such retiring Unit Agent shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Unit Agent all the rights, powers and trusts of the retiring Unit
Agent and shall duly assign, transfer and deliver to such successor Unit Agent
all property and money held by such retiring Unit Agent hereunder.
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(b) Upon request of any such successor Unit Agent, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Unit Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Unit Agent shall accept its appointment unless at the
time of such acceptance such successor Unit Agent shall be qualified and
eligible under this Article.
7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any
corporation into which the Unit Agent may be merged or converted or with which
it may be consolidated, or any-corporation resulting from any merger, conversion
or consolidation to which the Unit Agent shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the Unit
Agent, shall be the successor of the Unit Agent hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Unit Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Unit Agent then in office, any successor by merger, conversion or consolidation
to such Unit Agent may adopt such authentication and execution and deliver the
Unit Certificates so authenticated and executed with the same effect as if such
successor Unit Agent had itself authenticated and executed such Units.
7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Unit Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the Unit
Agent in its capacity as Unit Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Unit Agent, and furnish to the Unit 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 accompanied by a copy of the form
of proxy or other communication which such applicants propose to transmit, then
the Unit Agent shall, within five Business Days after the receipt of such
application, afford such applicants access to the information preserved at the
time by the Unit Agent in accordance with Section 7.12(a).
(c) Every Holder of Units, by receiving and holding the Unit
Certificates evidencing the same, agrees with the Company and the Unit Agent
that none of the Company, the Unit Agent nor any agent of any of them shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with Section 7.12(b),
regardless of the source from which such information was derived.
7.13 NO OBLIGATIONS OF UNIT AGENT. Except to the extent otherwise
provided in this Agreement, the Unit Agent assumes no obligations and shall not
be subject to any liability under this Agreement or any Purchase Contract or
Call Option in respect of the obligations of the Holder of any Unit thereunder.
The Company agrees, and each Holder of a Unit Certificate, by
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his acceptance thereof, shall be deemed to have agreed, that the Agent's
execution of the Unit Certificates on behalf of the Holders shall be solely as
agent and attorney-in-fact for the Holders, and that the Unit Agent shall have
no obligation to perform such Purchase Contracts or Call Options on behalf of
the Holders, except to the extent expressly provided in Article Five hereof.
7.14 TAX COMPLIANCE.
(a) The Unit 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 Unit Agent shall comply with any direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(ii) hereof.
(c) The Unit Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or to its authorized representative within a
reasonable period of time after receipt of such request.
8. SUPPLEMENTAL AGREEMENTS.
8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS. Without the
consent of any Holders, the parties to any Principal Agreement, at any time and
from time to time, may enter into one or more agreements supplemental hereto or
thereto, in form satisfactory to such parties, for any of the following
purposes:
(1) to evidence the succession of another Person to any such
party, and the assumption by any such successor of the covenants of
such party herein or therein and under the Units; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Unit Agent; or
(4) to evidence the succession of another Person to the rights
of the Call Option Holder under the Call Options, in connection with a
transfer of such rights by the Call Option Holder to such Person; or
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(5) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(6) to cure any ambiguity, to correct or supplement any
provisions herein or therein which may be inconsistent with any other
provisions herein or therein, or to make any other provisions with
respect to such matters or questions arising under such Principal
Agreement, provided such action shall not adversely affect the
interests of the Holders.
8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS. With the consent
of the Holders of not less than a majority of the Outstanding Units (or, with
respect to modifications that adversely affect only the Holders of Normal Units
or only the Holders of Stripped Units, with the consent of the Holders of not
less than a majority of the Outstanding Units that comprise Normal Units or
Stripped Units, as the case may be), by Act of said Holders delivered to the
parties to any Principal Agreement, such parties (when authorized, in the case
of the Company, by a Board Resolution) may enter into an agreement or agreements
supplemental to such Principal Agreement for the purpose of modifying in any
manner the terms of the Units, or the provisions of such Principal Agreement or
the rights of the Holders in respect of the Units; provided! however, that no
such supplemental agreement shall, without the consent of the Holder of each
Outstanding Unit affected thereby,
(1) change any payment date;
(2) change the amount or type of Pledged Securities underlying
a Unit, impair the right of the Holder of any Unit to receive
distributions or interest payments on the underlying Pledged Securities
or otherwise adversely affect the Holder's rights in or to such Pledged
Securities (including the rights of Holders of Normal Units to effect a
Stripped Unit Creation);
(3) reduce the Contract Fees, if any, or other amounts
receivable by Holders in respect of Units or increase the Contract
Fees, if any, or other amounts payable by Holders in respect of Units
or change any place where, or the coin or currency in which, any
Contract Fees or other amounts receivable or payable in respect of
Units are payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract, change the Stock Purchase Date or otherwise adversely affect
the Holder's rights under any Purchase Contract; or
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(6) reduce the amount payable on exercise of any Call Option,
extend the Call Option Execution Date (as defined in the Call Option
Agreement) or otherwise adversely affect any Holder's rights under any
Call Option; or
(7) reduce the percentage of the Outstanding Units the consent
of whose Holders is required for any such supplemental agreement.
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.
8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or accepting
the additional agencies created by, any supplemental agreement permitted by this
Article or the modifications thereby of the agencies created by this Agreement,
the Unit Agent shall be entitled to receive and (subject to Section 7.1) shall
be fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental agreement is authorized or permitted by this
Agreement. The Unit Agent may, but shall not be obligated to, enter into any
such supplemental agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of any
supplemental agreement under this Article, the relevant Principal Agreement
shall be modified in accordance therewith, and such supplemental agreement shall
form a part of such Principal Agreement for all purposes; and every Holder of
Unit Certificates theretofore or thereafter authenticated, executed on behalf of
the Holder and delivered hereunder shall be bound thereby.
8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS. Unit 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 Unit Agent, bear a notation in form approved by the Unit
Agent as to any matter provided for in such supplemental agreement. If the
Company shall so determine, new Unit Certificates so modified as to conform, in
the opinion of the Unit 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 Unit Agent in exchange
for Outstanding Unit Certificates evidencing the same number of Normal Units or
Stripped Units, as the case may be.
9. CONSOLIDATION, MERGER, SALE OR CONVEYANCE.
9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT
UNDER CERTAIN CONDITIONS. The Company covenants that it will not merge or
consolidate with any other Person or sell or convey all or substantially all of
its assets to any Person, except that the Company may merge or consolidate with,
or sell or convey all or substantially all of its assets to, any other Person,
provided that (a) the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized and
existing under the laws of the United States of America or a State thereof and
such corporation shall assume the obligations of the Company under the Purchase
Contracts and the Pledge Agreement by one or more
-43-
supplemental agreements in form satisfactory to the Unit Agent and, in the case
of the Pledge Agreement, the Collateral Agent, executed and delivered to the
Unit Agent, and, in the case of the Pledge Agreement, the Collateral Agent by
such corporation, and (b) the Company or such successor corporation, as the case
may be, shall not, immediately after such merger or consolidation, or such sale
or conveyance, be in default in the performance of any covenant or condition
under any Principal Amount or under any of the Units.
9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. In case of any such
consolidation, merger, sale or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of Providian Financial
Corporation, any or all of the Unit Certificates evidencing Units issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Unit Agent; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Unit Agent shall authenticate and execute on
behalf of the Holders and deliver any Unit Certificates which previously shall
have been signed and delivered by the officers of the Company to the Unit Agent
for authentication and execution, and any Unit Certificate evidencing Units
which such successor corporation thereafter shall cause to be signed and
delivered to the Unit Agent for that purpose. All the Unit Certificates so
issued shall in all respects have the same legal rank and benefit under this
Agreement as the Unit Certificates theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such Unit
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
change in phraseology and form (but not in substance) may be made in the Unit
Certificates evidencing Units thereafter to be issued as may be appropriate.
9.3 OPINION OF COUNSEL TO UNIT AGENT. The Unit Agent, subject to
Sections 7.1 and 7.3, may receive an Opinion of Counsel as conclusive evidence
that any such consolidation, merger, sale or conveyance, and any such
assumption, complies with the provisions of this Article.
10. COVENANTS.
10.1 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.
10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in the
Borough of Manhattan, The City of New York an office or agency where Unit
Certificates may be presented or surrendered for acquisition of shares of Common
Stock upon settlement and for transfer of Pledged Securities upon occurrence of
a Termination Event, where Unit Certificates may be surrendered for registration
of transfer or exchange or for effecting Stripped Unit Creations,
-44-
where payment of Contract Fees, if any, payable by the Company to the Holders
may be made 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 Unit Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Unit 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
Unit Agent as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other
offices or agencies where Unit Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Unit Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Units the
Corporate Trust Office and appoints the Unit Agent at its Corporate Trust Office
as paying agent in such city.
10.3 COMPANY TO RESERVE COMMON STOCK. The Company shall at all times
prior to the Stock Purchase 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 underlying the Units.
10.4 COVENANTS AS TO COMMON STOCK. The Company covenants that all
shares of Common Stock which may be issued against tender of payment in respect
of the Purchase Contracts underlying the Units will, upon issuance, be newly
issued (i.e., not issued out of treasury shares) and be duly authorized, validly
issued, fully paid and nonassessable.
10.5 STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT. The Company
will deliver to the Unit Agent, within 120 days after the end of each fiscal
year of the Company ending after the date hereof, an Officers' Certificate,
stating whether or not to the best knowledge of the signers thereof the Company
is in default in the performance and observance of any of the terms,
-45-
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PROVIDIAN FINANCIAL CORPORATION
By
----------------------------------------
Title
-------------------------------------
_________________, as Unit Agent
By
----------------------------------------
Title
-------------------------------------
-46-
EXHIBIT A
FORM OF NORMAL UNIT CERTIFICATE
PROVIDIAN FINANCIAL CORPORATION
% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS
(STATED AMOUNT $_______ PER NORMAL UNIT)
No. ____ _______ Normal Units
This Unit Certificate certifies that is the registered Holder of the
number of Normal Units set forth above. Each Normal Unit represents the right to
purchase Common Stock under a Purchase Contract with Providian Financial
Corporation, a Delaware corporation (the "Company"), together with ownership of
the QUIPS(sm)* or other Pledged Securities pledged to secure the obligations
referred to in (a) and (b) below, subject to (a) the obligations owed to the
Company under such Purchase Contract, (b) for so long as any Call Options remain
exercisable, the obligations owed to the Call Option Holder under a Call Option
and (c) the pledge arrangements securing the foregoing obligations.
Each Purchase Contract evidenced hereby is governed by a Master Unit
Agreement, dated as of ____________, 199_ (the "Master Unit Agreement"), between
the Company and _________________, as unit agent (herein called the "Unit
Agent"). All terms used herein which are defined in the Master Unit Agreement
have the meanings set forth therein. Each Call Option evidenced hereby is
governed by the Call Option Agreement. The Pledge of the Pledged Securities
evidenced hereby is governed by the Pledge Agreement. Reference is hereby made
to the Master Unit Agreement, the Call Option Agreement and the Pledge
Agreement, and any supplemental agreements thereto, for a description of the
respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Unit Agent, the Company, the Call Option Holder, the
Collateral Agent and the Holders. The summary contained herein is qualified in
its entirety by the provisions of the Principal Agreements, and the Principal
Agreements shall govern the rights of the parties to the extent that there is
any conflict between such summary and such provisions.
Each Purchase Contract evidenced hereby obligates the Holder of this
Unit Certificate to purchase, and the Company to sell, on [__________, 2001]
(the "Stock Purchase Date"), at a price equal to $________ (the "Stated
Amount"), a number of shares of Common Stock, par value $.01 per share ("Common
Stock"), of the Company equal to the Settlement Rate, unless on or prior to the
Stock Purchase Date there shall have occurred a Termination Event. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined in
the Master Unit Agreement) is greater than or equal to $________ (the "Threshold
Appreciation Price"),
- --------
* QUIPS is a servicemark of Goldman, Sachs & Co.
A-1
_______________ of a share of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than the Stated Amount, a fractional share of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value
(rounded to the nearest 1/10,000th of a share or, if there is no nearest
1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share)
and (c) if the Applicable Market Amount is less than or equal to the Stated
Amount, one share of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Master Purchase Agreement. No fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts. The purchase
price for the shares of Common Stock to be purchased pursuant to each Purchase
Contract evidenced hereby, if not paid by 10:00 a.m., New York City time, on the
Stock Purchase Date, shall be paid by application of payments received by the
Company on the Stock Purchase Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the Pledged Securities pledged to secure such
Holder's obligations under such Purchase Contract.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations to receive and pay accrued or deferred Contract Fees, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Unit Agent or the Company, if, on or prior to the
Stock Purchase Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Securities from the Pledge. The Normal Units shall thereafter represent
the right to receive the Pledged Securities forming a part of such Normal Units
in accordance with the provisions of the Master Unit Agreement and the Pledge
Agreement.
The Call Options evidenced hereby entitle the Call Option Holder to
acquire the QUIPS (or Junior Subordinated Debentures substituted therefor)
evidenced hereby on or before [_________, 2001,] unless prior to the exercise
thereof there shall have occurred a Termination Event. The Call Option Holder
may exercise such Call Options only in whole together with the Call Options
underlying the other Normal Units, by delivering to the Unit Agent a notice of
exercise and delivering to the Collateral Agent the Aggregate Consideration
Deliverable Upon Exercise of Call Options, whereupon the QUIPS or Junior
Subordinated Debentures underlying the Normal Units will be released from the
Pledge and the Treasury Securities constituting all or part of the Aggregate
Consideration Deliverable Upon Exercise of Call Options delivered to the
Collateral Agent will be substituted as the Pledged Securities underlying the
Normal Units.
The [COMPANY] [HOLDER] shall pay, on each ____________, ____________,
and ____________, commencing ________, 199__ (each, a "Quarterly Payment Date"),
in respect of each Purchase Contract evidenced hereby, a fee (the "Contract
Fee") accruing on the Stated Amount of such Unit from and including the date of
first issuance of any Units at a rate per annum equal to ____% (the "Contract
Fee Rate") (computed on the basis of a 360- day year of twelve 30-day months and
subject to deferral as described in the Master Unit Agreement), plus any
additional fees accrued thereon pursuant to Section 5.3 of the Master Unit
Agreement. [THE COMPANY'S OBLIGATIONS WITH RESPECT TO CONTRACT FEES SHALL BE, TO
THE EXTENT PROVIDED IN THE MASTER UNIT AGREEMENT, SUBORDINATE AND
A-2
SUBJECT IN RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS] [SUCH PAYMENT
WILL BE FUNDED OUT OF PAYMENTS MADE IN RESPECT OF THE PLEDGED
SECURITIES EVIDENCED HEREBY].
Payments due to the Holder in respect of the Normal Units evidenced
hereby will be payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of business on the
Record Date next preceding the relevant payment date.
The transfer of any Unit Certificate will be registered and Unit
Certificates may be exchanged as provided in the Master Unit Agreement. The Unit
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Master Unit Agreement. No
service charge shall be required for any such registration of transfer or
exchange, but the Company and the Unit Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Except as provided in the Master Unit Agreement in connection with a
Stripped Unit Creation, for so long as the Purchase Contract underlying a Normal
Unit remains in effect, such Normal Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Normal
Unit in respect of the Pledged Securities and Purchase Contract constituting
such Normal Unit may be transferred and exchanged only as an integrated Normal
Unit.
Upon registration of transfer of this Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts and Call Options evidenced
hereby and by the Pledge Agreement, and the transferor shall be released from
such obligations. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
The Holder of this Unit Certificate, by his acceptance hereof,
irrevocably authorizes the Unit Agent to enter into and perform the related
Purchase Contracts and Call Options evidenced hereby on his behalf as his
attorney-in-fact, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts
and Call Options, consents to the provisions of the Principal Agreements,
irrevocably authorizes the Unit Agent to enter into and perform the Call Option
Agreement and the Pledge Agreement on his behalf as his attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Pledged Securities
evidenced hereby pursuant to the Pledge Agreement.
Subject to certain exceptions, the provisions of the Principal
Agreements may be amended with the consent of the Holders of at least a majority
of the Outstanding Units or, if the amendment affects only the Holders of the
Normal Units or only the Holders of the Stripped Units, at least a majority of
the Outstanding Units comprising Normal Units or Stripped Units, as the case may
be.
The Purchase Contracts and Call Options shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York.
A-3
The Company, the Unit Agent and any agent of the Company or the Unit
Agent may treat the Person in whose name this Unit Certificate is registered as
the owner of the Normal Units evidenced hereby for the purpose of receiving
payments of distributions or interest on the Pledged Securities, receiving the
rights and performing the obligations under 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 Unit 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.
Copies of the Principal Agreements are available for inspection at the
offices of the Unit Agent.
Unless the certificate of authentication hereon has been executed by
the Unit Agent by manual signature, this Unit Certificate shall not be entitled
to any benefit under the Principal Agreements or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company and the Holder hereby agree to their
respective obligations under the Purchase Contracts evidenced by this
instrument, and the Holder hereby acknowledges that the Pledged Securities
evidenced by this instrument are subject to the Pledge under the Pledge
Agreement.
PROVIDIAN FINANCIAL CORPORATION
By
--------------------------------------
Title
-----------------------------------
HOLDER SPECIFIED ABOVE
By
--------------------------------------
As Attorney-in-Fact of such Holder
IN WITNESS WHEREOF, the Holder hereby agrees, for the benefit of the
Call Option Holder, to its obligations under any Call Options evidenced by this
instrument, and the Holder
A-4
hereby acknowledges, for the benefit of the Call Option Holder, that the Pledged
Securities evidenced by this instrument are subject to the Pledge under the
Pledge Agreement.
HOLDER SPECIFIED ABOVE
By
---------------------------------------
As Attorney-in-Fact of such Holder
Dated:
Agent's Certificate of Authentication
This is one of the Unit Certificates referred to in the within
mentioned Master Unit Agreement as Unit Agent.
By
---------------------------------------
By
---------------------------------------
A-5
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Normal Units evidenced by this Unit
Certificate be registered in the name of, and delivered, together with a check
in payment for any fractional share, to the undersigned at the address indicated
below unless a different name and address have been indicated below. If shares
are to be registered in the name of a Person other than the under signed, the
undersigned will pay any transfer tax payable incident thereto.
Dated:__________
------------------------------------
Signature
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person
other than the Holder, please print Please print name and address of
such Person's name and address: Registered Holder:
Name Name
Address Address
Social Unit or other Taxpayer
Identification Number, if any
A-6
REQUEST TO CREATE STRIPPED UNITS
The undersigned Holder directs that (a) the Pledged Securities
underlying the number of Normal Units indicated below (which number does not
exceed the number of Normal Units evidenced by this Unit Certificate) be
released from the Pledge and registered in the name of, and delivered, to the
undersigned at the address indicated below unless a different name and address
have been indicated below and (b) a corresponding number of Stripped Units be
registered in the name of, and delivered, to the undersigned at the address
indicated below unless a difference name and address have been indicated below.
If the released Pledged Securities or the Stripped Units are to be registered in
the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
The undersigned confirms that the requisite Treasury Securities, any
required cash and the instrument from the Call Option Holder have been delivered
to the Collateral Agent.
Dated: __________________
----------------------------------
Signature
If released Pledged Securities are to be REGISTERED HOLDER
registered in-the name of and delivered
to a Person other than the Holder,
please print Please print name and address of
such Person's name and address:
Registered Holder:
Name Name
Address Address
Social Unit or other Taxpayer
Identification Number, if any
If Stripped Units are to be registered
in the name of and delivered to a Person
other than the Holder, please print such
Person's name and address.
Name
Address
Social Unit or other Taxpayer
Identification Number, if any
A-7
EXHIBIT B
FORM OF STRIPPED UNIT CERTIFICATE
Providian Financial Corporation
___% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS
(STATED AMOUNT $_________ PER UNIT)
No. _____ ______ Stripped Units
This Unit Certificate certifies that is the registered Holder of the
number of Stripped Units set forth above. Each Stripped Unit represents the
right to purchase Common Stock under a Purchase Contract with Providian
Financial Corporation, a Delaware corporation (the "Company"), together with
ownership of the Treasury Securities pledged to secure the obligations referred
to in (a) below, subject to (a) the obligations owed to the Company under such
Purchase Contract and (b) the pledge arrangements securing the foregoing
obligations.
Each Purchase Contract evidenced hereby is governed by a Master Unit
Agreement, dated as of __________, 199_ (the "Master Unit Agreement"), between
the Company and _________________, as unit agent (herein called the "Unit
Agent"). All terms used herein which are defined in the Master Unit Agreement
have the meanings set forth therein. The Pledge of the Pledged Securities
evidenced hereby is governed by the Pledge Agreement. Reference is hereby made
to the Master Unit Agreement and the Pledge Agreement, and any supplemental
agreements thereto, for a description of the respective rights, limitations of
rights, obligations, duties and immunities thereunder of the Unit Agent, the
Company, the Collateral Agent and the Holders. The summary contained herein is
qualified in its entirety by the provisions of the Principal Agreements, and the
Principal Agreements shall govern the rights of the parties to the extent that
there is any conflict between such summary and such provisions.
Each Purchase Contract evidenced hereby obligates the Holder of this
Unit Certificate to purchase, and the Company to sell, on [___________, 2001]
(the "Stock Purchase Date"), at a price equal to $ (the "Stated Amount"), a
number of shares of Common Stock, par value $.01 per share ("Common Stock"), of
the Company equal to the Settlement Rate, unless on or prior to the Stock
Purchase Date there shall have occurred a Termination Event. The "Settlement
Rate" is equal to (a) if the Applicable Market Value (as defined in the Master
Unit Agreement) is greater than or equal to $_______ (the "Threshold
Appreciation Price"), of a share of Common Stock per Purchase Contract, (b) if
the Applicable Market Value is less than the Threshold Appreciation Price but is
greater than the Stated Amount, a fractional share of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value
(rounded to the nearest 1/10,000th of a share or, if there is no nearest
1/10,000th of a share, rounded downward to the nearest 1/10,000th of a share)
and (c) if the Applicable Market Amount is less than or equal to the Stated
Amount, one share of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Master Purchase Agreement. No fractional
B-1
shares of Common Stock will be issued upon settlement of Purchase Contracts. The
purchase price for the shares of Common Stock to be purchased pursuant to each
Purchase Contract evidenced hereby, if not paid by 10:00 a.m., New York City
time, on the Stock Purchase Date, shall be paid by application of payments
received by the Company on the Stock Purchase Date from the Collateral Agent
pursuant to the Pledge Agreement in respect of the Pledged Securities pledged to
secure such Holder's obligations under such Purchase Contract.
The Purchase Contracts and the obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights and
obligations to receive and pay accrued or deferred Contract Fees, shall
immediately and automatically terminate, without the necessity of any notice or
action by any Holder, the Unit Agent or the Company, if, on or prior to the
Stock Purchase Date, a Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Pledged Securities from the Pledge. The Stripped Units shall thereafter
represent the right to receive the Pledged Securities forming a part of such
Stripped Units in accordance with the provisions of the Master Unit Agreement
and the Pledge Agreement.
The [COMPANY] [HOLDER] shall pay, on each ________, ________, and
________, commencing ________, 199__ (each, a "Quarterly Payment Date"), in
respect of each Purchase Contract evidenced hereby, a fee (the "Contract Fee")
accruing on the Stated Amount of such Unit from and including the date of first
issuance of any Units at a rate per annum equal to _____% (the "Contract Fee
Rate") (computed on the basis of a 360- day year of twelve 30-day months and
subject to deferral as described in the Master Unit Agreement), plus any
additional fees accrued thereon pursuant to Section 5.3 of the Master Unit
Agreement. [THE COMPANY'S OBLIGATIONS WITH RESPECT TO CONTRACT FEES SHALL BE, TO
THE EXTENT PROVIDED IN THE MASTER UNIT AGREEMENT, SUBORDINATE AND SUBJECT IN
RIGHT OF PAYMENT TO ALL SENIOR INDEBTEDNESS] [SUCH PAYMENT WILL BE FUNDED OUT OF
PAYMENTS MADE IN RESPECT OF THE PLEDGED SECURITIES EVIDENCED HEREBY].
Payments due to the Holder in respect of the Stripped Units evidenced
hereby will be payable to the Person in whose name this Unit Certificate (or a
Predecessor Unit Certificate) is registered at the close of business on the
Record Date next preceding the relevant payment date.
The transfer of any Unit Certificate will be registered and Unit
Certificates may be exchanged as provided in the Master Unit Agreement. The Unit
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents permitted by the Master Unit Agreement. No
service charge shall be required for any such registration of transfer or
exchange, but the Company and the Unit Agent may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. For so long as the Purchase Contract underlying a Stripped Unit
remains in effect, such Stripped Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Stripped
Unit in respect of the Pledged Securities and Purchase Contract constituting
such Stripped Unit may be transferred and exchanged only as an integrated
Stripped Unit.
B-2
Upon registration of transfer of this Unit Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of the Purchase Contracts evidenced hereby and by the
Pledge Agreement, and the transferor shall be released from such obligations.
The Company covenants and agrees, and the Holder, by his acceptance hereof,
likewise covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Unit Certificate, by his acceptance hereof,
irrevocably authorizes the Unit Agent to enter into and perform the related
Purchase Contracts evidenced hereby on his behalf as his attorney-in-fact,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions of the Principal Agreements, irrevocably authorizes the Unit Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Pledged Securities evidenced hereby pursuant to the Pledge Agreement.
Subject to certain exceptions, the provisions of the Principal
Agreements may be amended with the consent of the Holders of at least a majority
of the Outstanding Units or, if the amendment affects only the Holders of the
Normal Units or only the Holders of the Stripped Units, at least a majority of
the Outstanding Units comprising Normal Units or Stripped Units, as the case may
be.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Unit Agent and any agent of the Company or the Unit
Agent may treat the Person in whose name this Unit Certificate is registered as
the owner of the Stripped Units evidenced hereby for the purpose of receiving
payments of distributions or interest on the Pledged Securities, receiving the
rights and performing the obligations under 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 Unit 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.
Copies of the Principal Agreements are available for inspection at the
offices of the Unit Agent.
Unless the certificate of authentication hereon has been executed by
the Unit Agent by manual signature, this Unit Certificate shall not be entitled
to any benefit under the Principal Agreements or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company and the Holder hereby agree to their
respective obligations under the Purchase Contracts evidenced by this
instrument, and the Holder hereby
B-3
acknowledges that the Pledged Securities evidenced by this instrument are
subject to the Pledge under the Pledge Agreement.
PROVIDIAN FINANCIAL CORPORATION
By
---------------------------------------
Title
------------------------------------
HOLDER SPECIFIED ABOVE
By
---------------------------------------
as Attorney-in-Fact of such Holder
Dated:
Agent's Certificate of Authentication
This is one of the Unit Certificates referred to in the within mentioned
Master Unit Agreement as Unit Agent
By
By
B-4
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Stock Purchase Date of the
Purchase Contracts underlying the number of Stripped Units evidenced by this
Unit Certificate be registered in the name of, and delivered, together with a
check in payment for any fractional share, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
If shares are to be registered in the name of a Person other than the under
signed, the undersigned will pay any transfer tax payable incident thereto.
Dated ______________
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Signature
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person
other than the Holder, please print Please print name and address
such Person's name and address: of Registered Holder:
Name Name
Address Address
Social Unit or other Taxpayer
Identification Number, if any
B-5