EXECUTION COPY
CENDANT CORPORATION
AND
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION
as Forward Purchase Contract Agent
----------
FORWARD PURCHASE CONTRACT AGREEMENT
----------
dated as of July 27, 2001
Table of Contents
Page
Article I Definitions and Other Provisions of General Applications............................................... 1
Section 1.1 Definitions................................................................................. 1
Section 1.2 Compliance Certificates and Opinions........................................................14
Section 1.3 Form of Documents Delivered to Agent........................................................15
Section 1.4 Acts of Holders; Record Dates...............................................................15
Section 1.5 Notices.....................................................................................16
Section 1.6 Notice to Holders; Waiver...................................................................17
Section 1.7 Effect of Headings and Table of Contents....................................................18
Section 1.8 Successors and Assigns......................................................................18
Section 1.9 Separability Clause.........................................................................18
Section 1.10 Benefits of Agreement......................................................................18
Section 1.11 Governing Law..............................................................................18
Section 1.12 Legal Holidays.............................................................................18
Section 1.13 Counterparts...............................................................................19
Section 1.14 Inspection of Agreement....................................................................19
Article II Certificate Forms.....................................................................................19
Section 2.1 Forms of Certificates Generally.............................................................19
Section 2.2 Form of Agent's Certificate of Authentication...............................................20
Article III The Securities.......................................................................................20
Section 3.1 Title and Terms; Denominations..............................................................20
Section 3.2 Rights and Obligations Evidenced by the Certificates........................................20
Section 3.3 Execution, Authentication, Delivery and Dating..............................................21
Section 3.4 Temporary Certificates......................................................................22
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Section 3.5 Registration; Registration of Transfer and Exchange.........................................22
Section 3.6 Book-Entry Interests........................................................................23
Section 3.7 Notices to Holders..........................................................................24
Section 3.8 Appointment of Successor Clearing Agency....................................................24
Section 3.9 Definitive Certificates.....................................................................24
Section 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.........................................25
Section 3.11 Persons Deemed Owners......................................................................26
Section 3.12 Cancellation...............................................................................26
Section 3.13 Establishment of Stripped DECS.............................................................26
Section 3.14 Reestablishment of Upper DECS..............................................................28
Section 3.15 Transfer of Collateral upon Occurrence of Termination Event................................29
Section 3.16 No Consent to Assumption...................................................................30
Section 3.17 CUSIP Numbers..............................................................................30
Article IV The Notes.............................................................................................30
Section 4.1 Interest and Other Payments; Rights to Payments Preserved; Rate Reset; Notice...............30
Section 4.2 Notice and Voting...........................................................................32
Section 4.3 Tax Event Redemption........................................................................32
Section 4.4 CUSIP Numbers...............................................................................33
Article V The Forward Purchase Contracts.........................................................................33
Section 5.1 Purchase of Shares of Common Stock..........................................................33
Section 5.2 Contract Adjustment Payments................................................................35
Section 5.3 Deferral of Payment Dates For Contract Adjustment Payments..................................40
Section 5.4 Initial Remarketing.........................................................................41
Section 5.5 Payment of Purchase Price...................................................................42
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Section 5.6 Issuance of Shares of Common Stock..........................................................45
Section 5.7 Adjustment of Settlement Rate...............................................................46
Section 5.8 Notice of Adjustments and Certain Other Events..............................................51
Section 5.9 Termination Event; Notice...................................................................52
Section 5.10 Early Settlement...........................................................................52
Section 5.11 No Fractional Shares.......................................................................54
Section 5.12 Charges and Taxes..........................................................................54
Article VI Remedies..............................................................................................54
Section 6.1 Unconditional Right of Holders to Purchase Common Stock.....................................54
Section 6.2 Restoration of Rights and Remedies..........................................................55
Section 6.3 Rights and Remedies Cumulative..............................................................55
Section 6.4 Delay or Omission Not Waiver................................................................55
Section 6.5 Undertaking for Costs.......................................................................55
Section 6.6 Waiver of Stay or Extension Laws............................................................56
Article VII The Agent............................................................................................56
Section 7.1 Certain Duties and Responsibilities.........................................................56
Section 7.2 Notice of Default...........................................................................57
Section 7.3 Certain Rights of Agent.....................................................................57
Section 7.4 Not Responsible for Recitals or Issuance of Securities......................................58
Section 7.5 May Hold Securities.........................................................................58
Section 7.6 Money Held in Custody.......................................................................58
Section 7.7 Compensation and Reimbursement..............................................................58
Section 7.8 Corporate Agent Required; Eligibility.......................................................59
Section 7.9 Resignation and Removal; Appointment of Successor...........................................59
Section 7.10 Acceptance of Appointment by Successor.....................................................60
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Section 7.11 Merger, Conversion, Consolidation or Succession to Business................................61
Section 7.12 Preservation of Information; Communications to Holders.....................................61
Section 7.13 No Obligations of Agent....................................................................61
Section 7.14 Tax Compliance.............................................................................62
Article VIII Supplemental Agreements.............................................................................62
Section 8.1 Supplemental Agreements Without Consent of Holders..........................................62
Section 8.2 Supplemental Agreements with Consent of Holders.............................................63
Section 8.3 Execution of Supplemental Agreements........................................................64
Section 8.4 Effect of Supplemental Agreements...........................................................64
Section 8.5 Reference to Supplemental Agreements........................................................64
Article IX Consolidation, Merger, Sale or Conveyance.............................................................64
Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions....................................................................64
Section 9.2 Rights and Duties of Successor Corporation..................................................65
Section 9.3 Opinion of Counsel Given to Agent...........................................................65
Article X Covenants..............................................................................................66
Section 10.1 Performance Under Forward Purchase Contracts...............................................66
Section 10.2 Maintenance of Office or Agency............................................................66
Section 10.3 Company to Reserve Common Stock............................................................66
Section 10.4 Covenants as to Common Stock...............................................................67
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FORWARD PURCHASE CONTRACT AGREEMENT, dated as of July 27, 2001
between Cendant Corporation, a Delaware corporation (the "Company"), and Bank
One Trust Company, National Association, acting as purchase contract agent for
the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of
this Agreement and the Certificates evidencing the Securities.
All things necessary to make the Forward Purchase Contracts,
when the Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this Agreement,
the valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATIONS
Section 1.1 Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
and nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(d) the following terms have the meanings given to them in
this Section 1.1(d).
"Act" when used with respect to any Holder, has the
meaning specified in Section 1.4.
1
"Affiliate" has the same meaning as given to that term in
Rule 405 promulgated under the Securities Act of 1993, as
amended, as is in effect on the date hereof.
"Agent" means the Person named as the "Agent" in the first
paragraph of this instrument until a successor Agent shall
have become such pursuant to the applicable provisions of this
Agreement, and thereafter "Agent" shall mean such Person.
"Agreement" means this instrument as originally
executed or as it may from time to time be supplemented or
amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in
Section 5.1.
"Applicable Ownership Interest" means, with respect to an
Upper DECS and the Treasury Securities in the Treasury
Portfolio, (A) a 1/20, or 5.0%, undivided beneficial ownership
interest in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury security
included in such Treasury Portfolio which matures on or prior
to August 17, 2004 and (B) for the scheduled interest payment
date on the Notes that occurs on the Forward Purchase Contract
Settlement Date, in the case of a Successful Initial
Remarketing, or for each scheduled interest payment date on
the Notes that occurs after the Tax Event Redemption Date and
on or before the Forward Purchase Contract Settlement Date, in
the case of a Tax Event Redemption, a 5.0% undivided
beneficial ownership interest in a $1,000 principal or
interest of a principal or interest strip in a U.S. Treasury
security included in the Treasury Portfolio that matures on or
prior to that interest payment date or dates.
"Applicable Principal Amount" means the aggregate
principal amount of the Notes which are components of Upper
DECS on the Initial Remarketing Date.
"Authorized Newspaper" means a daily newspaper, in the
English language, customarily published on each day that is a
Business Day in The City of New York, whether or not published
on days that are Legal Holidays, and of general circulation in
The City of New York. The Authorized Newspaper for the
purposes of the Reset Announcement Date is currently
anticipated to be The Wall Street Journal.
"Bankruptcy Code" means title 11 of the United States
Code, or any other law of the United States that from time to
time provides a uniform system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry
Interest, a Person who is the owner of such Book-Entry
Interest as reflected on the books of the Clearing Agency or
on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
2
"Board of Directors" means the board of directors of the
Company or a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the
Board of Directors, a copy of which has been certified by the
Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification and
delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a
Global Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Clearing Agency
as described in Section 3.6.
"Business Day" means any day other than a Saturday, a
Sunday or any other day on which banking institutions in New
York City (in the State of New York) are permitted or required
by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section
5.5(a)(i).
"Certificate" means an Upper DECS Certificate or a
Stripped DECS Certificate.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as a depositary for the Securities and in whose
name, or in the name of a nominee of that organization, shall
be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom
from time to time the Clearing Agency effects book entry
transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of
the Pledge Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as
Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in
Section 3.13.
"Common Equity Securities" means shares of a class of
stock of the Company that is not entitled to priority over any
other class of stock of the
3
Company in the payment of dividends or with respect to rights
upon the liquidation, dissolution or winding up of the
Company.
"Common Stock" means the Common Stock, $0.01 par value, of
the Company.
"Company" means the Person named as the "Company" in the
first paragraph of this instrument until a successor shall
have become such pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor.
"Constituted Person" has the meaning specified in Section
5.7(b).
"Contract Adjustment Payments" means, in the case of Upper
DECS and Stripped DECS, the amount payable by the Company in
respect of each Forward Purchase Contract constituting a part
of an Upper DECS or a Stripped DECS, equal to 1.0% per year of
the Stated Amount, in each case computed on the basis of a 360
day year of twelve 30 day months, plus any Deferred Contract
Adjustment Payments accrued pursuant to Section 5.2 or 5.3.
"Corporate Trust Office" means the principal corporate
trust office of the Agent at which, at any particular time,
its corporate trust business shall be administered, which
office at the date hereof is located at 1 Bank One Plaza Suite
IL1-0126, Chicago, IL 60670-0126, Attention: Global Corporate
Trust Services Division.
"Coupon Rate" means the percentage rate per year at which
each Note will bear interest initially.
"Current Market Price" has the meaning specified in
Section 5.7(a)(8).
"Deferred Contract Adjustment Payments" has the meaning
specified in Section 5.3.
"Depositary" means, initially, DTC until another Clearing
Agency becomes its successor.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Early Settlement" has the meaning specified in Section
5.10(a).
"Early Settlement Amount" has the meaning specified in
Section 5.10(a).
"Early Settlement Date" has the meaning specified in
Section 5.10(a).
"Early Settlement Rate" has the meaning specified in
Section 5.10(b).
4
"Exchange Act" means the Securities Exchange Act of 1934
and any statute successor thereto, in each case as amended
from time to time, and the rules and regulations promulgated
thereunder.
"Expiration Date" has the meaning specified in
Section 1.4.
"Expiration Time" has the meaning specified in Section
5.7(a)(6).
"Failed Initial Remarketing" has the meaning specified in
Section 5.4.
"Failed Secondary Remarketing" has the meaning specified
in Section 5.5(b).
"Global Certificate" means a Certificate that evidences
all or part of the Securities and is registered in the name of
a Depositary or a nominee thereof.
"Global Note Certificate" means a certificate evidencing
the respective rights and obligations of Holders in respect of
the number of Notes specified on such certificate and which is
registered in the name of a Clearing Agency or a nominee
thereof.
"Holder," when used with respect to a Security, means the
Person in whose name the Security evidenced by an Upper DECS
Certificate and/or a Stripped DECS Certificate is registered
in the related Upper DECS Register and/or Stripped DECS
Register, as the case may be.
"Indenture" means the Indenture dated as of February 24,
1998 between the Company and the Indenture Trustee, as amended
and supplemented by the Fourth Supplemental Indenture dated as
of July 27, 2001 between the Company and the Indenture
Trustee.
"Indenture Trustee" means The Bank of Nova Scotia Trust
Company of New York, as trustee under the Indenture, or any
successor thereto.
"Initial Remarketing" has the meaning specified in
Section 5.4.
"Initial Remarketing Date" has the meaning specified in
Section 5.4.
"Issuer Order" or "Issuer Request" means a written order
or request signed in the name of the Company by its Chairman
of the Board, its President or a Vice President and by its
Chief Financial Officer, its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Agent.
"New York Office" shall have the meaning set forth in
Section 10.2
"Notes" means the series of senior notes of the Company
designated the senior notes due August 17, 2006, to be issued
under the Indenture as of the date hereof.
5
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate of the Company
signed on its behalf by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the
Company or an Affiliate and who shall be reasonably acceptable
to the Agent.
"Outstanding Securities," with respect to the Upper DECS
or Stripped DECS, means, as of the date of determination, all
Upper DECS or Stripped DECS, as the case may be, evidenced by
Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) If a Termination Event has occurred, (A) Stripped
DECS for which the Stated Amount of Treasury Securities
has been theretofore deposited with the Agent in trust for
the Holders of such Stripped DECS and (B) Upper DECS for
which the Stated Amount of the related Notes or the
appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, has been theretofore
deposited with the Agent in trust for the Holders of such
Upper DECS;
(ii) Upper DECS or Stripped DECS evidenced by
Certificates theretofore cancelled by the Agent or
delivered to the Agent for cancellation or deemed
cancelled pursuant to the provisions of this Agreement;
and
(iii) Upper DECS or Stripped DECS evidenced by
Certificates in exchange for or in lieu of which other
Certificates have been authenticated, executed on behalf
of the Holder and delivered pursuant to this Agreement,
other than any such Certificate in respect of which there
shall have been presented to the Agent proof satisfactory
to it that such Certificate is held by a protected
purchaser in whose hands the Upper DECS or Stripped DECS
evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of
the requisite number of the Upper DECS or Stripped DECS have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Upper DECS or Stripped DECS owned
by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in
determining whether the Agent shall be protected in relying
upon any such request, demand, authorization, direction,
notice, consent or waiver, only Upper DECS or Stripped DECS
which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Upper DECS or Stripped DECS so owned
which have been
6
pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the satisfaction of
the Agent the pledgee's right so to act with respect to such
Upper DECS or Stripped DECS and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each February 17, May 17, August 17
and November 17, commencing November 17, 2001.
"Permitted Investments" has the meaning set forth in
Section 1 of the Pledge Agreement.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association,
joint-stock company, limited liability company, trust,
unincorporated association or government or any agency or
political subdivision thereof or any other entity of whatever
nature.
"Pledge" means the pledge under the Pledge Agreement of
the Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, and of the
Treasury Securities, in each case constituting a part of the
Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of
July 27, 2001, by and among the Company, the Collateral Agent
and the Agent, on its own behalf and as attorney-in-fact for
the Holders from time to time of the Securities, as the same
may hereafter be amended in accordance with the terms thereof.
"Predecessor Certificate" means a Predecessor Upper DECS
Certificate or a Predecessor Stripped DECS Certificate.
"Predecessor Upper DECS Certificate" of any particular
Upper DECS Certificate means every previous Upper DECS
Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Upper DECS
evidenced thereby; and, for the purposes of this definition,
any Upper DECS Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated,
destroyed, lost or stolen Upper DECS Certificate shall be
deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or
stolen Upper DECS Certificate.
"Predecessor Stripped DECS Certificate" of any particular
Stripped DECS Certificate means every previous Stripped DECS
Certificate evidencing all or a portion of the rights and
obligations of the Company and the Holder under the Stripped
DECS evidenced thereby; and, for the purposes of this
definition, any Stripped DECS Certificate authenticated and
delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Stripped DECS Certificate
shall be deemed to evidence the same rights and obligations of
the Company and the Holder as the mutilated, destroyed, lost
or stolen Stripped DECS Certificate.
7
"Primary Treasury Dealer" means a primary U.S. government
securities dealer in The City of New York.
"Proceeds" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Underwriting Agreement" means the Underwriting Agreement
dated July 20, 2001 between the Company and Salomon Smith
Barney Inc.
"Forward Purchase Contract," when used with respect to any
Security, means the contract forming a part of such Security
and obligating the Company to sell and the Holder of such
Security to purchase Common Stock on the terms and subject to
the conditions set forth in Article Five hereof.
"Forward Purchase Contract Settlement Date" means
August 17, 2004.
"Forward Purchase Contract Settlement Fund" has the
meaning specified in Section 5.6.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section
5.7(a)(6).
"Quotation Agent" means (i) Salomon Smith Barney Inc. and
its respective successors, provided, however, that if the
foregoing shall cease to be a Primary Treasury Dealer, the
Company shall substitute therefor another Primary Treasury
Dealer or (ii) any other Primary Treasury Dealer selected by
the Sponsor.
"Record Date" for the distribution payable in respect of
the Notes or the Applicable Ownership Percentage of the
Treasury Portfolio payable on any Payment Date means the first
day of the month in which the relevant Payment Date occurs.
"Redemption Amount" means, for each Note, the product of
(i) the principal amount of such Note and (ii) a fraction
whose numerator is the applicable Treasury Portfolio Purchase
Price and whose denominator is the applicable Tax Event
Redemption Principal Amount.
"Redemption Price" means the redemption price per Note
equal to the Redemption Amount plus any accrued and unpaid
interest on such Note to the date of redemption.
"Register" means the Upper DECS Register and the Stripped
DECS Register.
"Registrar" means the Upper DECS Registrar and the
Stripped DECS Registrar.
8
"Remarketing Agent" has the meaning specified in
Section 5.3.
"Remarketing Agreement" means the Remarketing Agreement
dated as of July 27, 2001 by and among the Company, the
Remarketing Agent and the Forward Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in
Section 5.4.
"Reorganization Event" has the meaning specified in
Section 5.7(b).
"Reset Agent" means a nationally recognized investment
banking firm chosen by the Company to determine the Reset
Rate. It is currently anticipated that Salomon Smith Barney
Inc. will act in such capacity.
"Reset Announcement Date" means, in the case of the Reset
Rate to be determined on the Initial Remarketing Date, the
tenth Business Day immediately preceding May 17, 2004 and, in
the case of the Reset Rate to be determined on the Secondary
Remarketing Date, the tenth Business Day immediately preceding
the Forward Purchase Contract Settlement Date.
"Reset Rate" means the interest rate per year (to be
determined by the Reset Agent), equal to the sum of (X) the
Reset Spread and (Y) the rate of interest on (1) in the case
of the Reset Rate to be determined on the Initial Remarketing
Date, the Two and One-Quarter Year Benchmark Treasury in
effect on the Initial Remarketing Date or (2) in the case of
the Reset Rate to be determined on the Secondary Remarketing
Date, the Two-Year Benchmark Treasury in effect on the
Secondary Remarketing Date; provided, however, that the Reset
Rate shall not exceed the maximum rate permitted by applicable
law.
"Reset Spread" means (a) in the case of the Reset Rate to
be determined on the Initial Remarketing Date, a spread amount
to be determined by the Reset Agent on the applicable Reset
Announcement Date as the appropriate spread so that the Reset
Rate will be the interest rate that the Notes should bear in
order for the Applicable Principal Amount of Notes to have an
approximate aggregate market value of 100.5% of the Treasury
Portfolio Purchase Price on the Initial Remarketing Date and
(b) in the case of the Reset Rate to be determined on the
Secondary Remarketing Date, a spread amount determined by the
Reset Agent on the applicable Reset Announcement Date as the
appropriate spread so that the Reset Rate will be the interest
rate that the Notes should bear in order for the Notes to have
an approximate market value of 100.5% of their principal
amount on the Secondary Remarketing Date.
"Responsible Officer," when used with respect to the
Agent, means any officer of the Agent assigned by the Agent
with primary responsibility to administer its duties and
responsibilities hereunder and under the Pledge Agreement.
"Secondary Remarketing" has the meaning specified in
Section 5.5(b).
9
"Secondary Remarketing Date" has the meaning specified in
Section 5.5(b).
"Security" means an Upper DECS or a Stripped DECS.
"Senior Indebtedness" means indebtedness of any kind of
the Company unless the instrument under which such
indebtedness is incurred expressly provides that it is on a
parity in right of payment with or subordinate in right of
payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in
Section 5.1.
"Stated Amount" means $50.
"Stripped DECS" means the collective rights and
obligations of a Holder of a Stripped DECS Certificate in
respect of the Treasury Securities, subject to the Pledge
thereof, and the related Forward Purchase Contract.
"Stripped DECS Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the
number of Stripped DECS specified on such certificate.
"Stripped DECS Register" and "Stripped DECS Registrar"
have the respective meanings specified in Section 3.5.
"Subsidiary" means (i) a corporation, a majority of whose
capital stock with voting power, under ordinary circumstances,
to elect directors is, at the date of determination, directly
or indirectly owned by the Company, by one or more
Subsidiaries of the Company or by the Company and one or more
Subsidiaries of the Company, (ii) a partnership in which the
Company or a Subsidiary of the Company holds a majority
interest in the equity capital or profits of such partnership,
or (iii) any other person (other than a corporation) in which
the Company, a Subsidiary of the Company or the Company and
one or more Subsidiaries of the Company, directly or
indirectly, at the date of determination, has (x) at least a
majority ownership interest or (y) the power to elect or
direct the election of a majority of the directors or other
governing body of such person.
"Successful Initial Remarketing" has the meaning specified
in Section 5.4.
"Successful Secondary Remarketing" has the meaning
specified in Section 5.5(b).
"Tax Event" means the receipt by the Company of an opinion
of a nationally recognized independent tax counsel experienced
in such matters, which may be Skadden, Arps, Slate, Meagher &
Flom LLP, to the effect that, as a result of (a) any amendment
to, or change (including any announced proposed change) in,
the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any
10
amendment to or change in an interpretation or application of
such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any
interpretation or pronouncement that provides for a position
with respect to such laws or regulations that differs from the
generally accepted position on July 20, 2001, which amendment,
change or proposed change is effective or which interpretation
or pronouncement is announced on or after July 20, 2001, 2001,
there is more than an insubstantial risk that interest on the
Notes would not be deductible, in whole or in part, by the
Company for United States federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur
and be continuing, the redemption of the Notes, at the option
of the Company, in whole but not in part, on not less than 30
days nor more than 60 days' written notice.
"Tax Event Redemption Date" means the date upon which a
Tax Event Redemption is to occur.
"Tax Event Redemption Principal Amount" means either (i)
if the Tax Event Redemption Date occurs prior to May 17, 2004
or, in the event of Failed Initial Remarketing, prior to the
Forward Purchase Contract Settlement Date, the aggregate
principal amount of the Notes which are components of Upper
DECS on the Tax Event Redemption Date or (ii) if the Tax Event
Redemption Date occurs on or after May 17, 2004 or, in the
event of a Failed Initial Remarketing, on or after the Forward
Purchase Contract Settlement Date, the aggregate principal
amount of the Notes outstanding on such Tax Event Redemption
Date.
"Termination Date" means the date, if any, on which a
Termination Event occurs.
"Termination Event" means the occurrence of any of the
following events: (i) at any time on or prior to the Forward
Purchase Contract Settlement Date, a judgment, decree or court
order shall have been entered granting relief under the
Bankruptcy Code, adjudicating the Company to be insolvent, or
approving as properly filed a petition seeking reorganization
or liquidation of the Company under the Bankruptcy Code or any
other similar applicable Federal or State law, and, unless
such judgment, decree or order shall have been entered within
60 days prior to the Forward Purchase Contract Settlement
Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on
or prior to the Forward Purchase Contract Settlement Date, a
judgment, decree or court order for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the
winding up or liquidation of its affairs, shall have been
entered, and, unless such judgment, decree or order shall have
been entered within 60 days prior to the Forward Purchase
Contract Settlement Date, such judgment, decree or order shall
have continued undischarged and unstayed for a period of 60
days, or (iii) at any time on or prior to the Forward Purchase
Contract Settlement Date the Company shall file a petition for
relief under the Bankruptcy Code, or shall
11
consent to the filing of a bankruptcy proceeding against it,
or shall file a petition or answer or consent seeking
reorganization or liquidation under the Bankruptcy Code or any
other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent
to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its property,
or shall make an assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts
generally as they become due.
"Threshold Appreciation Price" has the meaning specified
in Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended,
or any successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Portfolio" means (1) in connection with the
Initial Remarketing, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (a) principal or interest strips of
U.S. Treasury Securities that mature on or prior to August 15,
2004 in an aggregate amount equal to the Applicable Principal
Amount and (b) with respect to the scheduled interest payment
date on the Notes that occurs on the Forward Purchase Contract
Settlement Date, principal or interest strips of U.S. Treasury
Securities that mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that
would be due on the Applicable Principal Amount of the Notes
on such date if the applicable Coupon Rate on the Notes were
not reset to the Reset Rate as described in Section 4.1 and
(2) in connection with a Tax Event Redemption, (a) if the Tax
Event Redemption Date occurs prior to May 17, 2004 or, in the
event of a Failed Initial Remarketing, prior to the Forward
Purchase Contract Settlement Date, a portfolio of zero-coupon
U.S. Treasury Securities consisting of (i) principal or
interest strips of U.S. Treasury Securities which mature on or
prior to August 15, 2004 in an aggregate amount equal to the
applicable Tax Event Redemption Principal Amount and (ii) with
respect to each scheduled interest payment date on the Notes
that occurs after the Tax Event Redemption Date and on or
before the Forward Purchase Contract Settlement Date,
principal or interest strips of U.S. Treasury Securities that
mature on or prior to such date in an aggregate amount equal
to the aggregate interest payment that would be due on the
applicable Tax Event Redemption Principal Amount of the Notes
on such date, and (b) if the Tax Event Redemption Date occurs
on or after May 17, 2004 or, in the event of a Failed Initial
Remarketing, on or after the Forward Purchase Contract
Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of
U.S. Treasury Securities which mature on or prior to August
15, 2006 in an aggregate amount equal to the applicable Tax
Event Redemption Principal Amount and (ii) with respect to
each scheduled interest payment date on the Notes that occurs
after the Tax Event Redemption Date, principal or interest
strips of such U.S. Treasury Securities that mature on or
prior to such date in an aggregate amount equal to the
aggregate interest payment that would be due on
12
the applicable Tax Event Redemption Principal Amount of the
Notes on such date.
"Treasury Portfolio Purchase Price" means the lowest
aggregate price quoted by the Primary Treasury Dealer to the
Quotation Agent (a) in the case of a Tax Event Redemption, on
the third Business Day immediately preceding the Tax Event
Redemption Date for the purchase of the applicable Treasury
Portfolio for settlement on the Tax Event Redemption Date and
(b) in the case of the Initial Remarketing, on the Initial
Remarketing Date for the purchase of the applicable Treasury
Portfolio for settlement on May 17, 2004.
"Treasury Security" means zero-coupon U.S. Treasury
Securities (CUSIP Number 912820BK2) which are the principal
strip of the U.S. Treasury Securities that mature on
August 16, 2004.
"Two-Year Benchmark Treasury" means direct obligations of
the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the
remaining term to maturity of the Notes, as agreed upon by the
Company and the Reset Agent. The rate for the Two-Year
Benchmark Treasury will be the bid side rate displayed at
10:00 A.M., New York City time, on the fifth Business Day
immediately preceding the Forward Purchase Contract Settlement
Date in the Telerate system (or if the Telerate system is (a)
no longer available on the Secondary Remarketing Date or (b)
in the opinion of the Reset Agent (after consultation with the
Company) no longer an appropriate system from which to obtain
such rate, such other nationally recognized quotation system
as, in the opinion of the Reset Agent (after consultation with
the Company), is appropriate). If such rate is not so
displayed, the rate for the Two-Year Benchmark Treasury shall
be, as calculated by the Reset Agent, the yield to maturity
for the Two-Year Benchmark Treasury, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates,
as of 10:30 A.M., New York City time, on the Secondary
Remarketing Date of three leading United States government
securities dealers selected by the Reset Agent (after
consultation with the Company)(which may include the Reset
Agent or an Affiliate thereof).
"Two and One-Quarter Year Benchmark Treasury" means direct
obligations of the United States (which may be obligations
traded on a when-issued basis only) having a maturity
comparable to the remaining term to maturity of the Notes, as
agreed upon by the Company and the Reset Agent. The rate for
the Two and One-Quarter Year Benchmark Treasury will be the
bid side rate displayed at 10:00 A.M., New York City time, on
the Initial Remarketing Date in the Telerate system (or if the
Telerate system is (a) no longer available on the Initial
Remarketing Date or (b) in the opinion of the Reset Agent
(after consultation with the Company), no longer an
appropriate system from which to obtain such rate, such other
nationally recognized quotation system as, in the opinion of
the Reset Agent (after consultation with the Company) is
appropriate).
13
If such rate is not so displayed, the rate for the Two and
One-Quarter Year Benchmark Treasury shall be, as calculated by
the Reset Agent, the yield to maturity for the Two and
One-Quarter Year Benchmark Treasury, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by
taking the arithmetic mean of the secondary market bid rates,
as of 10:30 A.M., New York City time, on the Initial
Remarketing Date of three leading United States government
securities dealers selected by the Reset Agent (after
consultation with the Company) (which may include the Reset
Agent or an Affiliate thereof).
"Upper DECS" means the collective rights and obligations
of a Holder of an Upper DECS Certificate in respect of a Note
or an appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, subject in each case
to the Pledge thereof, and the related Forward Purchase
Contract.
"Upper DECS Certificate" means a certificate evidencing
the rights and obligations of a Holder in respect of the
number of Upper DECS specified on such certificate.
"Upper DECS Register" and "Upper DECS Registrar" have the
respective meanings specified in Section 3.5.
"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or
after the title "vice president."
Section 1.2 Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon
any application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Agreement relating to the proposed action have been complied with
and, if reasonably requested by the Agent, an Opinion of Counsel addressed to
the Agent stating that, in the opinion of such counsel, all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
14
(3) a statement that, in the opinion of each such Person, he
or she or it has made such examination or investigation as is necessary
to enable such individual to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Agent.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless the Company knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, the Company stating that the information with respect to
such factual matters is in the possession of the Company unless the Person
giving such certificate or Opinion of Counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be consolidated
and form one instrument.
Section 1.4 Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the
Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the Agent deems
sufficient.
15
(c) The ownership of Securities shall be proved by the Upper
DECS Register or the Stripped DECS Register, as the case may be.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Certificate shall bind every
future Holder of the same Certificate and the Holder of every Certificate issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the Agent
or the Company in reliance thereon, whether or not notation of such action is
made upon such Certificate.
(e) The Company may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to give,
make or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Agreement to be given, made
or taken by Holders of Securities. If any record date is set pursuant to this
paragraph, the Holders of the Outstanding Upper DECS and the Outstanding
Stripped DECS, as the case may be, on such record date, and no other Holders,
shall be entitled to take the relevant action with respect to the Upper DECS or
the Stripped DECS, as the case may be, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite number of Outstanding Securities on such record date. Nothing
in this paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite number of Outstanding Securities on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Agent in writing and to each Holder of Securities in the
manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section,
the Company may designate any date as the "Expiration Date" and from time to
time may change the Expiration Date to any earlier or later day; provided that
no such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in the
manner set forth in Section 1.6, on or prior to the existing Expiration Date. If
an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Section 1.5 Notices.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed with,
16
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Agent at 1 Bank One Plaza Suite IL1-0126, Chicago, IL 60670-0126,
Attention: Global Corporate Trust Services Division, or at any other
address previously furnished in writing by the Agent to the Holders and
the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Company at Cendant Corporation, 6 Sylvan Way, Parsippany, New Jersey
07054, Attention: Chief Financial Officer, or at any other address
previously furnished in writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed
in writing and personally delivered or mailed, first-class postage
prepaid, addressed to the Collateral Agent at 450 West 33rd Street, New
York, NY 10001-2697, Attention Corporate Trust Administration
Department, or at any other address previously furnished in writing by
the Collateral Agent to the Agent, the Company and the Holders; or
(4) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at One Liberty Plaza, 23rd Floor, New York, NY 10006,
Attention: Corporate Trust Administration, with a copy to the Agent, or
at any other address previously furnished in writing by the Indenture
Trustee to the Company.
Section 1.6 Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at its address as it appears in the
applicable Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice, nor
any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Agent, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
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
17
made with the approval of the Agent shall constitute a sufficient notification
for every purpose hereunder.
Section 1.7 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
Section 1.8 Successors and Assigns.
All covenants and agreements in this Agreement by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.9 Separability Clause.
In case any provision in this Agreement or in the Securities
shall be invalid, illegal or unenforceable, then, to the extent permitted by
law, the validity, legality and enforceability of the remaining provisions
hereof and thereof shall not in any way be affected or impaired thereby.
Section 1.10 Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the applicable terms and conditions hereof and of the
Securities evidenced by their Certificates by their acceptance of delivery of
such Certificates.
Section 1.11 Governing Law.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 1.12 Legal Holidays.
In any case where any Forward Purchase Contract Settlement
Date shall not be a Business Day, then (notwithstanding any other provision of
this Agreement, the Upper DECS Certificates or the Stripped DECS Certificates),
the Forward Purchase Contracts shall not be performed on such date, but the
Forward Purchase Contracts shall be performed on the immediately following
Business Day with the same force and effect as if performed on the Forward
Purchase Contract Settlement Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date unless there shall be a default in the payment due on such next
succeeding Business Day, except that, if such next succeeding Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on the
applicable Payment Date.
18
Section 1.13 Counterparts.
This Agreement may be executed in any number of counterparts
by the parties hereto on separate counterparts, each of which, when so executed
and delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
Section 1.14 Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable
times during normal business hours at the Corporate Trust Office for inspection
by any Holder.
ARTICLE II
CERTIFICATE FORMS
Section 2.1 Forms of Certificates Generally.
The Upper DECS Certificates (including the form of Forward
Purchase Contract forming part of the Upper DECS evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters, numbers
or other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Upper DECS are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Upper DECS Certificates, as evidenced by their execution
of the Upper DECS Certificates.
The definitive Upper DECS Certificates may be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Upper DECS Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
The Stripped DECS Certificates (including the form of Forward
Purchase Contract forming part of the Stripped DECS evidenced thereby) shall be
in substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by the
rules of any securities exchange on which the Stripped DECS are listed or any
depositary therefor, or as may, consistently herewith, be determined by the
officers of the Company executing such Stripped DECS Certificates, as evidenced
by their execution of the Stripped DECS Certificates.
The definitive Stripped DECS Certificates may be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Stripped DECS Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of
the Holders and delivered hereunder shall bear a legend in substantially the
following form:
19
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER
DEFINED) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY
OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER
OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE FORWARD PURCHASE CONTRACT AGREEMENT.
Section 2.2 Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the
Upper DECS shall be in substantially the form set forth on the form of the Upper
DECS Certificates.
The form of the Agent's certificate of authentication of the
Stripped DECS shall be in substantially the form set forth on the form of the
Stripped DECS Certificates.
ARTICLE III
THE SECURITIES
Section 3.1 Title and Terms; Denominations.
The aggregate number of Upper DECS and Stripped DECS evidenced
by Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to 15,000,000 (or 17,250,000 if the Underwriters'
overallotment option is exercised in full) except for Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5,
3.9, 3.10, 3.13, 3.14, 5.10 or 8.5.
The Certificates shall be issuable only in registered form and
only in denominations of a single Upper DECS or Stripped DECS and any integral
multiple thereof.
Section 3.2 Rights and Obligations Evidenced by the
Certificates.
Each Upper DECS Certificate shall evidence the number of Upper
DECS specified therein, with each such Upper DECS representing the ownership by
the Holder thereof of a beneficial interest in a Note or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, subject to the
Pledge of such Note or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement,
and the rights and obligations of the Holder thereof and the Company under one
Forward Purchase Contract. The Agent as attorney-in-fact for, and on behalf of,
the Holder of each Upper DECS shall pledge, pursuant to the Pledge Agreement,
the Note or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, forming a part of such Upper DECS, to the Collateral Agent and
grant to the Collateral Agent a security interest in the right, title, and
interest of such Holder in such Note or the Applicable Ownership Interest of the
Treasury
20
Portfolio, as the case may be, for the benefit of the Company, to secure the
obligation of the Holder under each Forward Purchase Contract to purchase the
Common Stock of the Company.
Each Stripped DECS Certificate shall evidence the number of
Stripped DECS specified therein, with each such Stripped DECS representing the
ownership by the Holder thereof of a 1/20, or 5.0%, undivided beneficial
interest in a Treasury Security with a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Forward Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Stripped DECS shall
pledge, pursuant to the Pledge Agreement, the Treasury Security to the
Collateral Agent and grant to the Collateral Agent a security interest in the
right, title and interest of such Holder in such Treasury Security, for the
benefit of the Company, to secure the obligation of the Holder under each
Forward Purchase Contract to purchase the Common Stock of the Company.
Section 3.3 Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof,
upon the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the Company
to the Agent for authentication, execution on behalf of the Holders and
delivery, together with its Issuer Order for authentication of such
Certificates, and the Agent in accordance with such Issuer Order shall
authenticate, execute on behalf of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers or its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates.
No Forward Purchase Contract evidenced by a Certificate shall
be valid until such Certificate has been executed on behalf of the Holder by the
manual signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Forward Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its
authentication.
No Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized signatory of the Agent by manual signature,
and such certificate upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly authenticated and delivered
hereunder.
21
Section 3.4 Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holders, and deliver, in lieu of such
definitive Certificates, temporary Certificates that are in substantially the
form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Upper DECS or
Stripped DECS are listed, or as may, consistently herewith, be determined by the
officers of the Company executing such Certificates, as evidenced by their
execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office or the New York Office, at the
expense of the Company and without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Upper DECS or Stripped DECS, as the case may be, as the temporary Certificate or
Certificates so surrendered. Until so exchanged, the temporary Certificates
shall in all respects evidence the same benefits and the same obligations with
respect to the Upper DECS or Stripped DECS, as the case may be, evidenced
thereby as definitive Certificates.
Section 3.5 Registration; Registration of Transfer and
Exchange.
The Agent shall keep at the Corporate Trust Office a Register
(the "Upper DECS Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Upper DECS
Certificates and of transfers of Upper DECS Certificates (the Agent, in such
capacity, the "Upper DECS Registrar") and a Register (the "Stripped DECS
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of Stripped DECS Certificates and
of transfers of Stripped DECS Certificates (the Agent, in such capacity, the
"Stripped DECS Registrar").
Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office or the New York Office, the Company shall execute
and deliver to the Agent, and the Agent shall authenticate, execute on behalf of
the designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Upper DECS
or Stripped DECS, as the case may be.
At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a like number
of Upper DECS or Stripped DECS, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office or the New York
Office. Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
22
execute on behalf of the Holder, and deliver the Certificates that the Holder
making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number of
Upper DECS or Stripped DECS, as the case may be, and be entitled to the same
benefits and subject to the same obligations, under this Agreement as the Upper
DECS or Stripped DECS, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or for exchange shall (if so required by the Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Agent duly executed, by the Holder thereof or its attorney
duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the Agent may require
payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.4, 3.6, 3.9 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not be
obligated to authenticate, execute on behalf of the Holder and deliver, any
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earlier of the
Forward Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Forward
Purchase Contract Settlement Date has occurred, deliver the shares of Common
Stock issuable in respect of the Forward Purchase Contracts forming a part of
the Securities evidenced by such Certificate (together with any cash or other
property to which the Holder is entitled), or (ii) if a Termination Event shall
have occurred prior to the Forward Purchase Contract Settlement Date, transfer
the Notes, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Treasury Securities, as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance with the
applicable provisions of Article Five hereof.
Notwithstanding anything in this Agreement to the contrary, no
transfer by any holder to any Person other than the Company of any Upper DECS,
Stripped DECS or Note may be made or will be recognized unless such instrument
has been surrendered and accepted for registration of transfer in accordance
with the provisions of this Section 3.5, or unless such transfer is effectuated
through the book-entry system described in Section 3.6.
Section 3.6 Book-Entry Interests.
The Certificates, on original issuance, will be issued in the
form of one or more fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the
23
Company in the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate representing such
Beneficial Owner's interest in such Global Certificate, except as provided in
Section 3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force
and effect;
(b) the Company and the Agent shall be entitled to deal with
the Clearing Agency for all purposes of this Agreement (including receiving
approvals, votes or consents hereunder) as the Holder of the Securities and the
sole holder of the Global Certificate(s) and shall have no obligation to the
Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants.
Section 3.7 Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Agent shall, except as set forth herein,
have no obligations to the Beneficial Owners.
Section 3.8 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities, the Company may, in its
sole discretion, appoint a successor Clearing Agency with respect to the
Securities.
Section 3.9 Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Forward Purchase Contracts, or one or more Notes,
then upon surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency.
24
Section 3.10 Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent, the
Company shall execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver in exchange therefor,
a new Certificate at the cost of the Holder, evidencing the same number of Upper
DECS or Stripped DECS, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruction, loss or theft of any
Certificate, and (ii) such security or indemnity at the cost of the Holder as
may be required by them to hold each of them and any agent of any of them
harmless, then, in the absence of notice to the Company or the Agent that such
Certificate has been acquired by a protected purchaser, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed,
lost or stolen Certificate, a new Certificate, evidencing the same number of
Upper DECS or Stripped DECS, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent shall not be
obligated to authenticate, execute on behalf of the Holder, and deliver to the
Holder, a Certificate on or after the Business Day immediately preceding the
earlier of the Forward Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Agent shall (i) if
the Forward Purchase Contract Settlement Date has occurred, deliver the shares
of Common Stock issuable in respect of the Forward Purchase Contracts forming a
part of the Securities evidenced by such Certificate (together with any cash or
other property to which the Holder is entitled), or (ii) if a Termination Event
shall have occurred prior to the Forward Purchase Contract Settlement Date,
transfer the Notes, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, evidenced
thereby, in each case subject to the applicable conditions and in accordance
with the applicable provisions of Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the reasonable fees and
expenses of the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu
of any destroyed, lost or stolen Certificate shall constitute an original
additional contractual obligation of the Company and of the Holder in respect of
the Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
25
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11 Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Agent, and any agent of the Company or the Agent,
may treat the Person in whose name such Certificate is registered as the owner
of the Upper DECS or Stripped DECS evidenced thereby, for the purpose of
receiving interest on the Notes or on the maturing quarterly interest strips of
the Treasury Portfolio, as applicable, receiving payments of Contract Adjustment
Payments (if any), for the performance of the Forward Purchase Contracts and for
all other purposes whatsoever, whether or not any interest on the Notes shall be
overdue and notwithstanding any notice to the contrary, and neither the Company
nor the Agent, nor any agent of the Company or the Agent, shall be affected by
notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent or any agent of
the Company or the Agent, from giving effect to any written certification, proxy
or other authorization furnished by any Clearing Agency (or its nominee), as a
Holder, with respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global Certificate,
the operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12 Cancellation.
All Certificates surrendered for delivery of shares of Common
Stock on or after the Forward Purchase Contract Settlement Date, upon the
transfer of Notes, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of an Upper DECS or Stripped DECS shall, if surrendered to any
Person other than the Agent, be delivered to the Agent and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Agent for cancellation any Certificates previously authenticated,
executed and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Certificates so delivered shall, upon Issuer Order,
be promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13 Establishment of Stripped DECS.
26
A Holder may separate the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, from the related
Forward Purchase Contracts in respect of an Upper DECS by substituting for such
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, Treasury Securities in an aggregate principal
amount of such Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any time from and
after the date of this Agreement and on or prior to the seventh Business Day
immediately preceding the Forward Purchase Contract Settlement Date in the case
of the Notes and on or prior to the second Business Day immediately preceding
the Forward Purchase Contract Settlement Date in the case of the appropriate
Applicable Ownership Interest of the Treasury Portfolio, in each case by (a)
depositing with the Collateral Agent Treasury Securities having an aggregate
principal amount at maturity equal to the aggregate principal amount of the
Notes comprising part of such Upper DECS or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio comprising part of such Upper DECS, as the case may be, and
(b) transferring the related Upper DECS to the Agent accompanied by a notice to
the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent to
release the Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Upper DECS, whereupon
the Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the Treasury
Securities described in clause (a) above and the instruction described in clause
(b) above, in accordance with the terms of the Pledge Agreement, the Collateral
Agent will release to the Agent, on behalf of the Holder, Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, having the appropriate aggregate principal amount in the case of such
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, from the Pledge, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Upper DECS;
(ii) transfer the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, to
the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Stripped DECS Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Forward
Purchase Contracts as were evidenced by the cancelled Upper DECS.
Holders who elect to separate the Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the related Forward Purchase Contract and to substitute Treasury Securities
for such Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as Collateral Agent in respect
of the substitution, and the Company shall not be responsible for any such fees
or expenses.
27
Holders may make Collateral Substitutions (i) only in integral
multiples of 20 Upper DECS if Treasury Securities are being substituted for by
the Notes, or (ii) only in integral multiples of 32,000 Upper DECS or another
integral multiple such that the Treasury Securities to be deposited and those to
be released are in integral multiples of $1,000 if Treasury Securities are being
substituted for appropriate Applicable Ownership Interest of the Treasury
Portfolio.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry transfer of the Upper
DECS or fails to deliver an Upper DECS Certificate(s) to the Agent after
depositing Treasury Securities with the Collateral Agent, the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting a part of such Upper DECS, and any interest on such Note or
the Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
shall be held in the name of the Agent or its nominee in trust for the benefit
of such Holder, until such Upper DECS are so transferred or the Upper DECS
Certificate is so delivered, as the case may be, or, with respect to an Upper
DECS Certificate, such Holder provides evidence satisfactory to the Company and
the Agent that such Upper DECS Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the
Forward Purchase Contract underlying an Upper DECS remains in effect, such Upper
DECS shall not be separable into its constituent parts, and the rights and
obligations of the Holder in respect of the Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Forward
Purchase Contract comprising such Upper DECS may be acquired, and may be
transferred and exchanged, only as an Upper DECS.
Section 3.14 Reestablishment of Upper DECS.
A Holder of a Stripped DECS may recreate Upper DECS at any
time (i) on or prior to the seventh Business Day immediately preceding the
Forward Purchase Contract Settlement Date, if a Tax Event Redemption or a
Successful Initial Remarketing has not occurred, and (ii) on or prior to the
second Business Day immediately preceding the Forward Purchase Contract
Settlement Date, if a Tax Event Redemption or a Successful Initial Remarketing
has occurred and an Applicable Ownership Interest in the Treasury Portfolio has
become a component of the Upper DECS, in each case by (a) depositing with the
Collateral Agent Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, having an aggregate principal amount in
the case of the Notes, or an appropriate Applicable Ownership Interest (as
defined in clause (A) of the definition of such term) of the Treasury Portfolio,
as the case may be, equal to the aggregate principal amount of the Treasury
Securities comprising part of the Stripped DECS and (b) transferring the related
Stripped DECS to the Agent accompanied by a notice to the Agent, substantially
in the form of Exhibit D hereto, stating that the Holder has transferred the
relevant amount of Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, to the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the Treasury Securities
underlying such Stripped DECS, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, described in clause (a)
above and the instruction described in clause (b) above, in accordance
28
with the terms of the Pledge Agreement, the Collateral Agent will release to the
Agent, on behalf of the Holder, the Treasury Securities having a corresponding
aggregate principal amount from the Pledge, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Stripped DECS;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Upper DECS Certificate executed by the Company in accordance
with Section 3.3 evidencing the same number of Forward Purchase
Contracts as were evidenced by the cancelled Stripped DECS.
Holders of Stripped DECS may reestablish Upper DECS in
integral multiples of 20 Stripped DECS for the same multiple of 20 Upper DECS if
a Tax Event Redemption or a Successful Initial Remarketing has not occurred, and
in integral multiples of 32,000 Stripped DECS or another integral multiple such
that the Treasury Securities to be deposited and those to be released are in
integral multiples of $1,000 for the same multiple of Upper DECS if a Tax Event
Redemption or a Successful Initial Remarketing has occurred.
In the event a Holder re-establishing Upper DECS pursuant to
this Section 3.14 fails to effect a book-entry transfer of the Stripped DECS or
fails to deliver a Stripped DECS Certificate(s) to the Agent after depositing
Notes or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, with the Collateral Agent, the Treasury
Securities constituting a part of such Stripped DECS shall be held in the name
of the Agent or its nominee in trust for the benefit of such Holder, until such
Stripped DECS are so transferred or the Stripped DECS Certificate is so
delivered, as the case may be, or, with respect to a Stripped DECS Certificate,
such Holder provides evidence satisfactory to the Company and the Agent that
such Stripped DECS Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Agent and the Company.
Except as provided in this Section 3.14, for so long as the
Forward Purchase Contract underlying a Stripped DECS remains in effect, such
Stripped DECS shall not be separable into its constituent parts and the rights
and obligations of the Holder of such Stripped DECS in respect of the Treasury
Security and Forward Purchase Contract comprising such Stripped DECS may be
acquired, and may be transferred and exchanged, only as a Stripped DECS.
Section 3.15 Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer to
the Agent of the Notes, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Upper DECS and the Stripped DECS pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Notes or the appropriate Applicable Ownership Interest of the Treasury Portfolio
or Treasury Securities, as the case may be, from each Holder by written request
mailed to such Holder at its address as it appears in the Upper DECS Register or
the Stripped DECS Register, as
29
the case may be. Upon book-entry transfer of the Upper DECS or Stripped DECS or
delivery of an Upper DECS Certificate or a Stripped DECS Certificate to the
Agent with such transfer instructions, the Agent shall transfer the Notes, the
Applicable Ownership Interest of the Treasury Portfolio or Treasury Securities,
as the case may be, underlying such Upper DECS or Stripped DECS, as the case may
be, to such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions; provided, however, that, to the extent that a
Holder of Upper DECS or Stripped DECS would otherwise be entitled to receive
less than $1,000 principal amount at maturity of the Treasury Portfolio or the
Treasury Securities, the Agent shall dispose of such securities for cash, and
transfer the appropriate amount of such cash to such Holder in accordance with
such Holder's instructions. In the event a Holder of Upper DECS or Stripped DECS
fails to effect such transfer or delivery, the Notes, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Upper DECS or Stripped DECS, as the case may be, and any
distributions thereon, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Upper DECS or Stripped DECS are
transferred or the Upper DECS Certificate or Stripped DECS Certificate is
surrendered or such Holder provides satisfactory evidence that such Upper DECS
Certificate or Stripped DECS Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and the Company.
Section 3.16 No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption under Section
365 of the Bankruptcy Code or otherwise, of the Forward Purchase Contract by the
Company, receiver, liquidator or a person or entity performing similar
functions, its trustee in the event that the Company becomes the debtor under
the Bankruptcy Code or subject to other similar state or federal law providing
for reorganization or liquidation.
Section 3.17 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Agent shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Agent of any changes in the "CUSIP" numbers.
ARTICLE IV
THE NOTES
Section 4.1 Interest and Other Payments; Rights to Payments
Preserved; Rate Reset; Notice.
30
Interest on any Note or on the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, which is made
on any Payment Date shall, subject to receipt thereof by the Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, be paid to
the Person in whose name the Upper DECS Certificate (or one or more Predecessor
Upper DECS Certificates) of which such Note or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, is a part is
registered at the close of business on the Record Date for such Payment Date.
Each Upper DECS Certificate evidencing Notes delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu of
any other Upper DECS Certificate shall carry the rights to accrued and unpaid
interest, and other amounts that are to accrue, which were or will be carried by
the Notes underlying such other Upper DECS Certificate.
In the case of any Upper DECS with respect to which Cash
Settlement of the underlying Forward Purchase Contract is effected on the
Business Day immediately preceding the Forward Purchase Contract Settlement Date
pursuant to prior notice, or with respect to which Early Settlement of the
underlying Forward Purchase Contract is effected on an Early Settlement Date, or
with respect to which a Collateral Substitution is effected, in each case on a
date that is after any Record Date and on or prior to the next succeeding
Payment Date, interest on the Notes or distributions on the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
underlying such Upper DECS otherwise payable on such Payment Date shall be
payable on such Payment Date notwithstanding such Cash Settlement or Early
Settlement or Collateral Substitution, and such distributions shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the Upper
DECS Certificate (or one or more Predecessor Certificates) was registered at the
close of business on the Record Date. Except as otherwise expressly provided in
the immediately preceding sentence, in the case of any Upper DECS with respect
to which Cash Settlement or Early Settlement of the underlying Forward Purchase
Contract is effected on the Business Day immediately preceding the Forward
Purchase Contract Settlement Date or an Early Settlement Date, as the case may
be, or with respect to which a Collateral Substitution has been effected,
distributions on the related Notes or on the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, that would otherwise be
payable after the Forward Purchase Contract Settlement Date or Early Settlement
Date shall not be payable hereunder to the Holder of such Upper DECS; provided,
however, that to the extent that such Holder continues to hold the separated
Notes that formerly comprised a part of such Holder's Upper DECS, such Holder
shall be entitled to receive any payments made on such separated Notes.
Unless a Tax Event Redemption has occurred, the applicable
Coupon Rate on the Notes on and after May 17, 2004 will be reset on the Initial
Remarketing Date to the applicable Reset Rate (such Reset Rate to be in effect
on and after May 17, 2004), except in the event of a Failed Initial Remarketing.
In the event of a Failed Initial Remarketing, the applicable Coupon Rate on the
Notes outstanding on and after the Forward Purchase Contract Settlement Date
will be reset on the Secondary Remarketing Date to the applicable Reset Rate
(such Reset Rate to be in effect on and after the Forward Purchase Contract
Settlement Date), except in the event of a Failed Secondary Remarketing. In the
event of a Failed Secondary Remarketing, the applicable Coupon Rate on the Notes
will not be reset. On the applicable Reset Announcement Date, the Reset Spread
and the Two-Year Benchmark Treasury or Two and One-Quarter Benchmark
31
Treasury, as applicable, to be used to determine the Reset Rate will be
announced by the Company. On the Business Day immediately following the Reset
Announcement Date, the Holders of Notes will be notified of such Reset Spread
and Two-Year Benchmark Treasury or Two and One-Quarter Benchmark Treasury, as
applicable, by the Company. Such notice shall be sufficiently given to Holders
of Notes if published in an Authorized Newspaper in The City of New York.
Not later than seven calendar days nor more than fifteen
calendar days prior to the Reset Announcement Date, the Company will notify DTC
or its nominee (or any successor Clearing Agency or its nominee) by first-class
mail, postage prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Upper DECS or Stripped DECS of such Reset Announcement Date
and, in the case of a Secondary Remarketing, the procedures to be followed by
Holders of Upper DECS who intend to settle their obligation under the Forward
Purchase Contract with separate cash on the Forward Purchase Contract Settlement
Date.
Section 4.2 Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the Notes pledged with the Collateral Agent but only to the extent instructed by
the Holders as described below. Upon receipt of notice of any meeting at which
holders of Notes are entitled to vote or upon any solicitation of consents,
waivers or proxies of holders of Notes, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Upper DECS a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of Notes entitled to vote) shall be entitled to instruct the Agent as to the
exercise of the voting rights pertaining to the Notes underlying their Upper
DECS and (c) stating the manner in which such instructions may be given. Upon
the written request of the Holders of Upper DECS on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Notes as to which any particular voting instructions are received. In the
absence of specific instructions from the Holder of an Upper DECS, the Agent
shall abstain from voting the Notes underlying such Upper DECS. The Company
hereby agrees, if applicable, to solicit Holders of Upper DECS to timely
instruct the Agent in order to enable the Agent to vote such Notes.
Section 4.3 Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to May 17,
2004, or in the event of a Failed Initial Remarketing, prior to the Forward
Purchase Contract Settlement Date, pursuant to the terms of the Pledge
Agreement, the Collateral Agent will apply, out of the aggregate Redemption
Price for the Notes that are components of Upper DECS, an amount equal to the
aggregate Redemption Amount for the Notes that are components of Upper DECS to
purchase on behalf of the Holders of Upper DECS the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price to the Agent for
payment to the Holders of such Upper DECS. The Treasury Portfolio will be
substituted for the pledged Notes, and will be held by the Collateral Agent in
accordance with the terms of the Pledge Agreement to secure the
32
obligation of each Holder of an Upper DECS to purchase the Common Stock of the
Company under the Forward Purchase Contract constituting a part of such Upper
DECS. Following the occurrence of a Tax Event Redemption prior to May 17, 2004,
or, in the event of a Failed Initial Remarketing, prior to the Forward Purchase
Contract Settlement Date, the Holders of Upper DECS and the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Treasury Portfolio as the Holder of Upper DECS and the Collateral Agent had in
respect of the Notes, as the case may be, subject to the Pledge thereof as
provided in Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference
herein or in the Certificates to the Note shall be deemed to be a reference to
such Treasury Portfolio and any reference herein or in the Certificates to
interest on the Notes shall be deemed to be a reference to corresponding
distributions on the Treasury Portfolio. The Company may cause to be made in any
Upper DECS Certificates thereafter to be issued such change in phraseology and
form (but not in substance) as may be appropriate to reflect the substitution of
the Treasury Portfolio for Notes as collateral.
Upon the occurrence of a Tax Event Redemption after the
Purchase Contract Settlement Date, the Redemption Price will be payable in cash
to the holders of the Notes.
Section 4.4 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if
then generally in use), and, if so, the Indenture Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Indenture Trustee and the Agent of any changes in the "CUSIP" numbers.
ARTICLE V
THE FORWARD PURCHASE CONTRACTS
Section 5.1 Purchase of Shares of Common Stock.
Each Forward Purchase Contract shall, unless an Early
Settlement has occurred in accordance with Section 5.10 hereof, obligate the
Holder of the related Security to purchase, and the Company to sell, on the
Forward Purchase Contract Settlement Date at a price equal to the Stated Amount
(the "Purchase Price"), a number of newly issued shares of Common Stock equal to
the Settlement Rate unless, on or prior to the Forward Purchase Contract
Settlement Date, there shall have occurred a Termination Event with respect to
the Security of which such Forward Purchase Contract is a part. The "Settlement
Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal
to or greater than $28.42 (the "Threshold Appreciation Price"), 1.7593 shares of
Common Stock per Forward Purchase Contract, (b) if the Applicable Market Value
is less than the Threshold Appreciation Price but is greater than $21.53, the
number of shares of Common Stock per Forward Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or
33
equal to $21.53, 2.3223 shares of Common Stock per Forward Purchase Contract, in
each case subject to adjustment as provided in Section 5.7 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share). As provided in
Section 5.11, no fractional shares of Common Stock will be issued upon
settlement of Forward Purchase Contracts.
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Forward Purchase
Contract Settlement Date or, for purposes of determining cash payable in lieu of
fractional shares in connection with an Early Settlement, the third Trading Day
immediately preceding the relevant Early Settlement Date.
The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing sale price is
reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not listed
for trading on the NYSE on any such date, as reported in composite transactions
for the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed on a United States national
or regional securities exchange, as reported by the Nasdaq National Market or,
if the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.
A "Trading Day" means a day on which the Common Stock (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 an Upper DECS or a Stripped DECS, by its
acceptance thereof, irrevocably authorizes the Agent to enter into and perform
the related Forward Purchase Contract on its behalf as its attorney-in-fact
(including the execution of Certificates on behalf of such Holder), agrees to be
bound by the terms and provisions thereof, covenants and agrees to perform its
obligations under such Forward Purchase Contracts, and consents to the
provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact to
enter into and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Notes, the Treasury Portfolio or the Treasury Securities pursuant to the Pledge
Agreement; provided that upon a Termination Event, the rights of the Holder of
such Security under the Forward Purchase Contract may be enforced without regard
to any other rights or obligations. Each Holder of an Upper DECS or a Stripped
DECS, by its acceptance thereof, further covenants and agrees that, to the
extent and in the manner provided in Section 5.5 and the Pledge Agreement, but
subject to the terms thereof, Proceeds of the Treasury Securities, the Notes or
the Treasury Portfolio, as applicable, on the Forward Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Forward Purchase Contract
and such Holder shall acquire no right, title or interest in such Proceeds.
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Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Forward Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Forward Purchase
Contracts underlying the Certificates so transferred and the Pledge Agreement.
The Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
Section 5.2 Contract Adjustment Payments.
(a) Subject to Section 5.3 herein, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Forward Purchase Contract to the Person in whose name a Certificate (or
one or more Predecessor Certificates) is registered at the close of business on
the Record Date next preceding such Payment Date in such coin or currency of the
United States as at the time of payment shall be legal tender for payments. The
Contract Adjustment Payments, if any, will be payable at the New York Office
maintained for that purpose or, at the option of the Company, by check mailed to
the address of the Person entitled thereto at such Person's address as it
appears on the Upper DECS Register or the Stripped DECS Register or by wire
transfer to the account designated by a prior written notice by such Person.
Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Adjustment Payments (including any accrued Deferred
Contract Adjustment Payments), if any, shall cease.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including as a
result of a Collateral Substitution or the re-establishment of an Upper DECS)
any other Certificate shall carry the rights to Contract Adjustment Payments, if
any, accrued and unpaid, and to accrue Contract Adjustment Payments, if any,
which were carried by the Forward Purchase Contracts underlying such other
Certificates.
Subject to Section 5.10, in the case of any Security with
respect to which Early Settlement of the underlying Forward Purchase Contract is
effected on an Early Settlement Date, or in respect of which Cash Settlement of
the underlying Forward Purchase Contract is effected on the Business Day
immediately preceding the Forward Purchase Contract Settlement Date, or with
respect to which a Collateral Substitution or an establishment or
re-establishment of Upper DECS pursuant to Section 3.14 is effected, in each
case on a date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments on the Forward Purchase
Contracts underlying such Securities otherwise payable on such Payment Date
shall be payable on such Payment Date notwithstanding such Cash Settlement,
Early Settlement, Collateral Substitution or establishment or re-establishment
of Upper DECS, and such Contract Adjustment Payments shall be paid to the Person
in whose name the Certificate evidencing such Security (or one or more
Predecessor Certificates) is registered at the close of business on such Record
Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Cash Settlement or
Early Settlement of the underlying Forward Purchase Contract is effected on the
Business Day immediately preceding
35
the Forward Purchase Contract Settlement Date or on an Early Settlement Date, as
the case may be, or with respect to which a Collateral Substitution or an
establishment or re-establishment of Upper DECS has been effected, Contract
Adjustment Payments, if any, that would otherwise be payable after the Forward
Purchase Contract Settlement Date or Early Settlement Date, Collateral
Substitution or such establishment or reestablishment with respect to such
Forward Purchase Contract shall not be payable.
(b) The Company's obligations with respect to Contract
Adjustment Payments, if any, will be subordinated and junior in right of payment
to the Company's obligations under any Senior Indebtedness.
(c) In the event (x) of any payment by, or distribution of
assets of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject to the
provisions of Subsection 5.2(e) below, that (i) a default shall have occurred
and be continuing with respect to the payment of principal, interest or any
other monetary amounts due and payable on any Senior Indebtedness and such
default shall have continued beyond the period of grace, if any, specified in
the instrument evidencing such Senior Indebtedness (and the Agent shall have
received written notice thereof from the Company or one or more holders of
Senior Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Senior Indebtedness may
have been issued), or (ii) the maturity of any Senior Indebtedness shall have
been accelerated because of a default in respect of such Senior Indebtedness
(and the Agent shall have received written notice thereof from the Company or
one or more holders of Senior Indebtedness or their representative or
representatives or the trustee or trustees under any indenture pursuant to which
any such Senior Indebtedness may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of clause (x) above, payment of all
amounts due or to become due upon all Senior Indebtedness and, in the
case of subclauses (i) and (ii) of clause (y) above, payment of all
amounts due thereon, or provision shall be made for such payment in
money or money's worth, before the Holders of any of the Securities are
entitled to receive any Contract Adjustment Payments on the Forward
Purchase Contracts underlying the Securities;
(ii) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities, to
which the Holders of any of the Securities would be entitled except for
the provisions of Subsections 5.2(b) through (n), including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being
subordinated to the payment of such Contract Adjustment Payments on the
Forward Purchase Contracts underlying the Securities, shall be paid or
delivered by the Person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of such Senior Indebtedness or their
representative or representatives or to the trustee or trustees under
any indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably
36
according to the aggregate amounts remaining unpaid on account of such
Senior Indebtedness held or represented by each, to the extent
necessary to make payment in full of all Senior Indebtedness remaining
unpaid after giving effect to any concurrent payment or distribution
(or provision therefor) to the holders of such Senior Indebtedness,
before any payment or distribution is made of such Contract Adjustment
Payments to the Holders of such Securities; and
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being
subordinated to the payment of Contract Adjustment Payments on the
Forward Purchase Contracts underlying the Securities, shall be received
by the Agent or the Holders of any of the Securities when such payment
or distribution is prohibited pursuant to Subsections 5.2(b) through
(n), such payment or distribution shall be paid over to the holders of
such Senior Indebtedness or their representative or representatives or
to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
(d) For purposes of Subsections 5.2(b) through (n), the words
"cash, property or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the Company or any
other Person provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in Subsections
5.2(b) through (n) with respect to such Contract Adjustment Payments on the
Securities to the payment of all Senior Indebtedness which may at the time be
outstanding; provided that (i) the indebtedness or guarantee of indebtedness, as
the case may be, that constitutes Senior Indebtedness is assumed by the Person,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of the Senior Indebtedness are not, without the consent of
each such holder adversely affected thereby, altered by such reorganization or
readjustment;
(e) Any failure by the Company to make any payment on or
perform any other obligation under Senior Indebtedness, other than any
indebtedness incurred by the Company or assumed or guaranteed, directly or
indirectly, by the Company for money borrowed (or any deferral, renewal,
extension or refunding thereof) or any indebtedness or obligation as to which
the provisions of Subsections 5.2(b) through (d) shall have been waived by the
Company in the instrument or instruments by which the Company incurred, assumed,
guaranteed or otherwise created such indebtedness or obligation, shall not be
deemed a default or event of default if (i) the Company shall be disputing its
obligation to make such payment or perform such obligation and (ii) either (A)
no final judgment relating to such dispute shall have been issued against the
Company which is in full force and effect and is not subject to further review,
including a judgment that has become final by reason of the expiration of the
time within which a party may seek further appeal or review, and (B) in the
event a judgment that is subject to further review or appeal has been issued,
the Company shall in good faith be prosecuting an
37
appeal or other proceeding for review and a stay of execution shall have been
obtained pending such appeal or review.
(f) Subject to the payment in full of all Senior Indebtedness,
the Holders of the Securities shall be subrogated (equally and ratably with the
holders of all obligations of the Company which by their express terms are
subordinated to Senior Indebtedness of the Company to the same extent as payment
of the Contract Adjustment Payments in respect of the Forward Purchase Contracts
underlying the Securities is subordinated and which are entitled to like rights
of subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all such Contract Adjustment
Payments owing on the Securities shall be paid in full, and as between the
Company, its creditors other than holders of such Senior Indebtedness and the
Holders, no such payment or distribution made to the holders of Senior
Indebtedness by virtue of Subsections 5.2(b) through (n) that otherwise would
have been made to the Holders shall be deemed to be a payment by the Company on
account of such Senior Indebtedness, it being understood that the provisions of
Subsections 5.2(b) through (n) are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
Senior Indebtedness, on the other hand.
(g) Nothing contained in Subsections 5.2(b) through (n) or
elsewhere in this Agreement or in the Securities is intended to or shall impair,
as among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders such Contract Adjustment Payments on
the Securities as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of Senior
Indebtedness, nor shall anything herein or therein prevent the Agent or any
Holder from exercising all remedies otherwise permitted by applicable law upon
default under this Agreement, subject to the rights, if any, under these
Subsections 5.2(b) through (n), of the holders of Senior Indebtedness in respect
of cash, property or securities of the Company received upon the exercise of any
such remedy.
(h) Upon payment or distribution of assets of the Company
referred to in these Subsections 5.2(b) through (n), the Agent and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or agent or other person making any
payment or distribution, delivered to the Agent or to the Holders, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to these
Subsections 5.2(b) through (n).
(i) The Agent shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee or representative on behalf of any such holder or holders. In the
event that the Agent determines in good faith that further evidence is required
with respect to
38
the right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to Subsections 5.2(b) through (n), the Agent
may request such Person to furnish evidence to the reasonable satisfaction of
the Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
Subsections 5.2(b) through (n), and, if such evidence is not furnished, the
Agent may defer payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
(j) Nothing contained in Subsections 5.2(b) through (n) shall
affect the obligations of the Company to make, or prevent the Company from
making, payment of the Contract Adjustment Payments, except as otherwise
provided in these Subsections 5.2(b) through (n).
(k) Each Holder of Securities, by his acceptance thereof,
authorizes and directs the Agent on his, her or its behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
Subsections 5.2(b) through (n) and appoints the Agent his, her or its
attorney-in-fact, as the case may be, for any and all such purposes.
(l) The Company shall give prompt written notice to the Agent
of any fact known to the Company that would prohibit the making of any payment
of moneys to or by the Agent in respect of the Securities pursuant to the
provisions of this Section. Notwithstanding the provisions of Subsections 5.2(b)
through (e) or any other provisions of this Agreement, the Agent shall not be
charged with knowledge of the existence of any facts that would prohibit the
making of any payment of moneys to or by the Agent, or the taking of any other
action by the Agent, unless and until the Agent shall have received written
notice thereof mailed or delivered to a Responsible Officer of the Agent from
the Company, any Holder, any paying agent or the holder or representative of any
Senior Indebtedness; provided that if at least two Business Days prior to the
date upon which by the terms hereof any such moneys may become payable for any
purpose, the Agent shall not have received with respect to such moneys the
notice provided for in this Section, then, anything herein contained to the
contrary notwithstanding, the Agent shall have full power and authority to
receive such moneys and to apply the same to the purpose for which they were
received and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to or on or after such date.
(m) The Agent in its individual capacity shall be entitled to
all the rights set forth in this Section with respect to any Senior Indebtedness
at the time held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Agreement shall deprive the Agent of any of its
rights as such holder.
(n) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
39
(o) Nothing in this Section 5.2 shall apply to claims of, or
payments to, the Agent under or pursuant to Section 7.7.
With respect to the holders of Senior Indebtedness, (i) the
duties and obligations of the Agent shall be determined solely by the express
provisions of this Agreement; (ii) the Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement; (iii) no implied covenants or obligations shall be read into this
Agreement against the Agent; and (iv) the Agent shall not be deemed to be a
fiduciary as to such holders.
Section 5.3 Deferral of Payment Dates For Contract Adjustment
Payments.
The Company shall have the right, at any time prior to the
Forward Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments otherwise payable on any Payment Date, but only
if the Company shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be deferred) at least
ten Business Days prior to the earlier of (i) the next succeeding Payment Date
or (ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Contract Adjustment Payments to the
NYSE or other applicable self-regulatory organization or to Holders of the
Securities, but in any event not less than one Business Day prior to such Record
Date. Any Contract Adjustment Payments so deferred shall, to the extent
permitted by law, bear additional Contract Adjustment Payments thereon at the
rate of 7.75% per year (computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, being referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section. No
Contract Adjustment Payments may be deferred to a date that is after the Forward
Purchase Contract Settlement Date and no such deferral period may end other than
on a Payment Date. If the Forward Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments, if any, and Deferred Contract Adjustment Payments will
terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Forward Purchase Contracts until a Payment
Date prior to the Forward Purchase Contract Settlement Date, then all Deferred
Contract Adjustment Payments, if any, shall be payable to the registered Holders
as of the close of business on the Record Date immediately preceding such
Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Forward Purchase Contracts until the Forward
Purchase Contract Settlement Date, each Holder will receive on the Forward
Purchase Contract Settlement Date in lieu of a cash payment a number of shares
of Common Stock (in addition to a number of shares of Common Stock equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to such Holder divided by (y) the Applicable Market
Value.
40
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract Adjustment Payments on
the Forward Purchase Contract Settlement Date. In lieu of fractional shares
otherwise issuable with respect to such payment of Deferred Contract Adjustment
Payments, the Holder will be entitled to receive an amount in cash as provided
in Section 5.11.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not, and shall not permit
its Subsidiaries to, declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of the Company's capital stock other than:
(i) purchases, redemptions or acquisitions of shares of
capital stock of the Company in connection with any employment
contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers or directors or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the
date the Company exercises its right to defer the Contract Adjustment
Payments;
(ii) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the
Company's capital stock;
(iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or
exchanged;
(iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases,
acquisitions or redemptions of capital stock in exchange for or out of
the net cash proceeds of the sale of the Company's capital stock (or
securities convertible into or exchangeable for shares of the Company's
capital stock);
(v) redemptions, exchanges or repurchases of any rights
outstanding under a shareholder rights plan or the declaration or
payment thereunder of a dividend or distribution of or with respect to
rights in the future; or
(vi) mandatory sinking fund payments with respect to any
series of preferred stock of the Company; provided that the aggregate
stated value of all such series outstanding at the time of such payment
does not exceed 5% of the aggregate of (1) the total principal amount
of all then outstanding bonds or other securities representing secured
indebtedness issued or assumed by the Company and (2) the Company's
capital and surplus to be stated on the Company's books of account
after giving effect to such payment; provided however that any moneys
deposited in to any sinking fund and not in violation of this clause
(vi) may thereafter be applied to the purchase or redemption of such
preferred stock in accordance with the terms of such sinking fund
without regard to the foregoing restrictions.
Section 5.4 Initial Remarketing.
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Unless a Tax Event Redemption has occurred, the Company shall
engage a nationally recognized investment bank (the "Remarketing Agent")
pursuant to the Remarketing Agreement to sell the Notes (the "Initial
Remarketing") on the fifth Business Day immediately preceding May 17, 2004 (the
"Initial Remarketing Date"). In order to facilitate the remarketing, the Agent
shall notify, by 10:00 a.m., New York City time, on the Business Day immediately
preceding the Initial Remarketing Date, the Remarketing Agent of the aggregate
principal amount of Notes to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing such
Notes to the Remarketing Agent. Upon receipt of such notice from the Agent and
such Notes from the Collateral Agent, the Remarketing Agent will, on the Initial
Remarketing Date, use its reasonable efforts to remarket such Notes on such date
at a price of approximately 100.5% (but not less than 100%) of the Treasury
Portfolio Purchase Price. If the Remarketing Agent is able to remarket the Notes
at a price equal to or greater than 100% of the Treasury Portfolio Purchase
Price (a "Successful Initial Remarketing"), the portion of the proceeds from
such Successful Initial Remarketing equal to the Treasury Portfolio Purchase
Price will be applied to purchase the Treasury Portfolio. In addition, the
Remarketing Agent may deduct as a remarketing fee ("Remarketing Fee") an amount
equal to 25 basis points (0.25%) of the Treasury Portfolio Purchase Price from
any amount of such proceeds in excess of the Treasury Portfolio Purchase Price.
Any proceeds in excess of those required to pay the Treasury Portfolio Purchase
Price and the Remarketing Fee will be remitted to the Agent for payment to the
Holders of the related Upper DECS. Upper DECS Holders whose Notes are so
remarketed will not otherwise be responsible for the payment of any Remarketing
Fee in connection therewith. The Treasury Portfolio will be substituted for the
Notes of Holders of Upper DECS and will be pledged to the Collateral Agent to
secure the Upper DECS Holders' obligation to pay the Purchase Price for the
Common Stock under the related Forward Purchase Contracts on the Forward
Purchase Contract Settlement Date. Following the occurrence of a Successful
Initial Remarketing, the Holders of Upper DECS and the Collateral Agent shall
have such security interests, rights and obligations with respect to the
Treasury Portfolio as the Holder of Upper DECS and the Collateral Agent had in
respect of the Notes, as the case may be, subject to the Pledge thereof as
provided in Sections 2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference
herein or in the Certificates to the Notes shall be deemed to be a reference to
such Treasury Portfolio and any reference herein or in the Certificates to
interest on the Notes shall be deemed to be a reference to corresponding
distributions on the Treasury Portfolio. The Company may cause to be made in any
Upper DECS Certificates thereafter to be issued such change in phraseology and
form (but not in substance) as may be appropriate to reflect the substitution of
the Treasury Portfolio for Notes as collateral.
If, (i) in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the related Notes (other than to the Company)
of such Holders of Upper DECS at a price not less than 100% of the Treasury
Portfolio Purchase Price, or (ii) the remarketing has not occurred because of a
condition precedent to the remarketing has not been fulfilled, the remarketing
will be deemed to have failed (a "Failed Initial Remarketing"). The Company will
cause a notice of a Failed Initial Remarketing to be published on the second
Business Day immediately preceding May 17, 2004 in an Authorized Newspaper and
by means of Bloomberg and Reuters newswire.
Section 5.5 Payment of Purchase Price.
42
(a) (i) Unless a Tax Event Redemption, Successful Initial
Remarketing, Termination Event or Early Settlement has occurred, each Holder of
an Upper DECS may pay in cash ("Cash Settlement") the Purchase Price for the
shares of Common Stock to be purchased pursuant to a Forward Purchase Contract
if such Holder notifies the Agent by use of a notice in substantially the form
of Exhibit E hereto of its intention to make a Cash Settlement. Such notice
shall be made on or prior to 5:00 p.m., New York City time, on the seventh
Business Day immediately preceding the Forward Purchase Contract Settlement
Date. The Agent shall promptly notify the Collateral Agent of the receipt of
such a notice from a Holder intending to make a Cash Settlement.
(ii) A Holder of an Upper DECS who has so notified the Agent
of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding the Forward
Purchase Contract Settlement Date in lawful money of the United States
by certified or cashiers' check or wire transfer, in each case payable
to or upon the order of the Company. Any cash received by the
Collateral Agent will be invested promptly by the Collateral Agent in
Permitted Investments and paid to the Company on the Forward Purchase
Contract Settlement Date in settlement of the Forward Purchase Contract
in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Collateral Agent in respect of the
investment earnings from the investment in such Permitted Investments,
will be distributed to the Agent when received for payment to the
Holder.
(iii) If a Holder of an Upper DECS fails to notify the Agent
of its intention to make a Cash Settlement in accordance with paragraph
(a)(i) above, such failure shall constitute an event of default and the
Holder shall be deemed to have consented to the disposition of the
pledged Notes pursuant to the Secondary Remarketing as described in
paragraph (b) below. If a Holder of an Upper DECS does notify the Agent
as provided in paragraph (a)(i) above of its intention to pay the
Purchase Price in cash, but fails to make such payment as required by
paragraph (a)(ii) above, such failure shall also constitute a default;
however, the Notes of such a Holder will not be remarketed but instead
the Collateral Agent, for the benefit of the Company, will exercise its
rights as a secured party with respect to such Notes, including but not
limited to those rights specified in paragraph (c) below.
(b) Unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred, the Notes of Upper DECS Holders who have not notified
the Agent of their intention to effect a Cash Settlement as provided in
paragraph (a)(i) above will be sold by the Remarketing Agent (the "Secondary
Remarketing") on the fifth Business Day immediately preceding the Forward
Purchase Contract Settlement Date (the "Secondary Remarketing Date"). The Agent
shall notify, by 10:00 a.m., New York City time, on the Business Day immediately
preceding the Secondary Remarketing Date, the Remarketing Agent of the aggregate
principal amount of Notes to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing such
Notes to the Remarketing Agent. Upon receipt of such notice from the Agent and
such Notes from the Collateral Agent, the Remarketing Agent will, on the
Secondary Remarketing Date, use its reasonable efforts to remarket such Notes on
such date at a price of approximately 100.5% (but not less than 100%) of the
aggregate principal
43
amount of such Notes. If the Remarketing Agent is able to remarket the Notes at
a price equal to or greater than 100% of the aggregate principal amount of Notes
(a "Successful Secondary Remarketing"), the Remarketing Agent will remit the
entire amount of the proceeds from such Successful Secondary Remarketing to the
Collateral Agent; provided, however, that the Remarketing Agent may deduct as
the Remarketing Fee an amount equal to 25 basis points (0.25%) of the aggregate
principal amount of the remarketed Notes from any amount of the proceeds of a
Successful Secondary Remarketing in excess of the aggregate principal amount of
the remarketed Notes. The portion of the proceeds equal to the aggregate
principal amount of Notes will automatically be applied by the Collateral Agent,
in accordance with the Pledge Agreement, to satisfy in full such Upper DECS
holders' obligations to pay the Purchase Price for the Common Stock under the
related Forward Purchase Contracts on the Forward Purchase Contract Settlement
Date. Any proceeds in excess of those required to pay the Purchase Price and the
Remarketing Fee will be remitted to the Agent for payment to the Holders of the
related Upper DECS. Upper DECS Holders whose Notes are so remarketed will not
otherwise be responsible for the payment of any Remarketing Fee in connection
therewith. If, (i) in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Notes (other than to the Company) of such
Holders of Upper DECS at a price not less than 100% of the aggregate principal
amount of the Notes, or (ii) the remarketing has not occurred because of a
condition precedent to the remarketing has not been fulfilled, the remarketing
will be deemed to have failed (a "Failed Secondary Remarketing") and in
accordance with the terms of the Pledge Agreement the Collateral Agent for the
benefit of the Company will exercise its rights as a secured party with respect
to such Notes, including those actions specified in paragraph (c) below. The
Company will cause a notice of such Failed Secondary Remarketing to be published
on the second Business Day immediately preceding the Forward Purchase Contract
Settlement Date in an Authorized Newspaper and by means of Bloomberg and Reuters
newswire.
(c) With respect to any Notes beneficially owned by Holders
who have elected Cash Settlement but failed to deliver cash as required in
(a)(ii) above, or with respect to Notes which are subject to a Failed Secondary
Remarketing, the Collateral Agent for the benefit of the Company reserves all of
its rights as a secured party with respect thereto and, subject to applicable
law and paragraph (h) below, may, among other things, (i) retain the Notes in
full satisfaction of the Holders obligations under the Forward Purchase
Contracts or (ii) sell the Notes in one or more public or private sales.
(d) Unless a Termination Event or an Early Settlement has
occurred, the Forward Purchase Contract underlying each Stripped DECS and, if a
Tax Event Redemption or a Successful Initial Remarketing has occurred, each
Upper DECS will be settled with the Proceeds at maturity of the Treasury
Security or the Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) of the Treasury Portfolio, as applicable. Upon receipt
of such Proceeds, the Collateral Agent will invest the Proceeds promptly in
Permitted Investments and pay the Proceeds to the Company on the Forward
Purchase Contract Settlement Date in accordance with the terms of this Agreement
and the Pledge Agreement. Any such Proceeds received by the Collateral Agent in
excess of the Purchase Price and any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such Permitted
Investments will be distributed to the Agent when received for payment to the
Holders.
44
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the New York Office maintained for that
purpose or, at the option of the Holder, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Register, or, at
the option of the Company, by wire transfer to the bank account designated by
such Holders in writing, such payments to be made to the same Persons entitled
to receive Common Stock with respect to the Forward Purchase Contracts referred
to in Subsection (d) above.
(f) Unless a Holder settles the underlying Forward Purchase
Contract through the Early Settlement in the manner described in Section 5.10,
the Company shall not be obligated to issue any shares of Common Stock in
respect of a Forward Purchase Contract or deliver any certificate therefor to
the Holder unless it shall have received payment in full of the Purchase Price
for the shares of Common Stock to be purchased thereunder in the manner set
forth in this Section 5.5.
(g) Upon Cash Settlement of any Forward Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the Pledge Agreement
cause the pledged Notes underlying the relevant Security to be released from the
Pledge by the Collateral Agent free and clear of any security interest of the
Company and transferred to the Agent for delivery to the Holder thereof or its
designee as soon as practicable and (ii) subject to the receipt thereof from the
Collateral Agent, the Agent shall, by book-entry transfer, or other appropriate
procedures, in accordance with instructions provided by the Holder thereof,
transfer such Notes (or, if no such instructions are given to the Agent by the
Holder, the Agent shall hold such Notes and any distributions thereon in the
name of the Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price
are non-recourse obligations and are payable solely out of any Cash Settlement
or the Proceeds of any Collateral pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency between the
Proceeds of Collateral and the Purchase Price.
Section 5.6 Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have
occurred, on the Forward Purchase Contract Settlement Date, upon its receipt of
payment in full of the Purchase Price for the shares of Common Stock purchased
by the Holders pursuant to the foregoing provisions of this Article and subject
to Section 5.7(b), the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing newly issued shares of Common Stock registered in the name of the
Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions for which
both a record date and payment date for such dividend or distribution has
occurred on or after the Forward Purchase Contract Settlement Date, being
hereinafter referred to as the "Forward Purchase Contract Settlement Fund") to
which the Holders are entitled hereunder. Subject to the foregoing, upon
surrender of a Certificate to the Agent on or after the Forward Purchase
Contract Settlement Date, together with settlement instructions thereon duly
completed and executed, the Holder of such Certificate shall be entitled to
receive in exchange therefor a certificate representing that number of whole
shares of
45
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Securities then held by such
Holder) together with cash in lieu of fractional shares as provided in Section
5.11 and any dividends or distributions with respect to such shares constituting
part of the Forward Purchase Contract Settlement Fund, but without any interest
thereon, and the Certificate so surrendered shall forthwith be cancelled. Such
shares shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Agent. If
any shares of Common Stock issued in respect of a Forward Purchase Contract are
to be registered to a Person other than the Person in whose name the Certificate
evidencing such Forward Purchase Contract is registered, no such registration
shall be made unless the Person requesting such registration has paid any
transfer and other taxes required by reason of such registration in a name other
than that of the registered Holder of the Certificate evidencing such Forward
Purchase Contract or has established to the satisfaction of the Company that
such tax either has been paid or is not payable.
Section 5.7 Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate,
as in effect at the opening of business on the day following the date
fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing such
Settlement Rate by a fraction of which 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 any shares issuable in respect of any share
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.
(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 Securities upon settlement of the
Forward Purchase Contracts underlying such Securities) entitling them,
for a period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights, options
or warrants, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of the
Common Stock on the date fixed for the determination of stockholders
entitled to receive such rights, options or warrants (other than
pursuant to a dividend reinvestment plan or share purchase plan), the
Settlement Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by
dividing such Settlement Rate by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the
denominator shall be the number of shares of Common Stock outstanding
at the close of
46
business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such
increase to become effective immediately after the opening of business
on the day following the date fixed for such determination. For
purposes of this paragraph (2), the number of shares of Common Stock at
any time outstanding shall not include shares held in the treasury of
the Company but shall include any shares issuable in respect of any
share certificates issued in lieu of fractions of shares of Common
Stock. The Company shall not issue any such rights, options or warrants
in respect of shares of Common Stock held in the treasury of the
Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock,
the Settlement Rate in effect at the opening of business on the day
following the day upon which such subdivision or split becomes
effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a
smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness, shares of capital stock, securities, cash or other
property (but excluding any rights or warrants referred to in paragraph
(2) of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph (1) of
this Section), the Settlement Rate shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution
by a fraction of which the numerator shall be the Current Market Price
per share of the Common Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution filed with the Agent) on such date of the portion of
the evidences of indebtedness, shares of capital stock, securities,
cash or other property so distributed applicable to one share of Common
Stock and the denominator shall be such Current Market Price per share
of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such
distribution. In any case in which this paragraph (4) is applicable,
paragraph (2) of this Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i)
regular quarterly cash distributions, (ii) any cash that is distributed
in a Reorganization Event to which Section 5.7(b) applies
47
or (iii) cash that is distributed as part of a distribution referred to
in paragraph (4) of this Section) in an aggregate amount that, combined
together with (II) the aggregate amount of any other distributions to
all holders of its Common Stock made exclusively in cash within the 12
months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made and (III) the aggregate of
any cash plus the fair market value, as of the expiration of the
applicable tender or exchange offer referred to below (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), of consideration payable in respect
of any tender or exchange offer (other than consideration payable in
respect of any odd-lot tender offer) by the Company or any of its
Subsidiaries for all or any portion of the Common Stock concluded
within the 12 months preceding the date of payment of the distribution
described in clause (I) above and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has
been made, exceeds 10% of the product of the Current Market Price per
share of the Common Stock on the date for the determination of holders
of shares of Common Stock entitled to receive such distribution times
the number of shares of Common Stock outstanding on such date, then,
and in each such case, immediately after the close of business on such
date for determination, the Settlement Rate shall be increased so that
the same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on the date
fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to
the Current Market Price per share of the Common Stock on the date
fixed for such determination less an amount equal to the quotient of
(x) the combined amount distributed or payable in the transactions
described in clauses (I), (II) and (III) above and (y) the number of
shares of Common Stock outstanding on such date for determination and
(ii) the denominator of which shall be equal to the Current Market
Price per share of the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company
or any Subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer (as amended upon
the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of
the tender or exchange offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution) that combined together with (II) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange
offer, of consideration payable in respect of any other tender or
exchange offer (other than consideration payable in respect of any
odd-lot tender offer) by the Company or any Subsidiary of the Company
for all or any portion of the Common Stock expiring within the 12
months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to paragraph (5) of this
Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions (other than regular quarterly cash
distributions) to all holders of the Company's Common Stock made
exclusively in cash within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section or this paragraph (6) has
been made,
48
exceeds 10% of the product of the Current Market Price per share of the
Common Stock as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender or exchange offer (as it may be
amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Settlement Rate shall be
adjusted so that the same shall equal the rate determined by dividing
the Settlement Rate immediately prior to the close of business as of
the Expiration Time by a fraction (i) the numerator of which shall be
equal to (A) the product of (I) the Current Market Price per share of
the Common Stock as of the Expiration Time and (II) the number of
shares of Common Stock outstanding (including any tendered shares) as
of the Expiration Time less (B) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate consideration payable
to stockholders based on the transactions described in clauses (I),
(II) and (III) above (assuming in the case of clause (I) the
acceptance, up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares), and (ii) the denominator of which
shall be equal to the product of (A) the Current Market Price per share
of the Common Stock as of the Expiration Time and (B) the number of
shares of Common Stock outstanding (including any tendered shares) as
of the Expiration Time less the number of all shares validly tendered
and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section 5.7(b)
applies) shall be deemed to involve (a) a distribution of such
securities other than Common Stock to all holders of Common Stock (and
the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision,
split or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification
into the number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall be
deemed to be "the day upon which such subdivision or split becomes
effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision, split or
combination becomes effective" within the meaning of paragraph (3) of
this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the five
consecutive Trading Days selected by the Company commencing not more
than 30 Trading Days before, and ending not later than, the earlier of
the day in question and the day before the "ex date" with respect to
the issuance or distribution requiring such computation. For purposes
of this paragraph, the term "ex date", when used with respect to any
issuance or distribution, shall mean the first date on which the Common
Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
49
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if
there is not a nearest 1/10,000th of a share to the next lower
1/10,000th of a share). No adjustment in the Settlement Rate shall be
required unless such adjustment would require an increase or decrease
of at least one percent therein; provided, however, that any
adjustments which by reason of this subparagraph are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. If an adjustment is made to the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section
5.7(a), an adjustment shall also be made to the Applicable Market Value
solely to determine which of clauses (a), (b) or (c) of the definition
of Settlement Rate in Section 5.1 will apply on the Forward Purchase
Contract Settlement Date. Such adjustment shall be made by multiplying
the Applicable Market Value by a fraction of which the numerator shall
be the Settlement Rate immediately after such adjustment pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section
5.7(a) and the denominator shall be the Settlement Rate immediately
before such adjustment; provided, however, that if such adjustment to
the Settlement Rate is required to be made pursuant to the occurrence
of any of the events contemplated by paragraph (1), (2), (3), (4), (5),
(7) or (10) of this Section 5.7(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate
and customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to
be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or
distribution of 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.
(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 other than as a result of or after the occurrence
of a Termination Event (any such event, a "Reorganization Event"), the
Settlement Rate will be adjusted to provide that each Holder of Securities will
receive on the Forward Purchase Contract Settlement Date with respect to each
Forward Purchase Contract forming a part thereof (or upon any Early Settlement),
the kind and amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Forward Purchase Contract Settlement Date) by a Holder of the number of shares
of Common Stock issuable on account of each Forward Purchase Contract if the
Forward Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event assuming such Holder of Common Stock is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was
50
made, as the case may be (any such Person, a "Constituent Person"), or an
Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise its rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by the non-electing
shares). In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires or leases the
assets of the Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Outstanding Security shall have the rights
provided by this Section 5.7. Such supplemental agreement shall provide for
adjustments which, for events 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.
Section 5.8 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.7 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.7 (or if the Company is not aware of such occurrence, as soon
as practicable after becoming so aware), provide a written notice to
the Holders of the Securities of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was determined and setting forth the
adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at the time
be issued or delivered with respect to any Forward Purchase Contract; and the
Agent makes no representation with respect thereto. The Agent shall not be
responsible for any failure of the Company to issue,
51
transfer or deliver any shares of Common Stock pursuant to a Forward Purchase
Contract or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article.
Section 5.9 Termination Event; Notice.
The Forward Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without limitation, the
rights and obligations of Holders to purchase Common Stock, shall immediately
and automatically terminate, without the necessity of any notice or action by
any Holder, the Agent or the Company, if, on or prior to the Forward Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon and
after the occurrence of a Termination Event, the Securities shall thereafter
represent the right to receive the Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, forming a part of such
Securities in the case of Upper DECS, or Treasury Securities in the case of
Stripped DECS, in accordance with the provisions of Section 4.3 of the Pledge
Agreement; provided, however, that, to the extent that a Holder of Upper DECS or
Stripped DECS would otherwise be entitled to receive less than $1,000 principal
amount at maturity of the Treasury Portfolio or the Treasury Securities, the
Agent shall dispose of such securities for cash, and transfer the appropriate
amount of such cash to such Holder in accordance with such Holder's
instructions. Upon the occurrence of a Termination Event, the Company shall
promptly but in no event later than two Business Days thereafter give written
notice to the Agent, the Collateral Agent and to the Holders, at their addresses
as they appear in the Register.
Section 5.10 Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.10, at any time Forward Purchase Contracts underlying Securities
having an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof may be settled early ("Early Settlement") at the option of the Holder
thereof; provided however, that if a Tax Event Redemption or a Successful
Initial Remarketing has occurred and the Treasury Portfolio has become a
component of the Upper DECS, Forward Purchase Contracts underlying Upper DECS
may be settled early but only in an aggregate amount of 32,000 Upper DECS or
another integral multiple such that the Treasury Securities to be deposited and
those to be released are in integral multiples of $1,000. In order to exercise
the right to effect Early Settlement with respect to any Forward Purchase
Contracts, the Holder of the Certificate evidencing Securities shall deliver
such Certificate to the Agent at the Corporate Trust Office or the New York
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early on the reverse thereof duly completed and accompanied
by payment (payable to the Company) in lawful money of the United States by wire
transfer, in each case in immediately available funds in an amount (the "Early
Settlement Amount") equal to (A) the product of (i) the Stated Amount times (ii)
the number of Forward Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement, plus (B) if such delivery is made with
respect to any Forward Purchase Contracts during the period from close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments, if any, payable on such Payment Date with respect to such Payment
Contracts; provided that no payment shall be required pursuant to clause (B) of
this sentence if the Company shall have elected to defer the Contract Adjustment
Payments which would
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otherwise be payable on such Payment Date. Except as provided in the immediately
preceding sentence and subject to the second to last paragraph of Section 5.2,
no payment or adjustment shall be made upon Early Settlement of any Forward
Purchase Contract on any Contract Adjustment Payments accrued on such Forward
Purchase Contract or on account of dividends on the Common Stock issued upon
such Early Settlement or on account of any Deferred Contract Adjustment
Payments. If the foregoing requirements are first satisfied with respect to
Forward Purchase Contracts underlying any Securities at or prior to 5:00 p.m.,
New York City time, on a Business Day, such day shall be the "Early Settlement
Date" with respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day or on a day
that is not a Business Day, the "Early Settlement Date" with respect to such
Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Forward Purchase Contracts by a
Holder of the related Securities and payment of any transfer or similar taxes
payable by such Holder in connection with the issuance of the related Common
Stock to any Person other than such Holder, the Company shall issue, and the
Holder shall be entitled to receive, 1.7593 shares of newly issued Common Stock
on account of each Forward Purchase Contract as to which Early Settlement is
effected (the "Early Settlement Rate"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Forward Purchase
Contracts in accordance with the provisions of this Section 5.10, the Company
shall issue and shall deliver to the Agent at the Corporate Trust Office a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.11.
(c) No later than the third Business Day after the applicable
Early Settlement Date, the Company shall cause (i) the shares of Common Stock
issuable upon Early Settlement of Forward Purchase Contracts to be issued and
delivered, and (ii) the related Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, in the case of Upper DECS, or the related
Treasury Securities, in the case of Stripped DECS, to be released from the
Pledge by the Collateral Agent and transferred, in each case to the Agent for
delivery to the Holder thereof or its designee.
(d) Upon Early Settlement of any Forward Purchase Contracts,
and subject to receipt of shares of Common Stock from the Company and the Notes,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided by the
Holder thereof on the applicable form of Election to Settle Early on the reverse
of the Certificate evidencing the related Securities, (i) transfer to the Holder
the Notes, Treasury Portfolio or Treasury Securities, as the case may be,
forming a part of such Securities, and (ii) deliver to the Holder a certificate
or certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.11.
(e) In the event that Early Settlement is effected with
respect to Forward Purchase Contracts underlying less than all the Securities
evidenced by a Certificate, upon such Early Settlement the Company shall execute
and the Agent shall authenticate, countersign and
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deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Securities as to which Early Settlement was not effected.
(f) Upon determination that Holders are or will be entitled to
settle Forward Purchase Contracts underlying their Securities early in
accordance with the provisions of this Section 5.10, but in no event later than
20 calendar days prior to the Applicable Transaction Date, the Company shall
issue a press release and publish such information on its web site.
Section 5.11 No Fractional Shares.
No fractional shares or scrip representing fractional shares
of Common Stock shall be issued or delivered upon settlement on the Forward
Purchase Contract Settlement Date or upon Early Settlement of any Forward
Purchase Contracts. If Certificates evidencing more than one Forward 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 Forward Purchase
Contracts evidenced by the Certificates so surrendered. Instead of any
fractional share of Common Stock which would otherwise be deliverable upon
settlement of any Forward Purchase Contracts on the Forward Purchase Contract
Settlement Date or upon Early Settlement, the Company, through the Agent, shall
make a cash payment in respect of such fractional interest in an amount equal to
the value of such fractional shares times the Applicable Market Value. The
Company shall provide the Agent from time to time with sufficient funds to
permit the Agent to make all cash payments required by this Section 5.11 in a
timely manner.
Section 5.12 Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common Stock
pursuant to the Forward Purchase Contracts and in payment of any Deferred
Contract Adjustment Payments; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Security or any
issuance of a share of Common Stock in a name other than that of the registered
Holder of a Certificate surrendered in respect of the Securities evidenced
thereby, other than in the name of the Agent, as custodian for such Holder, and
the Company shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid
or that no such tax is due.
ARTICLE VI
REMEDIES
Section 6.1 Unconditional Right of Holders to Purchase Common
Stock.
The Holder of any Upper DECS or Stripped DECS shall have the
right, which is absolute and unconditional, (A), subject to the right of the
Company to defer payment thereof pursuant to Section 5.3, and to the forfeiture
of any Deferred Contract Adjustment Payments upon Early Settlement pursuant to
Section 5.10(c) or upon the occurrence of a Termination
54
Event, to receive payment of each installment of the Contract Adjustment
Payments, if any, with respect to the Forward Purchase Contract constituting a
part of such Security on the respective Payment Date for such Security, and (B)
to purchase Common Stock pursuant to such Forward Purchase Contract and, in each
such case, to institute suit for the enforcement of any such payment and right
to purchase Common Stock, and such rights shall not be impaired without the
consent of such Holder.
Section 6.2 Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of such
Holder shall continue as though no such proceeding had been instituted.
Section 6.3 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or reserved
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4 Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5 Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Upper
DECS or Stripped DECS, by its acceptance of such Upper DECS or Stripped DECS
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of interest on any
Notes on or after the respective Payment Date therefor in respect
55
of any Security held by such Holder, or for enforcement of the right to purchase
shares of Common Stock under the Forward Purchase Contracts constituting part of
any Security held by such Holder.
Section 6.6 Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE VII
THE AGENT
Section 7.1 Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or obligations
shall be read into this Agreement and Pledge Agreement against the Agent; and
(2) The Agent may, with respect to the Securities,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Agent and conforming to the requirements of
this Agreement, but in the case of any certificates or opinions which
by any provision hereof are specifically required to be furnished to
the Agent, the Agent shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Agreement, but need not confirm or investigate the accuracy of
mathematical calculations stated therein.
(b) No provision of this Agreement shall be construed to
relieve the Agent from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct or bad faith, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts; and
56
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers.
(c) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the liability
of or affording protection to the Agent shall be subject to the provisions of
this Section.
(d) The Agent is authorized to execute and deliver the Pledge
Agreement in its capacity as Agent.
Section 7.2 Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder of which a Responsible Officer of the Agent has actual
knowledge, the Agent shall transmit by mail to the Company and the Holders of
Securities, as their names and addresses appear in the Register, notice of such
default hereunder, unless such default shall have been cured or waived.
Section 7.3 Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the 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 Officer's Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Directors
of the Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless
other evidence be herein specifically prescribed) may, in the absence
of bad faith on its part, rely upon an Officer's Certificate of the
Company;
(d) the Agent may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note, other evidence of indebtedness or other
paper or document, but the Agent, in its discretion, may make
reasonable further inquiry
57
or investigation into such facts or matters related to the execution,
delivery and performance of the Forward Purchase Contracts as it may
see fit, and, if the Agent shall determine to make such further inquiry
or investigation, it shall be given a reasonable opportunity to examine
the books, records and premises of the Company, personally or by agent
or attorney; and
(f) the Agent may execute any of the powers, perform any
duties hereunder, or delegate any administrative functions either
directly to, by or through its employees, officers, agents or attorneys
or an Affiliate located in any state of the United States and the Agent
shall not be responsible for any misconduct or negligence on the part
of any agent or attorney or an Affiliate appointed with due care by it
hereunder.
Section 7.4 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Certificates shall be
taken as the statements of the Company and the Agent assumes no responsibility
for their accuracy. The Agent makes no representations as to the validity or
sufficiency of either this Agreement or of the Securities, or of the Pledge
Agreement or the Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Forward Purchase
Contracts.
Section 7.5 May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent
and its Affiliates, in their individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the Company, the
Collateral Agent or any other Person with the same rights it would have if it
were not Registrar or such other agent, or the Agent.
Section 7.6 Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Agent shall be under no obligation to invest or pay interest on any
money received by it hereunder except as otherwise expressly provided herein or
as otherwise agreed in writing with the Company.
Section 7.7 Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such compensation
for all services rendered by it hereunder as the parties shall agree
from time to time;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of this Agreement (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, willful misconduct or bad faith; and
58
(3) to indemnify the Agent and any predecessor Agent for, and to hold it
harmless against, any loss, liability or expense, including taxes
(other than taxes based upon, measured by or determined by the income
of the Agent) incurred without negligence, willful misconduct or bad
faith on its part, arising out of or in connection with the acceptance
or administration of its duties hereunder, including the costs and
expenses of counsel selected by the Agent to defend the Agent against
any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The provisions of this Section shall survive the termination
of this Agreement.
Section 7.8 Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be
a corporation organized and doing business under the laws of the United States
of America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a subsidiary of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
an office in the Borough of Manhattan, The City of New York, if there be such a
corporation in the Borough of Manhattan, The City of New York, 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 Agent shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The provisions of this Section shall survive the termination of this
Agreement.
Section 7.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment
of a successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice
thereof to the Company 30 days prior to the effective date of such resignation.
If the instrument of acceptance by a successor Agent required by Section 7.10
shall not have been delivered to the Agent within 30 days after the giving of
such notice of resignation, the resigning Agent may petition any court of
competent jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders
of a majority in number of the Outstanding Securities delivered to the Agent and
the Company. If the instrument of acceptance by a successor Agent required by
Section 7.10 shall not have been delivered to the Agent within 30 days after the
giving of such notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor Agent.
(d) If at any time
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(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
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 Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office and New York
Office, if any.
Section 7.10 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent,
every such successor Agent so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Agent an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Agent
shall become effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers, agencies and
duties of the retiring Agent; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of its charges, execute
and deliver an instrument transferring to such successor Agent all the rights,
powers and trusts of the retiring Agent and shall duly assign, transfer and
deliver to such successor Agent all property and money held by such retiring
Agent hereunder.
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(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Agent all such rights, powers and agencies
referred to in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at
the time of such acceptance such successor Agent shall be qualified and eligible
under this Article.
Section 7.11 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Agent shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Agent, shall be the successor of the Agent hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 7.12 Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the Agent
in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the Agent reasonable
proof that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Agent shall mail to all the Holders copies of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
Section 7.13 No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability under
this Agreement, the Pledge Agreement or any Forward Purchase Contract in respect
of the obligations of the Holder of any Security thereunder. The Company agrees,
and each Holder of a Certificate, by his acceptance thereof, shall be deemed to
have agreed, that the Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and that
the Agent shall have no obligation to perform such Forward Purchase Contracts on
behalf of the Holders, except to the extent expressly provided in Article V
hereof.
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Section 7.14 Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company,
will comply with all applicable certification, information reporting and
withholding (including "backup" withholding) requirements imposed by applicable
tax laws, regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Securities or the
Notes. Such compliance shall include, without limitation, (i) preparing, timely
filing with the applicable taxing authority, and (to the extent required under
applicable tax laws) timely furnishing Holders with copies of, all tax reports
or statements with respect to payments on, or redemptions of, the Securities
which are required to be prepared, filed, and furnished under applicable tax
laws, (ii) withholding and paying over to the applicable taxing authorities any
tax withholdings that are required to be made with respect to payments on, or
redemptions of, the Securities under applicable tax laws, and (iii) making
reasonable efforts to obtain from Holders all IRS Forms (and similar forms under
applicable state, local, and foreign tax law) and other documentation required
under applicable tax laws in order to establish exemptions from or reductions in
withholding taxes.
(b) The Agent shall comply with any written direction received
from the Company with respect to the application of such requirements to
particular payments or Holders 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)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, until such time as all applicable
periods of limitation for assessing or collecting any taxes or penalties for
failure to comply fully with such requirements have expired, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
Section 8.1 Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the Agent,
at any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for any
of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
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(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.7(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders.
Section 8.2 Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of
the Outstanding Forward Purchase Contracts voting together as one class, by Act
of said Holders delivered to the Company and the Agent, the Company, when
authorized by a Board Resolution, and the Agent may enter into an agreement or
agreements supplemental hereto for the purpose of modifying in any manner the
terms of the Forward Purchase Contracts or the provisions of this Agreement or
the rights of the Holders in respect of the Securities (other than the Notes,
which may be modified only in accordance with the applicable provisions of the
Indenture); provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under any Forward Purchase
Contract, impair the right of the Holder of any Forward Purchase
Contract to receive distributions on the related Collateral (except for
the rights of Holders of Upper DECS to substitute the Treasury
Securities for the pledged Notes or the rights of holders of Stripped
DECS to substitute Notes for the Pledged Treasury Securities) or
otherwise adversely affect the Holder's rights in or to such Collateral
or adversely alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payment, or change any place where, or the
coin or currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of
any Forward Purchase Contract, any Contract Adjustment Payment, if any,
or any Deferred Contract Adjustment Payment, if any;
(5) reduce the number of shares of Common Stock (or the amount
of any other property) to be purchased pursuant to any Forward Purchase
Contract, increase the price to purchase shares of Common Stock (or any
other property) upon settlement of any Forward Purchase Contract,
change the Forward Purchase Contract Settlement Date or otherwise
adversely affect the Holder's rights under any Forward Purchase
Contract; or
(6) reduce the percentage of the outstanding Forward Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
63
provided, that if any amendment or proposal referred to above would adversely
affect only the Upper DECS or the Stripped DECS, then only the affected class of
Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 8.3 Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by,
any supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Agent shall be entitled
to receive and (subject to Section 7.1) 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 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.
Section 8.4 Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement and the Securities shall be modified in accordance
therewith, and such supplemental agreement shall form a part of this Agreement
for all purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder shall
be bound thereby.
Section 8.5 Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Company or the Agent, bear a notation
in form approved by the Company and the Agent as to any matter provided for in
such supplemental agreement. If the Company shall so determine, new Certificates
so modified as to conform, in the opinion of the Agent and the Company, to any
such supplemental agreement may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent in
exchange for Outstanding Certificates.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate
with any other Person or sell, assign, transfer, lease or convey all or
substantially all of its properties and assets
64
to any Person or group of affiliated Persons in one transaction or a series of
related transactions, unless (i) either the Company shall be the continuing
corporation, or the successor (if other than the Company) shall be a corporation
organized and existing under the laws of the United States of America or a State
thereof or the District of Columbia and such corporation shall expressly assume
all the obligations of the Company under the Forward Purchase Contracts, this
Agreement, the Indenture, the Remarketing Agreement and the Pledge Agreement by
one or more supplemental agreements in form reasonably satisfactory to the Agent
and the Collateral Agent, executed and delivered to the Agent and the Collateral
Agent by such corporation, and (ii) the Company or such successor corporation,
as the case may be, shall not, immediately after such merger or consolidation,
or such sale, assignment, transfer, lease or conveyance, be in default of its
payment obligations under this Agreement or the Notes, or in default of its
obligations to deliver Common Stock (or other property) on the Forward Purchase
Contract Settlement Date or any Early Settlement Date, or in material default in
the performance of any other covenant hereunder or under the Notes, the
Indenture, the Remarketing Agreement, the Forward Purchase Contracts or the
Pledge Agreement.
Section 9.2 Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation shall
succeed to and be substituted for the Company with the same effect as if it had
been named herein as the Company, and its predecessor shall, except in the case
of a lease, be released from its obligations under this Agreement. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Cendant Corporation any or all of the
Certificates evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Certificate evidencing Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance, such change in phraseology and form (but not in
substance) may be made in the Certificates evidencing Securities thereafter to
be issued as may be appropriate.
Section 9.3 Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, assignment, transfer, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions precedent
hereunder to the consummation of any such consolidation, merger, sale,
assignment, transfer, lease or conveyance have been met.
65
ARTICLE X
COVENANTS
Section 10.1 Performance Under Forward Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Securities that it will duly and punctually
perform its obligations under the Forward Purchase Contracts in accordance with
the terms of the Forward Purchase Contracts and this Agreement.
Section 10.2 Maintenance of Office or Agency.
The Company will maintain or cause to be maintained in the
Borough of Manhattan, The City of New York an office or agency (a "New York
Office") where Certificates may be presented or surrendered for payment and for
acquisition of shares of Common Stock (or other property) upon settlement of the
Forward Purchase Contracts on the Forward Purchase Contract Settlement Date or
Early Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or re-establishment of an Upper DECS and
where notices and demands to or upon the Company in respect of the Securities
and this Agreement may be served. The Company will give prompt written notice to
the Agent of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Agent with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Agent as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Borough of Manhattan, the
City of New York, as the places of payment for the Securities, and hereby
appoints the Agent, acting through its Corporate Trust Office at 1 Bank One
Plaza, Suite IL1-0126. Chicago, IL 60670-0126, Attention: Global Corporate Trust
Services Division, as the registrar, paying agent and transfer agent for the
Upper DECS and the Stripped DECS and for the other purposes contemplated by this
Section 10.2.
Section 10.3 Company to Reserve Common Stock.
The Company shall at all times prior to the Forward Purchase
Contract Settlement Date reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock the full number of
shares of Common Stock issuable against tender of payment
66
in respect of all Forward Purchase Contracts constituting a part of the
Securities evidenced by Outstanding Certificates.
Section 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 any Forward Purchase
Contract constituting a part of the Outstanding Securities will, upon issuance,
be duly authorized, validly issued, fully paid and nonassessable. The Company
shall comply with all applicable securities laws regulating the offer, issuance
and delivery of shares of Common Stock upon settlement of Forward Purchase
Contracts and will endeavor to list such shares on each national securities
exchange or automated quotation system on which the Common Stock is then listed.
67
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CENDANT CORPORATION
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
BANK ONE TRUST COMPANY, NATIONAL
ASSOCIATION,
as Forward Purchase Contract Agent
By:
------------------------------
Name:
Title:
68
EXHIBIT A
(Form of Face of Upper DECS Certificate)
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD
PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
No. _____ CUSIP No. 151313 889
Number of Upper DECS _______
- --------------------
* To be inserted in Global Certificates only.
A-1
7.75% Upper DECS
This Upper DECS Certificate certifies that ___________ is the
registered Holder of the number of Upper DECS set forth above. Each Upper DECS
represents (i) either (a) beneficial ownership by the Holder of $50 principal
amount of Notes due 2006 (the "Note") of Cendant Corporation, a Delaware
corporation, subject to the Pledge of such Note by such Holder pursuant to the
Pledge Agreement or (b) upon the occurrence of a Tax Event Redemption prior to
the Forward Purchase Contract Settlement Date or a Successful Initial
Remarketing, the appropriate Applicable Ownership Interest of the Treasury
Portfolio, subject to the Pledge of such Applicable Ownership Interest of the
Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Forward Purchase Contract with
Cendant Corporation, a Delaware corporation (the "Company," which term, as used
herein, includes its successors pursuant to the Forward Purchase Contract
Agreement). All capitalized terms used herein which are defined in the Forward
Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of each Upper DECS evidenced hereby have been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations of
the Holder under the Forward Purchase Contract comprising a portion of such
Upper DECS.
The Pledge Agreement provides that all payments of principal
on the pledged Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, or interest payments on any pledged Notes (as
defined in the Pledge Agreement) or the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, constituting part of the Upper DECS
received by the Collateral Agent shall be paid by the Collateral Agent by wire
transfer in same day funds (i) in the case of (A) interest payments with respect
to pledged Notes or the appropriate Applicable Ownership Interest (as specified
in clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and (B) any payments of principal or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such terms)
of the Treasury Portfolio, as the case may be, with respect to any Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, that have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent to the account designated by the Agent, no later than
2:00 p.m., New York City time, on the Business Day such payment is received by
the Collateral Agent (provided that in the event such payment is received by the
Collateral Agent on a day that is not a Business Day or after 12:30 p.m., New
York City time, on a Business Day, then such payment shall be made no later than
10:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in
the case of payments of principal on any pledged Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio that has not been released from the Pledge
pursuant to the Pledge Agreement, as the case may be, to the Company on the
Forward Purchase Contract Settlement Date (as defined herein) in accordance with
the terms of the Pledge Agreement, in full satisfaction of the respective
obligations of the Holders of the Upper DECS of which such pledged Notes or the
Treasury Portfolio, as the case may be, are a part under the Forward Purchase
Contracts forming
A-2
a part of such Upper DECS. Interest on any Notes or distributions on the
appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be, forming
part of an Upper DECS evidenced hereby which are payable quarterly in arrears on
February 17, May 17, November 17 and August 17, each year, commencing November
17, 2001 (a "Payment Date"), shall, subject to receipt thereof from the
Collateral Agent, be paid to the Person in whose name this Upper DECS
Certificate (or a Predecessor Upper DECS Certificate) is registered at the close
of business on the Record Date for such Payment Date.
Each Forward Purchase Contract evidenced hereby obligates the
Holder of this Upper DECS Certificate to purchase, and the Company to sell, on
August 17, 2004 (the "Forward Purchase Contract Settlement Date"), at a price
equal to $50 (the "Stated Amount"), a number of newly issued shares of Common
Stock, $0.01 par value ("Common Stock"), of the Company equal to the Settlement
Rate, unless on or prior to the Forward Purchase Contract Settlement Date there
shall have occurred a Termination Event or an Early Settlement with respect to
the Upper DECS of which such Forward Purchase Contract is a part, all as
provided in the Forward Purchase Contract Agreement and more fully described on
the reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Forward Purchase Contract evidenced
hereby, if not paid earlier, shall be paid on the Forward Purchase Contract
Settlement Date by application of (1) cash received from a Holder or (2) payment
received in respect of the Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, pledged to secure the obligations under
such Forward Purchase Contract of the Holder of the Upper DECS of which such
Forward Purchase Contract is a part.
Interest on the Notes or distributions on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, will be payable at the
Corporate Trust Office of the Agent and at the New York Office or, at the option
of the Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Upper DECS Register or by wire transfer to the
account designated by a prior written notice from such Person.
The Company shall pay on each Payment Date in respect of each
Forward Purchase Contract forming part of an Upper DECS evidenced hereby an
amount (the "Contract Adjustment Payments") equal to 1.0% per year of the Stated
Amount, computed on the basis of a 360-day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Forward Purchase
Contract Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Upper DECS Certificate (or a Predecessor Upper DECS Certificate) is registered
at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the
Corporate Trust Office of the Agent and at the New York Office or, at the option
of the Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Upper DECS Register.
A-3
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Upper DECS Certificate shall not
be entitled to any benefit under the Pledge Agreement or the Forward Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
CENDANT CORPORATION
By:
------------------------
Name:
Title:
By:
------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as
to obligations of such
Holder under the Forward
Purchase Contracts
evidenced hereby)
By: BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
not individually but solely as attorney-in-fact
of such Holder
By:
------------------------
Name:
Title:
Dated:
A-5
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Upper DECS Certificates referred to in the
within mentioned Forward Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION,
as Forward Purchase Contract Agent
By:
--------------------------
Authorized Signatory
Dated:
A-6
(Form of Reverse of Upper DECS Certificate)
Each Forward Purchase Contract evidenced hereby is governed by
a Forward Purchase Contract Agreement, dated as of July 27, 2001 (as may be
supplemented from time to time, the "Forward Purchase Contract Agreement"),
between the Company and Bank One Trust Company, National Association, as Forward
Purchase Contract Agent (including its successors thereunder, herein called the
"Agent"), to which Forward Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company and the Holders and of the terms upon which the Upper
DECS Certificates are, and are to be, executed and delivered. In the case of any
inconsistency between this Certificate and the terms of the Forward Purchase
Contract Agreement, the terms of the Forward Purchase Contract Agreement shall
prevail.
Each Forward Purchase Contract evidenced hereby obligates the
Holder of this Upper DECS Certificate to purchase, and the Company to sell, on
the Forward Purchase Contract Settlement Date at a price equal to the Purchase
Price, a number of newly issued shares of Common Stock of the Company equal to
the Settlement Rate, unless, on or prior to the Forward Purchase Contract
Settlement Date, there shall have occurred a Termination Event or an Early
Settlement with respect to the Security of which such Forward Purchase Contract
is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $28.42 (the "Threshold
Appreciation Price"), 1.7593 shares of Common Stock per Forward Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $21.53, the number of shares of Common
Stock per Forward Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value and (c) if the Applicable Market Value is less than or
equal to $21.53, 2.3223 shares of Common Stock per Forward Purchase Contract, in
each case subject to adjustment as provided in the Forward Purchase Contract
Agreement. No fractional shares of Common Stock will be issued upon settlement
of Forward Purchase Contracts, as provided in the Forward Purchase Contract
Agreement.
Each Forward Purchase Contract evidenced hereby which is
settled either through Early Settlement or Cash Settlement shall obligate the
Holder of the related Upper DECS to purchase at the Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
Early Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Forward Purchase
Contract Settlement Date or, for purposes of determining cash payable in lieu of
factional shares in connection with an Early Settlement, the third Trading Day
immediately preceding the relevant Early Settlement 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
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, the last closing sales
price on
A-7
and as reported by the Nasdaq National Market, or, if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar organization, or,
if such bid price is not available, the market value of the Common Stock on such
date as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Forward Purchase Contract
Agreement, the Holder of this Upper DECS Certificate shall pay the Purchase
Price for the shares of Common Stock purchased pursuant to each Forward Purchase
Contract evidenced hereby by effecting a Cash Settlement or an Early Settlement
or from the Proceeds of a remarketing of the related pledged Notes of such
holders or of the appropriate Applicable Ownership Interest of the Treasury
Portfolio. Unless a Tax Event Redemption or a Successful Initial Remarketing has
occurred, a Holder of Upper DECS who does not elect to make an effective (1)
Cash Settlement on or prior to 5:00 p.m., New York City time, on the seventh
Business Day immediately preceding the Forward Purchase Contract Settlement
Date, or (2) Early Settlement on or prior to 5:00 p.m. New York City time, on
the seventh Business Day immediately preceding the Forward Purchase Contract
Settlement Date, shall pay the Purchase Price for the shares of Common Stock to
be issued under the related Forward Purchase Contract from the Proceeds of the
sale of the related pledged Notes held by the Collateral Agent. Unless a Tax
Event Redemption or a Successful Initial Remarketing has occurred, such sale
will be made by the Remarketing Agent pursuant to the terms of the Remarketing
Agreement and any supplemental remarketing agreement executed in connection
therewith between the parties thereto, on the third Business Day immediately
preceding the Forward Purchase Contract Settlement Date. If a Tax Event
Redemption or a Successful Initial Remarketing has occurred, a Holder of Upper
DECS who does not elect to make an effective Early Settlement on or prior to
5:00 p.m. New York City time, on the second Business Day immediately preceding
the Forward Purchase Contract Settlement Date shall pay the Purchase Price with
the Proceeds at maturity of the Applicable Ownership Interest (as defined in
clause (A) of the definition of such term) of the Treasury Portfolio.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Forward Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received payment in
full of the aggregate Purchase Price for the shares of Common Stock to be
purchased thereunder in the manner herein set forth.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights pertaining to
the pledged Notes. Upon receipt of notice of any meeting at which holders of
Notes are entitled to vote or upon the solicitation of consents, waivers or
proxies of holders of Notes, the Agent shall, as soon as practicable thereafter,
mail to the Upper DECS holders a notice (a) containing such information as is
contained in the notice or solicitation, (b) stating that each Upper DECS holder
on the record date set by the Agent therefor (which, to the extent possible,
shall be the same date as the record
A-8
date for determining the holders of Notes entitled to vote) shall be entitled to
instruct the Agent as to the exercise of the voting rights pertaining to the
Notes constituting a part of such holder's Upper DECS and (c) stating the manner
in which such instructions may be given. Upon the written request of the Upper
DECS Holders on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of an Upper DECS, the Agent shall abstain from
voting the Notes evidenced by such Upper DECS.
Upon the occurrence of a Tax Event Redemption prior to the
Forward Purchase Contract Settlement Date, pursuant to the terms of the Pledge
Agreement, the Collateral Agent will apply, out of the aggregate Redemption
Price for the Notes that are components of Upper DECS, an amount equal to the
aggregate Redemption Amount for the Notes that are components of Upper DECS to
purchase on behalf of the Holders of Upper DECS, the Treasury Portfolio and,
after deducting the Remarketing Fee to the extent permitted under the terms of
the Remarketing Agreement, promptly remit the remaining portion of such
Redemption Price to the Agent for payment to the Holders of such Upper DECS.
Upon the occurrence of a Successful Initial Remarketing,
pursuant to the terms of the Remarketing Agreement, the Remarketing Agent will
apply an amount equal to the Treasury Portfolio Purchase Price to purchase on
behalf of the Holders of Upper DECS, the Treasury Portfolio, and, after
deducting the Remarketing Fee to the extent permitted under the terms of the
Remarketing Agreement, promptly remit the remaining portion of such Proceeds of
the Successful Initial Remarketing to the Agent for payment to the Holders of
such Upper DECS.
Following the occurrence of a Tax Event Redemption prior to
the Forward Purchase Contract Settlement Date or following a Successful Initial
Remarketing, the Holders of Upper DECS and the Collateral Agent shall have such
security interests, rights and obligations with respect to the Treasury
Portfolio as the Holder of Upper DECS and the Collateral Agent had in respect of
the Notes, as the case may be, subject to the Pledge thereof as provided in
Articles 2, 3, 4, 5 and 6 of the Pledge Agreement and any reference herein to
the Notes shall be deemed to be a reference to such Treasury Portfolio and any
reference herein or in the Certificates to interest on the Notes shall be deemed
to be a reference to corresponding distributions on the Treasury Portfolio.
Upon the occurrence of a Tax Event Redemption after the
Purchase Contract Settlement Date, the Redemption Price will be payable in cash
to the holders of the Notes.
The Upper DECS Certificates are issuable only in registered
form and only in denominations of a single Upper DECS and any integral multiple
thereof. The transfer of any Upper DECS Certificate will be registered and Upper
DECS Certificates may be exchanged as provided in the Forward Purchase Contract
Agreement. The Upper DECS Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents permitted by the Forward
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Treasury
Securities for Notes or the appropriate
A-9
Applicable Ownership Interest of the Treasury Portfolio, thereby creating
Stripped DECS, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Forward Purchase Contract
Agreement, for so long as the Forward Purchase Contract underlying an Upper DECS
remains in effect, such Upper DECS shall not be separable into its constituent
parts, and the rights and obligations of the Holder of such Upper DECS in
respect of Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, and the Forward Purchase Contract
constituting such Upper DECS may be transferred and exchanged only as an Upper
DECS. A Holder of an Upper DECS may create a Stripped DECS by delivering to the
Collateral Agent Treasury Securities in an aggregate principal amount equal to
the aggregate principal amount of the pledged Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) of the Treasury Portfolio, as the case may be, in exchange for the
release of such pledged Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be, in accordance with the terms of
the Forward Purchase Contract Agreement and the Pledge Agreement. From and after
such Collateral Substitution, the Security for which such pledged Treasury
Securities secures the Holder's obligation under the Forward Purchase Contract
shall be referred to as a "Stripped DECS." A Holder may make such Collateral
Substitution only in integral multiples of 20 Upper DECS for the same multiple
of 20 Stripped DECS; provided, however, that if a Tax Event Redemption or a
Successful Initial Remarketing has occurred and the Treasury Portfolio has
become a component of the Upper DECS, a Holder may make such Collateral
Substitutions only in integral multiples of 32,000 Upper DECS or another
integral multiple such that the Treasury Securities to be deposited and those to
be released are in integral multiples of $1,000 for the same multiple of
Stripped DECS. Such Collateral Substitution may cause the equivalent aggregate
Stated Amount of this Certificate to be increased or decreased; provided,
however, the equivalent aggregate Stated Amount outstanding under this Upper
DECS Certificate shall not exceed $[400,000,000]. [All such adjustments to the
equivalent aggregate Stated Amount of this Upper DECS Certificate shall be duly
recorded by placing an appropriate notation on the Schedule attached hereto.]
A Holder of Stripped DECS may recreate Upper DECS by
delivering to the Collateral Agent Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, with an aggregate principal amount, in the
case of such Notes, or with the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, in the case of such appropriate Applicable Ownership Interest of the
Treasury Portfolio, equal to the aggregate principal amount of the pledged
Treasury Securities in exchange for the release of such pledged Treasury
Securities in accordance with the terms of the Forward Purchase Contract
Agreement and the Pledge Agreement. Any such recreation of an Upper DECS may be
effected only in multiples of 20 Stripped DECS for the same multiple of 20 Upper
DECS; provided, however, that if a Tax Event Redemption or a Successful Initial
Remarketing has occurred and the Treasury Portfolio has become a component of
the Upper DECS, a Holder may make such substitution only in integral multiples
of 32,000 Stripped DECS or another integral multiple such that the Treasury
Securities to be deposited and those to be released are in integral multiples of
$1,000 for the same multiple of Upper DECS.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in
respect of each Forward Purchase Contract to the Person in whose name the Upper
DECS Certificate evidencing such
A-10
Forward Purchase Contract is registered at the close of business on the Record
Date for such Payment Date. Contract Adjustment Payments, if any, will be
payable at the Corporate Trust Office of the Agent and the New York Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Upper DECS Register or by
wire transfer to the account designated by such Person in writing.
The Company shall have the right, at any time prior to the
Forward Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments, if any, otherwise payable on any Payment Date,
but only if the Company shall give the Holders and the Agent written notice of
its election to defer such payment (specifying the amount to be deferred) as
provided in the Forward Purchase Contract Agreement. Any Contract Adjustment
Payments, if any, so deferred shall, to the extent permitted by law, bear
additional Contract Adjustment Payments thereon at the rate of 7.75% per year
(computed on the basis of a 360-day year of twelve 30 day months), compounding
on each succeeding Payment Date, until paid in full (such deferred installments
of Contract Adjustment Payments, if any, together with the additional Contract
Adjustment Payments accrued thereon, are referred to herein as the "Deferred
Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any,
shall be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to the Forward Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Forward Purchase Contract Settlement Date and no such deferral period may
end other than on a Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments, if any, on the Forward Purchase Contracts until a
Payment Date prior to the Forward Purchase Contract Settlement Date, then all
Deferred Contract Adjustment Payments, if any, shall be payable to the
registered Holders as of the close of business on the Record Date immediately
preceding such Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments, if any, on the Forward Purchase Contracts until
the Forward Purchase Contract Settlement Date, the Holder of this Upper DECS
Certificate will receive on the Forward Purchase Contract Settlement Date, in
lieu of a cash payment, a number of shares of Common Stock (in addition to the
number of shares of Common Stock equal to the Settlement Rate) equal to (x) the
aggregate amount of Deferred Contract Adjustment Payments payable to the Holder
of this Upper DECS Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, if any, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall not declare or
pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
other than: (i) purchases, redemptions or acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers or
directors or a stock purchase or dividend reinvestment plan, or the satisfaction
by the Company of its obligations pursuant to any contract or security
outstanding on the date of such event; (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock; (iii) the purchase of
A-11
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged; (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases, acquisitions or
redemptions of capital stock in connection with the issuance or exchange of
capital stock (or securities convertible into or exchangeable for shares of our
capital stock); (v) redemptions, exchanges or repurchases of any rights
outstanding under a shareholder rights plan or the declaration or payment
thereunder of a dividend or distribution of or with respect to rights in the
future; or (vi) mandatory sinking fund payments with respect to any series of
preferred stock of the Company; provided that the aggregate stated value of all
such series outstanding at the time of such payment does not exceed 5% of the
aggregate of (1) the total principal amount of all then outstanding bonds or
other securities representing secured indebtedness issued or assumed by the
Company and (2) the Company's capital and surplus to be stated on the Company's
books of account after giving effect to such payment; provided however that any
moneys deposited into any sinking fund and not in violation of this clause (vi)
may thereafter be applied to the purchase or redemption of such preferred stock
in accordance with the terms of such sinking fund without regard to the
foregoing restrictions.
The Forward Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
Contract Adjustment Payments, if any, or any Deferred Contract Adjustment
Payments, and the rights and obligations of Holders to purchase Common Stock,
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior to the
Forward Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall promptly
but in no event later than two Business Days thereafter give written notice to
the Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Upper DECS Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, from the Pledge in accordance with the provisions of the Pledge
Agreement.
Subject to and upon compliance with the provisions of the
Forward Purchase Contract Agreement, Forward Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") at the option of the
Holders thereof as provided in the Forward Purchase Contract Agreement;
provided, however, that if a Tax Event Redemption or a Successful Initial
Remarketing has occurred and the Treasury Portfolio has become a component of
the Upper DECS, Holders may early settle Upper DECS only in integral multiples
of 32,000 Upper DECS or another integral multiple such that the Treasury
Securities to be deposited and those to be released are in integral multiples of
$1,000. In order to exercise the right to effect Early Settlement with respect
to any Forward Purchase Contracts evidenced by this Upper DECS Certificate, the
Holder of this Upper DECS Certificate shall deliver this Upper DECS Certificate
to the Agent at the Corporate Trust Office or the New York Office duly endorsed
for transfer to the Company or in blank with the form of Election to Settle
Early set forth below duly completed and accompanied by payment in lawful money
of the United States by wire transfer, in each case in immediately available
funds payable to the Company in an amount (the "Early Settlement Amount") equal
to (i) the product of (A) the Stated Amount times (B) the number of Forward
A-12
Purchase Contracts with respect to which the Holder has elected to effect Early
Settlement plus (ii) if such delivery is made with respect to any Forward
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments, if any, payable on
such Payment Date with respect to such Forward Purchase Contracts; provided that
no payment shall be required pursuant to clause (ii) of this sentence if the
Company shall have elected to defer the Contract Adjustment Payments which would
otherwise be payable on such Payment Date. Upon Early Settlement of Forward
Purchase Contracts by a Holder of the related Securities, the pledged Notes or
the appropriate Applicable Ownership Interest of the Treasury Portfolio
underlying such Securities shall be released from the Pledge as provided in the
Pledge Agreement and the Holder shall be entitled to receive a number of shares
of Common Stock on account of each Forward Purchase Contract forming part of an
Upper DECS as to which Early Settlement is effected equal to the Early
Settlement Rate; provided, however, that upon the Early Settlement of the
Forward Purchase Contracts, the Holder of such related Securities will forfeit
the right to receive any Deferred Contract Adjustment Payments and any future
Contract Adjustment Payments, except to the extent that the Early Settlement
Date is after the close of business on a Record Date and prior to the opening of
business on the corresponding Payment Date. The Early Settlement Rate shall
initially be equal to 1.7593 shares of Common Stock and shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in the Forward Purchase Contract Agreement.
Upon registration of transfer of this Upper DECS Certificate
in accordance with the Forward Purchase Contract Agreement, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee, except as may be required by the Agent pursuant to the Forward
Purchase Contract Agreement) under the terms of the Forward Purchase Contract
Agreement, the Pledge Agreement and the Forward Purchase Contracts evidenced
hereby and the transferor shall be released from the obligations under the
Forward Purchase Contract Agreement, the Pledge Agreement and the Forward
Purchase Contracts evidenced by this Upper DECS Certificate. The Company
covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Upper DECS Certificate, by its acceptance
hereof, authorizes the Agent to enter into and perform the related Forward
Purchase Contracts forming part of the Upper DECS evidenced hereby on his behalf
as his attorney-in-fact, expressly withholds any consent to the assumption
(i.e., affirmance) of the Forward Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Forward Purchase
Contracts, consents to the provisions of the Forward Purchase Contract
Agreement, authorizes the Agent to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to the Pledge of the Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, underlying this Upper DECS Certificate pursuant to the Pledge
Agreement and to all other provisions of the Pledge Agreement. The Holder
further covenants and agrees, that, to the extent and in the manner provided in
the Forward Purchase Contract Agreement and the Pledge Agreement, but subject to
the terms thereof, Proceeds of the pledged Notes or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the
A-13
Treasury Portfolio on the Forward Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Forward Purchase Contract and such Holder shall acquire
no right, title or interest in such Proceeds.
Subject to certain exceptions, the provisions of the Forward
Purchase Contract Agreement may be amended with the consent of the Holders of a
majority of the Forward Purchase Contracts then outstanding.
The Forward Purchase Contracts shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Upper DECS
Certificate is registered as the owner of the Upper DECS evidenced hereby for
the purpose of receiving payments of interest payable quarterly on the Notes or
on the maturing quarterly interest strips of the Treasury Portfolio, as
applicable, receiving payments of Contract Adjustment Payments, if any, and any
Deferred Contract Adjustment Payments, performance of the Forward Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be affected by notice to
the contrary.
The Forward Purchase Contracts shall not, prior to the
settlement thereof, entitle the Holder to any of the rights of a holder of
shares of Common Stock.
A copy of the Forward Purchase Contract Agreement is available
for inspection at the offices of the Agent.
A-14
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - __________Custodian__________
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Upper DECS Certificates and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________________
attorney to transfer said Upper DECS Certificates on the books of Cendant
Corporation with full power of substitution in the premises.
Dated: _________________ _______________________________
Signature
A-15
NOTICE: The signature to
this assignment must
correspond with the name as
it appears upon the face of
the within Upper DECS
Certificates in every
particular, without
alteration or enlargement
or any change whatsoever.
Signature Guarantee: ____________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-16
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the Forward Purchase
Contract Settlement Date of the Forward Purchase Contracts underlying the number
of Upper DECS evidenced by this Upper DECS Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional share, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. If shares are to be registered in the name of
a Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: _________________ ________________________________
Signature
Signature Guarantee: ___________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address REGISTERED
HOLDER and (ii) provide a guarantee of your signature: Please print name and
address of Registered Holder:
______________________________ ______________________________
Name Name
______________________________ ______________________________
Address Address
______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-17
ELECTION TO SETTLE EARLY
The undersigned Holder of this Upper DECS Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Forward Purchase Contract Agreement with respect to the Forward
Purchase Contracts underlying the number of Upper DECS evidenced by this Upper
DECS Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Forward Purchase Contracts underlying Upper DECS
with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof;
provided, however, that if a Tax Event Redemption or a Successful Initial
Remarketing has occurred and the Treasury Portfolio has become a component of
the Upper DECS, Holders may early settle Upper DECS only in integral multiples
of 32,000 Upper DECS or another integral multiple such that the Treasury
Securities to be deposited and those to be released are in integral multiples of
$1,000. The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Upper DECS Certificate representing any Upper DECS evidenced hereby as to which
Early Settlement of the related Forward Purchase Contracts is not effected, to
the undersigned at the address indicated below unless a different name and
address have been indicated below. Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, deliverable
upon such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: _________________ ________________________________
Signature
Signature Guarantee
(if assigned to another person):__________________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Number of Securities evidenced hereby as to which Early
Settlement of the related Forward Purchase Contracts is being elected:
If shares of Common Stock or Upper DECS Certificates are to be
registered in the name of and delivered to and pledged Notes,
or an Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, are to be transferred to a Person other
than the Holder, please (i) print such Person's name and
address and (ii) provide a guarantee of your signature:
______________________________
Name
A-18
______________________________
Address
______________________________
______________________________
______________________________
______________________________
REGISTERED HOLDER
Please print name and address of Registered Holder:
______________________________
Name
______________________________
Address
______________________________
______________________________
______________________________
______________________________
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
Transfer Instructions for pledged Notes, or the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, Transferable Upon Early Settlement
or a Termination Event:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
A-19
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Signature of authorized
Amount of Amount of Stated Amount of this signatory of Purchase
decrease in Stated increase in Stated Global Certificate Contract Agent or
Amount of the Global Amount of the Global following such decrease Securities Custodian
Date Certificate Certificate or increase Agent
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
A-20
EXHIBIT B
(Form of Face of Stripped DECS Certificate)
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE FORWARD PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS
REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE FORWARD
PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]*
No. _____ CUSIP No.
Number of Stripped DECS _______
- ------------------
* To be inserted in Global Certificates only.
B-1
7.75 % Stripped DECS
This Stripped DECS Certificate certifies that __________ is
the registered Holder of the number of Stripped DECS set forth above. Each
Stripped DECS represents (i) a 1/20, or 5.0%, undivided beneficial ownership
interest in a Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder pursuant
to the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Forward Purchase Contract with Cendant Corporation, a Delaware corporation
(the "Company," which term, as used herein, includes its successors pursuant to
the Forward Purchase Contract Agreement). All capitalized terms used herein
which are defined in the Forward Purchase Contract Agreement have the meaning
set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Stripped DECS evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Forward Purchase Contract comprising a portion of such
Stripped DECS.
The Pledge Agreement provides that all payments of the
principal of any Treasury Securities received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds (i) in the case
of any principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Stripped DECS to the accounts designated by them in writing for such
purpose no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day), and (ii) in the case of the principal of any pledged
Treasury Securities, to the Company on the Forward Purchase Contract Settlement
Date (as defined herein) in accordance with the terms of the Pledge Agreement,
in full satisfaction of the respective obligations of the Holders of the
Stripped DECS of which such pledged Treasury Securities are a part under the
Forward Purchase Contracts forming a part of such Stripped DECS.
Each Forward Purchase Contract evidenced hereby obligates the
Holder of this Stripped DECS Certificate to purchase, and the Company to sell,
on August 17, 2004 (the "Forward Purchase Contract Settlement Date"), at a price
equal to $50 (the "Stated Amount"), a number of newly issued shares of Common
Stock, par value $0.01 ("Common Stock"), of the Company equal to the Settlement
Rate, unless on or prior to the Forward Purchase Contract Settlement Date there
shall have occurred a Termination Event or an Early Settlement with respect to
the Stripped DECS of which such Forward Purchase Contract is a part, all as
provided in the Forward Purchase Contract Agreement and more fully described on
the reverse hereof. The purchase price (the "Purchase Price") for the shares of
Common Stock purchased pursuant to each Forward Purchase Contract evidenced
hereby, if not paid earlier, shall be paid on the Forward Purchase Contract
Settlement Date by application of the Proceeds from the Treasury Securities
pledged to secure the obligations under such Forward Purchase Contract in
accordance with the terms of the Pledge Agreement.
B-2
The Company shall pay on each Payment Date in respect of each
Forward Purchase Contract forming part of a Stripped DECS evidenced hereby an
amount (the "Contract Adjustment Payments") equal to 1.0% per year of the Stated
Amount, computed on the basis of a 360-day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Forward Purchase
Contract Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Stripped DECS Certificate (or a Predecessor Stripped DECS Certificate) is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the
Corporate Trust Office of the Agent and at the New York Office or, at the option
of the Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Stripped DECS Register or by wire transfer to the
account designated by such Person by prior written notice.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Stripped DECS Certificate shall
not be entitled to any benefit under the Pledge Agreement or the Forward
Purchase Contract Agreement or be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed.
CENDANT CORPORATION
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Forward Purchase Contracts)
By: BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION,
not individually but solely as attorney-in-fact
of such Holder
By:
------------------------------
Name:
Title:
Dated:
B-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Stripped DECS referred to in the
within-mentioned Forward Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY,
NATIONAL ASSOCIATION,
as Forward Purchase Contract Agent
By:
------------------------------
Authorized Signatory
B-5
(Form of Reverse of
Stripped DECS Certificate)
Each Forward Purchase Contract evidenced hereby is governed by
a Forward Purchase Contract Agreement, dated as of July 27, 2001 (as may be
supplemented from time to time, the "Forward Purchase Contract Agreement"),
between the Company and Bank One Trust Company, National Association, as Forward
Purchase Contract Agent (including its successors thereunder, herein called the
"Agent"), to which the Forward Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company and the Holders and of the terms upon which the Stripped
DECS Certificates are, and are to be, executed and delivered. In the case of any
inconsistency between this Certificate and the terms of the Forward Purchase
Contract Agreement, the terms of the Forward Purchase Contract Agreement shall
prevail.
Each Forward Purchase Contract evidenced hereby obligates the
Holder of this Stripped DECS Certificate to purchase, and the Company to sell,
on the Forward Purchase Contract Settlement Date at the Purchase Price, a number
of newly issued shares of Common Stock of the Company equal to the Settlement
Rate, unless, on or prior to the Forward Purchase Contract Settlement Date,
there shall have occurred a Termination Event or an Early Settlement with
respect to the Security of which such Forward Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $28.42 (the "Threshold Appreciation Price"),
1.7593 shares of Common Stock per Forward Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $21.53, the number of shares of Common Stock per Forward Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value and
(c) if the Applicable Market Value is less than or equal to $21.53, 2.3223
shares of Common Stock per Forward Purchase Contract, in each case subject to
adjustment as provided in the Forward Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Forward Purchase
Contracts, as provided in the Forward Purchase Contract Agreement.
Each Forward Purchase Contract evidenced hereby which is
settled through Early Settlement shall obligate the Holder of the related
Stripped DECS to purchase at the Purchase Price, and the Company to sell, a
number of newly issued shares of Common Stock equal to the Early Settlement
Rate.
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Forward Purchase
Contract Settlement Date or, for purposes of determining cash payable in lieu of
fractional shares in connection with an Early Settlement, the third Trading Day
immediately preceding the relevant Early Settlement Date. The "Closing Price" of
the Common Stock on any date of determination means the closing sale price (or,
if no closing sale price is reported, the last reported sale price) of the
Common Stock on The New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such date, as reported
in composite transactions for the principal United States securities exchange on
which the Common Stock is so listed, or if the Common
B-6
Stock is not so listed on a United States national or regional securities
exchange, the last closing sales price on and as reported as reported by the
Nasdaq National Market or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, or, if such bid price
is not available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on which
the Common Stock (A) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (B) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
In accordance with the terms of the Forward Purchase Contract
Agreement, the Holder of this Stripped DECS Certificate shall pay the Purchase
Price for the shares of Common Stock purchased pursuant to each Forward Purchase
Contract evidenced hereby by effecting either an Early Settlement of each such
Forward Purchase Contract or by applying a principal amount of the pledged
Treasury Securities underlying such Holder's Stripped DECS equal to the Stated
Amount to the purchase of the Common Stock. A Holder of Stripped DECS who does
not elect, on or prior to 5:00 p.m., New York City time, on the second Business
Day immediately preceding the Forward Purchase Contract Settlement Date, to make
an Early Settlement, shall pay the Purchase Price for the shares of Common Stock
to be issued on the related Forward Purchase Contract by applying a principal
amount of the pledged Treasury Securities as aforesaid.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Forward Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received payment in
full of the aggregate Purchase Price for the shares of Common Stock to be
purchased thereunder in the manner herein set forth.
The Stripped DECS Certificates are issuable only in registered
form and only in denominations of a single Stripped DECS and any integral
multiple thereof. The transfer of any Stripped DECS Certificate will be
registered and Stripped DECS Certificates may be exchanged as provided in the
Forward Purchase Contract Agreement. The Stripped DECS Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents permitted by the Forward Purchase Contract Agreement. No service
charge shall be required for any such registration of transfer or exchange, but
the Company and the Agent may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. A Holder who
elects to substitute Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, for Treasury Securities, thereby
recreating Upper DECS, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Forward Purchase Contract
Agreement, for so long as the Forward Purchase Contract underlying a Stripped
DECS remains in effect, such Stripped DECS shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Stripped
DECS in respect of the Treasury Security and the Forward Purchase Contract
constituting such Stripped DECS may be transferred and exchanged only as a
Stripped DECS. A Holder of Stripped DECS may recreate Upper DECS by delivering
to the Collateral Agent Notes or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, with an aggregate
B-7
principal amount, in the case of such Notes, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the pledged Treasury Securities in exchange for the release of such pledged
Treasury Securities in accordance with the terms of the Forward Purchase
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Security for which such pledged Notes or appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, secures the Holder's
obligation under the Forward Purchase Contract shall be referred to as an "Upper
DECS." A Holder may make such a substitution only in integral multiples of 20
Stripped DECS for the same multiple of 20 Upper DECS; provided, however, that if
a Tax Event Redemption or a Successful Initial Remarketing has occurred and the
Treasury Portfolio has become a component of the Upper DECS, a Holder may make
such substitution only in integral multiples of 32,000 Stripped DECS or another
integral multiple such that the Treasury Securities to be deposited and those to
be released are in integral multiples of $1,000 for the same multiple of Upper
DECS. Such substitution may cause the equivalent aggregate Stated Amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate Stated Amount outstanding under this Stripped DECS Certificate shall
not exceed $[400,000,000]. [All such adjustments to the equivalent aggregate
Stated Amount of this Stripped DECS Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.]
A Holder of an Upper DECS may create a Stripped DECS by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount of the pledged Notes or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, in exchange for the release of such pledged Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, in accordance with the terms of the Forward Purchase Contract
Agreement and the Pledge Agreement. Any such creation of a Stripped DECS may be
effected only in multiples of 20 Upper DECS for the same multiple of 20 Stripped
DECS; provided, however, if a Tax Event Redemption or a Successful Initial
Remarketing has occurred and the Treasury Portfolio has become a component of
the Upper DECS, a Holder may make such Collateral Substitution only in integral
multiples of 32,000 Upper DECS or another integral multiple such that the
Treasury Securities to be deposited and those to be released are in integral
multiples of $1,000 for the same multiple of Stripped DECS.
Subject to the next succeeding paragraph, the Company shall
pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in
respect of each Forward Purchase Contract to the Person in whose name the
Stripped DECS Certificate evidencing such Forward Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the Corporate Trust
Office of the Agent and the New York Office or, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such address as it
appears on the Stripped DECS Register.
The Company shall have the right, at any time prior to the
Forward Purchase Contract Settlement Date, to defer the payment of any or all of
the Contract Adjustment Payments, if any, otherwise payable on any Payment Date,
but only if the Company shall give
B-8
the Holders and the Agent written notice of its election to defer such payment
(specifying the amount to be deferred) as provided in the Forward Purchase
Contract Agreement. Any Contract Adjustment Payments, if any, so deferred shall,
to the extent permitted by law, bear additional Contract Adjustment Payments
thereon at the rate of 7.75% per year (computed on the basis of a 360-day year
of twelve 30 day months), compounding on each succeeding Payment Date, until
paid in full (such deferred installments of Contract Adjustment Payments, if
any, together with the additional Contract Adjustment Payments accrued thereon,
are referred to herein as the "Deferred Contract Adjustment Payments"). Deferred
Contract Adjustment Payments, if any, shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to the
Forward Purchase Contract Agreement. No Contract Adjustment Payments, if any,
may be deferred to a date that is after the Forward Purchase Contract Settlement
Date and no such deferral period may end other than on a Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments, if any, on the Forward Purchase Contracts until a
Payment Date prior to the Forward Purchase Contract Settlement Date, then all
Deferred Contract Adjustment Payments, if any, shall be payable to the
registered Holders as of the close of business on the Record Date immediately
preceding such Payment Date.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments, if any, on the Forward Purchase Contracts until
the Forward Purchase Contract Settlement Date, the Holder of this Stripped DECS
Certificate will receive on the Forward Purchase Contract Settlement Date, in
lieu of a cash payment, a number of shares of Common Stock (in addition to the
number of shares of Common Stock equal to the Settlement Rate) equal to (x) the
aggregate amount of Deferred Contract Adjustment Payments payable to the Holder
of this Stripped DECS Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, if any, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall not declare or
pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
other than: (i) purchases, redemptions or acquisitions of shares of capital
stock of the Company in connection with any employment contract, benefit plan or
other similar arrangement with or for the benefit of employees, officers or
directors or a stock purchase or dividend reinvestment plan, or the satisfaction
by the Company of its obligations pursuant to any contract or security
outstanding on the date of such event; (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock; (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged; (iv) dividends
or distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases, acquisitions or redemptions of capital stock in
connection with the issuance or exchange of capital stock (or securities
convertible into or exchangeable for shares of our capital stock); (v)
redemptions, exchanges or repurchases of any rights outstanding under a
shareholder rights plan or the declaration or payment thereunder of a dividend
or distribution of or with respect to rights in the future; or (vi) mandatory
sinking fund payments with respect to any series of preferred stock of the
Company; provided that the aggregate stated value of all such series
B-9
outstanding at the time of such payment does not exceed 5% of the aggregate of
(1) the total principal amount of all then outstanding bonds or other securities
representing secured indebtedness issued or assumed by the Company and (2) the
Company's capital and surplus to be stated on the Company's books of account
after giving effect to such payment; provided however that any moneys deposited
into any sinking fund and not in violation of this clause (vi) may thereafter be
applied to the purchase or redemption of such preferred stock in accordance with
the terms of such sinking fund without regard to the foregoing restrictions.
The Forward Purchase Contracts and all obligations and rights
of the Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
Contract Adjustment Payments, if any, or any Deferred Contract Adjustment
Payments, and the rights and obligations of Holders to purchase Common Stock
shall immediately and automatically terminate, without the necessity of any
notice or action by any Holder, the Agent or the Company, if, on or prior to the
Forward Purchase Contract Settlement Date, a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the Company shall promptly
but in no event later than two Business Days thereafter give written notice to
the Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Stripped DECS Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the Treasury Securities
from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Forward Purchase Contract Agreement, Forward Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") at the option of the
Holders thereof as provided in the Forward Purchase Contract Agreement. In order
to exercise the right to effect Early Settlement with respect to any Forward
Purchase Contracts evidenced by this Stripped DECS Certificate, the Holder of
this Stripped DECS Certificate shall deliver this Stripped DECS Certificate to
the Agent at the Corporate Trust Office or the New York Office duly endorsed for
transfer to the Company or in blank with the form of Election to Settle Early
set forth below duly completed and accompanied by payment in lawful money of the
United States by wire transfer, in each case in immediately available funds
payable to the Company in an amount (the "Early Settlement Amount") equal to (i)
the product of (A) the Stated Amount times (B) the number of Forward Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement plus (ii) if such delivery is made with respect to any Forward
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments, if any, payable on
such Payment Date with respect to such Forward Purchase Contracts; provided that
no payment shall be required pursuant to clause (ii) of this sentence if the
Company shall have elected to defer the Contract Adjustment Payments which would
otherwise be payable on such Payment Date. Upon Early Settlement of Forward
Purchase Contracts by a Holder of the related Securities, the pledged Treasury
Securities underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive a
number of shares of Common Stock on account of each Forward Purchase Contract
forming part of a Stripped DECS as to which Early Settlement is effected equal
to the Early Settlement Rate; provided, however, that upon the Early Settlement
of the Forward Purchase Contracts, the Holder of such related Securities will
forfeit the right to receive any Deferred Contract
B-10
Adjustment Payments and any future Contract Adjustment Payments, except to the
extent that the Early Settlement Date is after the close of business on a Record
Date and prior to the opening of business on the corresponding Payment Date. The
Early Settlement Rate shall initially be equal to 1.7593 shares of Common Stock
and shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in the Forward Purchase Contract Agreement.
Upon registration of transfer of this Stripped DECS
Certificate, the transferee shall be bound (without the necessity of any other
action on the part of such transferee, except as may be required by the Agent
pursuant to the Forward Purchase Contract Agreement) under the terms of the
Forward Purchase Contract Agreement, the Pledge Agreement and the Forward
Purchase Contracts evidenced hereby and the transferor shall be released from
the obligations under the Forward Purchase Contract Agreement, the Pledge
Agreement and the Forward Purchase Contracts evidenced by this Stripped DECS
Certificate. The Company covenants and agrees, and the Holder, by his acceptance
hereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
The Holder of this Stripped DECS Certificate, by its
acceptance hereof, authorizes the Agent to enter into and perform the related
Forward Purchase Contracts forming part of the Stripped DECS evidenced hereby on
his behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Forward Purchase Contracts by the Company
or its trustee in the event that the Company becomes the subject of a case under
the Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Forward Purchase
Contracts, consents to the provisions of the Forward Purchase Contract
Agreement, authorizes the Agent to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to the Pledge of the
Treasury Securities underlying this Stripped DECS Certificate pursuant to the
Pledge Agreement and to all other provisions of the Pledge Agreement. The Holder
further covenants and agrees, that, to the extent and in the manner provided in
the Forward Purchase Contract Agreement and the Pledge Agreement, but subject to
the terms thereof, Proceeds of the pledged Treasury Securities on the Forward
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Forward Purchase
Contract and such Holder shall acquire no right, title or interest in such
Proceeds.
Subject to certain exceptions, the provisions of the Forward
Purchase Contract Agreement may be amended with the consent of the Holders of a
majority of the Forward Purchase Contracts then outstanding.
The Forward Purchase Contracts shall for all purposes be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
The Company, the Agent and its Affiliates and any agent of the
Company or the Agent may treat the Person in whose name this Stripped DECS
Certificate is registered as the owner of the Stripped DECS evidenced hereby for
the purpose of receiving payments on the Treasury Securities, receiving payments
of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, performance of the Forward Purchase Contracts and
B-11
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Forward Purchase Contracts shall not, prior to the
settlement thereof, entitle the Holder to any of the rights of a holder of
shares of Common Stock.
A copy of the Forward Purchase Contract Agreement is available
for inspection at the offices of the Agent.
B-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on
the face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - __________Custodian__________
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto __________________________________________________________
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Upper DECS Certificates and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________________
attorney to transfer said Upper DECS Certificates on the books of Cendant
Corporation with full power of substitution in the premises.
Dated: _________________ _______________________________
Signature
B-13
NOTICE: The signature to
this assignment must
correspond with the name as
it appears upon the face of
the within Upper DECS
Certificates in every
particular, without
alteration or enlargement
or any change whatsoever.
Signature Guarantee: ____________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-14
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the Forward Purchase
Contract Settlement Date of the Forward Purchase Contracts underlying the number
of Stripped DECS evidenced by this Stripped DECS Certificate be registered in
the name of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different name
and address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: _________________ ________________________________
Signature
Signature Guarantee: ___________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:
________________________________________________________________________
Name
________________________________________________________________________
Address
_______________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Social Security or other
Taxpayer Identification
Number, if any _________________________________________________________
B-15
REGISTERED HOLDER
Please print name and address of Registered Holder:
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
______________________________________________________________________________
_______________________________________________________________________________
B-16
ELECTION TO SETTLE EARLY
The undersigned Holder of this Stripped DECS Certificate
hereby irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Forward Purchase Contract Agreement with respect to the
Forward Purchase Contracts underlying the number of Stripped DECS evidenced by
this Stripped DECS Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Forward Purchase Contracts
underlying Stripped DECS with an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof. The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon such Early Settlement be registered in
the name of, and delivered, together with a check in payment for any fractional
share and any Stripped DECS Certificate representing any Stripped DECS evidenced
hereby as to which Early Settlement of the related Forward Purchase Contracts is
not effected, to the undersigned at the address indicated below unless a
different name and address have been indicated below. Pledged Treasury
Securities deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer or similar tax payable incident thereto.
Dated: _________________ ________________________________
Signature
Signature Guarantee: ________________________________________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-17
Number of Securities evidenced hereby as to which Early
Settlement of the related Forward Purchase Contracts is being elected:
If shares of Common Stock or Stripped DECS Certificates are to be registered in
the name of and delivered to and pledged Treasury Securities are to be
transferred to a Person other than the Holder, please (i) print such Person's
name and address and (ii) provide a guarantee of your signature:
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________________________________________
Please print name and address of Registered Holder:
_______________________________________________________________________________
Name
_______________________________________________________________________________
Address
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Transfer Instructions for pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
B-18
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
Signature of authorized
Amount of Amount of Stated Amount of this signatory of Purchase
decrease in Stated increase in Stated Global Certificate Contract Agent or
Amount of the Global Amount of the Global following such decrease Securities Custodian
Date Certificate Certificate or increase Agent
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
B-19
EXHIBIT C
INSTRUCTION FROM FORWARD PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
The Chase Manhattan Bank
Re: Upper DECS of Cendant Corporation (the "Company")
-------------------------------------------------
We hereby notify you in accordance with Section 4.1 4.2 of the
Pledge Agreement, dated as of July 27, 2001, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Forward Purchase Contract Agent and as
attorney-in-fact for the holders of [Upper DECS] [Stripped DECS] from time to
time, that the holder of the Securities listed below (the "Holder") has elected
to substitute [$_____ aggregate principal amount of Treasury Securities]
[$_______ aggregate principal amount of Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] in exchange
for an equal Value of [Pledged Notes or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be,], and upon the payment by such Holder of any applicable fees,
to release the [Notes or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] [Treasury Securities] related to such
[Upper DECS] [Stripped DECS] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:_____________ __________________________________
By:______________________
Name:
Title:
Signature Guarantee:______________
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] for the [Pledged Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities]:
__________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
__________________________
Address
C-1
EXHIBIT D
INSTRUCTION TO FORWARD PURCHASE CONTRACT AGENT
Bank One Trust Company,
National Association
1 Bank One Plaza
Suite IL1-0126
Chicago, IL 60670-0126
Attention: Global Corporate Trust Services Division
Re: Upper DECS of Cendant Corporation (the "Company")
-------------------------------------------------
The undersigned Holder hereby notifies you that it has
delivered to , as Collateral Agent, [$_______ aggregate principal amount of
Treasury Securities] [$ aggregate principal amount of Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,] in
exchange for an equal Value of [Pledged Notes or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with Section
[4.1], [4.2] of the Pledge Agreement, dated July 27, 2001 (the "Pledge
Agreement"), between you, the Company and the Collateral Agent. The undersigned
Holder has paid the Collateral Agent all applicable fees relating to such
exchange. The undersigned Holder hereby instructs you to instruct the Collateral
Agent to release to you on behalf of the undersigned Holder the [Pledged Notes
or the appropriate Applicable Ownership Interest of the Treasury Portfolio]
[Pledged Treasury Securities] related to such [Upper DECS] [Stripped DECS].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Dated:_____________ __________________________________
Signature
Signature Guarantee:______________
Please print name and address of Registered Holder:
_________________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
_________________________
Address
_________________________
_________________________
D-1
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
Bank One Trust Company,
National Association
1 Bank One Plaza
Suite IL1-0126
Chicago, IL 60670-0126
Attention: Global Corporate Trust Services Division
Re: Upper DECS of Cendant Corporation (the "Company")
-------------------------------------------------
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.5 of the Forward Purchase Contract Agreement dated as
of July 27, 2001 among the Company and yourselves, as Forward Purchase Contract
Agent and as Attorney-in-Fact for the Holders of the Forward Purchase Contracts,
that such Holder has elected to pay to the Collateral Agent, on or prior to
11:00 a.m. New York City time, on the Business Day immediately preceding the
Forward Purchase Contract Settlement Date, (in lawful money of the United States
by [certified or cashiers check or] wire transfer, in each case in immediately
available funds), $_________ as the Purchase Price for the shares of Common
Stock issuable to such Holder by the Company under the related Forward Purchase
Contract on the Forward Purchase Contract Settlement Date. The undersigned
Holder hereby instructs you to notify promptly the Collateral Agent of the
undersigned Holders election to make such cash settlement with respect to the
Forward Purchase Contracts related to such Holder's [Upper DECS] [Stripped
DECS].
Dated:_____________ __________________________________
Signature
Signature Guarantee:______________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
______________________ __________________________________
Name Social Security or other Taxpayer
Identification Number, if any
______________________
Address
E-1