<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 26, 1999
SECURITIES ACT FILE NO. 333-77547
INVESTMENT COMPANY ACT FILE NO. 811-9319
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-2
[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] PRE-EFFECTIVE AMENDMENT NO. 3
[ ] POST-EFFECTIVE AMENDMENT NO.
AND/OR
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 3
----------------------
AMERITRADE AUTOMATIC
COMMON EXCHANGE SECURITY TRUST
(Exact Name of Registrant as Specified in Charter)
C/O GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (212) 902-1000
KENNETH L. JOSSELYN, ESQ.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(Name and Address of Agent for Service)
Copies to:
JOHN EVANGELAKOS, ESQ.
SULLIVAN & CROMWELL
125 BROAD STREET
NEW YORK, NEW YORK 10004
(212)558-4000
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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after the effective date of this Registration Statement.
If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. [ ]
It is proposed that this filing will become effective when declared
effective pursuant to section 8(c).
If appropriate, check the following box:
[ ] This amendment designates a new effective date for a previously filed
registration statement.
[ ] This form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is 333- .
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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING REGISTERED AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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<S> <C> <C>
Trust Automatic Common Exchange Securities.................. $150,000,000 $41,700(2)
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
<TABLE>
<S> <C>
Part A -- Report of Independent Accountants. Statement of Assets and
Liabilities.
Part B -- None.
</TABLE>
(b) Exhibits
<TABLE>
<C> <S>
2.a.(i) Trust Agreement*
2.a.(ii) Form of Amended and Restated Trust Agreement*
2.d Form of Specimen Certificate of Trust Automatic Common
Exchange Security (included in Exhibit 2.a.(ii))*
2.h Form of Underwriting Agreement
2.j Form of Custodian Agreement*
2.k.(i) Form of Administration Agreement*
2.k.(ii) Form of Paying Agent Agreement*
2.k.(iii)(A) Form of Firm Purchase Contract
2.k.(iii)(B) Form of Extendible Purchase Contract
2.k.(iv) Form of Collateral Agreement*
2.k.(v) Form of Fund Expense Agreement*
2.k.(vi) Form of Fund Indemnity Agreement*
2.l Opinion and Consent of Counsel to the Trust
2.n.(i) Tax Opinion and Consent of Counsel to the Trust
2.n.(ii) Consent of Independent Public Accountants*
2.n.(iii) Consents to Being Named as Trustee*
2.p Form of Subscription Agreement
2.r Financial Data Schedule
</TABLE>
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* Previously filed.
ITEM 25. MARKETING ARRANGEMENTS
See the Form of Underwriting Agreement to be filed as Exhibit 2.h to this
Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:
<TABLE>
<S> <C>
Registration fees........................................... $ 41,700
Nasdaq National Market listing fee.......................... $ 60,000
Printing.................................................... $ 90,000
Fees and expenses of qualification under state securities
laws (excluding fees of counsel).......................... $ 0
Accounting fees and expenses................................ $ 96,500
Legal fees and expenses..................................... $200,000
NASD fees................................................... $ 15,500
Miscellaneous............................................... $ 10,000
--------
Total....................................................... $513,700
========
</TABLE>
C-1
<PAGE> 3
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Before April 30, 1999 the Trust had no existence. As of the effective date,
the Trust will have entered into a Subscription Agreement for one Security with
Goldman, Sachs & Co. and an Underwriting Agreement with Goldman, Sachs & Co.
with respect to the Securities offered by the prospectus.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF
RECORD
TITLE OF CLASS HOLDERS
- -------------- ---------
<S> <C>
Trust Automatic Common Exchange Securities.................. 1
</TABLE>
ITEM 29. INDEMNIFICATION
The Underwriting Agreement, to be filed as Exhibit 2.h to this Registration
Statement, provides for indemnification of the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act").
The Amended and Restated Trust Agreement filed as Exhibit 2.a.(ii) to this
Registration Statement provides for indemnification to each Trustee against any
claim or liability incurred in acting as Trustee of the Trust, except in the
case of willful misfeasance, bad faith, gross negligence or reckless disregard
of the Trustee's duties. The Custodian Agreement, Administration Agreement and
Paying Agent Agreement filed as Exhibits 2.j, 2.k.(i) and 2.k.(ii) to this
Registration Statement provide for indemnification to the Custodian,
Administrator and Paying Agent against any loss or expense incurred in the
performance of their obligations under the respective agreements, unless such
loss or expense is due to willful misfeasance, bad faith, gross negligence or
reckless disregard of their obligations. The Fund Indemnity Agreement filed as
Exhibit 2.k.(vi) to this Registration Statement provides that the Sellers will
indemnify the Trust for certain indemnification expenses incurred under the
Trust Agreement, the Custodian Agreement, the Administration Agreement and the
Paying Agent Agreement.
Insofar as indemnification for liability arising under the Securities Act
may be permitted to trustees, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. If a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a trustee, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Not Applicable.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
The Trust's accounts, books and other documents are currently located at
the offices of the Registrant, c/o Goldman, Sachs & Co., 85 Broad Street, New
York, New York 10004 and at the offices of The Chase Manhattan Bank, the
Registrant's administrator.
C-2
<PAGE> 4
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend offering of the Securities
until it amends its prospectus if (1) subsequent to the effective date of its
Registration Statement, the net asset value falls more than 10 percent from its
net asset value as of the effective date of the Registration Statement or (2)
the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.
(b) The Registrant hereby undertakes that (i) for the purpose of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the Registrant
under Rule 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective; (ii) for the
purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of the securities at that time shall be deemed to be the initial
bona fide offering thereof.
C-3
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this amendment to
the registration statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of New York, State of New York, on the 26th
day of July, 1999.
AMERITRADE AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By: /s/ PAUL S. EFRON
----------------------------------
Paul S. Efron
Trustee
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed below by the following person, in
the capacities and on the date indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ PAUL S. EFRON Principal Executive Officer, July 26, 1999
- ----------------------------------------------------- Principal Financial Officer,
Paul S. Efron Principal Accounting Officer and
Trustee
</TABLE>
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.a.(i) Trust Agreement*
2.a.(ii) Form of Amended and Restated Trust Agreement*
2.d Form of Specimen Certificate of Trust Automatic Common
Exchange Security (included in Exhibit 2.a.(ii))*
2.h Form of Underwriting Agreement
2.j Form of Custodian Agreement*
2.k.(i) Form of Administration Agreement*
2.k.(ii) Form of Paying Agent Agreement*
2.k.(iii)(A) Form of Firm Purchase Contract
2.k.(iii)(B) Form of Extendible Purchase Contract
2.k.(iv) Form of Collateral Agreement*
2.k.(v) Form of Fund Expense Agreement*
2.k.(vi) Form of Fund Indemnity Agreement*
2.l Opinion and Consent of Counsel to the Trust
2.n.(i) Tax Opinion and Consent of Counsel to the Trust
2.n.(ii) Consent of Independent Public Accountants*
2.n.(iii) Consents to Being Named as Trustee*
2.p Form of Subscription Agreement
2.r Financial Data Schedule
</TABLE>
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* Previously filed.
<PAGE> 1
EXHIBIT 2.h
AMERITRADE AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
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$ ______ TRUST AUTOMATIC COMMON EXCHANGE SECURITIES
(SUBJECT TO EXCHANGE INTO CLASS A COMMON STOCK (PAR
VALUE $.01 PER SHARE) OF AMERITRADE HOLDING CORPORATION)
---------------------------
UNDERWRITING AGREEMENT
---------------------------
July __ , 1999
Goldman, Sachs & Co.,
Credit Suisse First Boston Corporation,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Ameritrade Automatic Common Exchange Security Trust, a trust duly
created under the laws of the State of New York (such trust and the trustees
thereof acting in their capacities as such being referred to herein as the
"Trust"), proposes, subject to the terms and conditions stated herein, to issue
and sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 4,000,000 shares of the $_____ Automatic Common Exchange Securities
of the Trust specified above (the "Firm Securities") and, at the election of the
Underwriters, up to an aggregate of 600,000 additional shares of the $_____
Automatic Common Exchange Securities (the "Optional Securities") (the Firm
Securities and the Optional Securities which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Securities").
The $____ Automatic Common Exchange Securities of the Trust to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
called the "Automatic Common Exchange Securities". Each Automatic Common
Exchange Security will be exchanged for one or fewer shares of Class A Common
Stock, par value $.01 per share ("Stock"), of Ameritrade Holding Corporation, a
Delaware corporation (the "Company"), or, with respect only to the Extendible
Contract (as defined herein) for cash pursuant to the Cash Settlement
Alternative (as such term is defined in the Trust Prospectus (as defined in
Section 1(c)(i)
<PAGE> 2
hereof)) on July __ , 2002 (the "Exchange Date") to be delivered pursuant to
forward purchase contracts (the "Contracts"), dated July __ . , 1999, among the
Trust and certain stockholders of the Company identified in Schedule II hereto
(each of which is referred to as "Seller"). In lieu of delivery of shares of
Stock, the Contract between the Trust and J. Joe Ricketts, individually, (the
"Extendible Contract") (which Contract will become effective only if the
Underwriters exercise their option to acquire the Optional Securities) provides
that J. Joe Ricketts may elect (a) to pay cash or deliver other securities on
the Exchange Date for each share of Stock then deliverable and (b) to extend the
Exchange Date to a date not later than October __ , 2002, in each case subject
to the terms and conditions of the Extendible Contract. The Trust has entered
into a Contract with each Seller obligating that Seller (subject to certain
exceptions in the case only of the Extendible Contract) to deliver to the Trust
on the Exchange Date a number of shares of Stock equal to the product of the
Exchange Rate (as such term is defined in the Trust Prospectus) times the
initial number of shares of Stock subject to such Contract. Each Seller's
obligations under the Contracts will be secured by a pledge of collateral
pursuant to the terms of a collateral agreement, dated July __, 1999, among such
Seller, The Chase Manhattan Bank ("Chase"), as collateral agent (in such
capacity, the "Collateral Agent"), and the Trust (the "Collateral Agreements").
It is understood and agreed to by all parties that the Company, J. Joe
Ricketts and certain other stockholders of the Company (together with the
Sellers, the "Selling Stockholders") are concurrently entering into: (i) an
agreement (the "U.S. Underwriting Agreement") providing for the sale by the
Company and the Selling Stockholders of up to a total of 8,000,000 shares of
Stock and, at the election of the underwriters who are parties to the U.S.
Underwriting Agreement, up to 1,200,000 additional shares of Stock, through
arrangements with certain underwriters in the United States, for whom Goldman,
Sachs & Co., Credit Suisse First Boston Corporation, Deutsche Bank Securities
Inc., Raymond James & Associates, Inc., US Bancorp Piper Jaffray Inc. and Lehman
Brothers Inc. are acting as representatives; and (ii) an agreement (the
"International Underwriting Agreement") providing for the sale by the Company
and the Selling Stockholders of up to a total of 2,000,000 shares of Stock, and,
at the election of the underwriters who are parties to the International
Underwriting Agreement, up to 300,000 additional shares of Stock, through
arrangements with certain underwriters outside the United States for which
Goldman Sachs International, Credit Suisse First Boston (Europe) Limited,
Raymond James & Associates, Inc., Deutsche Bank AG London, U.S. Bancorp Piper
Jaffray Inc. and Lehman Brothers International (Europe) are acting as Lead
Managers. (The U.S. Underwriting Agreement and the International Underwriting
Agreement are collectively called the "Company Underwriting Agreements").
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<PAGE> 3
1. (a) The Company hereby represents and warrants to, and
agrees with, each of the Underwriters, the Trust and the Sellers that:
(i) A registration statement on Form S-3 (File No.
333-81559) (the "Initial Company Registration Statement") in respect of
the shares of Stock deliverable pursuant to the Contracts has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Company Registration Statement and any post-effective
amendment thereto, each in the form heretofore delivered to you, and,
excluding exhibits thereto but including all documents incorporated by
reference in the prospectus contained therein, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Company Rule
462(b) Registration Statement"), filed pursuant to Rule 462(b) under
the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Company Registration Statement or document incorporated by reference
therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Company Registration
Statement, any post-effective amendment thereto or the Company Rule
462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus in respect of the shares of
stock deliverable pursuant to the Contracts and included in the Initial
Company Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the
Act is hereinafter called a "Company Preliminary Prospectus"; the
various parts of the Initial Company Registration Statement and the
Company Rule 462(b) Registration Statement, if any, including all
exhibits thereto and including (A) the information contained in the
form of final prospectus filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof and deemed
by virtue of Rule 430A under the Act to be part of the Initial Company
Registration Statement at the time it was declared effective or such
part of the Company Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective and (B) the documents incorporated by
reference in the prospectus contained in the Initial Company
Registration Statement at the time such part of the Initial Company
Registration Statement became effective each as amended at the time
such part of the Initial Company Registration Statement became
effective or such part of the Company Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Company Registration Statement";
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the
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<PAGE> 4
"Company Prospectus"; and the Trust Registration Statement (as defined
in Section 1(c)(i) hereof) and the Company Registration Statement are
hereinafter collectively called the "Registration Statements" and the
Trust Prospectus and the Company Prospectus are hereinafter
collectively called the "Prospectuses"; and any reference herein to any
Company Preliminary Prospectus or the Company Prospectus shall be
deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Company Preliminary Prospectus or Company Prospectus, as the
case may be; any reference to any amendment or supplement to any
Company Preliminary Prospectus or the Company Prospectus shall also be
deemed to refer to the international version thereof and include any
documents filed after the date of such Company Preliminary Prospectus
or Company Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Company Preliminary Prospectus or Company
Prospectus, as the case may be; and any reference to any amendment to
the Company Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Company Registration Statement that is incorporated by
reference in the Company Registration Statement;
(ii) No order preventing or suspending the use of any
Company Preliminary Prospectus has been issued by the Commission, and
each Company Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Company by an Underwriter through Goldman, Sachs & Co. or
Goldman Sachs International expressly for use therein or by a Selling
Stockholder or Seller expressly for use in the preparation of the
answers therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the
Company Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required
-4-
<PAGE> 5
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Company Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. or Goldman Sachs International expressly for use therein;
(iv) The Company Registration Statement conforms, and the
Company Prospectus and any further amendments or supplements to the
Company Registration Statement or the Company Prospectus will conform,
in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will not,
as of the applicable effective date as to the Company Registration
Statement and any amendment thereto, and as of the applicable filing
date as to the Company Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Goldman,
Sachs & Co. expressly for use therein or by a Selling Stockholder or
Seller expressly for use in the preparation of the answers therein to
Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Company Prospectus any
material loss or material interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Company Prospectus; and, since the respective dates as of which
information is given in the Company Registration Statement and the
Company Prospectus, there has not been any change in the capital stock
(other than pursuant to any employee incentive or benefit plan in
existence as of the date of this agreement) or increase in excess of
$75 million in the
-5-
<PAGE> 6
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Company Prospectus;
(vi) The Company and its subsidiaries own no real property
and have good and marketable title to all personal property owned by
them, free and clear of all liens, encumbrances and defects except such
as are described in the Company Prospectus or such as do not materially
affect the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Company
and its subsidiaries; and any real property and buildings held under
lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not materially interfere with the use made and proposed
to be made of such property and buildings by the Company and its
subsidiaries;
(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Company
Prospectus, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is
subject to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction, and no proceeding of which
the Company has knowledge has been instituted in any such jurisdiction,
revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification;
(viii) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Company Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and
is in good standing under the laws of each other jurisdiction in which
it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; all of the issued and outstanding capital stock of each
subsidiary of the Company has been duly authorized and validly issued
and is fully paid
-6-
<PAGE> 7
and nonassessable; and, except as disclosed in the Company Prospectus,
the Company owns directly or indirectly 100% of the issued and
outstanding capital stock of each subsidiary free from liens,
encumbrances, equities or claims;
(ix) The Company has an authorized capitalization as set
forth in the Company Prospectus, and all of the issued shares of
capital stock of the Company (including the shares of Stock to be
pledged under Collateral Agreements) have been duly and validly
authorized and issued and are fully paid and non-assessable and conform
to the description of the Company's capital stock contained in the
Company Prospectus; and the stockholders of the Company have no
preemptive rights with respect to the Stock;
(x) The shares of Stock to be issued and sold by the
Company to the Underwriters under the Company Underwriting Agreements
have been duly and validly authorized and, when issued and delivered
against payment therefor as provided in the Company Underwriting
Agreements, will be duly and validly issued and fully paid and
non-assessable and will conform to the description of the Stock
contained in the Prospectus;
(xi) The compliance by the Company with all of the
provisions of this Agreement and the Company Underwriting Agreements
and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such action
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is, or at the Time of Delivery will be, required for the
issue and sale of the shares of Stock or the consummation by the
Company of the transactions contemplated by this Agreement and the
Company Underwriting Agreements, except the registration under the Act
of the shares of Stock and such consents, approvals, authorizations,
registrations or qualifications as may be required under state or
foreign securities or Blue Sky laws in connection with the purchase and
distribution of the shares of Stock pursuant to the Contracts and the
Company Underwriting Agreements;
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<PAGE> 8
(xii) Neither the Company nor any of its subsidiaries is in
violation of its Certificate of Incorporation or By-laws or other
constituent or organizational document or in default in the performance
or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other material agreement or instrument to which it
is a party or by which it or any of its properties may be bound;
(xiii) The financial statements included in the Company
Registration Statement and the Company Prospectus present fairly in all
material respects the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis; and the schedules (if any) included in the Company Registration
Statement present fairly in all material respects the information
required to be stated therein; the financial information set forth in
the Company Prospectus under "Summary Consolidated Financial and
Operating Data" and "Selected Consolidated Financial and Operating
Data" presents fairly in all material respects, on the basis stated in
the Company Registration Statement and the Company Prospectus, the
information set forth therein;
(xiv) The statements set forth in the Company Prospectus
under the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Stock and under the
caption "Underwriting", insofar as they purport to describe the
provisions of the laws and the Company Underwriting Agreements referred
to therein, are accurate, complete and fair;
(xv) The statements set forth in the international version
of the Company Prospectus under the caption "Certain United States Tax
Consequences to Non-U.S. Holders", insofar as such statements purport
to summarize certain United States federal income and estate tax
consequences of the ownership and dispensation of the Stock by certain
non-U.S. holders (as such term is defined in such Company Prospectus)
of the shares of Stock, provide a fair summary of such consequences
under current law;
(xvi) Other than as set forth in the Company Prospectus,
there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property
of the Company or any of its subsidiaries is the subject which, if
determined adversely to the
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<PAGE> 9
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries; and, to the best of the Company's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(xvii) Except as disclosed in the Company Prospectus, there
are no contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other like
payment in connection with the sale of the Stock;
(xviii) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act with
respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the
securities registered pursuant to the Company Registration Statement or
in any securities being registered pursuant to any other registration
statement filed by the Company under the Act;
(xix) The Stock has been accepted for quotation on the
National Association of Securities Dealers Automated Quotation National
Market System ("NASDAQ") under the symbol "AMTD";
(xx) The Company is not and, after giving effect to the
offering and sale of Stock under the Company Underwriting Agreements,
will not be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company
Act" and, together with the Act, the "Acts");
(xxi) Deloitte & Touche LLP, who have certified certain
financial statements of the Company and its subsidiaries, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(xxii) The Company has reviewed its operations and that of
its subsidiaries and is in the process of making inquiries of any third
parties with which the Company or any of its subsidiaries has a
material relationship to evaluate the extent to which the business or
operations of the Company or any of its subsidiaries will be affected
by the Year 2000 Problem. As a result of such review and inquiries to
which responses have been received, and
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<PAGE> 10
except as described in the Company Prospectus, the Company does not
believe that the Year 2000 Problem will have a material adverse effect
on the general affairs, management, the consolidated financial
position, business prospects, stockholders' equity or results of
operations of the Company and its subsidiaries or result in any
material loss or material interference with the Company's business or
operations. The "Year 2000 Problem" as used herein means any
significant risk that computer hardware or software used in the
receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of
dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring
prior to January 1, 2000;
(xxiii) Except as disclosed in the Company Prospectus, the
Company and its subsidiaries own or possess or are licensed to use the
patents, patent licenses, trademarks, trade names, service marks,
service names, copyrights and other intellectual property rights
(collectively, the "Intellectual Property") necessary to carry on their
business as presently conducted, to the best knowledge of the Company,
none of the technology employed by the Company or its subsidiaries has
been obtained or is being used by the Company or its subsidiaries in
violation of any contractual or fiduciary obligation binding on the
Company, its subsidiaries or any of their respective directors,
employees or consultants or otherwise in violation of the rights of any
person except for any such violations that, individually or in the
aggregate, do not or would not reasonably be expected to have a
material adverse effect on the general affairs, management,
consolidated financial position, business prospects, stockholders'
equity or results of operations of the Company and its subsidiaries;
except as disclosed in the Prospectus, neither the Company nor any of
its subsidiaries has received any notice of infringement or violation
of or conflict with (and knows of no such infringement or conflict
with) asserted rights of others with respect to any Intellectual
Property or any trade secrets, proprietary information, inventions,
know-how, processes and procedures owned, used by or licensed to the
Company or any such subsidiary which, individually or in the aggregate,
if the subject of any unfavorable decision, ruling or finding, would
reasonably be expected to have a material adverse effect on the general
affairs, management, consolidated financial position, business
prospects, stockholders' equity or results of operations of the Company
and its subsidiaries;
(xxiv) The Company has not taken and will not take, directly
or indirectly, any action designed to or which has constituted or which
might
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<PAGE> 11
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Stock;
(xxv) The Company and each of its subsidiaries maintains
reasonably adequate insurance;
(xxvi) There are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of sale
or liens related to or entitling any person to purchase or otherwise to
acquire from the Company any shares of the capital stock of, or other
ownership interest in, the Company or any subsidiary thereof except as
otherwise disclosed in the Company Prospectus; and
(xxvii) The Company has filed all necessary federal and state
income and franchise tax returns and has paid all taxes shown as due
thereon, and there is no tax deficiency that has been, or to the
knowledge of the Company might reasonably be, asserted against the
Company or any of its properties or assets that would or could
reasonably be expected to have a material adverse effect on the general
affairs, management, the consolidated financial position, stockholders'
equity or results of operations of the Company or its subsidiaries,
other than any such taxes as are being contested in good faith and
properly reserved for in accordance with generally accepted accounting
principles.
(b) Each Seller represents and warrants to, and agrees
with, each of the Underwriters, the Company and the Trust that:
(i) To the extent applicable to such Seller, such Seller
has been duly created, is validly existing as a trust under the laws of
the jurisdiction of its organization and has the power and authority to
own and sell its property and to conduct its business;
(ii) The compliance by such Seller with all of the
applicable provisions of this Agreement and the Contract and the
Collateral Agreement to which such Seller is a party, and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Seller is a party or by which such Seller is
bound or to which any of the property or assets of such Seller is
subject, nor will such action result in any violation of the provisions
of the constitutive documents of such Seller or any statute or any
order, rule or regulation of
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<PAGE> 12
any court or governmental agency or body having jurisdiction over such
Seller or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or filing with
any court or governmental agency or body is required for the compliance
by such Seller with or the consummation by such Seller of the
transactions contemplated by this Agreement, the Contract to which such
Seller is a party or the Collateral Agreement to which such Seller is a
party, except such as may be required by the National Association of
Securities Dealers ("NASD") or the registration under the Act of the
Stock and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws or any laws of jurisdictions outside the United States in
connection with the purchase and distribution of the Stock by the Trust
pursuant to the Contract;
(iii) This Agreement has been duly authorized, executed and
delivered by such Seller; the Contract to which such Seller is a party
and the Collateral Agreement to which such Seller is a party have been
duly authorized, executed and delivered by such Seller and, assuming
due authorization, execution and delivery by the other parties thereto,
constitute valid and legally binding agreements of such Seller,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles and except as rights to indemnity and
contribution thereunder may be limited by state or federal securities
laws or the public policy underlying such laws;
(iv) Such Seller has, and immediately prior to each Time
of Delivery (as defined in Section 4(a) hereof) such Seller will have,
good and valid title to the shares of Stock to be pledged and assigned
by it under the Collateral Agreement to which such Seller is a party,
free and clear of all liens, encumbrances, or claims other than those
created pursuant to such Collateral Agreement; all consents, approvals,
authorizations and orders necessary for such Seller to pledge and
assign the shares of Stock to be pledged and assigned by such Seller
pursuant to such Collateral Agreement have been obtained; such Seller
has full right, power and authority to pledge and assign the shares of
Stock to be pledged and assigned by such Seller pursuant to such
Collateral Agreement; and upon delivery of such shares of Stock to the
Collateral Agent, as defined in the Collateral Agreement, for the
benefit of the Trust pursuant to such Collateral Agreement, the
Collateral Agent will obtain a first priority perfected security
interest in such shares of Stock, and upon delivery of such shares of
Stock by the Collateral Agent to the Trust pursuant to such Collateral
Agreement and payment therefor
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<PAGE> 13
pursuant to the Contract, good and valid title to such shares of Stock,
free and clear of all liens, encumbrances, equities or claims, will
pass to the Trust;
(v) The representations and warranties of such Seller set
forth in Section 3 of the Collateral Agreement to which such Seller is
a party are true and correct on and as of the date hereof with the same
effect as though such representations and warranties had been set forth
in full in this Agreement;
(vi) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Trust Prospectus, such Seller will not offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder or in the
Underwriting Agreement, any Stock or any securities of the Company that
are substantially similar to the Stock, including but not limited to
any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than (A) pursuant to employee stock option plans
existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement,
(B) gifts and pledges of securities where the donees or pledgees, as
applicable, expressly agree in writing to be bound by the terms of this
paragraph and (C) sales of up to an aggregate of __________ shares of
Stock by J. Joe Ricketts to employees of the Company where the
employees expressly agree in writing to be bound by the terms of this
paragraph) without your prior written consent;
(vii) Such Seller has not taken, nor will such Seller take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities;
(viii) To the extent that any statements or omissions made
in the Registration Statements, any Preliminary Prospectus, the
Prospectuses or any amendment or supplement thereto are made in
reliance upon and in conformity with written information furnished to
the Company by such Seller expressly for use therein, (A) such
Preliminary Prospectus and the Registration Statements did, and the
Prospectuses and any further amendments or supplements to the
Registration Statements and the Prospectuses, when they become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Acts and
the rules and regulations of the Commission thereunder, (B) the
Registration Statements and any amendment or supplement thereto
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<PAGE> 14
do not and will not, as of the applicable effective date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading and (C) the Prospectuses do not, and as amended
or supplemented will not, as of the applicable filing date, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and
(ix) In order to document the Underwriters' compliance
with the reporting and withholding provisions of the Tax Equity and
Fiscal Responsibility Act of 1982 with respect to the transactions
herein contemplated, such Seller agrees to deliver to you prior to or
at the First Time of Delivery (as hereinafter defined) a properly
completed and executed United States Treasury Department Form W-9 (or
other applicable form or statement specified by Treasury Department
regulations in lieu thereof).
(c) The Trust represents and warrants to, and agrees
with, each of the Underwriters, the Sellers and the Company that:
(i) A notification on Form N-8A (the "Notification") of
registration of the Trust as an investment company has been filed with
the Commission; a registration statement on Form N-2 (File No.
333-77547 and File No. 811- 09319) (the "Initial Trust Registration
Statement") in respect of the Securities has been filed with the
Commission; the Initial Trust Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
to you, and, excluding exhibits thereto, have been declared effective
by the Commission in such form; no other document with respect to the
Initial Trust Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the
Initial Trust Registration Statement, or any post-effective amendment
thereto has been issued and no proceeding for that purpose has been
initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Trust Registration Statement or filed with the
Commission pursuant to Rule 497(a) of the rules and regulations of the
Commission under the Act, is hereinafter called a "Trust Preliminary
Prospectus"; the various parts of the Initial Trust Registration
Statement including all exhibits thereto and including the information
contained in the form of final prospectus filed with the Commission
pursuant to Rule 497(h) under the Act in accordance with Section 5(a)
hereof and deemed by virtue of Rule 430A under the Act to be part of
the Initial Trust Registration Statement at the time it was declared
effective, as amended at the time such part of the registration
statement became effective, are hereinafter collectively called the
"Trust Registration
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<PAGE> 15
Statement"; and such final prospectus, in the form first filed pursuant
to Rule 497(h) under the Act, is hereinafter called the "Trust
Prospectus");
(ii) No order preventing or suspending the use of any
Trust Preliminary Prospectus has been issued by the Commission, and
each Trust Preliminary Prospectus, at the time of filing thereof,
conformed in all material respects to the requirements of the Acts, and
the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing
to the Trust by the Underwriters through Goldman, Sachs & Co. or by a
Seller expressly for use therein;
(iii) The Notification and the Trust Registration Statement
conform, and the Trust Prospectus and any further amendments or
supplements to the Notification, the Trust Registration Statement or
the Trust Prospectus will conform, in all material respects to the
requirements of the Acts and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Trust Registration Statement and any amendment
thereto and as of the applicable filing date as to the Trust Prospectus
and any amendment or supplement thereto, contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust by the
Underwriters through Goldman, Sachs & Co. or by a Seller expressly for
use therein;
(iv) Since the respective dates as of which information is
given in the Trust Registration Statement and the Trust Prospectus,
there has not been any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, results of operations,
prospects, investment objectives, investment policies, or liabilities
of the Trust, otherwise than as set forth or contemplated in the Trust
Prospectus, and there have been no transactions entered into by the
Trust which are material to the Trust other than those in the ordinary
course of its business or as described in the Trust Prospectus;
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<PAGE> 16
(v) The Trust has been duly created, is validly existing
as a trust under the laws of the State of New York, with power and
authority to own its properties and conduct its business as described
in the Trust Prospectus and to enter into and perform its obligations
under this Agreement and the Fundamental Agreements (as defined in
Section 1(c)(vii) hereof); the Trust has all necessary consents,
approvals, authorizations, orders, registrations or qualifications, of
and from, and has made all declarations and filings with, all courts
and governmental agencies and bodies, to own and use its assets and to
conduct its business in the manner described in the Trust Prospectus,
except to the extent that the failure to obtain or file the foregoing
would not have a material adverse effect on the Trust and except such
as may be required by the NASD or the registration under the Act of the
Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Underwriters; the Trust has no subsidiaries;
(vi) The Trust is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to
the knowledge of the Trust, threatened by the Commission; no person is
serving or acting as an officer or trustee of the Trust except in
accordance with the provisions of the Investment Company Act;
(vii) Each of the Contracts, the Collateral Agreements, the
Administration Agreement between Chase and the Trust (the
"Administration Agreement"), the Custodian Agreement between Chase and
the Trust (the "Custodian Agreement"), the Paying Agent Agreement
between ChaseMellon Shareholder Services, L.L.C. and the Trust (the
"Paying Agent Agreement"), the Fund Expense Agreement among the
Sellers, the Trust and Chase (the "Fund Expense Agreement") and the
Fund Indemnity Agreement among the Sellers, Chase and the Trust (the
"Fund Indemnity Agreement") (the Contracts, the Collateral Agreements,
the Administration Agreement, the Custodian Agreement, the Paying Agent
Agreement, the Fund Expense Agreement and the Fund Indemnity Agreement
are herein collectively called the "Fundamental Agreements") has been
duly authorized, executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes a valid and legally binding agreement of the Trust,
enforceable in accordance with its terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
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<PAGE> 17
(viii) The Amended and Restated Trust Agreement dated as of
July __, 1999 (the "Trust Agreement") and the Fundamental Agreements
comply with all applicable provisions of the Acts, and all approvals of
such agreements required under the Investment Company Act by the
holders of the Automatic Common Exchange Securities and the trustees
have been obtained and are in full force and effect;
(ix) All of the outstanding Automatic Common Exchange
Securities have been duly and validly authorized and issued and are
fully paid and non-assessable, and the form of certificates used to
evidence the Automatic Common Exchange Securities is in due and proper
form and complies with all provisions of applicable law; the Trust
Agreement and the Fundamental Agreements conform to the descriptions
thereof contained in the Trust Prospectus;
(x) The Securities have been duly authorized and, when
issued and delivered pursuant to this Agreement, will be validly
issued, fully paid and non-assessable; the Securities will conform to
the description thereof in the Trust Prospectus; no person has rights
to registration of any securities because of the filing of the Trust
Registration Statement;
(xi) The issue and sale of the Securities and the
compliance by the Trust with all of the provisions of the Securities,
this Agreement and each Fundamental Agreement and the consummation of
the transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, the Trust Agreement or
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Trust is a party or by which the
Trust is bound or to which any of the property or assets of the Trust
is subject, no will such action result in any violation of any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust or any of its
properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Trust of the transactions
contemplated by this Agreement or the Fundamental Agreements, except
such as may be required by the NASD or the registration under the Act
of the Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
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<PAGE> 18
(xii) Assuming due authorization, execution and delivery by
the parties other than the Trust, the Fundamental Agreements are in
full force and effect and the Trust is not in default in the
performance or observance of any obligation, covenant or condition
thereunder and, to the knowledge of the Trust, no event has occurred
which with the passage of time or the giving of notice or both would
constitute a default thereunder; the Trust is not in default in the
performance or observance of any obligation, covenant or condition
contained in any other agreement or instrument to which it is a party
or by which it or any of its properties may be bound;
(xiii) The statements set forth in the Trust Prospectus
under the caption "Description of Securities", insofar as they purport
to constitute a summary of the terms of the Securities, under the
caption "Certain Federal Income Tax Considerations", and under the
caption "Underwriting", insofar as they purport to describe the
provisions of the laws and agreements referred to therein, are
accurate, complete and fair;
(xiv) Other than as set forth in the Trust Prospectus,
there are no legal or governmental proceedings pending to which the
Trust is a party or of which any property of the Trust is the subject
which, if determined adversely to the Trust, would individually or in
the aggregate have a material adverse effect on the current or future
financial position, or results of operations of the Trust; and, to the
best of the Trust's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(xv) There are no material restrictions, limitations or
regulations with respect to the ability of the Trust to invest its
assets as described in the Trust Prospectus, other than as described
therein;
(xvi) The Securities have been accepted for quotation on
NASDAQ subject to notice of issuance; the Trust's Registration
Statement on Form 8-A under the Exchange Act is effective; and
(xvii) PricewaterhouseCoopers LLP, who have certified
certain financial statements and supporting schedules included in the
Trust Registration Statement, are independent public accountants as
required by the Act and the rules and regulations of the Commission
thereunder.
2. Subject to the terms and conditions herein set forth, (a) the
Trust agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at a
purchase price of $________ per Security, the number of Firm Securities set
forth opposite the name
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<PAGE> 19
of such Underwriter in Schedule I hereto and (b) in the event and to the extent
that the Underwriters shall exercise the election to purchase Optional
Securities as provided below, the Trust agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly, to
purchase from the Trust, at the same purchase price set forth in clause (a) of
this Section 2, that portion of the aggregate number of Optional Securities as
to which such election shall have been exercised (to be adjusted by you so as to
eliminate fractional securities) determined by multiplying such number of
Optional Securities by a fraction, the numerator of which is the maximum
aggregate number of Optional Securities which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule I hereto
and the denominator of which is the maximum aggregate number of Optional
Securities that all of the Underwriters are entitled to purchase hereunder. The
agreements in this Section made by the Trust are for the benefit of and
enforceable by the Underwriters and the Sellers. The agreements in this Section
made by the Underwriters are for the benefit of and are enforceable by the
Sellers and the Trust.
The Trust hereby grants to the Underwriters the right to purchase at
their election up to 600,000 Optional Securities, at the purchase price set
forth in clause (a) of the first paragraph of this Section 2, for the sole
purpose of covering overallotments in the sale of the Firm Securities. Any such
election to purchase Optional Securities may be exercised only by written notice
from you to the Trust (with copies to Mayer, Brown & Platt), given within a
period of 30 calendar days after the date of this Agreement, setting forth the
aggregate principal amount of Optional Securities to be purchased and the date
on which such Optional Securities are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4(a)
hereof) or, unless you and the Trust otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Securities will be
used by the Trust as specified in the Contracts, the Sellers at each Time of
Delivery will pay to Goldman, Sachs & Co., for the accounts of the several
Underwriters, an amount equal to $________ per Security for the Securities to be
delivered at such Time of Delivery. Alternatively, as a matter of convenience,
Goldman, Sachs & Co. may deduct such amount from the purchase price of the
Securities, and in such event the Sellers shall be deemed to have paid the same.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Trust Prospectus.
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<PAGE> 20
4. (a) The Securities to be purchased by each Underwriter
hereunder, in definitive form, and in such authorized denominations and
registered in such names as Goldman, Sachs & Co. may request upon at least
forty-eight hours' prior notice to the Trust, shall be delivered by or on behalf
of the Trust to Goldman, Sachs & Co., for the account of such Underwriter,
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer or certified or official bank check or checks, payable
to the order of the Trust in Federal (same day) funds. The Trust will cause the
certificates representing the Securities to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as defined
below) at the office of Goldman, Sachs & Co., 85 Broad Street, New York, New
York 10004 (the "Designated Office") . The time and date of such delivery and
payment shall be, with respect to the Firm Securities, 9:30 a.m., New York City
time, on July __, 1999 or such other time and date as Goldman, Sachs & Co. and
the Trust may agree upon in writing, and, with respect to the Optional
Securities, 9:30 a.m., New York City time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the
Underwriters' election to purchase such Optional Securities, or such other time
and date as Goldman, Sachs & Co. and the Trust may agree upon in writing. Such
time and date for delivery of the Firm Securities is herein called the "First
Time of Delivery", such time and date for delivery of the Optional Securities,
if not the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a "Time of
Delivery".
(b) The documents to be delivered at each Time of
Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof,
including the cross-receipt for the Securities and any additional documents
requested by the Underwriters pursuant to Section 7(m) hereof, will be delivered
at the offices of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago,
Illinois 60603 (the "Closing Location"), and the Securities will be delivered at
the Designated Office, all at such Time of Delivery. A meeting will be held at
the Closing Location at 4:30 p.m., New York City time, on the New York Business
Day next preceding such Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York City are
generally authorized or obligated by law or executive order to close.
5. (a) The Trust agrees with each of the Underwriters:
(i) To prepare the Trust Prospectus in a form approved by
you and to file such Trust Prospectus pursuant to Rule 497(h) under the
Act not later than the Commission's close of business on the second
business day
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<PAGE> 21
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Act; to make no further amendment or any supplement to the
Trust Registration Statement or Trust Prospectus prior to the last Time
of Delivery which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Trust Registration
Statement has been filed or becomes effective or any supplement to the
Trust Prospectus or any amended prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Trust with the Commission pursuant to the Acts and the Exchange Act
subsequent to the date of the Trust Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Trust Preliminary
Prospectus or Prospectus or any order pursuant to Section 8(e) of the
Investment Company Act, of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, of the initiation
or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Trust Registration Statement or Trust Prospectus or for additional
information; and, in the event of the issuance of any stop order or of
any order preventing or suspending the use of any Trust Preliminary
Prospectus or Prospectus or suspending any such qualification or order
pursuant to Section 8(e) of the Investment Company Act, promptly to use
its reasonable best efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions in the United States as
you may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the
Securities, provided that in connection therewith the Trust shall not
be required to qualify as a foreign trust or association or to file a
general consent to service of process or subject itself to taxation in
any jurisdiction;
(iii) Prior to 12:00 P.M. (noon), New York City time, on
the New York Business Day next succeeding the date of this Agreement
and from time to time, at the expense of the Company, to furnish the
Underwriters with copies of the Trust Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of
a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the
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Trust Prospectus in connection with the offering or sale of the
Securities and if at such time any event shall have occurred as a
result of which the Trust Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
Trust Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary during such period to amend or supplement
the Trust Prospectus in order to comply with the Act, to notify you and
upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as you may
from time to time reasonably request of an amended Trust Prospectus or
a supplement to the Trust Prospectus which will correct such statement
or omission or effect such compliance; and in case any Underwriter is
required to deliver a prospectus in connection with sales of any of the
Securities at any time nine months or more after the time of issue of
the Trust Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Trust Prospectus
complying with Section 10(a)(3) of the Act;
(iv) To make generally available to the Trust's
securityholders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Trust Registration
Statement an earnings statement (as defined in Rule 158(c) under the
Act) of the Trust (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Trust, Rule 158);
(v) To use the net proceeds received by it from the sale
of the Securities pursuant to this Agreement in the manner specified in
the Trust Prospectus under the caption "Use of Proceeds"; and
(vi) To use its best efforts to have the Securities
accepted for quotation on NASDAQ, subject to notice of issuance, and to
maintain acceptance for quotation of the Securities on NASDAQ.
(b) The Company agrees with each of the Underwriters:
(i) To prepare the Company Prospectus in a form approved
by you and to file the Company Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule
430A(a)(3) under
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<PAGE> 23
the Act; to make no further amendment or any supplement to the Company
Registration Statement or Company Prospectus prior to the last Time of
Delivery which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Company Registration
Statement has been filed or becomes effective or any supplement to the
Company Prospectus or any amended Company Prospectus has been filed and
to furnish you with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by
the Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Company
Prospectus and for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Securities; to advise
you, promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Company Preliminary Prospectus or Prospectus, of the
suspension of the qualification of the shares of Stock to be delivered
pursuant to the Contracts for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Company Registration Statement or Company Prospectus or for
additional information; and, in the event of the issuance of any stop
order or any order preventing or suspending the use of any Company
Preliminary Prospectus or Prospectus or suspending any such
qualification, to promptly use its reasonable best efforts to obtain
the withdrawal of such order;
(ii) If the Company elects to rely upon Rule 462(b), to
file a Company Rule 462(b) Registration Statement with the Commission
in compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on
the date of this Agreement, and at the time of filing either pay to the
Commission the filing fee for the Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to
Rule 111(b) under the Act;
(iii) Promptly from time to time to take such action as you
may reasonably request to qualify the Securities for offering and sale
under the securities laws of such jurisdictions in the United States as
you may request and to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the
Securities, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process or to subject itself to taxation in any
jurisdiction;
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<PAGE> 24
(iv) Prior to 12:00 P.M. (noon) New York City time, on the
New York Business Day next succeeding the date of this Agreement and
from time to time, at the expense of the Company, to furnish the
Underwriters with copies of the Company Prospectus in New York City in
such quantities as you may reasonably request, and, if the delivery of
a prospectus is required at any time prior to the expiration of nine
months after the time of issue of the Company Prospectus in connection
with the offering or sale of the Securities and if at such time any
events shall have occurred as a result of which the Company Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which
they were made when such Company Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Company Prospectus or to
file under the Exchange Act any document incorporated by reference in
the Company Prospectus in order to comply with the Act or the Exchange
Act, to notify you and upon your request to file such document and to
prepare and, at the expense of the Company, furnish, without charge to
each Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Company
Prospectus or a supplement to the Company Prospectus which will correct
such statement or omission or effect such compliance; and in case any
Underwriter is required to deliver a prospectus in connection with
sales of any of the Securities at any time nine months or more after
the time of issue of the Company Prospectus, upon your request but at
the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or
supplemented Company Prospectus complying with Section 10(a)(3) of the
Act;
(v) To make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement an earnings
statement (as defined in Rule 158(c) under the Act) of the Company and
its subsidiaries (which need not be audited) complying with Section
11(a) of the Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158);
(vi) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectuses, not to offer, sell, contract to sell or otherwise dispose
of, except as provided in the Company Underwriting Agreements, any
securities of the Company that are substantially similar to the Stock,
including but not limited to any securities that are convertible into
or exchangeable for, or that
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<PAGE> 25
represent the right to receive, Stock or any such substantially similar
securities (other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), without your
prior written consent;
(vii) To furnish to its stockholders as soon as practicable
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flows of
the Company and its consolidated subsidiaries certified by independent
public accountants and prepared in conformity with generally accepted
accounting principles in the U.S. ("GAAP")) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year
prepared in accordance with GAAP, to make available to its stockholders
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(viii) During a period of three years from the effective
date of the Registration Statement, to furnish to you copies of all
reports or other communications (financial or other) furnished to
stockholders, and to deliver to you as soon as they are available,
copies of any reports and financial statements furnished to or filed
with the Commission or any securities exchange on which any class of
securities of the Company is listed;
(ix) To use the net proceeds received by it from the sale
of the Stock pursuant to the Company International Underwriting
Agreements in the manner specified in the Company Prospectus under the
caption "Use of Proceeds";
(x) To use its reasonable best efforts to obtain and
deliver to the Underwriters executed copies of lock-up agreements from
each of the stockholders of the Company set forth in the Company
Underwriting Agreements in form and substance satisfactory to the
Underwriters; and
(xi) To use its best efforts to maintain the quotation of
the Stock on NASDAQ.
6. Except as otherwise disclosed in the Prospectuses, the Trust,
the Company and the Sellers covenant and agree with the several Underwriters
that (a) the Company and the Sellers will pay or cause to be paid (i) the fees,
disbursements and expenses of the Company's outside counsel and the Company's
outside accountants in connection with the registration of the Securities under
the Act and all other expenses in connection with the preparation, printing and
filing of
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<PAGE> 26
the Notification, the Trust Registration Statement, any Trust Preliminary
Prospectus and the Trust Prospectus and amendments and supplements thereto and
the mailing and delivering of copies thereof to the Underwriters and dealers;
(ii) the cost of printing or producing any Agreement among Underwriters, this
Agreement and Blue Sky Memorandum and the closing documents (including any
compilations thereof); (iii) all expenses in connection with the qualification
of the Securities for offering and sale under state securities laws as provided
in Section 5(b)(iii) hereof, including the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky survey; (iv) the filing fees incident to, and the
fees and disbursements of counsel for the Underwriters in connection with,
securing any required review by the NASD of the terms of the sale of the
Securities; (v) all fees and expenses in connection with the preparation and
filing of a registration statement under the Exchange Act relating to the
Securities and all fees and expenses in connection with having the Securities
accepted for quotation on NASDAQ or other national or regional exchange; (vi)
the cost of preparing certificates representing the Securities; (vii) the cost
and charges of any transfer agent or registrar for the Securities; (viii) the
cost of preparing Stock certificates; (ix) the cost and charges of any transfer
agent or registrar for the Stock; (x) the fees and expenses of the
Attorneys-in-Fact and the Custodian, if any; (xi) all fees, expenses and costs
in connection with the marketing of the Securities; (xii) all costs and expenses
incident to the performance of all obligations hereunder which are not otherwise
specifically provided for in this Section, including (A) any fees and expenses
of counsel for the Sellers and (B) all expenses and taxes incident to the sale
and delivery of the shares of Stock to be sold or pledged by the Sellers; (xiii)
all other costs and expenses incident to the performance by the Trust, the
Company and the Sellers of their respective obligations hereunder which are not
otherwise specifically provided for in this Section; and (b) Goldman, Sachs &
Co. will pay or cause to be paid all fees, disbursements and expenses of the
Trust's counsel and the Trust's accountants in connection with the registration
of the Securities under the Acts. In connection with clause (a)(xii)(B) of the
preceding sentence, Goldman, Sachs & Co. agrees to pay New York State stock
transfer tax, and each Seller agrees to reimburse Goldman, Sachs & Co. for
associated carrying costs if such tax payment is not rebated on the day of
payment and for any portion of such tax payment not rebated. It is understood,
however, that, except as provided in this Section, and Sections 8 and 11 hereof,
the Underwriters will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the
Securities to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Trust, the Company and such Seller herein are, at and as of
such Time of Delivery, true
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<PAGE> 27
and correct, the condition that the Trust, the Company and such Seller shall
have performed all of their respective obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectuses shall have been filed with the
Commission pursuant to Rule 424(b) or Rule 497(h), as applicable, within the
applicable time period prescribed for such filing by the rules and regulations
under the Act and in accordance with Sections 5(a)(i) and 5(b)(i) hereof; if the
Company has elected to rely upon Rule 462 (b), the Company Rule 462 (b)
Registration Statement shall have become effective by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statements or any part thereof, and no order
pursuant to Section 8(e) of the Investment Company Act, shall have been issued
and no proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction;
(b) You shall have received from Sullivan & Cromwell such
written opinion or opinions, dated such Time of Delivery, in form and substance
satisfactory to you, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Sullivan & Cromwell, counsel for the Trust, shall
have furnished to you their written opinion or opinions, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Trust (x) has been duly formed and is validly
existing as a trust under the laws of the State of New York and (y) is
registered with the Commission under the Investment Company Act as a
non-diversified, closed-end management investment company;
(ii) The Securities have been duly authorized and validly
issued and are fully paid and non-assessable and are entitled to the
benefits provided by the Trust Agreement;
(iii) The Securities will be exchanged for shares of Stock
in accordance with the terms of the Trust Agreement and the Contracts
(unless a Reorganization Event (as such term is defined in the
Contracts) occurs or J. Joe Ricketts elects the Cash Settlement
Alternative under the Extendible Contract), subject to bankruptcy,
insolvency, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
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<PAGE> 28
(iv) All regulatory consents, authorizations, approvals
and filings required to be obtained or made by the Trust under the
Federal laws of the United States and the laws of the State of New York
for the issuance, sale and delivery of the Securities by the Trust to
you have been obtained or made;
(v) This Agreement has been duly authorized, executed and
delivered by the Trust;
(vi) Each Fundamental Agreement has been duly authorized,
executed and delivered by the Trust and, assuming due authorization,
execution and delivery by the other parties thereto, constitutes a
valid and legally binding agreement of the Trust, enforceable in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles;
(vii) The statements in the Trust Prospectus under the
caption "Certain Federal Income Tax Considerations", to the extent that
such statements constitute summaries of the legal matters referred to
therein, fairly represent their opinion as to such matters;
(viii) On the basis of information which was reviewed in the
course of the performance of the services referred to in their opinion
considered in the light of their understanding of the applicable law
and the experience they have gained through their practice under the
Acts, such counsel are of the opinion that the Trust Registration
Statement, as of its effective date, and the Trust Prospectus, as of
the date of the Trust Prospectus, appeared on their face to be
appropriately responsive in all material respects to the requirements
of the Acts and the applicable rules and regulations of the Commission
thereunder; and that nothing that came to their attention in the course
of such review has caused them to believe that the Trust Registration
Statement, as of its effective date, contained any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Trust Prospectus, as of the date of the Trust
Prospectus, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; also, nothing that has come to such
counsel's attention in the course of certain procedures (as described
in such opinion) has caused such counsel to believe that the Trust
Prospectus, as of the date and time of delivery of such opinion,
contained any untrue statement of a material fact or omitted to state
any
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<PAGE> 29
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that such opinion may state that the limitations
inherent in the independent verification of factual matters and the
character of determinations involved in the registration process are
such, however, that such counsel do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in
the Trust Registration Statement or the Trust Prospectus except for
those made under the captions "Underwriting", "Investment Objective and
Policies", and "Description of Securities" in the Trust Prospectus
insofar as they relate to provisions of documents therein described,
and such counsel need not express any opinion or belief as to the
financial statements or other financial data; and provided further that
such counsel may state that they have not participated in the
preparation of the Company Registration Statement or the Company
Prospectus, and need not express any opinion or belief with respect
thereto or with respect to information relating to the Company
contained in the Trust Prospectus under the captions "Prospectus
Summary--The Company" and "Investment Objectives and Policies--The
Company and the Class A Common Stock."
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than the laws of the
State of New York and the Federal laws of the United States.
(d) Mayer, Brown & Platt, counsel for the Company, shall
have furnished to you their written opinion, dated such Time of Delivery, in
form and substance reasonably satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Company Prospectus;
(ii) The Company has an authorized capitalization as set
forth in the Company Prospectus, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued, and are fully paid and nonassessable and conform in all
material respects to the description of the Company's capital stock
contained in the Company Prospectus; the stockholders of the Company
have no preemptive rights with respect to the Stock; and the
certificates for the Stock comply with the requirements of the Delaware
General Corporation Law;
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<PAGE> 30
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of local counsel and in respect of matters of fact upon
certificates of officers of the Company, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(iv) Each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation; and all of the
issued shares of capital stock of each such subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable,
and, except as disclosed in the Company Registration Statement, the
Company owns directly or indirectly 100% of the outstanding capital
stock of each subsidiary, free and clear, to such counsel's knowledge,
of all liens, encumbrances, equities or claims (such counsel being
entitled to rely in respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such counsel
shall state that they believe that both you and they are justified in
relying upon such opinions and certificates);
(v) To such counsel's knowledge and other than as set
forth in the Company Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries is
a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate, reasonably be expected to have a material adverse effect on
the current or future consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries;
and to such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vi) This Agreement has been duly authorized, executed and
delivered by the Company;
(vii) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of
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<PAGE> 31
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or any of its
subsidiaries is subject and which is listed on Exhibit A attached to
such opinion, nor will such action result in any violation of the
provisions of the Certificate of Incorporation or By-laws of the
Company or any statute, order, rule or regulation known to such counsel
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties
(provided that such counsel need express no opinion regarding foreign
or state securities or Blue Sky laws);
(viii) No consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the consummation by the Company of the
transactions contemplated by this Agreement, except the registration
under the Acts of the Securities and the Stock and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Securities and the
Stock (as to which such counsel need express no opinion);
(ix) The statements set forth in the Company Prospectus
under the caption "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Stock, and under
the caption "Underwriting", insofar as they purport to describe the
provisions of the laws and Company Underwriting Agreements, referred to
therein, are accurate and complete in all material respects;
(x) The Company is not an "investment company" as such
term is defined in the Investment Company Act;
(xi) The documents incorporated by reference in the
Company Prospectus or any further amendment or supplement thereto made
by the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, each complied as to form in all
material respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained, in the case of a registration
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<PAGE> 32
statement which became effective under the Act, an untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed under
the Exchange Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading (such
counsel being entitled to rely in respect of the opinion in this clause
upon opinions of [Kutack Rock], provided that such counsel shall state
that they believe that both you and they are justified in relying upon
such opinions); and
(xii) The Company Registration Statement and the Company
Prospectus and any further amendments and supplements thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder;
although they do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Company
Registration Statement or the Company Prospectus, except for those
referred to in the opinion in subsection (ix) of this Section 7(d),
they have no reason to believe that, as of its effective date, the
Company Registration Statement or any further amendment thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein and other financial
information therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that, as of its date, the Company
Prospectus or any further amendment or supplement thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein and other financial
information therein, as to which such counsel need express no opinion)
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that,
as of such Time of Delivery, either the Company Prospectus or any
further amendment or supplement thereto made by the Company prior to
such Time of Delivery (other than the financial statements and related
schedules therein and other financial information therein, as to which
such counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and they do not know of any contracts or
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<PAGE> 33
other documents of a character required to be filed as an exhibit to
the Company Registration Statement or required to be incorporated by
reference into the Company Prospectus or required to be described in
the Company Registration Statement or the Company Prospectus which are
not filed or incorporated by reference or described as required.
In rendering such opinion, such counsel may state that they
express no opinion as to the laws of any jurisdiction other than as to the laws
of the State of New York, the General Corporation Law of the State of Delaware
and the Federal laws of the United States;
(e) [ ] shall have furnished to you their written
opinion with respect to each Seller, dated such Time of Delivery, in form and
substance reasonably satisfactory to you, to the effect that:
(i) To the extent applicable to such Seller, such Seller
validly exists as a trust under, and is governed by, the laws of the
State of New York; and the trustee of such Seller has the requisite
power and authority, on behalf of such Seller, to enter into this
Agreement and the Contract and Collateral Agreement to which such
Seller is a party, and to consummate the transactions contemplated
hereby and thereby (such counsel being entitled to rely in respect of
the opinion in this clause upon opinions of Schiff Hardin & Waitt,
provided that such counsel shall state that they believe that both you
and they are justified in relying upon such opinions);
(ii) This Agreement has been duly executed and delivered
by or on behalf of each Seller; the Contracts and the Collateral
Agreements have been duly executed and delivered by or on behalf of
each Seller and, assuming due authorization, execution and delivery by
the other parties thereto, each constitutes a valid and legally binding
agreement of the Seller party thereto, enforceable against such Seller
in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or
at law); and the compliance by each Seller with all of the provisions
of this Agreement, the Contract and the Collateral Agreement to which
such Seller is a party and the consummation of the transactions herein
and therein contemplated will not breach or result in a default under
any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Seller is a party or by which
such Seller is bound or to which any of the property or assets of such
Seller are subject and which is listed in Exhibit A to such opinion,
nor will such action violate any Federal or New York statute or any
rule or regulation issued pursuant to any Federal or New York statute
or any order known to such counsel issued pursuant to any Federal
-33-
<PAGE> 34
or New York statute by any court or governmental agency or body having
jurisdiction over such Seller or any of its properties;
(iii) No authorization of the United States or the State of
New York is required for the compliance by each Seller with all of the
provisions of this Agreement and the Contract and the Collateral
Agreement to which such Seller is a party, except for the registration
of the Securities and the Stock under the Acts and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities and the Stock (as to which
such counsel need express no opinion);
(iv) Assuming due authorization, execution and delivery
thereof by the Trust and the Collateral Agent, each Collateral
Agreement, together with the delivery of (x) the certificates in
registered form representing the Stock pledged thereunder by the Seller
party thereto and (y) undated stock powers with respect thereto duly
endorsed in blank, to the Collateral Agent for the benefit of the Trust
in the State of New York creates in favor of the Collateral Agent for
the benefit of the Trust a perfected security interest in such Stock
under the Uniform Commercial Code as in effect in the State of New York
(the "New York UCC"); upon such delivery, at the First Time of
Delivery, assuming that (A) the Collateral Agent and the Trust will
acquire the security interest in such shares in good faith and without
notice of any adverse claim (within the meaning of the New York UCC)
and (B) the Seller party thereto has rights in the shares of Stock
subject to the Collateral Agreement, the Collateral Agent will acquire
such security interest in such shares of Stock for the benefit of the
Trust free of any adverse claims (within the meaning of the New York
UCC); and
(v) Upon payment for and delivery of certificates
representing the shares of Stock together with undated stock powers
with respect thereto duly endorsed in blank in accordance with the
Contract and Collateral Agreements, assuming due authorization,
execution and delivery thereof by the Trust and, in the case of the
Collateral Agreements, the Collateral Agent, and assuming that (A) each
Seller continues to be the sole registered owners of the shares of
Stock to be sold by it, (B) the certificates representing the shares to
be sold do not contain any notation of liens or restrictions and (C)
the purchasers of Securities will acquire such shares in good faith and
without notice of any adverse claims (within the meaning of the New
York UCC), the purchasers will acquire all of the rights of the Sellers
in the shares of Stock to be sold by them and will also acquire their
-34-
<PAGE> 35
interest in such shares free of any adverse claims (within the meaning
of the New York UCC);
In rendering such opinion, such counsel may state that they express no
opinion as to the laws of any jurisdiction other than as to the laws of the
State of New York, the General Corporation Law of the State of Delaware and the
Federal laws of the United States;
(f) On the date of the Trust Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Trust Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
PricewaterhouseCoopers LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you to the effect set forth in Annex I hereto;
(g) (i) Since the respective dates as of which information is
given in the Trust Registration Statement and the Trust Prospectus, there shall
not have been any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, results of
operations, prospects, investment objectives, investment policies or liabilities
of the Trust, otherwise than as set forth or contemplated in the Trust
Prospectus, (ii) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Company Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Company Prospectus, and (iii) since the
respective dates as of which information is given in the Company Prospectus
there shall not have been any change in the capital stock, net current assets,
stockholders' equity or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Company Prospectus, the effect of
which, in any such case described in clause (i) , (ii) or (iii), is in the
judgment of the Underwriters so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Securities being issued at such Time of Delivery on the terms and in the manner
contemplated in the Trust Prospectus;
(h) On or after the date hereof there shall not have occurred any
of the following: (i) a suspension or material limitation in trading in
securities generally on NASDAQ; (ii) a suspension or material limitation in
trading in the Company's
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<PAGE> 36
securities on the NASDAQ; (iii) a general moratorium on commercial banking
activities in New York declared by the relevant authorities; (iv) the outbreak
or escalation of hostilities involving the United States or the declaration by
the United States of a national emergency or war, if the effect of any such
event specified in this clause (iv) in the judgment of the Underwriters makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Securities being issued at such Time of Delivery on the terms and in the
manner contemplated in the Trust Prospectus or (v) the occurrence of any
material adverse change in the existing financial, political or economic
conditions in the United States or elsewhere which, in the judgment of the
Underwriters, would materially and adversely affect the financial markets or the
market for the Securities and other equity securities;
(i) The Securities shall have been duly listed, subject to notice
of issuance, on NASDAQ;
(j) Each Fundamental Agreement shall have been executed and
delivered by all parties thereto and each Seller shall have delivered to the
Collateral Agent the number of shares of Stock required by the Collateral
Agreement to which such Seller is a party to be initially pledged thereunder in
accordance with the requirements of the Collateral Agreement;
(k) The Trust and the Company shall have complied with the
provisions of Sections 5(a)(iii) and 5(b)(iv) hereof with respect to the
furnishing of prospectuses on the New York Business Day next succeeding the date
of this Agreement;
(l) The Trust shall have obtained and delivered to the
Underwriters executed copies of the lock-up agreements from each from each of
the stockholders of the Company set forth in the Company Underwriting Agreements
in form and substance reasonably satisfactory to the Underwriters; and
(m) The Trust, the Company and the Sellers shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
of the Trust, the Company and the Sellers reasonably satisfactory to you as to
the accuracy of the representations and warranties of the Trust, the Company and
the Sellers, respectively, herein and in the Contracts and Collateral Agreements
at and as of such Time of Delivery, as to the satisfaction and performance by
the Trust, the Company and the Sellers of all of their respective obligations
hereunder and thereunder to be performed at or prior to such Time of Delivery
and as to such other matters as you may reasonably request, and the Company and
the Trust shall have furnished or caused to be furnished certificates as to the
matters set forth in subsections (a) and (g) of this Section.
-36-
<PAGE> 37
8. (a) The Company and the Sellers, jointly and severally,
will indemnify and hold harmless the Trust and each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which the Trust or
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Company Preliminary Prospectus, the Company
Registration Statement or the Company Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Trust and each
Underwriter for any legal or other expenses reasonably incurred by the Trust or
such Underwriter in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company and
the Sellers shall not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Company Preliminary Prospectus, the Company Registration Statement or the
Company Prospectus, or any such amendment or supplement thereto, in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through Goldman, Sachs & Co. expressly for use therein; provided,
further that in no event shall any Seller be liable under this Section 8(a) for
an amount in excess of the gross proceeds from the transactions contemplated by
this Agreement and the Fundamental Agreements received by such Seller from the
sale of the Securities; and provided, further, that the Company shall not be
liable to any Underwriter under the indemnity agreement in this subsection (a)
with respect to any Company Preliminary Prospectus to the extent that any such
loss, claim, damage or liability of such Underwriter results from the fact that
such Underwriter sold Securities to a person as to whom it shall be established
that there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the Company Prospectus (excluding documents incorporated by
reference) in any case where such delivery is required by the Act if the Company
has previously furnished copies thereof in sufficient quantity to such
Underwriter and the loss, claim, damage or liability of such Underwriter results
from an untrue statement or omission of a material fact contained in the Company
Preliminary Prospectus which was identified in writing at such time to such
Underwriter and corrected in the Company Prospectus (excluding any document
incorporated by reference) or in the Company Prospectus as then amended or
supplemented (excluding documents incorporated by reference) and such correction
would have cured the defect giving rise to such loss, claim, damage or
liability.
(b) Each Underwriter will indemnify and hold harmless the Company,
the Trust and each Seller against any losses, claims, damages or liabilities to
which the
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<PAGE> 38
Company, the Trust or such Seller may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Company Preliminary
Prospectus or Trust Preliminary Prospectus, either of the Registration
Statements or either of the Prospectuses, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Company Preliminary Prospectus or Trust
Preliminary Prospectus, either of the Registration Statements or either of the
Prospectuses, or any amendment or supplement thereto, in reliance upon and in
conformity with written information furnished to the Trust or the Company by
such Underwriter through Goldman, Sachs & Co. expressly for use therein; and
will reimburse the Company, the Trust and such Seller for any legal or other
expenses reasonably incurred by the Company, the Trust or such Seller in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (which
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the written consent of the indemnified party,
effect the settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising
-38-
<PAGE> 39
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of any
indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Trust and the Sellers on the one
hand and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Trust and the Sellers on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Trust and the Sellers on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, the Trust and the Sellers bear to the total
compensation received by the Underwriters, in each case as set forth in the
Trust Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, the Trust or the Sellers on the one hand or
the Underwriters on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company, the Trust, the Sellers and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d) no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price
-39-
<PAGE> 40
at which the Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company, the Trust and the Sellers
under this Section 8 shall be in addition to any liability which the Company,
the Trust and the Sellers may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company or any Sellers (if any),
to each trustee of the Trust and to each person, if any, who controls the
Company, the Trust or any Seller within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Securities which it has agreed to purchase hereunder, you may in
your discretion arrange for you or another party or other parties reasonably
satisfactory to the Company to purchase such Securities on the terms contained
herein at a Time of Delivery. If within thirty-six hours after such default by
any Underwriter you do not arrange for the purchase of such Securities, then the
Company, the Trust and the Sellers shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
reasonably satisfactory to you to purchase such Securities on such terms. In the
event that, within the respective prescribed periods, you notify the Company,
the Trust and the Sellers that you have so arranged for the purchase of such
Securities, or the Company, the Trust and the Sellers notify you that it has so
arranged for the purchase of such Securities, you or the Company, the Trust and
the Sellers shall have the right to postpone such Time of Delivery for a period
of not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statements or the Prospectuses, or in any
other documents or arrangements, and the Company, the Trust and the Sellers
agree to file promptly any amendments to the Registration Statements or the
Prospectuses which in your opinion may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Securities.
-40-
<PAGE> 41
(b) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter or Underwriters by you and the
Company, the Trust and the Sellers as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of all the Securities to
be purchased at such Time of Delivery, then the Company, the Trust and the
Sellers shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Securities which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Securities which such Underwriter agreed to purchase
hereunder) of the Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase
of the Securities of a defaulting Underwriter or Underwriters by you and the
Company, the Trust and the Sellers as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities to be
purchased at such Time of Delivery, or if the Company, the Trust and the Sellers
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Trust to
sell the Optional Securities) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, the Trust and the
Sellers, except for the expenses to be borne by the Company, the Trust, the
Sellers and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, the Trust, the Sellers and the
several Underwriters, as set forth in this Agreement or made by or on behalf of
them, respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any Underwriter or any controlling person of
any Underwriter, or the Company, the Trust or any Seller or any officer or
director or controlling person of the Company, the Trust or any Seller and shall
survive delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company, the Trust nor the Sellers shall then be under any
liability to
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<PAGE> 42
any Underwriter except as provided in Sections 6 and 8 hereof; but, if for any
other reason, any Securities are not delivered by or on behalf of the Trust as
provided herein, the Sellers, pro rata (based on the number of shares of Stock
to be sold by each Seller pursuant to the Contracts), will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Securities not so delivered, but the Company, the Trust and the Sellers shall
then be under no further liability to any Underwriter in respect of the
Securities not so delivered except as provided in Sections 6 and 8 hereof.
12. All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to you as the representatives at 85 Broad
Street, New York, New York 10004, Attention: Registration Department; if to the
Trust shall be delivered or sent by mail, telex or facsimile transmission in
care of Donald J. Puglisi, Puglisi & Associates, 850 Library Avenue, Suite 204,
Newark, Delaware 19711; if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the Company in care of Ameritrade Holding
Corporation, 4211 South 102nd Street, Omaha, Nebraska 68127, Attention: Chief
Financial Officer; and if to any Seller shall be delivered or sent by mail,
telex or facsimile transmission to _______________; provided, however, that any
notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address
set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, the Trust, the Sellers and, to the
extent provided in Sections 8 and 10 hereof, the officers and directors of the
Company, the Trust, the Sellers and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's office
in Washington, D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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<PAGE> 43
16. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding,
please sign and return to us ten counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement between each of the
Underwriters, the Trust, the Company and the Sellers. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
Ameritrade Holding Corporation
By:
-----------------------------------------------
Name:
Title:
Ameritrade Automatic Common
Exchange Security Trust
By:
-----------------------------------------------
Name: Donald J. Puglisi
By: -----------------------------------------------
Name: William R. Latham III
By: -----------------------------------------------
Name: James B. O'Neill
each a trustee of Ameritrade Automatic
Common Exchange Security Trust
[OTHER SELLER]
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<PAGE> 44
-----------------------------------------------------
J. JOE RICKETTS
-----------------------------------------------------
Accepted as of the date hereof:
Goldman, Sachs & Co.
Credit Suisse First Boston Corporation
By:
--------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
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<PAGE> 45
SCHEDULE I
<TABLE>
<CAPTION>
NUMBER OF OPTIONAL
SECURITIES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SECURITIES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
------------- ------------------ ---------------
<S> <C> <C>
Goldman, Sachs & Co......................................................
Credit Suisse First Boston Corporation...................................
-- --
Total.................................................. -- --
4,000,000 600,000
</TABLE>
I-1
<PAGE> 46
SCHEDULE II
<TABLE>
<CAPTION>
Number of Optional
Securities to be
Total Number of Sold if
Firm Securities Maximum Option
to be Sold Exercised
------------------------- ------------------
<S> <C> <C>
The Sellers:
[SELLER]........................................................ 4,000,000
J. Joe Ricketts................................................. 600,000
-- --
-- --
Total........................................................... 4,000,000 600,000
</TABLE>
II-1
<PAGE> 47
ANNEX I
[Executed accountants' comfort letter, dated the date hereof, and form of bring-
down comfort letter]
A-I-1
<PAGE> 1
EXHIBIT 2.k(iii)(A)
================================================================================
PURCHASE AGREEMENT
Between
[NAME OF SELLER],
As Seller
and
AMERITRADE AUTOMATIC COMMON EXCHANGE SECURITY TRUST,
As Purchaser
--------------------------------------------
--------------------------------------------
Dated as of July __, 1999
================================================================================
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Page
ARTICLE I ------
DEFINITIONS; INTERPRETATION
<S> <C> <C>
Section 1.1. Defined Terms...............................................................................2
Section 1.2. Interpretation..............................................................................7
ARTICLE II
SALE AND PURCHASE
Section 2.1. Sale and Purchase...........................................................................7
Section 2.2. Purchase Price..............................................................................8
Section 2.3. Payment for and Delivery of Firm Stock......................................................8
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Seller....................................................9
Section 3.2. Representations and Warranties of Purchaser.................................................9
ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 4.1. Condition to Delivery of Firm Purchase Price................................................9
ARTICLE V
COVENANTS
Section 5.1. Covenants of Seller.........................................................................9
Section 5.2. Further Assurances.........................................................................10
ARTICLE VI
ADJUSTMENTS TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE; REORGANIZATION EVENTS
Section 6.1. Dilution Adjustments.......................................................................11
Section 6.2. Adjustment for Consolidation, Merger or Other Reorganization Event.........................14
Section 6.3. Spin-Off Distributions.....................................................................15
Section 6.4. Adjustments with Respect to Marketable Securities..........................................15
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default..........................................................................16
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Adjustments of Exchange Rate; Selection of Independent Investment
Banking Firm...........................................................................17
Section 8.2. No Assumption of Liability.................................................................17
Section 8.3. Notices....................................................................................17
Section 8.4. Governing Law; Severability................................................................17
Section 8.5. Entire Agreement...........................................................................17
Section 8.6. Amendments; Waivers........................................................................18
Section 8.7. Non-Assignability..........................................................................18
Section 8.8. No Third Party Rights; Successors and Assigns..............................................18
Section 8.9. Counterparts...............................................................................18
</TABLE>
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PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of July __, 1999, between [NAME OF
SELLER], a trust organized under the laws of [ ] ("Seller"), and Ameritrade
Automatic Common Exchange Security Trust, a trust organized under the laws of
the State of New York under and by virtue of an Amended and Restated Trust
Agreement, dated as of July __, 1999 (such trust and the trustees thereof acting
in their capacity as such being referred to in this Agreement as "Purchaser").
WITNESSETH:
WHEREAS, Seller owns Class A Common Stock, par value $0.01 per share
(the "Class A Common Stock"), of Ameritrade Holding Corporation, a Delaware
corporation (the "Company"); and
WHEREAS, Purchaser has filed with the Securities and Exchange
Commission a registration statement on Form N-2 contemplating the offering of up
to 4,000,000 $o Trust Automatic Common Exchange Securities (the "Securities"),
the terms of which contemplate delivery by Purchaser to the holders of such
Securities of a number of shares of Class A Common Stock (or, in certain
circumstances, cash in lieu of such Class A Common Stock) on the Exchange Date
referred to below; and
WHEREAS, Seller has agreed, pursuant to the Collateral Agreement, dated
as of July __, 1999 (the "Collateral Agreement"), among Seller, as Pledgor, The
Chase Manhattan Bank, as collateral agent, and Purchaser to grant to the
Collateral Agent, for the benefit of Purchaser, a security interest in Class A
Common Stock and, in certain circumstances, certain other collateral to secure
the obligations of Seller under this Agreement; and
WHEREAS, Purchaser has agreed, pursuant to an underwriting agreement,
dated July __, 1999 (the "Underwriting Agreement"), among Purchaser, Seller, J.
Joe Ricketts, the Company, and Goldman Sachs & Co., as representatives of the
several underwriters named in such agreement (the "Underwriters"), to issue and
sell to the Underwriters an aggregate of 4,000,000 Securities (the "Firm
Securities") and, at the Underwriters' option, up to 600,000 additional
Securities (such additional Securities as the Underwriters shall actually
purchase pursuant to the Underwriting Agreement, the "Optional Securities") to
cover overallotments;
NOW, THEREFORE, the parties to this Agreement, intending to be bound,
agree as follows:
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ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings:
"Accelerated Portion" means, in relation to any Cash Merger,
the portion of the Merger Consideration, other than Marketable
Securities, that has a Value equal to the amount determined by
multiplying the Basic Reorganization Event Amount by a fraction, the
numerator of which is the Value of the portion of the Merger
Consideration delivered in exchange for a single share of Class A
Common Stock that consists of assets other than Marketable Securities,
and the denominator of which is the aggregate Transaction Value of the
Merger Consideration received in exchange for a single Share of Class A
Common Stock.
"Administrator" means The Chase Manhattan Bank, administrator
for Purchaser under the Administration Agreement, dated as of July __,
1999, between the Administrator and Purchaser, or its successor in such
capacity, or any other Administrator appointed pursuant to the Trust
Agreement.
"Agreement" means this Purchase Agreement.
"Appreciation Threshold Price" has the meaning specified in
Section 2.1(b).
"Average Market Price" per share of Class A Common Stock or
share of Marketable Securities on any date means the average Closing
Price of a share of Class A Common Stock or share of Marketable
Securities for the Calculation Period consisting of the 20 Trading Days
immediately prior to but not including such date; provided that if no
Closing Price for the Class A Common Stock or Marketable Securities is
determined for one or more (but not all) of such Trading Days, such
Trading Days shall be disregarded in the calculation of the Average
Market Price (but no additional Trading Days shall be added to the
Calculation Period). If no Closing Price for the Class A Common Stock
or Marketable Securities may be determined for any of such Trading
Days, the Average Market Price shall be the Closing Price for the Class
A Common Stock or Marketable Securities for the most recent Trading Day
prior to such 20 Trading Days for which a Closing Price for the Class A
Common Stock or Marketable Securities may be determined pursuant to the
definition of "Closing Price".
"Basic Reorganization Event Amount" has the meaning provided
in Section 6.2(a).
"Business Day" means a day on which the NYSE is open for
trading and that is not a day on which commercial banks in The City of
New York are authorized or obligated by law to close.
"Calculation Period" means any period of Trading Days for
which an average security price must be determined pursuant to this
Agreement.
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"Cash Merger" has the meaning specified in Section 6.2(b).
"Class A Common Stock" has the meaning specified in the
recitals to this Agreement.
"Closing Price" of any common equity security on any date of
determination means the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such common equity
security as reported on the NYSE Consolidated Tape on such date of
determination or, if such common equity security is not listed for
trading on the NYSE on such date, as reported in the composite
transactions for the principal United States national or regional
securities exchange on which such common equity security is so listed,
or if such common equity security is not so listed on a United States
national or regional securities exchange on such date, as reported by
the NASDAQ National Market or, if such common equity security is not so
reported on such date, the last quoted bid price for such common equity
security in the over-the-counter market as reported by the National
Quotation Bureau or any similar organization; provided that if any
event that results in an adjustment to the number of shares of Class A
Common Stock or shares of Marketable Securities deliverable under this
Agreement pursuant to Article VI occurs during any Calculation Period,
the Closing Price as determined pursuant to the foregoing for each
Trading Day in the Calculation Period occurring prior to the day on
which such adjustment is effected will be adjusted in accordance with
Article VI to reflect the occurrence of such event.
"Collateral Agent" means The Chase Manhattan Bank, in its
capacity as Collateral Agent under the Collateral Agreement, or its
successor in such capacity, or any other Collateral Agent appointed
pursuant to the Trust Agreement.
"Collateral Agreement" has the meaning specified in the
recitals to this Agreement.
"common equity security" means any security of any class of
capital stock (whether voting or non-voting) that has no preference in
respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
issuer of such capital stock and that is not subject to redemption by
the issuer of such capital stock.
"Company" has the meaning specified in the recitals to this
Agreement.
"Company Successor" has the meaning specified in Section 6.2.
"Custodian" means The Chase Manhattan Bank, as custodian for
Purchaser under the Custodian Agreement, dated as of July __, 1999,
between the Custodian and Purchaser, or its successor in such capacity,
or any other Custodian appointed pursuant to the Trust Agreement.
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"Dilution Adjustment" means any fraction or number by which
the Exchange Rate shall be multiplied pursuant to Section 6.1(a), (b),
(c) or (d).
"Event of Default" has the meaning specified in Section 7.1.
"Excess Purchase Payment" means the excess, if any, of (x) the
cash and the value (as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Administrator, whose determination shall be final) of all other
consideration paid by the Company with respect to one share of Class A
Common Stock acquired in a tender offer or exchange offer by the
Company, over (y) the Then-Current Market Price of the Class A Common
Stock.
"Exchange Date" means July __, 2002.
"Exchange Rate" has the meaning specified in Section 2.1(b).
"Firm Purchase Price" has the meaning specified in Section
2.2.
"Firm Stock" has the meaning specified in Section 2.1(a).
"Firm Stock Base Amount" has the meaning specified in Section
2.1(a).
"Initial Price" has the meaning specified in Section 2.1(b).
"Liens" means any lien, mortgage, security interest, pledge,
charge, encumbrance or adverse claim of any kind.
"Marketable Securities" means any common equity securities
listed on a U.S. national or regional securities exchange or reported
by the NASDAQ National Market.
"Merger Consideration" has the meaning specified in Section
6.2(a).
"NYSE" means the New York Stock Exchange, Inc.
"Optional Securities" has the meaning specified in the
recitals to this Agreement.
"Permitted Dividend" means any quarterly cash dividend in
respect of the Class A Common Stock, except to the extent that the per
share amount of such dividend results in an annualized dividend yield
on the Class A Common Stock in excess of 12.5%.
"Pricing Date" has the meaning specified in the definition of
"Average Market Price".
"Purchaser" has the meaning specified in the preamble to this
Agreement.
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"Reorganization Event" has the meaning specified in Section
6.2.
"Securities" has the meaning specified in the recitals to this
Agreement.
"Seller" has the meaning specified in the preamble to this
Agreement.
"Spin-Off Distribution" means a distribution by the Company to
holders of Class A Common Stock of Marketable Securities issued by an
issuer other than the Company.
"Then-Current Market Price" of the Class A Common Stock means
the average Closing Price per share of Class A Common Stock for the
Calculation Period consisting of five Trading Days immediately prior to
the time such adjustment is effected (or, in the case of an adjustment
effected at the opening of business on the Business Day next following
a record date as described in Section 6.1(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related
ex-date); provided that if no Closing Price for the Class A Common
Stock is determined for one or more (but not all) of such Trading Days,
such Trading Days shall be disregarded in the calculation of the Then-
Current Market Price (but no additional Trading Days shall be added to
the Calculation Period). If no Closing Price for the Class A Common
Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Class A Common Stock
for the most recent Trading Day prior to such five Trading Days for
which a Closing Price for the Class A Common Stock may be determined
pursuant to the definition of "Closing Price". The "ex-date" with
respect to any dividend, distribution or issuance shall mean the first
date on which the Class A Common Stock trade regular way on their
principal market without the right to receive such dividend,
distribution or issuance.
"Time of Delivery" has the meaning specified in Section
2.3(a).
"Trading Day" in respect of any common equity security means a
day on which such common equity security (A) is not suspended from
trading on any United States 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 United States national or regional
securities exchange or association or over-the-counter market that is
the primary market for the trading of such security.
"Transaction Value" means, with respect to any Reorganization
Event, the sum of: (x) for any cash received in such Reorganization
Event, the amount of such cash received per share of Class A Common
Stock; (y) for any property other than cash or Marketable Securities
received in such Reorganization Event, an amount equal to the market
value on the date such Reorganization Event is consummated of such
property received per share of Class A Common Stock (as determined by a
nationally recognized independent investment banking firm retained for
this purpose by the Administrator, whose determination shall be final);
and (z) for any Marketable Securities received in such Reorganization
Event, an amount equal to the average Closing Price per share of such
Marketable
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Securities for the Calculation Period consisting of 20 Trading Days
immediately prior to the Exchange Date (or, in the case of a Cash
Merger, for the Calculation Period consisting of the 20 Trading Days
immediately prior to the date the Reorganization Event is consummated),
multiplied by the number of such Marketable Securities received for
each share of Class A Common Stock; provided that if no Closing Price
for such Marketable Securities may be determined for one or more (but
not all) of such Trading Days, such Trading Days shall be disregarded
in the calculation of such average Closing Price (but no additional
Trading Days shall be added to the Calculation Period). If no Closing
Price for the Marketable Securities may be determined for any of such
Trading Days, the calculation in the preceding clause (z) shall be
based on the Closing Price for the Marketable Securities for the most
recent Trading Day prior to such 20 Trading Days for which a Closing
Price for the Marketable Securities may be determined pursuant to the
definition of "Closing Price".
"Transfer Restrictions" has the meaning provided in the
Collateral Agreement.
"Transferred Security" has the meaning specified in Section
2.3(c).
"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of July __, 1999, constituting Ameritrade Automatic
Common Exchange Security Trust.
"Underwriters" has the meaning specified in the recitals to
this Agreement.
"Underwriting Agreement" has the meaning specified in the
recitals to this Agreement.
"U.S. Government Securities" means direct obligations of the
United States of America.
"Value" means (i) in respect of cash, the amount of such cash;
(ii) in respect of any property other than cash or Marketable
Securities, an amount equal to the market value on the date the
relevant Reorganization Event is consummated (as determined by a
nationally recognized independent investment banking firm retained for
this purpose by the Administrator, whose determination shall be final);
and (iii) in respect of any share of Marketable Securities, an amount
equal to the average Closing Price per share of such Marketable
Securities for the Calculation Period consisting of the 20 Trading
Days immediately prior to the date the relevant Reorganization Event is
consummated; provided that if no Closing Price for such Marketable
Securities may be determined for one or more (but not all) of such
Trading Days, such Trading Days shall be disregarded in the calculation
of such average Closing Price (but no additional Trading Days shall be
added to the Calculation Period). If no Closing Price for the
Marketable Securities may be determined for any of such Trading Days,
the calculation in the preceding clause (iii) shall be based on the
Closing Price for the Marketable Securities for which a Closing Price
for the Marketable Securities may be determined pursuant to the
definition of "Closing Price".
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Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles, Sections,
Exhibits or Schedules, such reference is to Articles or Sections of, or Exhibits
or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this Agreement are
for reference purposes only and are not part of this Agreement, and shall not be
deemed to limit or otherwise affect any of the provisions of this Agreement.
(c) Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
ARTICLE II
SALE AND PURCHASE
Section 2.1. Sale and Purchase.
(a) Firm Stock. Upon the terms and subject to the conditions of this
Agreement, Seller agrees to sell to Purchaser on the Exchange Date, and
Purchaser agrees to purchase from Seller on the Exchange Date, the number of
shares of Class A Common Stock (the "Firm Stock") equal to the product of [O]
(the "Firm Stock Base Amount") and the Exchange Rate.
(b) Exchange Rate. The "Exchange Rate" shall be the rate determined in
accordance with the following formula, subject to adjustment as provided in
Article VI:
(i) if the Average Market Price is less than $o (the
"Appreciation Threshold Price") but equal to or greater than $o (the
"Initial Price"), a fraction (rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th) equal to the Initial Price divided by the Average Market
Price;
(ii) if the Average Market Price is equal to or greater than
the Appreciation Threshold Price, o; and
(iii) if the Average Market Price is less than the Initial
Price, 1.
Section 2.2. Purchase Price.
Firm Purchase Price. The purchase price for the Firm Stock (the "Firm
Purchase Price") shall be $-- in cash.
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Section 2.3. Payment for and Delivery of Firm Stock.
(a) Time of Delivery. Upon the terms and subject to the conditions of
this Agreement, Purchaser shall deliver to Seller the Firm Purchase Price on
July , 1999 (the "Time of Delivery") at the offices of Mayer, Brown & Platt, 190
South LaSalle Street, Chicago, Illinois 60603, or at such other place as shall
be agreed upon by Purchaser and Seller, paid by wire transfer to an account
designated by Seller, in Federal (immediately available) funds.
(b) Sale and Delivery of Firm Stock. Seller agrees to sell and deliver
the Firm Stock to Purchaser on the Exchange Date. Sale and delivery shall be
effected by delivery by the Collateral Agent to the Custodian, for the account
of Purchaser, of Class A Common Stock then held by the Collateral Agent as
collateral under the Collateral Agreement, in an amount equal to the number of
shares of Firm Stock, rounded down to the nearest whole number. Seller agrees to
make a cash payment in respect of any fractional shares included in the Firm
Stock at the Exchange Date, in an amount equal to the value of such fractional
shares at the Average Market Price. In addition, if the difference between (A)
the aggregate proceeds of any sale (net of any brokerage or related expenses) of
any Class A Common Stock or Marketable Securities sold by Purchaser pursuant to
section 2.4(f)(ii) of the Trust Agreement and (B) the product of the number of
shares of Class A Common Stock or Marketable Securities so sold and the Average
Market Price, is negative, Seller shall pay such difference to Purchaser; if
such difference is positive, Purchaser shall pay the difference to Seller.
Notwithstanding the foregoing, if a Reorganization Event shall have occurred
prior to the Exchange Date then, in lieu of the foregoing, delivery shall be
effected as follows: (i) in the case of any cash required to be delivered on the
Exchange Date as provided in Section 6.2, by wire transfer to an account
designated by Purchaser in Federal (immediately available) funds; or (ii) in the
case of any Marketable Securities to be delivered in lieu of cash as provided in
Section 6.2, by delivery by the Collateral Agent to the Custodian, for the
account of Purchaser, of the applicable number of Marketable Securities then
held as collateral under the Collateral Agreement, as provided in Section 5.7 of
the Collateral Agreement; and (iii) in the case of any cash included in the
Accelerated Portion as provided in Section 6.2(b), by wire transfer as provided
in clause (i) above or in the case of any non-cash assets included in such
Accelerated Portion, by delivery of such assets to the Custodian, for the
account of Purchaser.
(c) Satisfaction of Obligations. Notwithstanding any other provision of
this Agreement, if on or prior to the Exchange Date as then in effect, Seller
transfers Securities to Purchaser, free and clear of any Liens and Transfer
Restrictions, for cancellation (any Securities so transferred being referred to
in this Agreement as the "Transferred Securities") then the number of shares of
Firm Stock deliverable by Seller pursuant to this Agreement shall be reduced by
a number equal to the product of (i) the number of shares of Firm Stock before
giving effect to any such transfers and (ii) a fraction, the numerator of which
is the number of Transferred Securities and the denominator of which is the Firm
Stock Base Amount (rounded down to the nearest whole share).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Seller. Seller
represents and warrants to Purchaser that each representation and warranty made
by Seller pursuant to section 1(b) of the Underwriting Agreement is true and
correct on the date of this Agreement.
Section 3.2. Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller that each representation and warranty made by
Purchaser pursuant to section 1(c) of the Underwriting Agreement is true and
correct on the date of this Agreement.
ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 4.1. Condition to Delivery of Firm Purchase Price. The
obligation of Purchaser to deliver the Firm Purchase Price at the Time of
Delivery is subject to the condition that the purchase by the Underwriters of
the Firm Securities shall have been consummated as contemplated under the
Underwriting Agreement.
ARTICLE V
COVENANTS
Section 5.1. Covenants of Seller.
(a) Taxes. Seller shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the execution of
this Agreement and the transfer and delivery of the Firm Stock (or any cash or
Marketable Securities in lieu of the Firm Stock) pursuant to this Agreement.
(b) Forward Contract. Seller hereby agrees that: (i) it will not treat
this Agreement, any portion of this Agreement, or any obligation under this
Agreement as giving rise to any interest income or other inclusions of ordinary
income; (ii) it will not treat the delivery of any portion of the Firm Stock,
cash, Marketable Securities or other property to be delivered pursuant to this
Agreement as the payment of interest or ordinary income; (iii) it will treat
this Agreement in its entirety as a forward contract for the delivery of such
Firm Stock, cash, Marketable Securities or other property; and (iv) it will not
take any action (including filing any tax return or form or taking any position
in any tax proceeding) that is inconsistent with the obligations contained in
clauses (i) through (iii) of this Section 5.1(b). Notwithstanding the preceding
sentence, Seller may take any action or position required by law, provided that
Seller delivers to Purchaser an unqualified opinion of counsel, nationally
recognized as expert in Federal tax matters, to the effect that such action or
position is required by a statutory change, Treasury regulation, or applicable
court decision published after the date of this Agreement.
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(c) Limitations on Trading During Certain Days. Seller hereby agrees
that it will not buy Class A Common Stock for its own account during the 60 days
prior to the Exchange Date.
(d) Notices. Seller will cause to be delivered to Purchaser:
(i) Immediately upon the occurrence of any Event of Default,
or upon Seller's obtaining knowledge that any of the conditions or
events described in Section 7.1(a) or (b) shall have occurred with
respect to the Company, notice of such occurrence; and
(ii) If at any time prior to the Exchange Date Seller
receives notice, or otherwise obtains knowledge, that any event
requiring an adjustment to be effected pursuant to Article VI shall
have occurred or be pending, then Seller shall promptly cause to be
delivered to Purchaser a notice identifying such event and stating, if
known to Seller, the date on which such event occurred or is to occur
and, if applicable, the record date relating to such event. Seller
shall cause further notices to be delivered to Purchaser if
Seller shall subsequently receive notice, or otherwise obtain
knowledge, of any further or revised information regarding the terms
or event or any record date relating to such event.
Section 5.2. Further Assurances. From time to time on and after the
date of this Agreement through the Exchange Date, each of the parties to this
Agreement shall use its reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement in accordance with the terms and
conditions of this Agreement, including (i) using reasonable best efforts to
remove any legal impediment to the consummation of such transactions and (ii)
the execution and delivery of all such deeds, agreements, assignments and
further instruments of transfer and conveyance necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement in
accordance with the terms and conditions of this Agreement.
ARTICLE VI
ADJUSTMENTS TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE; REORGANIZATION EVENTS
Section 6.1. Dilution Adjustments. The Exchange Rate, Appreciation
Threshold Price and Initial Price shall be subject to adjustment from time to
time as follows:
(a) Stock Dividends, Splits, Reclassifications, Etc. If the Company
shall, after the date of this Agreement,
(i) pay a stock dividend or make a distribution with respect
to the Class A Common Stock in the form of Class A Common Stock;
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(ii) subdivide or split the outstanding Class A Common Stock
into a greater number of shares of Class A Common Stock;
(iii) combine the outstanding Class A Common Stock into a
smaller number of shares of Class A Common Stock; or
(iv) issue by reclassification of Class A Common Stock any
other capital shares of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Class A Common Stock (or in the case
of a reclassification referred to in clause (iv) above, the number of other
capital shares of the Company issued pursuant to such reclassification), or the
fraction of such shares, that a shareholder who held one Share of Class A Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Threshold Price and
Initial Price shall also be adjusted in the manner described in Section 6.1(e).
(b) Right or Warrant Issuances. If the Company shall, after the date of
this Agreement, issue, or declare a record date in respect of an issuance of,
rights or warrants to all holders of Class A Common Stock entitling them to
subscribe for or purchase Class A Common Stock at a price per share less than
the Then-Current Market Price of the Class A Common Stock (other than rights to
purchase Class A Common Stock pursuant to a plan for the reinvestment of
dividends or interest), then, in each such case, the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, (i) the numerator of
which shall be the number of shares of Class A Common Stock outstanding
immediately prior to the time the adjustment resulting from the issuance of such
rights or warrants is effected, plus the number of additional shares of Class A
Common Stock offered for subscription or purchase pursuant to such rights or
warrants, and (ii) the denominator of which shall be the number of shares of
Class A Common Stock outstanding immediately prior to the time such adjustment
is effected plus the number of additional shares of Class A Common Stock that
the aggregate offering price of the total number of shares of Class A Common
Stock so offered for subscription or purchase pursuant to such rights or
warrants would purchase at the Then-Current Market Price of the Class A Common
Stock, which shall be determined by multiplying the total number of shares so
offered for subscription or purchase by the exercise price of such rights or
warrants and dividing the product so obtained by such Then-Current Market Price.
To the extent that, after the expiration of such rights or warrants, any of the
Class A Common Stock offered thereby shall not have been delivered, the Exchange
Rate shall be further adjusted to equal the Exchange Rate which would have been
in effect had such adjustment for the issuance of such rights or warrants been
made upon the basis of delivery of only the number of shares of Class A Common
Stock actually delivered. The Appreciation Threshold Price and Initial Price
shall also be adjusted in the manner described in Section 6.1(e).
(c) Distributions of Other Assets. If the Company shall, after the date
of this Agreement, declare or pay a dividend or make a distribution to all
holders of Class A Common Stock, in either case, of evidences of its
indebtedness or other non-cash assets (excluding (A) any dividends or
distributions referred to in Section 6.1(a) and (B) any
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Spin-Off Distributions) or shall issue to all holders of Class A Common Stock
rights or warrants to subscribe for or purchase any of its securities (other
than rights or warrants referred to in Section 6.1(b)), then, in each such case,
the Exchange Rate shall be multiplied by a Dilution Adjustment equal to a
fraction, the numerator of which shall be the Then-Current Market Price per
share of Class A Common Stock, and the denominator of which shall be such
Then-Current Market Price per share less the fair market value (as determined by
a nationally recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be final) as of the time
the adjustment is effected of the portion of the evidences of indebtedness or
assets so distributed or of such subscription rights or warrants so issued
applicable to one share of Class A Common Stock. The Appreciation Threshold
Price and Initial Price shall also be adjusted in the manner described in
Section 6.1(e).
(d) Cash Dividends; Excess Purchase Payments. If the Company shall,
after the date of this Agreement, declare a record date in respect of a
distribution of cash (other than any Permitted Dividend, any cash distributed in
consideration of fractional Class A Common Stock and any cash distributed in a
Reorganization Event), by dividend or otherwise, to all holders of Class A
Common Stock, or make an Excess Purchase Payment, then the Exchange Rate will be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Class A Common Stock on such
record date, and the denominator of which shall be such Then-Current Market
Price less the amount of such distribution applicable to one Share of Class A
Common Stock which would not be a Permitted Dividend or, in the case of an
Excess Purchase Payment, less the aggregate amount of such Excess Purchase
Payment for which adjustment is being made at such time divided by the number of
shares of Class A Common Stock outstanding on such record date. The Appreciation
Threshold Price and Initial Price shall also be adjusted in the manner described
in Section 6.1(e).
(e) Corresponding Adjustments to Initial Price, Appreciation Threshold
Price and Closing Price.
(i) If any adjustment is made to the Exchange Rate pursuant
to Section 6.1(a), (b), (c) or (d), the Appreciation Threshold
Price and the Initial Price shall also be adjusted by dividing each of
the Appreciation Threshold Price and the Initial Price by the
applicable Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the
Average Market Price, the Then-Current Market Price or the Transaction
Value, there shall occur any event requiring an adjustment to be
effected pursuant to this Section 6.1, then the Closing Price for each
Trading Day in the Calculation Period occurring prior to the day on
which such adjustment is effected shall be adjusted by being divided by
the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall be
effected:
(i) in the case of any dividend, distribution or issuance, as
of the opening of business on the Business Day next following the
record date for determination of holders of Class A Common Stock
entitled to receive such dividend, distribution
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<PAGE> 15
or issuance or, if the announcement of any such dividend, distribution
or issuance is after such record date, at the time such dividend,
distribution or issuance is announced by the Company;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Company shall announce, at or prior to the time it commences the
relevant stock repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment, on the
date that the holders of the repurchased shares become entitled to
payment of such Excess Purchase Payment.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th or, if
there is not a nearest 1/10,000th, to the next lower 1/10,000th. No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Exchange Rate; provided,
however, that any adjustments that by reason of this sentence are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. If any announcement or declaration of a record date in respect of a
dividend, distribution, issuance or repurchase requiring an adjustment pursuant
to this Section 6.1 shall subsequently be canceled by the Company or shall fail
to occur for any other reason, then, upon such cancellation or failure to occur,
the Exchange Rate shall be further adjusted to the Exchange Rate that would then
have been in effect had adjustment for such event not been made. If, after an
announcement of a stock repurchase requiring an adjustment pursuant to this
Section 6.1, the Company reduces the repurchase price or repurchases fewer
shares than announced, then upon completion of such stock repurchase the
Exchange Rate shall be further adjusted to equal the Exchange Rate that would
have been in effect had the adjustment for such repurchase been based on the
actual price and amount repurchased. If a Reorganization Event shall occur after
the occurrence of one or more events requiring an adjustment pursuant to this
Section 6.1, the Dilution Adjustments previously applied to the Exchange Rate in
respect of such events shall not be rescinded but shall be applied to the new
Exchange Rate provided for under Section 6.2.
Section 6.2. Adjustment for Consolidation, Merger or Other
Reorganization Event.
(a) In the event of (i) any consolidation, amalgamation or merger of
the Company, or any surviving entity or subsequent surviving entity of the
Company (a "Company Successor"), with or into another entity (other than a
consolidation, amalgamation or merger in which the Company is the continuing
corporation and in which the Class A Common Stock outstanding immediately prior
to the consolidation, amalgamation or merger are not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another corporation of the property of
the Company or any Company Successor as an entirety or substantially as
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<PAGE> 16
an entirety, (iii)(x) any statutory exchange of securities of the Company or any
Company Successor with another corporation or (y) any sale of all or
substantially all of the outstanding equity securities of the Company or any
Successor Company, including pursuant to any plan of arrangement or similar
scheme with the Company's stockholders under any applicable law, rule or
regulation or order of any court or governmental authority (in the case of each
of the preceding clauses (x) and (y), other than in connection with a
consolidation, amalgamation or merger referred to in clause (i) immediately
above), or (iv) any liquidation, dissolution or winding up of the Company or any
Company Successor (any such event described in clause (i), (ii), (iii) or (iv),
a "Reorganization Event"), Seller shall deliver on the Exchange Date, in lieu of
the Firm Stock, cash in an amount (the "Basic Reorganization Event Amount")
equal to the result of applying the Dilution Adjustment (or successive Dilution
Adjustments), if any, to the Exchange Rate pursuant to Section 6.1 at or prior
to the time of such Reorganization Event, multiplied by the product of (x) the
Firm Stock Base Amount and (y)(i) if the Transaction Value is less than the
Appreciation Threshold Price but equal to or greater than the Initial Price, the
Initial Price, (ii) if the Transaction Value is equal to or greater than the
Appreciation Threshold Price, o multiplied by the Transaction Value, and (iii)
if the Transaction Value is less than the Initial Price, the Transaction Value.
Notwithstanding the foregoing, if the consideration received by the holders of
the Class A Common Stock in the Reorganization Event (the "Merger
Consideration") includes any Marketable Securities, Seller may, at its option,
in lieu of delivering cash as described above, deliver an equivalent amount
(based on the value determined in accordance with clause (z) of the definition
of Transaction Value) of such Marketable Securities, but not exceeding, as a
percentage of the total consideration required to be delivered, the percentage
of the total Transaction Value attributable to such Marketable Securities.
(b) Notwithstanding Section 6.2(a), if at least 30% of the Merger
Consideration in any Reorganization Event consists of cash or cash equivalents
(a "Cash Merger"), then Seller shall be required (i) within five Business Days
after Seller receives the Merger Consideration, to deliver the Accelerated
Portion to Purchaser, provided that to the extent the Accelerated Portion
consists of property other than cash or cash equivalents, Seller may, at its
option, deliver, in lieu of such other property, cash in an amount equal to the
Value of such other property; and (ii) on the Exchange Date, to deliver to
Purchaser the number of Marketable Securities equal to the product of (x) the
Firm Stock Base Amount and (y) the Exchange Rate, adjusted as described in the
next sentence, and the provisions of Section 2.3(b) shall apply mutatis mutandis
to such Marketable Securities. For purposes of calculating such Exchange Rate,
(A) the Initial Price and Appreciation Threshold Price shall each be adjusted by
multiplying the Initial Price or Appreciation Threshold Price, as applicable, as
then in effect, by a fraction, the numerator of which is the Value of a share of
the Marketable Securities included in the Merger Consideration on the date the
Cash Merger is closed, and the denominator of which shall be the Transaction
Value; and (B) the Exchange Rate shall be adjusted by multiplying the Exchange
Rate (computed on the basis of the adjusted Initial Price and Appreciation
Threshold Price and the Average Market Price of the Marketable Securities) by a
fraction, the numerator of which is the aggregate Value of the Marketable
Securities included in the Merger Consideration received in exchange for a
single share of Class A Common Stock, and the denominator of which is the Value
of a share of the Marketable Securities included in the Merger Consideration on
the date the Cash Merger is closed.
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<PAGE> 17
Section 6.3. Spin-Off Distributions. If the Company shall, after the
date of this Agreement, effect a Spin-Off Distribution, then for all purposes of
this Agreement, from and after the record date in respect of such Spin-Off
Distribution, (i) the Firm Stock shall be deemed to include both (A) that number
of shares of Class A Common Stock equal to the product of (x) the Firm Stock
Base Amount and (y) the Exchange Rate, and (B) that number of Marketable
Securities of the class distributed in respect of the Firm Stock in such
Spin-Off Distribution equal to the product of (x) the Firm Stock Base Amount,
(y) the Exchange Rate, and (z) the number of shares of such Marketable
Securities distributed per share of Class A Common Stock in the Spin-Off
Distribution; (ii) Seller's obligations under Section 2.3 shall include delivery
of such Marketable Securities together with the Class A Common Stock comprising
the Firm Stock and the provisions of Section 2.3(b) shall apply mutatis mutandis
to such Marketable Securities; and (iii) the "Closing Price" of the Class A
Common Stock shall thereafter be deemed to be equal to the sum of (A) the
Closing Price per share of Class A Common Stock and (B) the product of (x) the
Closing Price per share of the spun-off Marketable Securities and (y) the number
of shares of such Marketable Securities distributed per share of Class A Common
Stock in the Spin-Off Distribution.
Section 6.4. Adjustments with Respect to Marketable Securities. The
number of shares of any Marketable Securities included in any calculation
pursuant to this Agreement shall be subject to adjustment if any event that
would, had it occurred with respect to the Class A Common Stock or the Company,
have required an adjustment pursuant to Section 6.1 or Section 6.2, shall occur
with respect to such Marketable Securities or the issuer of such Marketable
Securities between the time of the Spin-Off Distribution or Reorganization Event
(or, in the case of any adjustment occurring during a Calculation Period, the
first day of such Calculation Period) and the Exchange Date. Adjustment for such
subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1 or Section 6.2.
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default. If one or more of the following events
(each an "Event of Default") shall occur:
(a) Seller shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to
Seller or Seller's debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
Seller or any substantial part of Seller's property, or shall consent
to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced
against Seller, or shall make a general assignment for the benefit of
creditors, or shall take any action to authorize any of the foregoing;
or
(b) an involuntary case or other proceeding shall be commenced
against Seller seeking liquidation, reorganization or other relief with
respect to Seller or
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<PAGE> 18
Seller's debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of Seller or
any substantial part of Seller's property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered against Seller under
the federal bankruptcy laws as now or hereafter in effect; or
(c) a Collateral Event of Default within the meaning of the
Collateral Agreement shall occur;
then, upon the occurrence of any such event, Seller shall become obligated to
deliver the Firm Stock (or the Marketable Securities or cash or combination of
Marketable Securities and cash deliverable in respect of such Firm Stock), or
any U.S. Government Securities then pledged under the Collateral Agreement in
respect of such Firm Stock. Purchaser and Seller agree that such amount is a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and Purchaser will not be entitled to recover additional
damages as a consequence of any loss resulting from an Event of Default.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Adjustments of Exchange Rate; Selection of Independent
Investment Banking Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI and shall furnish Seller
notice of any such adjustment and shall provide Seller reasonable opportunity to
review the calculations pertaining to any such adjustment. If, pursuant to the
terms and conditions of this Agreement, the Administrator shall be required to
retain a nationally recognized independent investment banking firm for any
purpose provided in this Agreement, such nationally recognized independent
investment banking firm shall be selected and retained by the Administrator only
after consultation with Seller.
Section 8.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement.
Section 8.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 8.3 to
each other party to this Agreement. Until such notice is given, (i) notices to
Purchaser shall be directed to it in care of the Administrator, The Chase
Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Telecopier No.
(212) 946-3638, Attention: Pledge Asset Control Services; and (ii) notices to
Seller [REVISE AS NECESSARY] shall be directed to it at -, Telecopier No. --.
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<PAGE> 19
(b) Each notice given pursuant to Section 8.3(a) shall be effective (i)
if sent by certified mail (return receipt requested), three Business Days after
being deposited in the United States mail, postage prepaid; (ii) if given by
telex or telecopier, when such telex or telecopied notice is transmitted (with
electronic confirmation of transmission or verbal confirmation from the
addressee of receipt); or (iii) if given by any other means, when delivered at
the address specified in this Section 8.3.
Section 8.4. Governing Law; Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
To the extent permitted by law, the unenforceability or invalidity of any
provision or provisions of this Agreement shall not render any other provision
or provisions contained in this Agreement unenforceable or invalid.
Section 8.5. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
Section 8.6. Amendments; Waivers. Any provision of this Agreement may
be amended or waived (either generally or in a particular instance and either
retrospectively or prospectively) if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Purchaser and Seller or,
in the case of a waiver, by the party against whom the waiver is to be
effective. Purchaser agrees that it will not, without Seller's written consent,
agree to amend or waive any provision of the Trust Agreement in any manner that
materially and adversely affects the rights or obligations of Seller hereunder.
No failure or delay by either party in exercising any right, power or privilege
under this Agreement shall operate as a waiver of such right, power or privilege
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise of such right, power or privilege or the
exercise of any other right, power or privilege. The rights and remedies
provided in this Agreement shall be cumulative and not exclusive of any rights
or remedies provided by law.
Section 8.7. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 8.8. No Third Party Rights; Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Seller and Purchaser and their respective successors and
assigns and no person shall assert any rights as third party beneficiary under
this Agreement. Whenever any of the parties to this Agreement is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All the covenants and agreements contained in this Agreement by or on
behalf of Seller and Purchaser shall bind and be enforceable by, and inure to
the benefit of, their respective successors and assigns whether so expressed or
not.
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<PAGE> 20
Section 8.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures on each such counterpart were upon the same instrument.
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<PAGE> 21
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to
be duly executed and delivered as of the first date set forth above.
SELLER:
[NAME OF SELLER]
By:
---------------------------------------
Name:
Title:
PURCHASER:
AMERITRADE AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By:
---------------------------------------
Donald J. Puglisi,
as Trustee
By:
---------------------------------------
William R. Latham III,
as Trustee
By:
---------------------------------------
James B. O'Neill,
as Trustee
<PAGE> 1
EXHIBIT 2.k(iii)B
================================================================================
PURCHASE AGREEMENT
Between
J. JOE RICKETTS,
As Seller
and
AMERITRADE AUTOMATIC COMMON EXCHANGE SECURITY TRUST,
As Purchaser
--------------------------------------------
Dated as of July __, 1999
---------------------------------------------
================================================================================
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS; INTERPRETATION Page
------
<S> <C> <C>
Section 1.1. Defined Terms...............................................................................2
Section 1.2. Interpretation..............................................................................8
ARTICLE II
SALE AND PURCHASE
Section 2.1. Sale and Purchase...........................................................................8
Section 2.2. Purchase Price..............................................................................9
Section 2.3. Payment for and Delivery of Additional Stock................................................9
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Seller...................................................11
Section 3.2. Representations and Warranties of Purchaser................................................11
ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 4.1. Condition to Delivery of Additional Purchase Price.........................................12
ARTICLE V
COVENANTS
Section 5.1. Covenants of Seller........................................................................12
Section 5.2. Further Assurances.........................................................................13
ARTICLE VI
ADJUSTMENTS TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE; REORGANIZATION EVENTS
Section 6.1. Dilution Adjustments.......................................................................13
Section 6.2. Adjustment for Consolidation, Merger or Other Reorganization Event.........................16
Section 6.3. Spin-Off Distributions.....................................................................18
Section 6.4. Adjustments with Respect to Marketable Securities..........................................18
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default..........................................................................18
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Adjustments of Exchange Rate; Selection of Independent Investment
Banking Firm............................................................................19
Section 8.2. No Assumption of Liability.................................................................19
Section 8.3. Notices....................................................................................19
Section 8.4. Governing Law; Severability................................................................20
Section 8.5. Entire Agreement...........................................................................20
Section 8.6. Amendments; Waivers........................................................................20
Section 8.7. Non-Assignability..........................................................................20
Section 8.8. No Third Party Rights; Successors and Assigns..............................................20
Section 8.9. Counterparts...............................................................................21
</TABLE>
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<PAGE> 3
Exhibits
Exhibit A - Form of Certificate for Extension of Exchange Date
-ii-
<PAGE> 4
PURCHASE AGREEMENT
PURCHASE AGREEMENT, dated as of July __, 1999, between J. Joe
Ricketts ("Seller"), and Ameritrade Automatic Common Exchange Security Trust, a
trust organized under the laws of the State of New York under and by virtue of
an Amended and Restated Trust Agreement, dated as of July __, 1999 (such trust
and the trustees thereof acting in their capacity as such being referred to in
this Agreement as "Purchaser").
WITNESSETH:
WHEREAS, Seller owns Class A Common Stock, par value $0.01 per
share (the "Class A Common Stock"), of Ameritrade Holding Corporation, a
Delaware corporation (the "Company"); and
WHEREAS, Purchaser has filed with the Securities and Exchange
Commission a registration statement on Form N-2 contemplating the offering of up
to 4,000,000 $- Trust Automatic Common Exchange Securities (the "Securities"),
the terms of which contemplate delivery by Purchaser to the holders of such
Securities of a number of shares of Class A Common Stock (or, in certain
circumstances, cash in lieu of such Class A Common Stock) on the Exchange Date
referred to below; and
WHEREAS, Seller has agreed, pursuant to the Collateral
Agreement, dated as of July __, 1999 (the "Collateral Agreement"), among Seller,
as Pledgor, The Chase Manhattan Bank, as collateral agent, and Purchaser to
grant to the Collateral Agent, for the benefit of Purchaser, a security interest
in Class A Common Stock and, in certain circumstances, certain other collateral
to secure the obligations of Seller under this Agreement; and
WHEREAS, Purchaser has agreed, pursuant to an underwriting
agreement, dated July __, 1999 (the "Underwriting Agreement"), among Purchaser,
[OTHER SELLER], Seller, the Company, and Goldman Sachs & Co., as representatives
of the several underwriters named in such agreement (the "Underwriters"), to
issue and sell to the Underwriters, at the Underwriters' option, up to 600,000
additional Securities (such additional Securities as the Underwriters shall
actually purchase pursuant to the Underwriting Agreement, the "Optional
Securities") to cover overallotments;
NOW, THEREFORE, the parties to this Agreement, intending to be
bound, agree as follows:
<PAGE> 5
ARTICLE I
DEFINITIONS; INTERPRETATION
Section 1.1. Defined Terms. As used in this Agreement, the
following terms have the following meanings:
"Accelerated Portion" means, in relation to any Cash
Merger, the portion of the Merger Consideration, other than
Marketable Securities, that has a Value equal to the amount
determined by multiplying the Basic Reorganization Event Amount
by a fraction, the numerator of which is the Value of the
portion of the Merger Consideration delivered in exchange for a
single share of Class A Common Stock that consists of assets
other than Marketable Securities, and the denominator of which
is the aggregate Transaction Value of the Merger Consideration
received in exchange for a single Share of Class A Common Stock.
"Additional Purchase Price" has the meaning specified
in Section 2.2.
"Additional Stock Base Amount" means a number equal to
the number of Optional Securities that the Underwriters elect to
purchase under the Underwriting Agreement.
"Additional Stock" has the meaning specified in
Section 2.1(a).
"Additional Treasury Securities" means the U.S.
Government Securities purchased by Purchaser pursuant to section
2.3(b)(ii) of the Trust Agreement for settlement at the Second
Time of Delivery.
"Administrator" means The Chase Manhattan Bank,
administrator for Purchaser under the Administration Agreement,
dated as of July __, 1999, between the Administrator and
Purchaser, or its successor in such capacity, or any other
Administrator appointed pursuant to the Trust Agreement.
"Agreement" means this Purchase Agreement.
"Appreciation Threshold Price" has the meaning
specified in Section 2.1(b).
"Average Market Price" per share of Class A Common
Stock or share of Marketable Securities on any date means the
average Closing Price of a share of Class A Common Stock or
share of Marketable Securities for the Calculation Period
consisting of the 20 Trading Days immediately prior to but not
including such date; provided that if no Closing Price for the
Class A Common Stock or Marketable Securities is determined for
one or more (but not all) of such Trading Days, such Trading
Days shall be disregarded in the calculation of the Average
Market Price (but no additional Trading Days shall be added to
the Calculation Period). If no Closing Price for the Class A
Common Stock or Marketable Securities may be determined for any
of such Trading Days, the Average Market Price shall be the
Closing Price for the Class A Common Stock or Marketable
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<PAGE> 6
Securities for the most recent Trading Day prior to such 20
Trading Days for which a Closing Price for the Class A Common
Stock or Marketable Securities may be determined pursuant to the
definition of "Closing Price". Notwithstanding the foregoing,
for purposes of determining the payment required upon cash
settlement of this Agreement in connection with a Rollover
Offering, "Average Market Price" means the Closing Price per
share of Class A Common Stock or share of Marketable Securities
on the Trading Day immediately preceding the date that the
Rollover Offering is priced (the "Pricing Date") or, if the
Rollover Offering is priced after 4:00 P.M., New York City time,
on the Pricing Date, the Closing Price per share on the Pricing
Date.
"Basic Reorganization Event Amount" has the meaning
provided in Section 6.2(a).
"Business Day" means a day on which the NYSE is open
for trading and that is not a day on which commercial banks in
The City of New York are authorized or obligated by law to
close.
"Calculation Period" means any period of Trading Days
for which an average security price must be determined pursuant
to this Agreement.
"Cash Merger" has the meaning specified in Section
6.2(b).
"Cash Settlement Alternative" has the meaning provided
in Section 2.3(c).
"Class A Common Stock" has the meaning specified in
the recitals to this Agreement.
"Closing Price" of any common equity security on any
date of determination means the closing sale price (or, if no
closing sale price is reported, the last reported sale price) of
such common equity security as reported on the NYSE Consolidated
Tape on such date of determination or, if such common equity
security is not listed for trading on the NYSE on such date, as
reported in the composite transactions for the principal United
States national or regional securities exchange on which such
common equity security is so listed, or if such common equity
security is not so listed on a United States national or
regional securities exchange on such date, as reported by the
NASDAQ National Market or, if such common equity security is not
so reported on such date, the last quoted bid price for such
common equity security in the over-the-counter market as
reported by the National Quotation Bureau or any similar
organization; provided that if any event that results in an
adjustment to the number of shares of Class A Common Stock or
shares of Marketable Securities deliverable under this Agreement
pursuant to Article VI occurs during any Calculation Period, the
Closing Price as determined pursuant to the foregoing for each
Trading Day in the Calculation Period occurring prior to the day
on which such adjustment is effected will be adjusted in
accordance with Article VI to reflect the occurrence of such
event.
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<PAGE> 7
"Collateral Agent" means The Chase Manhattan Bank, in
its capacity as Collateral Agent under the Collateral Agreement,
or its successor in such capacity, or any other Collateral Agent
appointed pursuant to the Trust Agreement.
"Collateral Agreement" has the meaning specified in
the recitals to this Agreement.
"common equity security" means any security of any
class of capital stock (whether voting or non-voting) that has
no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the issuer of such capital stock
and that is not subject to redemption by the issuer of such
capital stock.
"Company" has the meaning specified in the recitals to
this Agreement.
"Company Successor" has the meaning specified in
Section 6.2.
"Custodian" means The Chase Manhattan Bank, as
custodian for Purchaser under the Custodian Agreement, dated as
of July __, 1999, between the Custodian and Purchaser, or its
successor in such capacity, or any other Custodian appointed
pursuant to the Trust Agreement.
"Dilution Adjustment" means any fraction or number by
which the Exchange Rate shall be multiplied pursuant to Section
6.1(a), (b), (c) or (d).
"Event of Default" has the meaning specified in
Section 7.1.
"Excess Purchase Payment" means the excess, if any, of
(x) the cash and the value (as determined by a nationally
recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be
final) of all other consideration paid by the Company with
respect to one share of Class A Common Stock acquired in a
tender offer or exchange offer by the Company, over (y) the
Then-Current Market Price of the Class A Common Stock.
"Exchange Date" means July __, 2002, subject to (i)
extension by Seller pursuant to Section 2.3(d) and (ii)
subsequent acceleration by Seller pursuant to Section 2.3(e).
"Exchange Rate" has the meaning specified in Section
2.1(b).
"First Time of Delivery" means the First Time of
Delivery specified pursuant to section 4(a) of the Underwriting
Agreement.
"Initial Price" has the meaning specified in Section
2.1(b).
"Liens" means any lien, mortgage, security interest,
pledge, charge, encumbrance or adverse claim of any kind.
-4-
<PAGE> 8
"Marketable Securities" means any common equity
securities listed on a U.S. national or regional securities
exchange or reported by the NASDAQ National Market.
"Merger Consideration" has the meaning specified in
Section 6.2(a).
"NYSE" means the New York Stock Exchange, Inc.
"Optional Securities" has the meaning specified in the
recitals to this Agreement.
"Permitted Dividend" means any quarterly cash dividend
in respect of the Class A Common Stock, except to the extent
that the per share amount of such dividend results in an
annualized dividend yield on the Class A Common Stock in excess
of 12.5%.
"Pricing Date" has the meaning specified in the
definition of "Average Market Price".
"Purchaser" has the meaning specified in the preamble
to this Agreement.
"Reorganization Event" has the meaning specified in
Section 6.2.
"Rollover Offering" means a reoffering or refinancing
of Securities effected not earlier than July __, 2002 by means
of a completed public offering or offerings, or another similar
offering (which may include one or more exchange offers), by or
on behalf of Seller.
"Second Time of Delivery" means the Second Time of
Delivery specified pursuant to section 4(a) of the Underwriting
Agreement.
"Securities" has the meaning specified in the recitals
to this Agreement.
"Seller" has the meaning specified in the preamble to
this Agreement.
"Spin-Off Distribution" means a distribution by the
Company to holders of Class A Common Stock of Marketable
Securities issued by an issuer other than the Company.
"Then-Current Market Price" of the Class A Common
Stock means the average Closing Price per share of Class A
Common Stock for the Calculation Period consisting of five
Trading Days immediately prior to the time such adjustment is
effected (or, in the case of an adjustment effected at the
opening of business on the Business Day next following a record
date as described in Section 6.1(f)(i), immediately prior to the
earlier of the time such adjustment is effected and the related
ex-date); provided that if no Closing Price for the Class A
Common Stock is determined for one or more (but not all) of such
Trading Days,
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such Trading Days shall be disregarded in the calculation of the
Then-Current Market Price (but no additional Trading Days shall
be added to the Calculation Period). If no Closing Price for the
Class A Common Stock may be determined for any of such Trading
Days, the Then-Current Market Price shall be the Closing Price
for the Class A Common Stock for the most recent Trading Day
prior to such five Trading Days for which a Closing Price for
the Class A Common Stock may be determined pursuant to the
definition of "Closing Price". The "ex-date" with respect to any
dividend, distribution or issuance shall mean the first date on
which the Class A Common Stock trade regular way on their
principal market without the right to receive such dividend,
distribution or issuance.
"Trading Day" in respect of any common equity security
means a day on which such common equity security (A) is not
suspended from trading on any United States 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
United States national or regional securities exchange or
association or over-the-counter market that is the primary
market for the trading of such security.
"Transaction Value" means, with respect to any
Reorganization Event, the sum of: (x) for any cash received in
such Reorganization Event, the amount of such cash received per
share of Class A Common Stock; (y) for any property other than
cash or Marketable Securities received in such Reorganization
Event, an amount equal to the market value on the date such
Reorganization Event is consummated of such property received
per share of Class A Common Stock (as determined by a nationally
recognized independent investment banking firm retained for this
purpose by the Administrator, whose determination shall be
final); and (z) for any Marketable Securities received in such
Reorganization Event, an amount equal to the average Closing
Price per share of such Marketable Securities for the
Calculation Period consisting of 20 Trading Days immediately
prior to the Exchange Date (or, in the case of a Cash Merger,
for the Calculation Period consisting of the 20 Trading Days
immediately prior to the date the Reorganization Event is
consummated), multiplied by the number of such Marketable
Securities received for each share of Class A Common Stock;
provided that if no Closing Price for such Marketable Securities
may be determined for one or more (but not all) of such Trading
Days, such Trading Days shall be disregarded in the calculation
of such average Closing Price (but no additional Trading Days
shall be added to the Calculation Period). If no Closing Price
for the Marketable Securities may be determined for any of such
Trading Days, the calculation in the preceding clause (z) shall
be based on the Closing Price for the Marketable Securities for
the most recent Trading Day prior to such 20 Trading Days for
which a Closing Price for the Marketable Securities may be
determined pursuant to the definition of "Closing Price".
"Transfer Restrictions" has the meaning provided in
the Collateral Agreement.
"Transferred Securities" has the meaning specified in
Section 2.3(f).
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"Trust Agreement" means the Amended and Restated Trust
Agreement, dated as of July __, 1999, constituting Ameritrade
Automatic Common Exchange Security Trust.
"Underwriters" has the meaning specified in the
recitals to this Agreement.
"Underwriting Agreement" has the meaning specified in
the recitals to this Agreement.
"U.S. Government Securities" means direct obligations
of the United States of America.
"Value" means (i) in respect of cash, the amount of
such cash; (ii) in respect of any property other than cash or
Marketable Securities, an amount equal to the market value on
the date the relevant Reorganization Event is consummated (as
determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator,
whose determination shall be final); and (iii) in respect of any
share of Marketable Securities, an amount equal to the average
Closing Price per share of such Marketable Securities for the
Calculation Period consisting of the 20 Trading Days immediately
prior to the date the relevant Reorganization Event is
consummated; provided that if no Closing Price for such
Marketable Securities may be determined for one or more (but not
all) of such Trading Days, such Trading Days shall be
disregarded in the calculation of such average Closing Price
(but no additional Trading Days shall be added to the
Calculation Period). If no Closing Price for the Marketable
Securities may be determined for any of such Trading Days, the
calculation in the preceding clause (iii) shall be based on the
Closing Price for the Marketable Securities for which a Closing
Price for the Marketable Securities may be determined pursuant
to the definition of "Closing Price".
Section 1.2. Interpretation.
(a) When a reference is made in this Agreement to Articles,
Sections, Exhibits or Schedules, such reference is to Articles or Sections of,
or Exhibits or Schedules to, this Agreement unless otherwise indicated.
(b) The table of contents and headings contained in this
Agreement are for reference purposes only and are not part of this Agreement,
and shall not be deemed to limit or otherwise affect any of the provisions of
this Agreement.
(c) Whenever the words "include", "includes" or "including" are
used in this Agreement, they shall be deemed to be followed by the words
"without limitation".
(d) Any reference to any statute, regulation or agreement is a
reference to such statute, regulation or agreement as supplemented or amended
from time to time.
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ARTICLE II
SALE AND PURCHASE
Section 2.1. Sale and Purchase.
(a) Additional Stock. Upon the terms and subject to the conditions of
this Agreement, if the Underwriters exercise the option to purchase Optional
Securities pursuant to the Underwriting Agreement, Seller agrees to sell
to Purchaser on the Exchange Date, and Purchaser agrees to purchase from Seller
on the Exchange Date, the number of additional shares of Class A Common Stock
(the "Additional Stock") equal to the product of the Additional Stock Base
Amount and the Exchange Rate. If the Underwriters exercise their option to
purchase Optional Securities pursuant to the Underwriting Agreement, Purchaser
shall notify Seller in writing that Purchaser will purchase the Additional
Stock on the Exchange Date, which notice shall specify the Additional Stock
Base Amount and the Second Time of Delivery.
(b) Exchange Rate. The "Exchange Rate" shall be the rate determined
in accordance with the following formula, subject to adjustment as provided in
Article VI:
(i) if the Average Market Price is less than $o (the
"Appreciation Threshold Price") but equal to or greater than $ - (the
"Initial Price"), a fraction (rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the
next lower 1/10,000th) equal to the Initial Price divided by the
Average Market Price;
(ii) if the Average Market Price is equal to or
greater than the Appreciation Threshold Price, o; and
(iii) if the Average Market Price is less than the
Initial Price, 1.
Section 2.2. Purchase Price.
Additional Purchase Price. The purchase price for the Additional Stock
(the "Additional Purchase Price") shall be [$O IN CASH.] [AN AMOUNT EQUAL TO THE
DIFFERENCE BETWEEN (I) THE AGGREGATE PROCEEDS TO PURCHASER FROM THE SALE OF THE
OPTIONAL SECURITIES AND (II) THE AGGREGATE COST TO PURCHASER, AS NOTIFIED BY
PURCHASER TO SELLER AT THE SECOND TIME OF DELIVERY, OF THE ADDITIONAL TREASURY
SECURITIES.]
Section 2.3. Payment for and Delivery of Additional Stock.
(a) Second Time of Delivery. Upon the terms and subject to the
conditions of this Agreement, Purchaser shall deliver to Seller the Additional
Purchase Price at the Second Time of Delivery at the offices of Mayer, Brown &
Platt, 190 South LaSalle Street, Chicago, Illinois 60603, or at such other place
as shall be agreed upon by Purchaser and Seller, paid by wire transfer to an
account designated by Seller, in Federal (immediately available) funds.
(b) Sale and Delivery of Additional Stock. Seller agrees to sell and
deliver the Additional Stock to Purchaser on the Exchange Date. Unless Seller
elects the Cash
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Settlement Alternative as provided in Section 2.3(c), sale and delivery shall be
effected by delivery by the Collateral Agent to the Custodian, for the account
of Purchaser, of Class A Common Stock then held by the Collateral Agent as
collateral under the Collateral Agreement, in an amount equal to the number of
shares of Additional Stock, rounded down to the nearest whole number. Seller
agrees to make a cash payment in respect of any fractional shares included in
the Additional Stock at the Exchange Date, in an amount equal to the value of
such fractional shares at the Average Market Price. In addition, if the
difference between (A) the aggregate proceeds of any sale (net of any brokerage
or related expenses) of any Class A Common Stock or Marketable Securities sold
by Purchaser pursuant to section 2.4(f)(ii) of the Trust Agreement and (B) the
product of the number of shares of Class A Common Stock or Marketable Securities
so sold and the Average Market Price, is negative, Seller shall pay such
difference to Purchaser; if such difference is positive, Purchaser shall pay the
difference to Seller. Notwithstanding the foregoing, if a Reorganization Event
shall have occurred prior to the Exchange Date then, in lieu of the foregoing,
delivery shall be effected as follows: (i) in the case of any cash required to
be delivered on the Exchange Date as provided in Section 6.2, by wire transfer
to an account designated by Purchaser, in Federal (immediately available) funds;
(ii) in the case of any Marketable Securities to be delivered in lieu of cash as
provided in Section 6.2, by delivery by the Collateral Agent to the Custodian,
for the account of Purchaser, of the applicable number of Marketable Securities
then held as collateral under the Collateral Agreement, as provided in Section
5.7 of the Collateral Agreement; and (iii) in the case of any cash included in
the Accelerated Portion as provided in Section 6.2(b), by wire transfer as
provided in clause (i) above or in the case of any non-cash assets included in
such Accelerated Portion, by delivery of such assets to the Custodian, for the
account of Purchaser.
(c) Cash Settlement Alternative. At its option, Seller may deliver to
Purchaser on the Exchange Date (whether or not extended pursuant to Section
2.3(d) or accelerated pursuant to Section 2.3(e)), in lieu of the Additional
Stock, an amount in cash equal to the aggregate Average Market Price of the
Additional Stock on the Exchange Date (the "Cash Settlement Alternative"), paid
by wire transfer to an account designated by Purchaser, in Federal (immediately
available) funds; provided that if Seller elects the Cash Settlement Alternative
in connection with a Rollover Offering, as provided below, and such Rollover
Offering has been consummated on or before the Exchange Date, such cash payment
shall be made not later than the fifth Trading Day after the Exchange Date.
Seller may elect the Cash Settlement Alternative in respect of all, but not less
than all, Additional Stock and may do so by notice to Purchaser, the Collateral
Agent and the Custodian not less than 35 days prior to the Exchange Date as then
in effect (specifying whether such cash settlement is being made in connection
with a Rollover Offering). If Seller elects the Cash Settlement Alternative,
Purchaser shall provide notice of such election (specifying whether such cash
settlement is being made in connection with a Rollover Offering) to the holders
of the Securities, not less than 30 nor more than 90 days prior to the Exchange
Date as then in effect.
(d) Extension of Exchange Date at Election of Purchaser. Seller may, at
its option, by notice to Purchaser not earlier than [MAY -, 2002], and not later
than [JUNE -, 2002], elect to extend the Exchange Date to October -, 2002, and
the number of shares of Additional Stock and amount of cash to be delivered
pursuant to Section 2.3(b) shall be
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calculated as of such extended Exchange Date; provided that such extension shall
be effective only if, on or before the date of such notice, Seller shall have:
(i) delivered to the Custodian, for the account of and subject
to the exclusive control of Purchaser, free and clear of any Liens and
Transfer Restrictions, U.S. Government Securities that, through the
scheduled payment of principal and interest in accordance with their
terms, will provide, not later than one Business Day before October -,
2002, cash in an amount equal to not less than the product of (1) $-
and (2) the Additional Stock Base Amount; and
(ii) delivered to Purchaser (1) a certificate of Seller
substantially in the form of Exhibit A and dated the date of such
delivery (A) identifying the U.S. Government Securities being
transferred, (B) certifying that with respect to such U.S. Government
Securities the representations and warranties contained in Exhibit A
are true and correct on and as of the date of such transfer, and (C)
certifying that such U.S. Government Securities satisfy the conditions
set forth in Section 2.3(d)(i); and (2) an opinion, dated the date of
such delivery, of counsel addressed to Purchaser confirming the
representations contained in the second sentence of paragraph 2(c) of
Exhibit A.
In addition, Seller hereby covenants and agrees to take all other
actions necessary for Seller to take in order for Purchaser to be a protected
purchaser of such U.S. Government Securities, within the meaning of Article 8 of
the New York Uniform Commercial Code.
If Seller elects to extend the Exchange Date, Purchaser shall provide
notice of such election to the holders of the Securities not later than June -,
2002.
(e) Acceleration of Exchange Date at Election of Seller. At any time
after the Exchange Date has been extended pursuant to Section 2.3(d), Seller
may, at its option in connection with the consummation of a Rollover Offering,
accelerate the Exchange Date to any date on or after July -, 2002, by notice to
Purchaser not later than 10:00 a.m. on the date to which the Exchange Date is
accelerated, and the number of shares of Additional Stock and amount of cash to
be delivered pursuant to Section 2.3(b) shall be calculated as of such
accelerated Exchange Date; provided that such acceleration shall be effective
only if, at or prior to 10:00 a.m. on such accelerated Exchange Date, Seller
shall have paid to Purchaser, by wire transfer to an account designated by the
Custodian, in Federal (immediately available) funds, an amount equal to the
product of (i) the aggregate accrued and unpaid quarterly distributions on each
Security (computed on the basis of a quarterly distribution of $- and a 360-day
year comprised of twelve 30-day months) and (ii) the Additional Stock Base
Amount. Upon receipt of such amount in Federal (immediately available) funds,
Purchaser shall promptly deliver to Seller, free and clear of any Liens and
Transfer Restrictions, the U.S. Government Securities previously delivered by
Seller to Purchaser pursuant to Section 2.3(d)(i) (together with any payments
received by Purchaser before the date of such transfer in respect of such U.S.
Government Securities).
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<PAGE> 14
If Seller elects to accelerate the Exchange Date, Purchaser shall
provide notice of such election to the holders of the Securities not later than
the accelerated Exchange Date.
(f) Satisfaction of Obligations. Notwithstanding any other provision of
this Agreement, if on or prior to the Exchange Date as then in effect, Seller
transfers Securities to Purchaser, free and clear of any Liens and Transfer
Restrictions, for cancellation (any Securities so transferred being referred to
in this Agreement as the "Transferred Securities") then the number of shares of
Additional Stock deliverable by Seller pursuant to this Agreement shall be
reduced by a number equal to the product of (i) the number of shares of
Additional Stock before giving effect to any such transfers and (ii) a fraction,
the numerator of which is the number of Transferred Securities and the
denominator of which is the Additional Stock Base Amount (rounded down to the
nearest whole share).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Representations and Warranties of Seller. Seller
represents and warrants to Purchaser that each representation and warranty made
by Seller pursuant to section 1(b) of the Underwriting Agreement is true and
correct on the date of this Agreement.
Section 3.2. Representations and Warranties of Purchaser. Purchaser
represents and warrants to Seller that each representation and warranty made by
Purchaser pursuant to section 1(c) of the Underwriting Agreement is true and
correct on the date of this Agreement.
ARTICLE IV
CONDITIONS TO PURCHASER'S OBLIGATIONS
Section 4.1. Condition to Delivery of Additional Purchase Price. The
obligation of Purchaser to deliver the Additional Purchase Price at the Second
Time of Delivery is subject to the condition that the purchase by the
Underwriters of the Optional Securities shall have been consummated as
contemplated under the Underwriting Agreement.
ARTICLE V
COVENANTS
Section 5.1. Covenants of Seller.
(a) Taxes. Seller shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the execution of
this Agreement and
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<PAGE> 15
the transfer and delivery of the Additional Stock (or any cash or Marketable
Securities in lieu of the Additional Stock) pursuant to this Agreement.
(b) Forward Contract. Seller hereby agrees that: (i) it will not treat
this Agreement, any portion of this Agreement, or any obligation under this
Agreement as giving rise to any interest income or other inclusions of ordinary
income; (ii) it will not treat the delivery of any portion of the Additional
Stock, cash, Marketable Securities or other property to be delivered pursuant to
this Agreement as the payment of interest or ordinary income; (iii) it will
treat this Agreement in its entirety as a forward contract for the delivery of
such Additional Stock, cash, Marketable Securities or other property; and (iv)
it will not take any action (including filing any tax return or form or taking
any position in any tax proceeding) that is inconsistent with the obligations
contained in clauses (i) through (iii) of this Section 5.1(b). Notwithstanding
the preceding sentence, Seller may take any action or position required by law,
provided that Seller delivers to Purchaser an unqualified opinion of counsel,
nationally recognized as expert in Federal tax matters, to the effect that such
action or position is required by a statutory change, Treasury regulation, or
applicable court decision published after the date of this Agreement.
(c) Limitations on Trading During Certain Days. Seller hereby agrees
that it will not buy Class A Common Stock for its own account during the 60 days
prior to the Exchange Date.
(d) Notices. Seller will cause to be delivered to Purchaser:
(i) Immediately upon the occurrence of any Event of Default,
or upon Seller's obtaining knowledge that any of the conditions or
events described in Section 7.1(a) or (b) shall have occurred with
respect to the Company, notice of such occurrence; and
(ii) If at any time prior to the Exchange Date Seller receives
notice, or otherwise obtains knowledge, that any event requiring an
adjustment to be effected pursuant to Article VI shall have occurred or
be pending, then Seller shall promptly cause to be delivered to
Purchaser a notice identifying such event and stating, if known to
Seller, the date on which such event occurred or is to occur and, if
applicable, the record date relating to such event. Seller shall cause
further notices to be delivered to Purchaser if Seller shall
subsequently receive notice, or otherwise obtain knowledge, of any
further or revised information regarding the terms or timing of such
event or any record date relating to such event.
Section 5.2. Further Assurances. From time to time on and after the
date of this Agreement through the Exchange Date, each of the parties to this
Agreement shall use its reasonable best efforts to take, or cause to be taken,
all action and to do, or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement in accordance with the terms and
conditions of this Agreement, including (i) using reasonable best efforts to
remove any legal impediment to the consummation of such transactions and (ii)
the execution and delivery of all such deeds, agreements, assignments and
further instruments of transfer and conveyance necessary, proper or
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advisable to consummate and make effective the transactions contemplated by this
Agreement in accordance with the terms and conditions of this Agreement.
ARTICLE VI
ADJUSTMENTS TO EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE; REORGANIZATION EVENTS
Section 6.1. Dilution Adjustments. The Exchange Rate, Appreciation
Threshold Price and Initial Price shall be subject to adjustment from time to
time as follows:
(a) Stock Dividends, Splits, Reclassifications, Etc. If the Company
shall, after the date of this Agreement,
(i) pay a stock dividend or make a distribution with respect
to the Class A Common Stock in the form of Class A Common Stock;
(ii) subdivide or split the outstanding Class A Common Stock
into a greater number of shares of Class A Common Stock;
(iii) combine the outstanding Class A Common Stock into a
smaller number of shares of Class A Common Stock; or
(iv) issue by reclassification of Class A Common Stock any
other capital shares of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Class A Common Stock (or in the case
of a reclassification referred to in clause (iv) above, the number of other
capital shares of the Company issued pursuant to such reclassification), or the
fraction of such shares, that a shareholder who held one Share of Class A Common
Stock immediately prior to such event would be entitled solely by reason of such
event to hold immediately after such event. The Appreciation Threshold Price and
Initial Price shall also be adjusted in the manner described in Section 6.1(e).
(b) Right or Warrant Issuances. If the Company shall, after the date of
this Agreement, issue, or declare a record date in respect of an issuance of,
rights or warrants to all holders of Class A Common Stock entitling them to
subscribe for or purchase Class A Common Stock at a price per share less than
the Then-Current Market Price of the Class A Common Stock (other than rights to
purchase Class A Common Stock pursuant to a plan for the reinvestment of
dividends or interest), then, in each such case, the Exchange Rate shall be
multiplied by a Dilution Adjustment equal to a fraction, (i) the numerator of
which shall be the number of shares of Class A Common Stock outstanding
immediately prior to the time the adjustment resulting from the issuance of such
rights or warrants is effected, plus the number of additional shares of Class A
Common Stock offered for subscription or purchase pursuant to such rights or
warrants, and (ii) the denominator of which shall be the number of shares of
Class A Common Stock outstanding immediately prior to the time such adjustment
is effected plus the
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number of additional shares of Class A Common Stock that the aggregate offering
price of the total number of shares of Class A Common Stock so offered for
subscription or purchase pursuant to such rights or warrants would purchase at
the Then-Current Market Price of the Class A Common Stock, which shall be
determined by multiplying the total number of shares so offered for subscription
or purchase by the exercise price of such rights or warrants and dividing the
product so obtained by such Then-Current Market Price. To the extent that, after
the expiration of such rights or warrants, any of the Class A Common Stock
offered thereby shall not have been delivered, the Exchange Rate shall be
further adjusted to equal the Exchange Rate which would have been in effect had
such adjustment for the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Class A Common Stock actually
delivered. The Appreciation Threshold Price and Initial Price shall also be
adjusted in the manner described in Section 6.1(e).
(c) Distributions of Other Assets. If the Company shall, after the date
of this Agreement, declare or pay a dividend or make a distribution to all
holders of Class A Common Stock, in either case, of evidences of its
indebtedness or other non-cash assets (excluding (A) any dividends or
distributions referred to in Section 6.1(a) and (B) any Spin-Off Distributions)
or shall issue to all holders of Class A Common Stock rights or warrants to
subscribe for or purchase any of its securities (other than rights or warrants
referred to in Section 6.1(b)), then, in each such case, the Exchange Rate shall
be multiplied by a Dilution Adjustment equal to a fraction, the numerator of
which shall be the Then-Current Market Price per share of Class A Common Stock,
and the denominator of which shall be such Then-Current Market Price per share
less the fair market value (as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Administrator, whose
determination shall be final) as of the time the adjustment is effected of the
portion of the evidences of indebtedness or assets so distributed or of such
subscription rights or warrants so issued applicable to one Share of Class A
Common Stock. The Appreciation Threshold Price and Initial Price shall also be
adjusted in the manner described in Section 6.1(e).
(d) Cash Dividends; Excess Purchase Payments. If the Company shall,
after the date of this Agreement, declare a record date in respect of a
distribution of cash (other than any Permitted Dividend, any cash distributed in
consideration of fractional Class A Common Stock and any cash distributed in a
Reorganization Event), by dividend or otherwise, to all holders of Class A
Common Stock, or make an Excess Purchase Payment, then the Exchange Rate will be
multiplied by a Dilution Adjustment equal to a fraction, the numerator of which
shall be the Then-Current Market Price of the Class A Common Stock on such
record date, and the denominator of which shall be such Then-Current Market
Price less the amount of such distribution applicable to one Share of Class A
Common Stock which would not be a Permitted Dividend or, in the case of an
Excess Purchase Payment, less the aggregate amount of such Excess Purchase
Payment for which adjustment is being made at such time divided by the number of
shares of Class A Common Stock outstanding on such record date. The Appreciation
Threshold Price and Initial Price shall also be adjusted in the manner described
in Section 6.1(e).
(e) Corresponding Adjustments to Initial Price, Appreciation Threshold
Price and Closing Price.
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(i) If any adjustment is made to the Exchange Rate pursuant
to Section 6.1(a), (b), (c) or (d), the Appreciation Threshold Price
and the Initial Price shall also be adjusted by dividing each of the
Appreciation Threshold Price and the Initial Price by the applicable
Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the
Average Market Price, the Then-Current Market Price or the Transaction
Value, there shall occur any event requiring an adjustment to be
effected pursuant to this Section 6.1, then the Closing Price for each
Trading Day in the Calculation Period occurring prior to the day on
which such adjustment is effected shall be adjusted by being divided by
the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall be
effected:
(i) in the case of any dividend, distribution or issuance, as
of the opening of business on the Business Day next following the
record date for determination of holders of Class A Common Stock
entitled to receive such dividend, distribution or issuance or, if the
announcement of any such dividend, distribution or issuance is after
such record date, at the time such dividend, distribution or issuance
is announced by the Company;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Company shall announce, at or prior to the time it commences the
relevant stock repurchase, the repurchase price per share for shares
proposed to be repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment, on the
date that the holders of the repurchased shares become entitled to
payment of such Excess Purchase Payment.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th or, if
there is not a nearest 1/10,000th, to the next lower 1/10,000th. No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Exchange Rate; provided,
however, that any adjustments that by reason of this sentence are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. If any announcement or declaration of a record date in respect of a
dividend, distribution, issuance or repurchase requiring an adjustment pursuant
to this Section 6.1 shall subsequently be canceled by the Company or shall fail
to occur for any other reason, then, upon such cancellation or failure to occur,
the Exchange Rate shall be further adjusted to the Exchange Rate that would then
have been in effect had adjustment for such event not been made. If, after an
announcement of a stock repurchase requiring an adjustment pursuant to this
Section 6.1, the Company reduces the repurchase price or repurchases fewer
shares than announced, then upon completion of such stock repurchase the
Exchange Rate shall be further adjusted to
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equal the Exchange Rate that would have been in effect had the adjustment for
such repurchase been based on the actual price and amount repurchased. If a
Reorganization Event shall occur after the occurrence of one or more events
requiring an adjustment pursuant to this Section 6.1, the Dilution Adjustments
previously applied to the Exchange Rate in respect of such events shall not be
rescinded but shall be applied to the new Exchange Rate provided for under
Section 6.2.
Section 6.2. Adjustment for Consolidation, Merger or Other
Reorganization Event.
(a) In the event of (i) any consolidation, amalgamation or merger of
the Company, or any surviving entity or subsequent surviving entity of the
Company (a "Company Successor"), with or into another entity (other than a
consolidation, amalgamation or merger in which the Company is the continuing
corporation and in which the Class A Common Stock outstanding immediately prior
to the consolidation, amalgamation or merger are not exchanged for cash,
securities or other property of the Company or another corporation), (ii) any
sale, transfer, lease or conveyance to another corporation of the property of
the Company or any Company Successor as an entirety or substantially as an
entirety, (iii)(x) any statutory exchange of securities of the Company or any
Company Successor with another corporation or (y) any sale of all or
substantially all of the outstanding equity securities of the Company or any
Successor Company, including pursuant to any plan of arrangement or similar
scheme with the Company's stockholders under any applicable law, rule or
regulation or order of any court or governmental authority (in the case of each
of the preceding clauses (x) and (y), other than in connection with a
consolidation, amalgamation or merger referred to in clause (i) immediately
above), or (iv) any liquidation, dissolution or winding up of the Company or any
Company Successor (any such event described in clause (i), (ii), (iii) or (iv),
a "Reorganization Event"), Seller shall deliver on the Exchange Date, in lieu of
the Additional Stock, cash in an amount (the "Basic Reorganization Event
Amount") equal to the result of applying the Dilution Adjustment (or successive
Dilution Adjustments), if any, that have been to the Exchange Rate pursuant to
Section 6.1 at or prior to the time of such Reorganization Event, multiplied by
the product of (x) the Additional Stock Base Amount and (y)(i) if the
Transaction Value is less than the Appreciation Threshold Price but equal to or
greater than the Initial Price, the Initial Price, (ii) if the Transaction Value
is equal to or greater than the Appreciation Threshold Price, o multiplied by
the Transaction Value, and (iii) if the Transaction Value is less than the
Initial Price, the Transaction Value. Notwithstanding the foregoing, if the
consideration received by the holders of the Class A Common Stock in the
Reorganization Event (the "Merger Consideration") includes any Marketable
Securities, Seller may, at its option, in lieu of delivering cash as described
above, deliver an equivalent amount (based on the value determined in accordance
with clause (z) of the definition of Transaction Value) of such Marketable
Securities, but not exceeding, as a percentage of the total consideration
required to be delivered, the percentage of the total Transaction Value
attributable to such Marketable Securities.
(b) Notwithstanding Section 6.2(a), if at least 30% of the Merger
Consideration in any Reorganization Event consists of cash or cash equivalents
(a "Cash Merger"), then Seller shall be required (i) within five Business Days
after Seller receives the Merger Consideration, to deliver the Accelerated
Portion to Purchaser, provided that to the extent
-16-
<PAGE> 20
the Accelerated Portion consists of property other than cash or cash
equivalents, Seller may, at its option, deliver, in lieu of such other property,
cash in an amount equal to the Value of such other property; and (ii) on the
Exchange Date, to deliver to Purchaser the number of Marketable Securities equal
to the product of (x) the Additional Stock Base Amount and (y) the Exchange
Rate, adjusted as described in the next sentence, and the provisions of Section
2.3(b) shall apply mutatis mutandis to such Marketable Securities, provided that
Seller may exercise the Cash Settlement Alternative in respect of such
Marketable Securities, in which case Section 2.3(c) shall apply mutatis mutandis
to such Marketable Securities. For purposes of calculating such Exchange Rate,
(A) the Initial Price and Appreciation Threshold Price shall each be adjusted by
multiplying the Initial Price or Appreciation Threshold Price, as applicable, as
then in effect, by a fraction, the numerator of which is the Value of a share of
the Marketable Securities included in the Merger Consideration on the date the
Cash Merger is closed, and the denominator of which shall be the Transaction
Value; and (B) the Exchange Rate shall be adjusted by multiplying the Exchange
Rate (computed on the basis of the adjusted Initial Price and Appreciation
Threshold Price and the Average Market Price of the Marketable Securities) by a
fraction, the numerator of which is the aggregate Value of the Marketable
Securities included in the Merger Consideration received in exchange for a
single share of Class A Common Stock, and the denominator of which is the Value
of a share of the Marketable Securities included in the Merger Consideration on
the date the Cash Merger is closed.
Section 6.3. Spin-Off Distributions. If the Company shall, after the
date of this Agreement, effect a Spin-Off Distribution, then for all purposes of
this Agreement, from and after the record date in respect of such Spin-Off
Distribution, (i) the Additional Stock shall be deemed to include both (A) that
number of shares of Class A Common Stock equal to the product of (x) the
Additional Stock Base Amount and (y) the Exchange Rate, and (B) that number of
Marketable Securities of the class distributed in respect of the Additional
Stock in such Spin-Off Distribution equal to the product of (x) the Additional
Stock Base Amount, (y) the Exchange Rate, and (z) the number of shares of such
Marketable Securities distributed per share of Class A Common Stock in the Spin-
Off Distribution; (ii) Seller's obligations under Section 2.3 shall include
delivery of such Marketable Securities together with the Class A Common Stock
comprising the Additional Stock and the provisions of Section 2.3(b) shall apply
mutatis mutandis to such Marketable Securities; and (iii) the "Closing Price" of
the Class A Common Stock shall thereafter be deemed to be equal to the sum of
(A) the Closing Price per share of Class A Common Stock and (B) the product of
(x) the Closing Price per share of the spun-off Marketable Securities and (y)
the number of shares of such Marketable Securities distributed per share of
Class A Common Stock in the Spin-Off Distribution.
Section 6.4. Adjustments with Respect to Marketable Securities. The
number of shares of any Marketable Securities included in any calculation
pursuant to this Agreement shall be subject to adjustment if any event that
would, had it occurred with respect to the Class A Common Stock or the Company,
have required an adjustment pursuant to Section 6.1 or Section 6.2, shall occur
with respect to such Marketable Securities or the issuer of such Marketable
Securities between the time of the Spin-Off Distribution or Reorganization Event
(or, in the case of any adjustment occurring during a Calculation Period, the
first day of such Calculation Period) and the Exchange Date. Adjustment for such
subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1 or Section 6.2.
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<PAGE> 21
ARTICLE VII
ACCELERATION UPON AN EVENT OF DEFAULT
Section 7.1. Events of Default. If one or more of the following events
(each an "Event of Default") shall occur:
(a) Seller shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to
Seller or Seller's debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
Seller or any substantial part of Seller's property, or shall consent
to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced
against Seller, or shall make a general assignment for the benefit of
creditors, or shall take any action to authorize any of the foregoing;
or
(b) an involuntary case or other proceeding shall be commenced
against Seller seeking liquidation, reorganization or other relief with
respect to Seller or Seller's debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official
of Seller or any substantial part of Seller's property, and such
involuntary case or other proceeding shall remain undismissed and
unstayed for a period of 60 days; or an order for relief shall be
entered against Seller under the federal bankruptcy laws as now or
hereafter in effect; or
(c) a Collateral Event of Default within the meaning of the
Collateral Agreement shall occur;
then, upon the occurrence of any such event, Seller shall become obligated to
deliver the Additional Stock (or the Marketable Securities or cash or
combination of Marketable Securities and cash deliverable in respect of such
Additional Stock), or any U.S. Government Securities then pledged under the
Collateral Agreement in respect of such Additional Stock. Purchaser and Seller
agree that such amount is a reasonable preestimate of loss and not a penalty.
Such amount is payable for the loss of bargain and Purchaser will not be
entitled to recover additional damages as a consequence of any loss resulting
from an Event of Default.
ARTICLE VIII
MISCELLANEOUS
Section 8.1. Adjustments of Exchange Rate; Selection of Independent
Investment Banking Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI and shall furnish Seller
notice of any such adjustment and shall provide Seller reasonable opportunity to
review the
-18-
<PAGE> 22
calculations pertaining to any such adjustment. If, pursuant to the terms and
conditions of this Agreement, the Administrator shall be required to retain a
nationally recognized independent investment banking firm for any purpose
provided in this Agreement, such nationally recognized independent investment
banking firm shall be selected and retained by the Administrator only after
consultation with Seller.
Section 8.2. No Assumption of Liability. By executing this Agreement,
none of the Trustees assumes any personal liability under this Agreement.
Section 8.3. Notices.
(a) All notices and other communications provided for in this
Agreement, unless otherwise specified, shall be in writing and shall be given at
the addresses set forth in the following sentence or at such other addresses as
may be designated by notice duly given in accordance with this Section 8.3 to
each other party to this Agreement. Until such notice is given, (i) notices to
Purchaser shall be directed to it in care of the Administrator, The Chase
Manhattan Bank, 450 West 33rd Street, New York, New York 10001, Telecopier No.
(212) 946-3638, Attention: Pledge Asset Control Services; and (ii) notices to
Seller [REVISE AS NECESSARY] shall be directed to it at -, Telecopier No. -.
(b) Each notice given pursuant to Section 8.3(a) shall be effective (i)
if sent by certified mail (return receipt requested), three Business Days after
being deposited in the United States mail, postage prepaid; (ii) if given by
telex or telecopier, when such telex or telecopied notice is transmitted (with
electronic confirmation of transmission or verbal confirmation from the
addressee of receipt); or (iii) if given by any other means, when delivered at
the address specified in this Section 8.3.
Section 8.4. Governing Law; Severability. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
To the extent permitted by law, the unenforceability or invalidity of any
provision or provisions of this Agreement shall not render any other provision
or provisions contained in this Agreement unenforceable or invalid.
Section 8.5. Entire Agreement. Except as expressly set forth in this
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement.
Section 8.6. Amendments; Waivers. Any provision of this Agreement may
be amended or waived (either generally or in a particular instance and either
retrospectively or prospectively) if, and only if, such amendment or waiver is
in writing and signed, in the case of an amendment, by Purchaser and Seller or,
in the case of a waiver, by the party against whom the waiver is to be
effective. Purchaser agrees that it will not, without Seller's written consent,
agree to amend or waive any provision of the Trust Agreement in any manner that
materially and adversely affects the rights or obligations of Seller hereunder.
No failure or delay by either party in exercising any right, power or privilege
under this Agreement shall operate as a waiver of such right, power or privilege
nor shall any single or partial exercise of any such right, power or privilege
preclude any other or
-19-
<PAGE> 23
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. The rights and remedies provided in this Agreement
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 8.7. Non-Assignability. This Agreement and the rights and
obligations of the parties under this Agreement may not be assigned or delegated
by either party without the prior written consent of the other party, and any
purported assignment without such consent shall be void.
Section 8.8. No Third Party Rights; Successors and Assigns. This
Agreement is not intended and shall not be construed to create any rights in any
person other than Seller and Purchaser and their respective successors and
assigns and no person shall assert any rights as third party beneficiary under
this Agreement. Whenever any of the parties to this Agreement is referred to,
such reference shall be deemed to include the successors and assigns of such
party. All the covenants and agreements contained in this Agreement by or on
behalf of Seller and Purchaser shall bind and be enforceable by, and inure to
the benefit of, their respective successors and assigns whether so expressed or
not.
Section 8.9. Counterparts. This Agreement may be executed, acknowledged
and delivered in any number of counterparts, each of which shall be an original,
but all of which shall constitute a single agreement, with the same effect as if
the signatures on each such counterpart were upon the same instrument.
-20-
<PAGE> 24
IN WITNESS WHEREOF, the parties have caused this Purchase Agreement to
be duly executed and delivered as of the first date set forth above.
SELLER:
J. JOE RICKETTS
By:________________________________
Name:
Title:
PURCHASER:
AMERITRADE AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By:________________________________
Donald J. Puglisi,
as Trustee
By:________________________________
William R. Latham III,
as Trustee
By:________________________________
James B. O'Neill,
as Trustee
<PAGE> 25
Exhibit A
to
Purchase Agreement
CERTIFICATE FOR EXTENSION OF EXCHANGE DATE
The undersigned, - ("Seller"), hereby certifies, pursuant to Section
2.3(e) of the Purchase Agreement, dated as of July __, 1999 (the "Contract"),
between Seller and Ameritrade Automatic Common Exchange Security Trust, that:
1. Seller is transferring the following U.S. Government Securities to
Purchaser:
[INSERT LIST OF TRANSFERRED U.S. GOVERNMENT SECURITIES]
2. Seller hereby represents and warrants to Purchaser that:
(a) Consents to Transfer. No Transfer Restrictions exist with respect
to or otherwise apply to the transfer by Seller of such U.S. Government
Securities to Purchaser.
(b) Delivery. Seller has delivered to the Custodian, for the account of
and subject to the exclusive control of Purchaser, free and clear of any Liens
and Transfer Restrictions, U.S. Government Securities that, through the
scheduled payment of principal and interest in accordance with their terms, will
provide, not later than one Business Day before October -, 2002, cash in an
amount equal to not less than the product of - and the Additional Stock Base
Amount.
(c) Title. Seller has good and marketable title to such U.S. Government
Securities, free and clear of all Liens and Transfer Restrictions. Upon delivery
of such U.S. Government Securities to Purchaser, Purchaser will obtain good and
marketable title to such U.S. Government Securities free and clear of all Liens
and Transfer Restrictions.
Capitalized terms defined in the Contract are used in this Certificate
as defined in the Contract.
IN WITNESS WHEREOF, the undersigned has executed this certificate this
____ day of ____________, _____.
J. JOE RICKETTS
__________________________
A-1
<PAGE> 1
Exhibit 2.l
July 26, 1999
Ameritrade Automatic Common Exchange Security Trust,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933
(the "Act") and the Investment Company Act of 1940 (the "Investment Company
Act") of the Trust Automatic Common Exchange Securities (the "Securities") of
Ameritrade Automatic Common Exchange Security Trust, a New York trust (the
"Trust"), we, as your counsel, have examined such trust records, certificates
and other documents, and such questions of law, as we have considered necessary
or appropriate for the purposes of this opinion. Upon the basis of such
examination, we advise you that, in our opinion, when the registration statement
relating to the Securities (the "Registration Statement") has become effective
under the Act, the Trust's Amended and Restated Trust Agreement has been duly
executed and delivered by the parties thereto, and the Securities have been duly
issued and sold as contemplated by the Registration Statement, the Securities
will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of New York, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity of
Securities" in the Prospectus. In giving such consent, we do not thereby admit
that we are in a category of persons whose consent is required under Section 7
of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
Exhibit 2.n.(i)
July 26, 1999
Ameritrade Automatic Common Exchange Security Trust,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
We have acted as special tax counsel to Ameritrade Common Exchange
Security Trust (the "Trust") in connection with the Registration Statement on
Form N-2 of the Trust filed with the Securities and Exchange Commission (the
"Registration Statement") and hereby confirm to you our opinion as set forth
under the heading "Certain Federal Income Tax Considerations" in the Prospectus
included in the Registration Statement.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to the Registration Statement and the
reference to us under the heading "Certain Federal Income Tax Considerations."
In giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933.
Very truly yours,
/s/ SULLIVAN & CROMWELL
<PAGE> 1
EXHIBIT 2.p
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is entered into as of the ___ day of July,
1999, between Paul S. Efron (the "Trustee"), not in his individual capacity, but
solely as trustee of Ameritrade Automatic Common Exchange Security Trust
(previously known as Ninth Automatic Common Exchange Security Trust), a trust
organized and existing under the laws of New York (the "Trust"), and Goldman,
Sachs & Co. (the "Purchaser").
THE PARTIES HEREBY AGREE AS FOLLOWS:
PURCHASE AND SALE OF THE SECURITY
1.1 SALE AND ISSUANCE OF THE SECURITY. Subject to the terms and
conditions of this Agreement, the Trustee agrees to sell to the Purchaser, and
the Purchaser agrees to purchase from the Trustee, one Trust Automatic Common
Exchange Security, representing an undivided beneficial interest in the Trust
(the "Security") at an aggregate purchase price of $100.
1.2 CLOSING. The purchase and sale of the Security (the "Closing")
shall take place at the offices of [Mayer, Brown & Platt, 190 South LaSalle
Street, Chicago, Illinois 60603] at ___ a.m., on July ___, 1999, or at such
other time (the "Closing Date") and place as the Trustee and the Purchaser
mutually agree upon. At or after the Closing, the Trustee shall deliver to the
Purchaser a certificate representing the Security, registered in the name of the
Purchaser or its nominee. Payment for the Security shall be made on or prior to
the Closing Date by the Purchaser by bank wire transfers or by delivery of
certified or official bank checks, in either case in immediately available
funds, of an amount equal to the purchase price of the Security.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser hereby represents and warrants to, and covenants for the benefit of,
the Trust that:
2.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made by the
Trustee with the Purchaser in reliance upon the Purchaser's representation to
the Trustee, which by the Purchaser's execution of this Agreement the Purchaser
hereby confirms, that the Security is being acquired for investment for the
Purchaser's own account, and not as a nominee or agent and not with a view to
the resale
<PAGE> 2
or distribution by the Purchaser of the Security, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the Security, in either case in violation of any securities
registration requirement under applicable law, but subject nevertheless, to any
requirement of law that the disposition of its property shall at all times be
within its control. By executing this Agreement, the Purchaser further
represents that the Purchaser does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participation to such
person or to any third person, with respect to the Security.
2.2 INVESTMENT EXPERIENCE. The Purchaser acknowledges that it can bear
the economic risk of the investment for an indefinite period of time and has
such knowledge and experience in financial and business matters (and
particularly in the business in which the Trust operates) as to be capable of
evaluating the merits and risks of the investment in the Security. The Purchaser
is an "accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933, as amended (the "Act").
2.3 RESTRICTED SECURITIES. The Purchaser understands that the Security
is characterized as a "restricted security" under the United States securities
laws inasmuch as it is being acquired from the Trustee in a transaction not
involving a public offering and that under such laws and applicable regulations
the Security may be resold without registration under the Act only in certain
circumstances. In this connection, the Purchaser represents that it understands
the resale limitations imposed by the Act and is generally familiar with the
existing resale limitations imposed by Rule 144.
2.4 FURTHER LIMITATIONS ON DISPOSITION.
(a) The Purchaser further agrees not to make any disposition directly
or indirectly of all or any portion of the Security unless and until:
(i) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
-2-
<PAGE> 3
(ii) The Purchaser shall have furnished the Trustee with an
opinion of counsel, reasonably satisfactory to the Trustee, that such
disposition will not require registration of such Securities under the Act; or
(b) Notwithstanding the provisions of subsection (a) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by the Purchaser to any affiliate of the Purchaser, if the transferee agrees in
writing to be subject to the terms hereof to the same extent as if it were the
original Purchaser hereunder.
2.5 LEGENDS. It is understood that the certificate evidencing the
Security may bear either or both of the following legends:
(a) "These securities have not been registered under the Securities
Act of 1933. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with
respect to the securities under such Act or an opinion of counsel
reasonably satisfactory to the Trustee of Ameritrade Automatic Common
Exchange Security Trust that such registration is not required."
(b) Any legend required by the laws of any other applicable
jurisdiction.
The Purchaser and the Trustee agree that the legend contained in the
paragraph (a) above shall be removed at a holder's request when it is no longer
necessary to ensure compliance with federal securities laws.
2.6 AMENDMENT TO TRUST AGREEMENT; SPLIT OF THE SECURITIES. The
Purchaser consents to (a) the execution and delivery by the Trustee and Goldman,
Sachs & Co., as sponsor of the Trust, of an Amended and Restated Trust Agreement
in such form as the Trustee may deem appropriate, and (b) the split of the
Purchaser's Security. Subsequent to the determination of the public offering
price per Security and related underwriting discount for the Securities to be
sold to the Underwriters (as defined in the aforementioned Amended and Restated
Trust Agreement) but prior to the sale of the Securities to the Underwriters,
the Security purchased hereby shall be split into a greater number of Securities
so that immediately following such split the
-3-
<PAGE> 4
value of each Security held by the Purchaser will equal the aforesaid public
offering price less the related underwriting discount.
2.7 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TRUSTEE
Paul S. Efron
as Trustee
GOLDMAN, SACHS & CO.
Goldman, Sachs & Co.
as Purchaser
<PAGE> 1
[ARTICLE] 6
[LEGEND]
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERITRADE
AUTOMATIC COMMON EXCHANGE SECURITY TRUST STATEMENT OF ASSETS AND LIABILITIES AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
[/LEGEND]
<TABLE>
<S> <C>
[PERIOD-TYPE] OTHER
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] JUN-28-1999
[PERIOD-END] JUN-28-1999
[INVESTMENTS-AT-COST] 0
[INVESTMENTS-AT-VALUE] 100
[RECEIVABLES] 0
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 100
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 0
[TOTAL-LIABILITIES] 0
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 100
[SHARES-COMMON-STOCK] 1
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 100
[ACCUM-APPREC-OR-DEPREC] 0
[NET-ASSETS] 0
[DIVIDEND-INCOME] 0
[INTEREST-INCOME] 0
[OTHER-INCOME] 0
[EXPENSES-NET] 0
[NET-INVESTMENT-INCOME] 0
[REALIZED-GAINS-CURRENT] 0
[APPREC-INCREASE-CURRENT] 0
[NET-CHANGE-FROM-OPS] 0
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 0
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 0
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 0
[AVERAGE-NET-ASSETS] 0
[PER-SHARE-NAV-BEGIN] 0
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 0
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 0
[EXPENSE-RATIO] 0
</TABLE>
