<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 22, 1999
THE COASTAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7176 74-1734212
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
Coastal Tower
Nine Greenway Plaza
Houston, Texas 77046-0995
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 877-1400
N/A
(Former name or former address, if changed since last report)
<PAGE> 2
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following exhibits are filed with reference to the
Registration Statement on Form S-3 (Registration Nos.
333-81095, 333-81095-01 and 333-81095-02) of The Coastal
Corporation:
4.21 Form of Purchase Contract Agreement between The
Coastal Corporation and The Bank of New York, as
Purchase Contract Agent.
4.21(a) Form of Income PRIDES Certificate (included as
Exhibit A to Exhibit 4.21).
4.21(b) Form of Growth PRIDES Certificate (included as
Exhibit B to Exhibit 4.21).
4.22 Form of Pledge Agreement among The Coastal
Corporation, The Bank of New York, as Purchase
Contract Agent, and The Chase Manhattan Bank, as
Collateral Agent.
4.23 Form of Seventh Supplemental Indenture to be used in
connection with the issuance of the Debentures.
4.24 Form of Debenture (included in exhibit 4.23)
4.25 Form of Remarketing Agreement among The Coastal
Corporation, The Bank of New York, as Purchase
Contract Agent, and Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, as the
Remarketing Agent.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE COASTAL CORPORATION
Date: July 22, 1999 By: /s/ AUSTIN M. O'TOOLE
-------------------------------
Name: Austin M. O'Toole
Title: Senior Vice President
and Secretary
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INDEX TO EXHIBITS
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Exhibit No. Description
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<S> <C>
4.21 Form of Purchase Contract Agreement between The Coastal
Corporation and The Bank of New York, as Purchase Contract
Agent.
4.21(a) Form of Income PRIDES Certificate (included as Exhibit A to
Exhibit 4.21).
4.21(b) Form of Growth PRIDES Certificate (included as Exhibit B to
Exhibit 4.21).
4.22 Form of Pledge Agreement among The Coastal Corporation, The
Bank of New York, as Purchase Contract Agent, and The Chase
Manhattan Bank, as Collateral Agent.
4.23 Form of Seventh Supplemental Indenture to be used in
connection with the issuance of the Debentures.
4.24 Form of Debenture (included in exhibit 4.23)
4.25 Form of Remarketing Agreement among The Coastal Corporation,
The Bank of New York, as Purchase Contract Agent, and
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as the Remarketing Agent.
</TABLE>
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EXHIBIT 4.21
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE COASTAL CORPORATION
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
--------------------------
PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF , 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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RECITALS............................................................................................1
ARTICLE I
Definitions and Other Provisions of General Applications............................................1
Section 1.1. Definitions.......................................................................1
Section 1.2. Compliance Certificates and Opinions.............................................15
Section 1.3. Form of Documents Delivered to Agent.............................................16
Section 1.4. Acts of Holders; Record Dates....................................................16
Section 1.5. Notices..........................................................................18
Section 1.6. Notice to Holders; Waiver........................................................19
Section 1.7. Effect of Headings and Table of Contents.........................................19
Section 1.8. Successors and Assigns...........................................................20
Section 1.9. Separability Clause..............................................................20
Section 1.10. Benefits of Agreement............................................................20
Section 1.11. Governing Law....................................................................20
Section 1.12. Legal Holidays...................................................................20
Section 1.13. Counterparts.....................................................................21
Section 1.14. Inspection of Agreement..........................................................21
ARTICLE II
Certificate Forms..................................................................................21
Section 2.1. Forms of Certificates Generally..................................................21
Section 2.2. Form of Agent's Certificate of Authentication....................................23
ARTICLE III
The Securities.....................................................................................23
Section 3.1. Title and Terms; Denominations...................................................23
Section 3.2. Rights and Obligations Evidenced by the Certificates.............................23
Section 3.3. Execution, Authentication, Delivery and Dating...................................24
Section 3.4. Temporary Certificates...........................................................25
Section 3.5. Registration; Registration of Transfer and Exchange..............................26
Section 3.6. Book-Entry Interests.............................................................27
Section 3.7. Notices to Holders...............................................................28
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Section 3.8. Appointment of Successor Clearing Agency.........................................29
Section 3.9. Definitive Certificates..........................................................29
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates...............................29
Section 3.11. Persons Deemed Owners............................................................31
Section 3.12. Cancellation.....................................................................31
Section 3.13 Establishment or Restablishment of Growth PRIDES.................................32
Section 3.14. Establishment or Reestablishment of Income PRIDES................................34
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event......................36
Section 3.16. No Consent to Assumption.........................................................36
ARTICLE IV
The Debentures.....................................................................................37
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice................................37
Section 4.2. Notice and Voting................................................................38
Section 4.3. Tax Event Redemption.............................................................39
ARTICLE V
The Purchase Contracts.............................................................................40
Section 5.1. Purchase of Shares of Common Stock...............................................40
Section 5.2. Contract Adjustment Payments.....................................................42
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.......................43
Section 5.4. Payment of Purchase Price........................................................45
Section 5.5. Issuance of Shares of Common Stock...............................................50
Section 5.6. Adjustment of Settlement Rate....................................................51
Section 5.7. Notice of Adjustments and Certain Other Events...................................57
Section 5.8. Termination Event; Notice........................................................58
Section 5.9. Early Settlement.................................................................59
Section 5.10. No Fractional Shares.............................................................61
Section 5.11. Charges and Taxes................................................................62
ARTICLE VI
Remedies...........................................................................................62
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock.................................62
Section 6.2. Restoration of Rights and Remedies...............................................63
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Section 6.3. Rights and Remedies Cumulative...................................................63
Section 6.4. Delay or Omission Not Waiver.....................................................63
Section 6.5. Undertaking for Costs............................................................63
Section 6.6. Waiver of Stay or Extension Laws.................................................64
ARTICLE VII
The Agent..........................................................................................64
Section 7.1. Certain Duties and Responsibilities..............................................64
Section 7.2. Notice of Default................................................................65
Section 7.3. Certain Rights of Agent..........................................................66
Section 7.4. Not Responsible for Recitals or Issuance of Securities...........................67
Section 7.5. May Hold Securities..............................................................67
Section 7.6. Money Held in Custody............................................................67
Section 7.7. Compensation and Reimbursement...................................................67
Section 7.8. Corporate Agent Required; Eligibility............................................68
Section 7.9. Resignation and Removal; Appointment of Successor................................68
Section 7.10. Acceptance of Appointment by Successor...........................................70
Section 7.11. Merger, Conversion, Consolidation or Succession to Business......................70
Section 7.12. Preservation of Information; Communications to Holders...........................71
Section 7.13. No Obligations of Agent..........................................................71
Section 7.14. Tax Compliance...................................................................72
ARTICLE VIII
Supplemental Agreements............................................................................72
Section 8.1. Supplemental Agreements Without Consent of Holders...............................72
Section 8.2. Supplemental Agreements with Consent of Holders..................................73
Section 8.3. Execution of Supplemental Agreements.............................................74
Section 8.4. Effect of Supplemental Agreements................................................75
Section 8.5. Reference to Supplemental Agreements.............................................75
ARTICLE IX
Consolidation, Merger, Sale or Conveyance..........................................................75
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.........................................75
Section 9.2. Rights and Duties of Successor Corporation.......................................76
Section 9.3. Opinion of Counsel Given to Agent................................................77
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ARTICLE X
Covenants..........................................................................................77
Section 10.1. Performance Under Purchase Contracts.............................................77
Section 10.2. Maintenance of Office or Agency..................................................77
Section 10.3. Company to Reserve Common Stock..................................................78
Section 10.4. Covenants as to Common Stock.....................................................78
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EXHIBIT A Form of Face Income PRIDES Certificate
EXHIBIT B Form of Face Growth PRIDES Certificate
EXHIBIT C Instruction From Purchase Contract Agent to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle by Separate Cash
iv
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PURCHASE CONTRACT AGREEMENT, dated as of , 1999 between The Coastal
Corporation, a Delaware corporation (the "Company"), and The Bank of New York, a
national banking association, acting as purchase contract agent for the Holders
of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Agent, as provided in this Agreement, the
valid obligations of the Company, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular; and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
<PAGE> 7
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in this Section
1.1(d).
"Act" when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1993, as amended, as is in effect on the date hereof.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
"Applicable Ownership Interest" means, with respect to an Income PRIDES
and the Treasury Securities in the Treasury Portfolio, (A) a, or %, undivided
beneficial ownership interest in a $1,000 principal or interest amount of a
principal or interest strip in a U.S. Treasury Security included in such
Treasury Portfolio which matures on or prior to 15, 2002 and (B) for each
scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a % undivided beneficial ownership interest in a $1,000
face amount of such U.S. Treasury Security which is a principal or interest
strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to 16, 2002, the aggregate principal amount of
the Debentures which are components of Income PRIDES on the Tax Event Redemption
Date or (ii)
2
<PAGE> 8
if the Tax Event Redemption occurs on or after 16, 2002, the aggregate
principal amount of the Debentures outstanding on such Tax Event Redemption
Date.
"Authorized Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are Legal Holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
purposes of the Reset Announcement Date is currently anticipated to be The Wall
Street Journal.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the owner of such Book-Entry Interest as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in New York City (in the State of New York)
are permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
3
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"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee of
that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have become
such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, $0.33 1/3 par value, of the
Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Contract Adjustment Payments" means (i) in the case of Income PRIDES,
the amount payable by the Company in respect of each Purchase Contract initially
constituting a part of an Income PRIDES, equal to o% per annum of the Stated
Amount and (ii) in the case of Growth PRIDES, the amount payable by the Company
in respect of each Purchase Contract initially constituting a part of a Growth
PRIDES, equal to % per annum of the Stated Amount, in each case computed on
the basis of a 360 day year of twelve 30 day months, plus any Deferred Contract
Adjustment Payments accrued pursuant to Section 5.2 or 5.3.
4
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"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business shall
be administered, which office at the date hereof is located at The Bank of New
York, 101 Barclay Street, Floor 12 East, New York, NY 10286, Attention:
Corporate Trust Administration.
"Coupon Rate" means the percentage rate per annum at which each
Debenture will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the % Debentures due 16, 2004, to be issued under the Indenture as of
the date hereof.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency
becomes its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
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"Failed Remarketing" has the meaning specified in Section 5.4(b).
"Global Debenture Certificate" means a certificate evidencing the
respective rights and obligations of Holders in respect of the number of
Debentures specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Depositary or a nominee
thereof.
"Growth PRIDES" means the collective rights and obligations of a Holder
of a Growth PRIDES Certificate in respect of the Treasury Securities, subject to
the Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES specified
on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Guarantee" means the guarantee agreement to be dated as of , 1999
of the Company in respect of the Common Securities and the Debentures.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Debenture or an appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Income PRIDES specified
on such certificate.
6
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"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" means, collectively, the Base Indenture and the First
Supplemental Indenture, and any other indentures supplemental thereto pursuant
to which the Debentures are to be issued.
"Indenture Trustee" means Harris Trust and Savings Bank, a national
banking association, as trustee under the Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chairman of the Board, its President or
a Vice President and by its Treasurer, an Assistant Treasurer, its Secretary or
an Assistant Secretary, and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"New York Office" shall have the meaning set forth in Section 10.2
"Officer's Certificate" means a certificate of the Company signed on
its behalf by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company or an Affiliate and
who shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to the Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES, as the case may be, evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES for
which the Stated Amount of Treasury Securities has been theretofore
deposited with the Agent in trust for the Holders of such Growth
PRIDES and (B) Income PRIDES for which the Stated Amount of the related
Debenture or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the
7
<PAGE> 13
case may be, has been theretofore deposited with the Agent in trust for
the Holders of such Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates in exchange for or in lieu of which other Certificates
have been authenticated, executed on behalf of the Holder and
delivered pursuant to this Agreement, other than any such Certificate
in respect of which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona fide
purchaser in whose hands the Income PRIDES or Growth PRIDES evidenced
by such Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have been
pledged in good faith may be regarded as Outstanding Securities if the pledgee
establishes to the satisfaction of the Agent the pledgee's right so to act with
respect to such Income PRIDES or Growth PRIDES and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November
16, commencing 16, .
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any
agency or political subdivision thereof or any other entity of whatever nature.
8
<PAGE> 14
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Debentures
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, and of the Treasury Securities, in each case constituting a
part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities, as the same may hereafter be amended in accordance with the terms
thereof.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York.
9
<PAGE> 15
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means 16, 2002.
"Purchase Contract Settlement Fund" has the meaning specified in
Section 5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Sponsor shall substitute therefor
another Primary Treasury Dealer or (ii) any other Primary Treasury Dealer
selected by the Sponsor.
"Record Date" for the distribution payable in respect of the Debentures
and Contract Adjustment Payments, if any, payable on any Payment Date means the
first day of the month in which the relevant Payment Date occurs.
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"Redemption Price" means the redemption price per Security equal to the
Redemption Amount plus any accrued and unpaid Distributions to the date of
redemption or, in the case of any redemption in connection with the final
maturity of the Debentures, an amount per Security equal to the redemption price
for $ in principal amount of Debentures plus accrued and unpaid
Distributions to the date of redemption.
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<PAGE> 16
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated as of
, 1999 by and among the Company, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Reset Agent" means a nationally recognized investment banking firm
chosen by the Sponsor to determine the Reset Rate. It is currently anticipated
that Merrill Lynch, Pierce, Fenner & Smith Incorporated will act in such
capacity.
"Reset Announcement Date" means the tenth Business Day immediately
preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be determined by
the Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the rate of
interest on the Two-Year Benchmark Treasury in effect on the third Business Day
immediately preceding the Purchase Contract Settlement Date that the Capital
Securities should bear in order for the Debentures to have an approximate market
value of % of their aggregate stated liquidation amount on the third Business
Day immediately preceding the Purchase Contract Settlement Date; provided, that
the Company may limit such Reset Spread to be no higher than basis points ( %)
and the Sponsor shall limit the Reset Rate, if applicable, to the maximum rate
permitted by applicable law.
"Reset Spread" means a spread amount to be determined by the Reset
Agent on the tenth Business Day immediately preceding the Purchase Contract
Settlement Date.
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"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on a parity in right of payment with or subordinate in right
of payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $ .
"Tax Event" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally accepted position on the date the
Debentures are issued, which amendment, change or proposed change is effective
or which interpretation or pronouncement is announced on or after the date of
the first issuance of Debentures under the Indenture, there is more than an
insubstantial risk that (i) interest payable by the Company on the Debentures
would not be deductible, in whole or in part, by the Company for United States
federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Debentures, at the option of the Company, in
whole but not in part, on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
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"Termination Event" means the occurrence of any of the following
events: (i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days, or (iii) at any time on or
prior to the Purchase Contract Settlement Date the Company shall file a petition
for relief under the Bankruptcy Code, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to
16, 2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of
(i) principal or interest strips of U.S. Treasury Securities which mature on or
prior to 15, 2002 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of U.S. Treasury Securities which
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<PAGE> 19
mature on or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the Applicable Principal Amount of the
Debentures on such date, and (b) if the Tax Event Redemption Date occurs after
16, 2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to 15, 2004 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of such U.S. Treasury Securities which mature on or prior to
such date in an aggregate amount equal to the aggregate interest payment that
would be due on the Applicable Principal Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase of the Treasury Portfolio for settlement on the Tax Event Redemption
Date.
"Treasury Security" means zero-coupon U.S. Treasury Securities (CUSIP
Number ) which are the principal strip of the U.S. Treasury Securities which
mature on 15, 2002.
"Two-Year Benchmark Treasury" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having a
maturity comparable to the remaining term to maturity of the Debentures, as
agreed upon by the Sponsor and the Reset Agent. The rate for the Two-Year
Benchmark Treasury will be the bid side rate displayed at 10:00 A.M., New York
City time, on the third Business Day immediately preceding the Purchase Contract
Settlement Date in the Telerate system (or if the Telerate system is (a) no
longer available on the third Business Day immediately preceding the Purchase
Contract Settlement Date or (b) in the opinion of the Reset Agent (after
consultation with the Company) no longer an appropriate system from which to
obtain such rate, such other nationally recognized quotation system as, in the
opinion of the Reset Agent (after consultation with the Company) is
appropriate). If such rate is not so displayed, the rate for the Two-Year
Benchmark Treasury shall be, as calculated by the Reset Agent, the yield to
maturity for the Two-Year Benchmark Treasury, expressed as a bond equivalent on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis, and computed by taking the arithmetic mean of the secondary market bid
rates, as of 10:30 A.M., New York City time, on the third Business Day
immediately preceding the Purchase Contract Settlement Date of three leading
United States government
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<PAGE> 20
securities dealers selected by the Reset Agent (after consultation with the
Company) (which may include the Reset Agent or an Affiliate thereof).
"Underwriting Agreement" means the Underwriting Agreement dated ,
1999 among the Company, and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Lehman Brothers Inc. and Banc of America Securities LLC.
"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
reasonably requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(1) a statement that each Person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, he
or she or it has made such examination or investigation as is necessary
to enable such individual to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
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<PAGE> 21
(4) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless the Company knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless the Person giving such certificate or
Opinion of Counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the
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<PAGE> 22
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and (subject to Section 7.1)
conclusive in favor of the Agent and the Company, if made in the manner provided
in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Income PRIDES or the Growth PRIDES,
as the case may be, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any action
for which a record date has previously been set pursuant to this paragraph
(whereupon the record date previously set shall automatically and with no action
by any Person be cancelled and of no effect), and nothing in this paragraph
shall be construed to render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Company,
at its own expense, shall cause notice of such record date, the pro posed action
by Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section 1.6.
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<PAGE> 23
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in Section 1.6, on or prior to the existing Expiration Date. If an
Expiration Date is not designated with respect to any record date set pursuant
to this Section, the Company shall be deemed to have initially designated the
180th day after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than
the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement to
be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Agent at The Bank of New York, 101 Barclay Street, Floor 12 East, New
York, NY 10286, Attention: Corporate Trust Administration, or at any
other address previously furnished in writing by the Agent to the
Holders and the Company; or
(2) the Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to the
Company at The Coastal Corporation, Coastal Tower, Nine Greenway Plaza,
Houston, TX 77046-0995, Attention: [Chief Financial Officer], or at any
other address previously furnished in writing to the Agent by the
Company; or
(3) the Collateral Agent by the Agent, the Company or any
Holder shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if made, given, furnished or filed
in writing and person ally delivered or mailed, first-class postage
prepaid, addressed to the Collateral Agent at , Attention:
[Corporate Trust
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<PAGE> 24
Administration], or at any other address previously furnished in
writing by the Collateral Agent to the Agent, the Company and the
Holders; or
(4) the Indenture Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at c/o Bank of Montreal Trust Company, 77 Water
Street, New York, New York 10005, Attention: Trust Officer, or at any
other address previously furnished in writing by the Indenture Trustee
to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, then, to the extent permitted by law, the
validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be bound by all
of the applicable terms and conditions hereof and of the Securities evidenced by
their Certificates by their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, provided that no interest shall accrue or be
payable by the Company or any Holder for the period from and after any such
Payment Date unless there shall be a default in the payment due on such next
succeeding Business Day, except that, if such next succeeding Business Day is in
the next succeeding calendar
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<PAGE> 26
year, such payment shall be made on the immediately preceding Business Day with
the same force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of
the Company executing such Income PRIDES Certificates, as evidenced by their
execution of the Income PRIDES Certificates.
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<PAGE> 27
The definitive Income PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Income PRIDES Certificates, consistent with the provisions of this Agreement,
as evidenced by their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase Contract
forming part of the Growth PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit B hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of
the Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing such
Growth PRIDES Certificates, consistent with the provisions of this Agreement,
as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED
IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS
CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE
REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING
AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
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Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES and Growth PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.9, 3.10, 3.13, 3.14, 5.9 or
8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the owner
ship by the Holder thereof of a beneficial interest in a Debenture or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject to the Pledge of such Debenture or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Agent as attorney-in-fact for, and on
behalf of, the Holder of each Income PRIDES shall pledge, pursuant to the Pledge
Agreement, the Debenture or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,
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forming a part of such Income PRIDES, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title, and interest of such
Holder in such Debenture or the Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase the Common
Stock of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the owner
ship by the Holder thereof of a 1/100 undivided beneficial interest in a
Treasury Security with a principal amount at maturity equal to $ , subject to
the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the Company
under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf
of, the Holder of each Growth PRIDES shall pledge, pursuant to the Pledge
Agreement, the Treasury Security to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such Treasury Security, for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase the Common
Stock of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers or its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
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<PAGE> 30
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent shall
be conclusive evidence that the Holder of such Certificate has entered into the
Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES are listed, or
as may, consistently herewith, be deter mined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office or the New York office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Agent, and
the Agent shall
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authenticate, execute on behalf of the Holder, and deliver in exchange therefor,
one or more definitive Certificates of like tenor and denominations and
evidencing a like number of Income PRIDES or Growth PRIDES, as the case may be,
as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Income PRIDES or Growth
PRIDES, as the case may be, evidenced thereby as definitive Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a Register (the
"Income PRIDES Register") in which, subject to such reasonable regulations as it
may prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
and transfers of Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or the New York Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Income
PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office or the New York
Office. Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver the Certificates which the Holder
making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Income
PRIDES or
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Growth PRIDES, as the case may be, and be entitled to the same benefits and
subject to the same obligations, under this Agreement as the Income PRIDES or
Growth PRIDES, as the case may be, evidenced by the Certificate surrendered upon
such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer
or for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.4,
3.6, 3.9 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver, any Certificate
presented or surrendered for registration of transfer or for exchange on or
after the Business Day immediately preceding the earlier of the Purchase
Contract Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate (together with any cash or other property to which the Holder is
entitled), or (ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Debentures, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the
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books and records of the Company in the name of Cede & Co., the nominee of the
Depositary, and no Beneficial Owner will receive a definitive Certificate
representing such Beneficial Owner's interest in such Global Certificate,
except as provided in Section 3.9. The Agent shall enter into an agreement with
the Depositary if so requested by the Company. Unless and until definitive,
fully registered Certificates have been issued to Beneficial Owners pursuant to
Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force
and effect;
(b) the Company shall be entitled to deal with the Clearing
Agency for all purposes of this Agreement (including the payment of Contract
Adjustment Payments, if any, and receiving approvals, votes or consents
hereunder) as the Holder of the Securities and the sole holder of the Global
Certificate(s) and shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6
conflict with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and transmit payments
of Contract Adjustment Payments, if any, to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any
Securities registered in the name of a Clearing Agency or the nominee of a
Clearing Agency, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
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Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Securities and a successor Clearing
Agency is not appointed within 90 days after such discontinuance pursuant to
Section 3.8, (ii) the Company elects to terminate the book-entry system through
the Clearing Agency with respect to the Securities, or (iii) there shall have
occurred and be continuing a default by the Company in respect of its
obligations under one or more Purchase Contracts, or one or more Debentures,
then upon surrender of the Global Certificates representing the Book-Entry
Interests with respect to the Securities by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to
be delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company shall not be liable for any delay in delivery of
such instructions and may conclusively rely on and shall be protected in relying
on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence
to their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same
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number of Income PRIDES or Growth PRIDES, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate (together with any cash or other property to which
the Holder is entitled), or (ii) if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Debentures, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Agent may require the payment by the Holder of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the reasonable fees and expenses of
the Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
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Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of receiving
interest on the Debentures or on the maturing quarterly interest strips of the
Treasury Portfolio, as applicable, receiving payments of Contract Adjustment
Payments, if any, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any interest on the Debentures or the
Contract Adjustment Payments, if any, payable in respect of the Purchase
Contracts constituting a part of the Income PRIDES or Growth PRIDES evidenced
thereby shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, the Agent or any agent of the Company
or the Agent, from giving effect to any written certification, proxy or other
authorization furnished by any Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date, upon the transfer of Debentures,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early Settlement, or upon the registration of a transfer
or exchange of a Security, or a Collateral Substitution or the re-establishment
of an Income PRIDES or a Growth PRIDES shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as
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expressly permitted by this Agreement. All cancelled Certificates held by the
Agent shall upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Establishment or Reestablishment of Growth PRIDES.
A Holder may separate the Debentures or the appropriate Applicable
Owner ship Interest of the Treasury Portfolio, as applicable, from the related
Purchase Contracts in respect of an Income PRIDES by substituting for such
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, Treasury Securities in an aggregate principal
amount of such Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as applicable (a "Collateral Substitution"), at any time from and
after the date of this Agreement and on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date in the case of the
Debentures and on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the appropriate Applicable
Ownership Interest of the Treasury Portfolio, in each case by (a) deposit ing
with the Collateral Agent Treasury Securities having an aggregate principal
amount of the Debentures comprising part of such Income PRIDES or for the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio comprising part of such
Income PRIDES, as the case may be, and (b) (i) delivering cash in an amount
equal to the excess of the Contract Adjustment Payments that would have accrued
since the last date that Contract Adjustment Payments were made to the date of
substitution on the Growth PRIDES being created by the holder, over the Contract
Adjustment Payments that have accrued over the same time period on the related
Income PRIDES, which amount the Agent shall promptly remit to the Company, and
(ii) transferring the related Income PRIDES to the Agent accompanied by a notice
to the Agent, substantially in the form of Exhibit D hereto, stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Collateral Agent and requesting that the Agent instruct the Collateral Agent to
release the Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Income PRIDES,
whereupon the Agent shall promptly give such instruction to the Collateral
Agent, substantially in the form of Exhibit C hereto. Upon receipt of the
Treasury Securities described in clause (a) above and the instruction described
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in clause (b) above, in accordance with the terms of the Pledge Agreement, the
Collateral Agent will release to the Agent, on behalf of the Holder, Debentures
or the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, having the appropriate aggregate principal amount in the case
of such Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, from the Pledge, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Debentures or the appropriate Applicable
Owner ship Interest of the Treasury Portfolio, as the case may be, to
the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Growth PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Income PRIDES.
Holders who elect to separate the Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the related Purchase Contract and to substitute Treasury Securities for
such Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as Collateral Agent in respect
of the substitution, and the Company shall not be responsible for any such fees
or expenses.
Holders may make Collateral Substitutions (i) only in integral
multiples of [40] Income PRIDES if Debentures are being substituted by Treasury
Securities, or (ii) only in integral multiples of [ ] Income PRIDES if the
appropriate Applicable Ownership Interests of the Treasury Portfolio are being
substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting a part of such Income PRIDES, and any interest on such Debenture or
the Applicable
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Ownership Interest of the Treasury Portfolio, as the case may be, shall be held
in the name of the Agent or its nominee in trust for the benefit of such Holder,
until such Income PRIDES is so transferred or the Income PRIDES Certificate is
so delivered, as the case may be, or, with respect to an Income PRIDES
Certificate, such Holder provides evidence satisfactory to the Company and the
Agent that such Income PRIDES Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, and Purchase Contract
comprising such Income PRIDES may be acquired, and may be transferred and
exchanged, only as an Income PRIDES.
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES at any
time (i) on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has not occurred,
and (ii) on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has occurred and an
Applicable Owner ship Interest in the Treasury Portfolio has become a component
of the Income PRIDES, in each case by (a) depositing with the Collateral Agent
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, having an aggregate principal amount in the case
of the Debentures, or an appropriate Applicable Ownership Interest (as defined
in clause (A) of the definition of such term) of the Treasury Portfolio, as the
case may be, equal to the aggregate principal amount of the Treasury Securities
comprising part of the Growth PRIDES and (b) transferring the related Growth
PRIDES to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the relevant
amount of Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, to the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the Treasury Securities
underlying such Growth PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, described in clause
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(a) above and the instruction described in clause (b) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will release to the
Agent, on behalf of the Holder, of the Treasury Securities having a
corresponding aggregate principal amount from the Pledge, free and clear of the
Company's security interest therein, and upon receipt thereof the Agent shall
promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company in
accordance with Section 3.3 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Growth PRIDES.
Holders of Growth PRIDES may establish or reestablish Income PRIDES in
integral multiples of [25] Growth PRIDES for [25] Income PRIDES if a Tax Event
Redemption has not occurred, and in integral multiples of Growth PRIDES for
Income PRIDES if a Tax Event Redemption has occurred.
In the event a Holder establishing or re-establishing Income PRIDES
pursuant to this Section 3.14 fails to effect a book-entry transfer of the
Growth PRIDES or fails to deliver a Growth PRIDES Certificate(s) to the Agent
after depositing Debentures or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, with the Collateral Agent, the
Treasury Securities constituting a part of such Growth PRIDES shall be held in
the name of the Agent or its nominee in trust for the benefit of such Holder,
until such Growth PRIDES is so transferred or the Growth PRIDES Certificate is
so delivered, as the case may be, or, with respect to a Growth PRIDES
Certificate, such Holder provides evidence satisfactory to the Company and the
Agent that such Growth PRIDES Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Agent and the Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged, only as a Growth PRIDES.
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Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Agent of the Debentures, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Income PRIDES and the Growth PRIDES pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, from each Holder by
written request mailed to such Holder at its address as it appears in the Income
PRIDES Register or the Growth PRIDES Register, as the case may be. Upon
book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an
Income PRIDES Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Debentures, the Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Income PRIDES or Growth PRIDES, as the case may be, to
such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions; provided, however, that, to the extent that a
Holder of Income PRIDES or Growth PRIDES would otherwise be entitled to receive
less than $1,000 principal amount at maturity of the Treasury Portfolio or the
Treasury Securities, the Agent shall dispose of such securities for cash, and
transfer the appropriate amount of such cash to such Holder in accordance with
such Holder's instructions. In the event a Holder of Income PRIDES or Growth
PRIDES fails to effect such transfer or delivery, the Debentures, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Income PRIDES or Growth PRIDES,
as the case may be, and any distributions thereon, shall be held in the name of
the Agent or its nominee in trust for the benefit of such Holder, until such
Income PRIDES or Growth PRIDES are transferred or the Income PRIDES Certificate
or Growth PRIDES Certificate is surrendered or such Holder provides satisfactory
evidence that such Income PRIDES Certificate or Growth PRIDES Certificate has
been destroyed, lost or stolen, together with any indemnity that may be required
by the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person or entity performing similar functions, its
trustee in the event that the
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Company becomes the debtor under the Bankruptcy Code or subject to other similar
state or federal law providing for reorganization or liquidation.
ARTICLE IV
The Debentures
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Debenture or on the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, which is paid
on any Payment Date shall, subject to receipt thereof by the Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, be paid to
the Person in whose name the Income PRIDES Certificate (or one or more
Predecessor Income PRIDES Certificates) of which such Debenture or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, is a part is registered at the close of business on the Record Date for
such Payment Date.
Each Income PRIDES Certificate evidencing Debentures delivered under
this Agreement upon registration of transfer of or in exchange for or in lieu of
any other Income PRIDES Certificate shall carry the rights to distributions
accrued and unpaid, and distributions to accrue, which were or will be carried
by the Debentures underlying such other Income PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement
of the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, interest on the Debentures
or on the appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, underlying such Income PRIDES otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Cash
Settlement or Early Settlement or Collateral Substitution, and such
distributions shall, subject to receipt thereof by the Agent, be payable to the
Person in whose name the Income PRIDES Certificate (or one or more Predecessor
Certificates) was registered at the close of business on the
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Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Income PRIDES with respect to which Cash Settlement
or Early Settlement of the underlying Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract Settlement Date or an
Early Settlement Date, as the case may be, or with respect to which a Collateral
Substitution has been effected, distributions on the related Debentures or on
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, that would otherwise be payable after the Purchase Contract
Settlement Date or Early Settlement Date shall not be payable hereunder to the
Holder of such Income PRIDES; provided, however, that to the extent that such
Holder continues to hold the separated Debentures that formerly comprised a part
of such Holder's Income PRIDES, such Holder shall be entitled to receive the
distributions on such separated Debentures.
The applicable Coupon Rate on the Debentures on and after the Purchase
Contract Settlement Date will be reset on the third Business Day immediately
preceding the Purchase Contract Settlement Date to the Reset Rate (such Reset
Rate to be in effect on and after the Purchase Contract Settlement Date). On the
Reset Announcement Date the Reset Spread and the Two-Year Benchmark Treasury to
be used to determine the Reset Rate will be announced by the Company. On the
Business Day immediately following the Reset Announcement Date, the Debentures
Holders will be notified of such Reset Spread and Two-Year Benchmark Treasury by
the Company. Such notice shall be sufficiently given to Holders of Debentures if
published in an Authorized Newspaper in The City of New York.
Not later than 7 calendar days nor more than 15 calendar days prior to
the Reset Announcement Date, the Company will notify the DTC or its nominee (or
any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency Participants holding
Income PRIDES or Growth PRIDES, of such Reset Announcement Date and the
procedures to be followed by such Holders of Income PRIDES who intend to settle
their obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Debentures
pledged with the Collateral Agent but only to the extent instructed by the
Holders as
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described below. Upon receipt of notice of any meeting at which holders of
Debentures are entitled to vote or upon any solicitation of consents, waivers or
proxies of holders of Debentures, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Income PRIDES a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of Debentures entitled to vote) shall be entitled to instruct the Agent as to
the exercise of the voting rights pertaining to the Debentures underlying their
Income PRIDES and (c) stating the manner in which such instructions may be
given. Upon the written request of the Holders of Income PRIDES on such record
date, the Agent shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of Debentures as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder of an Income
PRIDES, the Agent shall abstain from voting the Debentures underlying such
Income PRIDES. The Company hereby agrees, if applicable, to solicit Holders of
Income PRIDES to timely instruct the Agent in order to enable the Agent to vote
such Debentures.
Section 4.3. Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES. The
Treasury Portfolio will be substituted for the Pledged Debentures, and will be
held by the Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of an Income PRIDES to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Income PRIDES. Following the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the Holders of
Income PRIDES and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holder of
Income PRIDES and the Collateral Agent had in respect of the Debentures, as the
case may be, subject to the Pledge thereof as provided in Sections 2, 3, 4, 5
and 6 of the Pledge Agreement, and any reference herein or in the Certificates
to the Debenture shall be deemed to be a reference to such Treasury Portfolio
and any reference herein or in the Certificates to interest on the Debentures
shall be deemed to be a reference to corresponding distributions on
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the Treasury Portfolio. The Company may cause to be made in any Income PRIDES
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of the
Treasury Portfolio for Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred
in accordance with Section 5.9 hereof, obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the Settlement Rate
unless, on or prior to the Purchase Contract Settlement Date, there shall have
occurred a Termination Event with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is equal to or greater than $ (the "Threshold
Appreciation Price"), o shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $ , the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if
the Applicable Market Value is less than or equal to $ , shares of Common
Stock per Purchase Contract, in each case subject to adjustment as provided in
Section 5.6 (and in each case rounded upward or down ward to the nearest
1/10,000th of a share). As provided in Section 5.10, no fractional shares of
Common Stock will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Settlement, the third Trading Day immediately
preceding the relevant Early Settlement Date. The "Closing Price" of the Common
Stock on any date of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of the Common Stock on
The New York Stock Exchange, Inc. (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the
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NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United States national or
regional securities exchange, as reported by the Nasdaq National Market or, if
the Common Stock is not so reported, the last quoted bid price for the Common
Stock in the over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company. A "Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the Debentures, the Treasury Portfolio or
the Treasury Securities pursuant to the Pledge Agreement; provided that upon a
Termination Event, the rights of the Holder of such Security under the Purchase
Contract may be enforced without regard to any other rights or obligations. Each
Holder of an Income PRIDES or a Growth PRIDES, by its acceptance thereof,
further covenants and agrees, that, to the extent and in the manner provided in
Section 5.4 and the Pledge Agreement, but subject to the terms thereof, payments
in respect of the principal amount of the Debentures or the Proceeds of the
Treasury Securities or the Treasury Portfolio on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this
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Agreement, the Purchase Contracts underlying the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments, if any, payable in respect of each
Purchase Contract to the Person in whose name a Certificate (or one or more
Predecessor Certificates) is registered at the close of business on the Record
Date next preceding such Payment Date. The Contract Adjustment Payments, if any,
will be payable at the New York Office maintained for that purpose or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Income PRIDES Register or
the Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments), if any, shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the rights to Contract Adjustment Payments, if any,
accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which
were carried by the Purchase Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, or in respect of which Cash Settlement of the underlying
Purchase Contract is effected on the Business Day immediately preceding the
Purchase Contract Settlement Date, or with respect to which a Collateral
Substitution or an establishment or re-establishment or Income PRIDES pursuant
to Section 3.14 is effected, in each case on a date that is after any Record
Date and on or prior to the next succeeding Payment Date, Contract Adjustment
Payments on the Purchase Contracts underlying such Securities otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement, Early Settlement, Collateral Substitution or establishment or
re-establishment of Income PRIDES, and such Contract Adjustment Payments shall
be paid to the Person in whose name the
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Certificate evidencing such Security (or one or more Predecessor Certificates)
is registered at the close of business on such Record Date. Except as otherwise
expressly provided in the immediately preceding sentence, in the case of any
Security with respect to which Cash Settlement or Early Settlement of the
underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement Date, as
the case may be, or with respect to which a Collateral Substitution or an
establishment or re-establishment of Income PRIDES has been effected, Contract
Adjustment Payments, if any, that would otherwise be payable after the Purchase
Contract Settlement Date or Early Settlement Date with respect to such Purchase
Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments,
if any, will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) at least ten
Business Days prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Contract Adjustment Payments, if
any, to the NYSE or other applicable self-regulatory organization or to Holders
of the Securities, but in any event not less than one Business Day prior to such
Record Date. Any Contract Adjustment Payments, if any, so deferred shall, to the
extent permitted by law, bear additional Contract Adjustment Payments thereon at
the rate of % per annum (computed on the basis of 360 day year of twelve 30
day months), compounding on each succeed ing Payment Date, until paid in full
(such deferred installments of Contract Adjustment Payments, if any, together
with the additional Contract Adjustment Payments accrued thereon, being referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date and no such deferral period may end other
than on a Payment Date. If the Purchase Contracts are terminated upon the
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occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments, if any, and Deferred Contract Adjustment Payments will
terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date in lieu of a cash payment a number of shares of Common Stock (in
addition to a number of shares of Common Stock equal to the Settlement Rate)
equal to (x) the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or
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repurchases or redemptions of capital stock solely from the issuance or exchange
of capital stock or (v) redemptions or repurchases of any rights outstanding
under a shareholder rights plan or the declaration thereunder of a dividend of
rights in the future).
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder
settles the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section
5.9, each Holder of an Income PRIDES must notify the Agent by use of a
notice in substantially the form of Exhibit E hereto of its intention
to pay in cash ("Cash Settlement") the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract. Such
notice shall be made on or prior to 5:00 p.m., New York City time, on
the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent
of the receipt of such a notice from a Holder intending to make a Cash
Settlement.
(ii) A Holder of an Income PRIDES who has so notified the
Agent of its intention to make a Cash Settlement is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York
City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of the
Company. Any cash received by the Collateral Agent will be invested
promptly by the Collateral Agent in Permitted Investments and paid to
the Company on the Purchase Contract Settlement Date in settlement of
the Purchase Contract in accordance with the terms of this Agreement
and the Pledge Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received
for payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the
Agent of its intention to make a Cash Settlement in accordance with
paragraph (a)(i) above, such failure shall constitute an event of
default and the Holder shall be deemed to have consented to the
disposition of the pledged Debentures pursuant to the remarketing as
described in paragraph (b) below. If a Holder of an Income PRIDES does
notify the Agent as provided in paragraph (a)(i)
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above of its intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph (a)(ii) above, such failure
shall also constitute a default; however, the Debentures of such a
Holder will not be remarketed but instead the Collateral Agent, for the
benefit of the Company, will exercise its rights as a secured party
with respect to such Debentures, including but not limited to those
rights specified in paragraph (c) below.
(b) In order to dispose of the Debentures of Income PRIDES
Holders who have not notified the Agent of their intention to effect a
Cash Settlement as provided in paragraph (a)(i) above, the Company
shall engage a nationally recognized investment bank (the "Remarketing
Agent") pursuant to the Remarketing Agreement to sell such Debentures.
In order to facilitate the remarketing, the Agent shall notify, by
10:00 a.m., New York City time, on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date, the Remarketing Agent
of the aggregate principal amount of Debentures to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for remarketing such Debentures to the
Remarketing Agent. Upon receipt of such notice from the Agent and such
Debentures from the Collateral Agent, the Remarketing Agent will, on
the third Business Day immediately preceding the Purchase Contract
Settlement Date, use its reasonable efforts to remarket such Debentures
on such date at a price of approximately [ ]% (but not less than 100%)
of the aggregate stated liquidation amount of such aggregate principal
amount of Debentures, plus accrued and unpaid interest (including
deferred interest), if any, thereon; provided that the Company may
limit the Reset Rate to be no higher than the rate on the Two-Year
Benchmark Treasury plus [ basis points ( %)] and provided further that
the Reset Rate shall in no event exceed (and the Company shall limit
the Reset Rate so that it does not exceed) the maximum rate permitted
by law. After deducting as the remarketing fee ("Remarketing Fee") an
amount not exceeding basis points ( %)] of the aggregate principal
amount of the remarketed Debentures from any amount of such proceeds in
excess of the aggregate principal amount of the remarketed Debentures
plus accrued and unpaid interest (including deferred interest), if any,
then the Remarketing Agent will remit the entire amount of the proceeds
from such remarketing to the Collateral Agent. Such portion of the
proceeds, equal to the aggregate principal amount of Debentures will
automatically be applied by the Collateral Agent, in accordance with
the Pledge Agreement to satisfy in full such Income PRIDES holders'
obligations to pay the Purchase Price for the Common Stock under the
related
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Purchase Contracts on the Purchase Contract Settlement Date. Any
proceeds in excess of those required to pay the Purchase Price and the
Remarketing Fee will be remitted to the Agent for payment to the
Holders of the related Income PRIDES. Income PRIDES Holders whose
Debentures are so remarketed will not otherwise be responsible for the
payment of any Remarketing Fee in connection therewith. If, in spite of
using its reasonable efforts, the Remarketing Agent cannot remarket the
related Debentures (other than to the Company) of such Holders of
Income PRIDES at a price not less than 100% of the aggregate principal
amount of Debentures plus accrued and unpaid interest (including
deferred interest), if any, the remarketing will be deemed to have
failed (a "Failed Remarketing") and in accordance with the terms of the
Pledge Agreement the Collateral Agent for the benefit of the Company
will exercise its rights as a secured party with respect to such
Debentures, including those actions specified in paragraph (c) below;
provided, that if upon a Failed Remarketing the Collateral Agent
exercises such rights for the benefit of the Company with respect to
such Debentures, any accrued and unpaid interest (including deferred
interest) on such Debentures will become payable and be paid in cash by
the Company to the Agent for payment to the Holder of the Income PRIDES
to which such Debentures relates. Such payment will be made by the
Company on or prior to 11 a.m. New York City time on the Purchase
Contract Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately available
funds payable to or upon the order of the Agent. The Company will cause
a notice of such Failed Remarketing to be published on the second
Business Day immediately preceding the Purchase Contract Settlement
Date in a daily newspaper in the English language of general
circulation in The City of New York, which is expected to be The Wall
Street Journal.
(c) With respect to any Debentures beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as
required in (a)(ii) above, or with respect to Debentures which are
subject to a Failed Remarketing, the Collateral Agent for the benefit
of the Company reserves all of its rights as a secured party with
respect thereto and, subject to applicable law and paragraph (h) below,
may, among other things, (i) retain the Debentures in full
satisfaction of the Holders obligations under the Purchase Contracts or
(ii) sell the Debentures in one or more public or private sales.
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(d) (i) Unless a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) settles the underlying Purchase
Contract through the early delivery of cash to the Purchase
Contract Agent in the manner described in Section 5.9, each
Holder of an Income PRIDES (if a Tax Event Redemption has
occurred) must notify the Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to
pay in cash the Purchase Price for the shares of Common Stock
to be purchased pursuant to a Purchase Contract on or prior to
5:00 p.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date.
The Agent shall promptly notify the Collateral Agent of the
receipt of such a notice from a Holder intending to make such
a Cash Settlement.
(ii) A Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) who has so notified the Agent of its
intention to make a Cash Settlement in accordance with
paragraph (d)(i) above is required to pay the Purchase Price
to the Collateral Agent prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase
Contract Settlement Date in lawful money of the United States
by certified or cashiers' check or wire transfer, in each case
in immediately available funds payable to or upon the order of
the Company. Any cash received by the Collateral Agent will be
invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in
accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in such
Permitted Investments will be distributed to the Agent when
received for payment to the Holder.
(iii) If a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) fails to notify the Agent of its
intention to make a Cash Settlement in accordance with
paragraph (d)(i) above, or if a Holder of an Income PRIDES (if
a Tax Event Redemption has occurred) does notify the Agent as
provided in paragraph (d)(i) above its intention to pay the
Purchase Price in cash, but fails to make such payment as
required by paragraph (d)(ii) above, then upon the maturity
of the appropriate Applicable Ownership Interest of the
Treasury Portfolio held by the Collateral Agent on the
Business Day
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immediately prior to the Purchase Contract Settlement Date,
the appropriate Applicable Ownership Interest of the Treasury
Portfolio received by the Collateral Agent will be invested
promptly in overnight Permitted Investments. On the Purchase
Contract Settlement Date an amount equal to the Purchase Price
will be remitted to the Company as payment thereof without
receiving any instructions from the Holder. In the event the
sum of the proceeds from the related appropriate Applicable
Ownership Interest of the Treasury Portfolio and the
investment earnings earned from such investments is in excess
of the aggregate Purchase Price of the Purchase Contracts
being settled thereby, the Collateral Agent will distribute
such excess to the Agent for the benefit of the Holder of the
related Income PRIDES when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the New York Office maintained for
that purpose or, at the option of the Holder, by check mailed to the
address of the Person entitled thereto at such address as it appears on
the Register.
(f) Unless a Holder settles the underlying Purchase Contract
through the early delivery of cash to the Collateral Agent in the
manner described herein, the Company shall not be obligated to issue
any shares of Common Stock in respect of a Purchase Contract or deliver
any certificate therefor to the Holder unless it shall have received
payment in full of the Purchase Price for the shares of Common Stock to
be purchased thereunder in the manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge
Agreement cause the Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, or
the Pledged Treasury Securities underlying the relevant Security to be
released from the Pledge by the Collateral Agent free and clear of any
security interest of the Company and transferred to the Agent for
delivery to the Holder thereof or its designee as soon as practicable
and (ii) subject to the receipt thereof from the Collateral Agent, the
Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof,
transfer such Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, or such
Treasury Securities (or, if no such instructions are given to the Agent
by the Holder, the Agent shall
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hold such Debentures or the Treasury Portfolio, as the case may be, or
such Treasury Securities, and any distributions thereon, in the name of
the Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price
are non-recourse obligations and are payable solely out of any Cash
Settlement or the proceeds of any Collateral pledged to secure the
obligations of the Holders and in no event will Holders be liable for
any deficiency between the proceeds of Collateral disposition and the
Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred,
on the Purchase Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates
representing newly issued shares of Common Stock registered in the name of the
Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions for which
both a record date and payment date for such dividend or distribution has
occurred on or after the Purchase Contract Settlement Date, being hereinafter
referred to as the "Purchase Contract Settlement Fund") to which the Holders are
entitled hereunder. Subject to the foregoing, upon surrender of a Certificate to
the Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all Securities then held by such Holder) together with cash
in lieu of fractional shares as provided in Section 5.10 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason
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of such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available on an
equivalent basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities) entitling them, for a period expiring
within 45 days after the record date for the determination of stockholders
entitled to receive such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights, options or
warrants (other than pursuant to a dividend reinvestment plan or share purchase
plan), the Settlement Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by dividing
such Settlement Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination plus the number of shares of Common Stock which the
aggregate offering price of
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the total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the denominator shall
be the number of shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common Stock
so offered for subscription or purchase, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (2), the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include any shares issuable in respect of
any scrip certificates issued in lieu of fractions of shares of Common Stock.
The Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day following the
day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of Common
Stock shall each be combined into a smaller number of shares of Common Stock,
the Settlement Rate in effect at the opening of business on the day following
the day upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its indebtedness,
shares of capital stock, securities, cash or other property (but excluding any
rights or warrants referred to in paragraph (2) of this Section, any dividend or
distribution paid exclusively in cash and any dividend or distribution referred
to in paragraph (1) of this Section), the Settlement Rate shall be increased so
that the same shall equal the rate determined by dividing the Settlement Rate in
effect immediately prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a Board Resolution filed with the Agent) on
such date of the portion of the evidences of indebtedness, shares of capital
stock, securities, cash or other property so distributed applicable to one share
of Common
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Stock and the denominator shall be such Current Market Price per share of the
Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall not be
applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i) regular
quarterly cash distributions, (ii) any cash that is distributed in a
Reorganization Event to which Section 5.6(b) applies or (iii) cash that is
distributed as part of a distribution referred to in paragraph (4) of this
Section) in an aggregate amount that, combined together with (II) the aggregate
amount of any other distributions to all holders of its Common Stock (other
than regular quarterly cash distributions) made exclusively in cash within the
12 months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value, as of the expiration of the applicable tender or exchange offer referred
to below (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution), of consideration payable in
respect of any tender or exchange offer (other than consideration payable in
respect of any odd-lot tender offer) by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of the distribution described in clause (I) above
and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds 15% of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for determination
of the stockholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and (ii)
the denominator of which shall be equal to the Current Market Price per share of
the Common Stock on such date for determination.
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(6) In case (I) a tender or exchange offer made by the Company
or any subsidiary of the Company for all or any portion of the Common Stock
shall expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution) that combined together with (II) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer) by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions (other than regular quarterly cash distributions) to
all holders of the Company's Common Stock made exclusively in cash within the 12
months preceding the expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business as of the Expiration Time by a fraction (i) the
numerator of which shall be equal to (A) the product of (I) the Current Market
Price per share of the Common Stock as of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any tendered shares) as
of the Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the transactions described in clauses (I), (II) and (III) above
(assuming in the case of clause (I) the acceptance, up to any maximum specified
in the terms of the tender or exchange offer, of Purchased Shares), and (ii) the
denominator of which shall be equal to the product of (A) the Current Market
Price per share of the Common Stock as of the Expiration Time and (B) the number
of shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the
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number of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any reclassification
upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Stock to all
holders of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of stockholders entitled
to receive such distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the effective
date of such reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which such
subdivision, split or combination becomes effective" within the meaning of
paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 30 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex date" with respect to the issuance or distribution requiring
such computation. For purposes of this paragraph, the term "ex date", when used
with respect to any issuance or distribution, shall mean the first date on which
the Common Stock trades regular way on such exchange or in such market without
the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be
calculated to the nearest 1/10,000th of a share of Common Stock (or if there is
not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant
to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable
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Market Value solely to determine which of clauses (a), (b) or (c) of the
definition of Settlement Rate in Section 5.1 will apply on the Purchase Contract
Settlement Date. Such adjustment shall be made by multiplying the Applicable
Market Value by a fraction of which the numerator shall be the Settlement Rate
immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of this Section 5.6(a) and the denominator shall be the
Settlement Rate immediately before such adjustment; provided, however, that if
such adjustment to the Settlement Rate is required to be made pursuant to the
occurrence of any of the events contemplated by paragraph (1), (2), (3), (4),
(5), (7) or (10) of this Section 5.6(a) during the period taken into
consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
In the event of (i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"), the Settlement Rate will be adjusted
to provide that each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part thereof
(or upon any Early Settlement), the kind and amount of securities, cash and
other property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement Date) by a Holder
of the number of shares of Common Stock issuable on account of each Purchase
Contract if the Purchase Contract Settlement Date had occurred immediately prior
to such Reorganization Event assuming such Holder of Common
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Stock is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "Constituent Person"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise its rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the kind
or amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by of the non-electing
shares). In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires or leases the
assets of the Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Agent an agreement supplemental hereto
providing that the Holders of each Out standing Security shall have the rights
provided by this Section 5.6. Such supple mental agreement shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental agreement, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent an Officer's
Certificate setting forth the Settlement Rate, the method of
calculation thereof in reason able detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
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(ii) within 10 Business Days following the occurrence of an
event that requires an adjustment to the Settlement Rate pursuant to
Section 5.6 (or if the Company is not aware of such occurrence, as soon
as practicable after becoming so aware), provide a written notice to
the Holders of the Securities of the occurrence of such event and a
statement in reasonable detail setting forth the method by which the
adjustment to the Settlement Rate was deter mined and setting forth the
adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility
to any Holder of Securities to determine whether any facts exist which may
require any adjustment of the Settlement Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed in making the same. The Agent shall not be accountable with
respect to the validity or value (or the kind or amount) of any shares of Common
Stock, or of any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract; and the Agent makes no
representation with respect thereto. The Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders to purchase
Common Stock, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, forming a part of such Securities in the case of Income PRIDES, or
Treasury Securities in the case of Growth PRIDES, in accordance with the
provisions of Section 4.3 of the Pledge Agreement; provided, however, that, to
the extent that a Holder of Income PRIDES or Growth PRIDES would otherwise be
entitled to receive less than $1,000 principal amount at maturity of the
Treasury Portfolio or the Treasury Securities, the Agent shall dispose of such
securities for cash, and transfer the appropriate amount of such cash to such
Holder
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in accordance with such Holder's instructions. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") in the case of Income
PRIDES (unless a Tax Event Redemption has occurred) on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and in
the case of Growth PRIDES on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as provided
herein; provided however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, Purchase
Contracts underlying Income PRIDES may be settled early on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
but only in an aggregate amount of Income PRIDES or in an integral multiple
thereof. In order to exercise the right to effect Early Settlement with respect
to any Purchase Contracts, the Holder of the Certificate evidencing Securities
shall deliver such Certificate to the Agent at the Corporate Trust Office or the
New York Office duly endorsed for transfer to the Company or in blank with the
form of Election to Settle Early on the reverse thereof duly completed and
accompanied by payment (payable to the Company) in immediately available funds
in an amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
Payments, if any, payable on such Payment Date with respect to such Purchase
Contracts; provided that no payment shall be required pursuant to clause (ii) of
this sentence if the Company shall have elected to defer the Contract Adjustment
Payments which would otherwise be payable on such Payment Date. Except as
provided in the immediately preceding sentence and subject to the next to last
paragraph of Section 5.2, no payment or adjustment shall be made upon Early
Settlement of any Purchase Contract on account of any Contract Adjustment
Payments accrued on such Purchase Contract or on account of any dividends on the
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Common Stock issued upon such Early Settlement or on account of any Deferred
Contract Adjustment Payments. If the foregoing requirements are first satisfied
with respect to Purchase Contracts underlying any Securities at or prior to 5:00
p.m., New York City time, on a Business Day, such day shall be the "Early
Settlement Date" with respect to such Securities and if such requirements are
first satisfied after 5:00 p.m., New York City time, on a Business Day or on a
day that is not a Business Day, the "Early Settlement Date" with respect to such
Securities shall be the next succeed ing Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities and payment of any transfer or similar taxes payable by such
Holder in connection with the issuance of the related Common Stock to any person
other than such Holder, the Company shall issue, and the Holder shall be
entitled to receive, shares of newly issued Common Stock on account of each
Purchase Contract as to which Early Settlement is effected (the "Early
Settlement Rate"); provided, however, that upon the Early Settlement of the
Purchase Contracts, the Holder of such related Securities will forfeit the right
to receive any Deferred Contract Adjustment Payments and future Contract
Adjustment Payments, if any, except to the extent that the Early Settlement Date
is after the close of business on a Record Date and prior to the opening of
business on the corresponding Payment Date. The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted. As promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 5.9, the Company
shall issue and shall deliver to the Agent at the Corporate Trust Office a
certificate or certificates for the full number of shares of Common Stock
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, in the case of Income PRIDES, or the related Treasury
Securities, in the case of Growth PRIDES, to be released from the Pledge by the
Collateral Agent and transferred, in each case to the Agent for delivery to the
Holder thereof or its designee.
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(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Debentures, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Debentures, Treasury Portfolio or Treasury Securities, as the case may be,
forming a part of such Securities, and (ii) deliver to the Holder a certificate
or certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
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Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts and in payment of any Deferred Contract Adjustment
Payments; provided, however, that the Company shall not be required to pay any
such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Security or any issuance of a share
of Common Stock in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid
or that no such tax is due.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
The Holder of any Income PRIDES or Growth PRIDES shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, and to the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive payment of
each installment of the Contract Adjustment Payments, if any, with respect to
the Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock pursuant to such
Purchase Contract and, in each such case, to institute suit for the enforcement
of any such payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
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Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of such Holder
shall continue as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon
a default shall impair any such right or remedy or constitute a waiver of any
such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES
or Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Agreement, or in any
suit against the Agent for any action taken, suffered or omitted by it as Agent,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable
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attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
provided that the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of interest on any Debentures or Contract Adjustment
Payments, if any, on any Purchase Contract on or after the respective Payment
Date therefor in respect of any Security held by such Holder, or for enforcement
of the right to purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set forth in
this Agreement and the Pledge Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Agent; and
(2) The Agent may, with respect to the Securities,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Agent and conforming to the requirements of
this Agreement, but in the case of any
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certificates or opinions which by any provision hereof are specifically
required to be furnished to the Agent, the Agent shall be under a duty
to examine the same to determine whether or not they conform to the
requirements of this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Agent from liability for its own negligent action, its own negligent failure to
act, or its own wilful misconduct or bad faith, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers.
(c) Whether or not therein expressly so provided, every provision of
this Agreement relating to the conduct or affecting the liability of or
affording protection to the Agent shall be subject to the provisions of this
Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement
in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
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Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(a) the Agent may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate
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and the Agent shall not be responsible for any misconduct or negligence on the
part of any agent or attorney or an Affiliate appointed with due care by it
hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated
from the other funds except to the extent required by law or provided herein.
The Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise expressly provided herein or as
otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such compensation
for all services rendered by it hereunder as the parties shall agree
from time to time;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Agent in accordance
with any provision of
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this Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence,
willful misconduct or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for, and
to hold it harmless against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration
of its duties hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a subsidiary of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having
an office in the Borough of Manhattan, The City of New York, if there be such a
corporation in the Borough of Manhattan, The City of New York, qualified and
eligible under this Article and willing to act on reasonable terms. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Agent shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
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(b) The Agent may resign at any time by giving written notice thereof
to the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall
not have been delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA,
as if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under Section 7.8 and
shall fail to resign after written request therefor by the Company or
by any such Holder, or
(3) the Agent shall become incapable of acting or shall be ad
judged a bankrupt or insolvent or a receiver of the Agent or of its
property shall be appointed or any public officer shall take charge or
control of the Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Agent for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Agent and
shall comply with the applicable requirements of Section 7.10. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by
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Section 7.10, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Agent.
(f) The Company shall give, or shall cause such successor Agent to
give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders as their names and addresses
appear in the applicable Register. Each notice shall include the name of the
successor Agent and the address of its Corporate Trust Office and New York
Office, if any.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every
such successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirm ing
to such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time
of such acceptance such successor Agent shall be qualified and eligible under
this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Agent shall be a party, or any
corporation
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succeeding to all or substantially all the corporate trust business of the
Agent, shall be the successor of the Agent hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Certificates shall have been authenticated and
executed on behalf of the Holders, but not delivered, by the Agent then in
office, any successor by merger, conversion or consolidation to such Agent may
adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply
in writing to the Agent, and furnish to the Agent reasonable proof that each
such applicant has owned a Security for a period of at least six months
preceding the date of such application, and such application states that the
applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Agent shall mail to all the Holders copies of the form of
proxy or other communication which is specified in such request, with reasonable
promptness after a tender to the Agent of the materials to be mailed and of
payment, or provision for the payment, of the reasonable expenses of such
mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article V hereof.
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Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will
comply with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any
time and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Certificates; or
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(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.6(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement, provided such action shall not
adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts or the provisions of this Agreement or the rights of the
Holders in respect of the Securities (other than the Debentures, which may be
modified only in accordance with the applicable provisions of the Indenture;
provided, however, that, except as contemplated herein, no such supplemental
agreement shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under any Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of
Holders of Income PRIDES to substitute the Treasury Securities for the
Pledged Debentures or the rights of holders of Growth PRIDES to
substitute Debentures for the Pledged Treasury Securities) or otherwise
adversely affect the Holder's rights in or to such Collateral or
adversely alter the rights in or to such Collateral;
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(3) reduce any Contract Adjustment Payments, if any, or any
Deferred Contract Adjustment Payment, or change any place where, or the
coin or currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract, any Contract Adjustment Payment, if any, or any
Deferred Contract Adjustment Payment, if any;
(5) reduce the number of shares of Common Stock (or the amount
of any other property) to be purchased pursuant to any Purchase
Contract, increase the price to purchase shares of Common Stock (or any
other property) upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect the
Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected class
of Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Agent shall be entitled to
receive and (subject to Section 7.1) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
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Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement and the Securities shall be modified in accordance therewith, and
such supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder shall
be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Agent in exchange for
Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any
other Person or sell, assign, transfer, lease or convey all or substantially all
of its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement, the Indenture, the Remarketing Agreement and
the Pledge Agreement by one or more supplemental agreements in form reasonably
satisfactory to the Agent and the Collateral Agent, executed and delivered to
the Agent and the Collateral Agent by such corporation, and (ii) the Company or
such successor corporation, as the case may be, shall not,
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immediately after such merger or consolidation, or such sale, assignment,
transfer, lease or conveyance, be in default of its payment obligations under
this Agreement or the Debentures, or in default of its obligations to deliver
Common Stock (or other property) on the Purchase Contract Settlement Date or any
Early Settlement Date, or in material default in the performance of any other
covenant hereunder or under the Debentures, the Indenture, the Remarketing
Agreement, the Purchase Contracts or the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company, and its predecessor shall, except in the case of a lease, be
released from its obligations under this Agreement. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of The Coastal Corporation any or all of the Certificates evidencing
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Agent; and, upon the order of such successor
corporation, instead of the Company, and subject to all the terms, conditions
and limitations in this Agreement prescribed, the Agent shall authenticate and
execute on behalf of the Holders and deliver any Certificates which previously
shall have been signed and delivered by the officers of the Company to the Agent
for authentication and execution, and any Certificate evidencing Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Agent for that purpose. All the Certificates so issued shall in
all respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance, such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
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Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent
hereunder to the consummation of any such consolidation, merger, sale,
assignment, transfer, lease or conveyance have been met.
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain or cause to be maintained in the Borough of
Manhattan, The City of New York an office or agency (a "New York Office") and in
where Certificates may be presented or surrendered for payment and for
acquisition of shares of Common Stock (or other property) upon settlement of the
Purchase Contracts on the Purchase Contract Settlement Date or Early Settlement
and for transfer of Collateral upon occurrence of a Termination Event, where
Certificates may be surrendered for registration of transfer or exchange, for a
Collateral Substitution or re-establishment of an Income PRIDES and where
notices and demands to or upon the Company in respect of the Securities and this
Agreement may be served. The Company will give prompt written notice to the
Agent of the location, and any change in the location, of such office or agency.
If at any time the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Agent as its agent
to receive all such presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Agent of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Borough of Manhattan, the City of New
York and , as the places of payment for the Securities, and hereby appoints
the Agent, acting through its Corporate Trust Office in The Bank of New York,
101 Barclay Street, Floor 12 East, New York, NY 10286 and through its office
located at c/o , as the registrar, paying agent and transfer agent for the
Income PRIDES and the Growth PRIDES and for the other purposes contemplated by
this Section 10.2.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable. The Company shall
comply with all applicable securities laws regulating the offer, issuance and
delivery of shares of Common Stock upon settlement of Purchase Contracts and
will endeavor to list such shares on each national securities exchange or
automated quotation system on which the Common Stock is then listed.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
THE COASTAL CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
The Bank of New York
as Purchase Contract Agent
By:
------------------------------------
Name:
Title:
<PAGE> 85
EXHIBIT A
(Form of Face of Income PRIDES Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ CUSIP No.
Number of Income PRIDES _______
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of $
principal amount of % Debentures due , 16, 2004 (the "Debenture"),
subject to the Pledge of such Debenture by such Holder pursuant to the Pledge
Agreement or (b) upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement
<PAGE> 86
Date, the appropriate Applicable Ownership Interest of the Treasury Portfolio,
subject to the Pledge of such Applicable Ownership Interest of the Treasury
Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Holder under one Purchase Contract with The Coastal
Corporation, a Dela ware corporation (the "Company," which term, as used herein,
includes its successors pursuant to the Purchase Contract Agreement). All
capitalized terms used herein which are defined in the Purchase Contract
Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
constituting part of each Income PRIDES evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising a portion of such Income
PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, or cash
distributions on any Pledged Debentures (as defined in the Pledge Agreement) or
the appropriate Applicable Ownership Interest (as specified in clause (B) of the
definition of such term) of the Treasury Portfolio, as the case may be,
constituting part of the Income PRIDES received by the Collateral Agent shall be
paid by the Collateral Agent by wire transfer in same day funds (i) in the case
of (A) cash distributions with respect to Pledged Debentures or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and (B) any payments
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such terms) of the Treasury
Portfolio, as the case may be, with respect to any Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
that have been released from the Pledge pursuant to the Pledge Agreement, to
the Agent to the account designated by the Agent, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Collateral
Agent (provided that in the event such payment is received by the Collateral
Agent on a day that is not a Business Day or after 12:30 p.m., New York City
time, on a Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day) and (ii) in the
case of payments of the Stated Amount of any Pledged Debentures or the
appropriate Applicable Owner ship Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio that has not been released
from the Pledge pursuant to the Pledge
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<PAGE> 87
Agreement, as the case may be, to the Company on the Purchase Contract
Settlement Date (as defined herein) in accordance with the terms of the Pledge
Agreement, in full satisfaction of the respective obligations of the Holders of
the Income PRIDES of which such Pledged Debentures or the Treasury Portfolio, as
the case may be, are a part under the Purchase Contracts forming a part of such
Income PRIDES. Interest on any Debentures or Distributions on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, forming part of an
Income PRIDES evidenced hereby which are payable quarterly in arrears on
February 16, May 16, August 16 and November 16 each year, commencing 16, (a
"Payment Date"), shall, subject to receipt thereof by the Agent from the
Collateral Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on 16, 2002
(the "Purchase Contract Settlement Date"), at a price equal to $25 (the "Stated
Amount"), a number of shares of Common Stock, $0.33 1/3 par value per share
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Income PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of payment received in respect
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of the Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
pledged to secure the obligations under such Purchase Contract of the Holder of
the Income PRIDES of which such Purchase Contract is a part.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of an Income PRIDES evidenced hereby an amount (the
"Contract Adjustment Payments") equal to % per annum of the Stated Amount,
computed on the basis of a 360-day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if
A-3
<PAGE> 88
any, shall be payable to the Person in whose name this Income PRIDES Certificate
(or a Predecessor Income PRIDES Certificate) is registered at the close of
business on the Record Date for such Payment Date.
Interest on the Debentures or Distributions on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and Contract
Adjustment Payments, if any, will be payable at the Corporate Trust Office of
the Agent and at the New York Office or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears on
the Income PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Income PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
A-4
<PAGE> 89
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
THE COASTAL CORPORATION
By:
------------------------------------
Name:
Title:
By:
------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK not individually but
solely as attorney-in-fact of such Holder
By:
------------------------------------
Name:
Title:
Dated: , 1999
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
------------------------------------
Authorized Signatory
A-5
<PAGE> 90
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of , 1999 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Income PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Purchase Price, a number of
shares of Common Stock of the Company equal to the Settlement Rate, unless, on
or prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event or an Early Settlement with respect to the Security of which
such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or greater than $ (the
"Threshold Appreciation Price"), shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $ , the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than or equal to $
, shares of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Purchase Contract Agreement. No fractional shares
of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of the
related Income PRIDES to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or,
A-6
<PAGE> 91
for purposes of determining cash payable in lieu of factional shares in
connection with an Early Settlement, the third Trading Day immediately preceding
the relevant Early Settlement Date. The "Closing Price" of the Common Stock on
any date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange, Inc. (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, as reported by the Nasdaq
National Market, or, if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or from the proceeds
of a remarketing of the related Pledged Debentures of such holders. A Holder of
Income PRIDES who does not elect, on or prior to 5:00 p.m. New York City time on
the fifth Business Day (or, if a Tax Event Redemption has occurred, the second
Business Day) immediately preceding the Purchase Contract Settlement Date, to
make an effective Cash Settlement or an Early Settlement, shall pay the Purchase
Price for the shares of Common Stock to be issued under the related Purchase
Contract from the Proceeds of the sale of the related Pledged Debentures held by
the Collateral Agent. Such sale will be made by the Remarketing Agent pursuant
to the terms of the Remarketing Agreement and the Remarketing Underwriting
Agreement on the third Business Day immediately preceding the Purchase Contract
Settlement Date. If, as provided in the Purchase Contract Agreement, upon the
occurrence of a Failed Remarketing the Collateral Agent, for the benefit of the
Company, exercises its rights as a secured creditor with respect to the Pledged
Debentures related to this Income PRIDES certificate, any accrued and unpaid
interest (including deferred interest) on such
A-7
<PAGE> 92
Pledged Debentures will become payable by the Company to the holder of this
Income PRIDES Certificate in the manner provided for in the Purchase Contract
Agreement.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Debentures. Upon receipt of notice of any meeting at which holders of
Debentures are entitled to vote or upon the solicitation of consents, waivers or
proxies of holders of Debentures, the Agent shall, as soon as practicable
thereafter, mail to the Income PRIDES holders a notice (a) containing such
information as is contained in the notice or solicitation, (b) stating that each
Income PRIDES holder on the record date set by the Agent therefor (which, to the
extent possible, shall be the same date as the record date for determining the
holders of Debentures entitled to vote) shall be entitled to instruct the Agent
as to the exercise of the voting rights pertaining to the Debentures
constituting a part of such holder's Income PRIDES and (c) stating the manner in
which such instructions may be given. Upon the written request of the Income
PRIDES Holders on such record date, the Agent shall endeavor insofar as
practicable to vote or cause to be voted, in accordance with the instructions
set forth in such requests, the maximum number of Debentures as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of an Income PRIDES, the Agent shall abstain from
voting the Debentures evidenced by such Income PRIDES.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES, the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of Income PRIDES and the
Collateral Agent shall have such security interests rights and obligations with
respect to the Treasury Portfolio as the Holder of Income PRIDES and the
Collateral Agent had in respect of
A-8
<PAGE> 93
the Debentures, as the case may be, subject to the Pledge thereof as provided in
Sections 2, 3, 4, 5 and 6 of the Pledge Agreement and any reference herein to
the Debenture shall be deemed to be a reference to such Treasury Portfolio and
any reference herein or in the Certificates to interest on the Debentures shall
be deemed to be a reference to corresponding distributions on the Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Treasury
Securities for Debentures or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, thereby creating or recreating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection therewith. Except as
provided in the Purchase Contract Agreement, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder of such Income PRIDES in respect of Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, and
the Purchase Contract constituting such Income PRIDES may be transferred and
exchanged only as an Income PRIDES. A Holder of an Income PRIDES may create or
recreate a Growth PRIDES by delivering to the Collateral Agent Treasury
Securities in an aggregate principal amount equal to the aggregate principal
amount of the Pledged Debentures or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, in exchange for the release of such
Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury Securities
secures the Holder's obligation under the Purchase Contract shall be referred to
as a "Growth PRIDES." A Holder may make such Collateral Substitution only in
integral multiples of 40 Income PRIDES for 40 Growth PRIDES; provided, however,
that if a Tax Event Redemption has occurred and the Treasury Portfolio has
become a component of the Income PRIDES, a Holder may make such Collateral
Substitutions only in integral multiples of Income
A-9
<PAGE> 94
PRIDES for Growth PRIDES. Such Collateral Substitution may
cause the equivalent aggregate Stated Amount of this Certificate to be increased
or decreased; provided, however, the equivalent aggregate Stated Amount
outstanding under this Income PRIDES Certificate shall not exceed $ . All
such adjustments to the equivalent aggregate Stated Amount of this Income PRIDES
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Debentures or the appropriate Applicable
Owner ship Interest of the Treasury Portfolio, with an aggregate principal
amount, in the case of such Debentures, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in ex change for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Any such creation or recreation of an Income
PRIDES may be effected only in multiples of 40 Growth PRIDES for 40 Income
PRIDES; provided, however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, a Holder may
make such substitution only in integral multiples of Growth PRIDES
for Income PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Income PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the Corporate Trust Office of the Agent and the New
York Office or, at the option of the Company, by check mailed to the address of
the Person entitled thereto at such address as it appears on the Income PRIDES
Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of % per annum (computed on the
basis of a 360-day year of twelve 30 day
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<PAGE> 95
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date and no such deferral period may end other
than on a Payment Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Income PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock equal to the Settlement Rate) equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Income
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
purchase capital stock of the Company, (ii) as a result of a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock
A-11
<PAGE> 96
or the security being converted or exchanged, (iv) dividends or distributions in
capital stock of the Company (or rights to acquire capital stock) or repurchases
or redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan or a declaration thereunder of a dividend of rights in
the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Income PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of Income PRIDES. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contracts evidenced by this Income PRIDES
Certificate, the Holder of this Income PRIDES Certificate shall deliver this
Income PRIDES Certificate to the Agent at the Corporate Trust Office or the New
York Office duly endorsed for transfer to the Company or in blank with the form
of Election to Settle Early set forth below duly completed and accompanied by
payment in the form of immediately available funds payable to the Company in an
amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of
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<PAGE> 97
business on such Payment Date, an amount equal to the Contract Adjustment
Payments, if any, payable on such Payment Date with respect to such Purchase
Contracts; provided that no payment shall be required pursuant to clause (ii) of
this sentence if the Company shall have elected to defer the Contract Adjustment
Payments which would otherwise be payable on such Payment Date. Upon Early
Settlement of Purchase Contracts by a Holder of the related Securities, the
Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio underlying such Securities shall be released from the Pledge
as provided in the Pledge Agreement and the Holder shall be entitled to receive
a number of shares of Common Stock on account of each Purchase Contract forming
part of a Income PRIDES as to which Early Settlement is effected equal to the
Early Settlement Rate; provided however, that upon the Early Settlement of the
Purchase Contracts, the Holder thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments and any future Contract Adjustment
Payments, if any, on such Purchase Contracts, except to the extent that the
Early Settlement Date is after the close of business on a Record Date and prior
to the opening of business on the corresponding Payment Date. The Early
Settlement Rate shall initially be equal to o shares of Common Stock and shall
be adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Income PRIDES Certificate. The Company covenants and agrees, and the Holder, by
its acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as
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<PAGE> 98
its attorney-in-fact, and consents to the Pledge of the Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, underlying this Income PRIDES Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and in
the manner provided in the Purchase Contract Agreement and the Pledge Agreement,
but subject to the terms thereof, payments in respect to the aggregate principal
amount of the Pledged Debentures, or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, on the Purchase Contract Settlement Date shall be paid by
the Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Income PRIDES Certificate
is registered as the owner of the Income PRIDES evidenced hereby for the purpose
of receiving payments of interest payable quarterly on the Debentures or on the
maturing quarterly interest strips of the Treasury Portfolio, as applicable,
receiving payments of Contract Adjustment Payments, if any, and any Deferred
Contract Adjustment Payments, if any, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and neither
the Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
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<PAGE> 99
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
-------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
---------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _____________________________________
attorney to transfer said Income PRIDES Certificates on the books of The Coastal
Corporation with full power of substitution in the premises.
Dated:
----------------- -------------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Income PRIDES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee:
-------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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<PAGE> 100
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
-------------------------------- ------------------------------------
Signature
Signature Guarantee:
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered to
a Person other than the Holder,
please (i) print such Person's
name and address and (ii) provide
a guarantee of your signature:
Please print name and address of
Registered Holder:
- ------------------------------------- -----------------------------------
Name Name
- ------------------------------------- -----------------------------------
Address Address
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
----------------------------------
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<PAGE> 101
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Income PRIDES Certificate representing any Income PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, deliverable
upon such Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:
---------------------------- ------------------------------
Signature
Signature Guarantee
(if assigned to another person):
-----------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-17
<PAGE> 102
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Debentures, or an
Applicable Ownership Interest in
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please (i) print such
Person's name and address and (ii) provide
a guarantee of your signature:
Please print name and address of
Registered Holder:
- ------------------------------------- -----------------------------------
Name Name
- ------------------------------------- -----------------------------------
Address Address
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
----------------------------------
A-18
<PAGE> 103
Transfer Instructions for Pledged Debentures, or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, Transferable Upon Early
Settlement or a Termination Event:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
A-19
<PAGE> 104
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
<TABLE>
<CAPTION>
==============================================================================================================
Signature of autho-
Amount of Amount of Stated Amount of this rized officer of Pur-
decrease in Stated increase in Stated Global Certificate chase Contract Agent
Amount of the Global Amount of the Global following such de- or Securities Custo-
Date Certificate Certificate crease or increase dian
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
==============================================================================================================
</TABLE>
A-20
<PAGE> 105
EXHIBIT B
(Form of Face of Growth PRIDES Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No.__________ CUSIP NO.
Number of Growth PRIDES __________
_________% Growth PRIDES
This Growth PRIDES Certificate certifies that __________ is the
registered Holder of the number of Growth PRIDES set forth above. Each Growth
PRIDES represents (i) a 1/100 undivided beneficial ownership interest in a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with The Coastal Corporation, a Delaware corporation (the "Company,"
which term, as used herein, includes its successors pursuant to the Purchase
Contract Agreement). All capitalized terms used herein which are defined in the
Purchase Contract Agreement have the meaning set forth therein.
B-1
<PAGE> 106
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer of same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of
the applicable Growth PRIDES to the accounts designated by them in writing for
such purpose no later than 2:00 p.m. New York City time, on the Business Day
such payment is received by the Collateral Agent (provided that in the event
such payment is received by the Collateral Agent on a day that is not a Business
Day or after 12:30 p.m., New York City time, on a Business Day, then such
payment shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day), and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Growth PRIDES
of which such Pledged Treasury Securities are a part under the Purchase
Contracts forming a part of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on o 16, 2002
(the "Purchase Contract Settlement Date"), at a price equal to $o (the "Stated
Amount"), a number of shares of Common stock, $0.33 1/3 par value per share
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Growth PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to
each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on
the Purchase Contract Settlement Date by application of the Proceeds from the
Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each
Purchase Contract forming part of a Growth PRIDES evidenced hereby an amount
(the "Contract Adjustment Payments") equal to o % per annum of the Stated
Amount, computed on the basis of a 360-day year of twelve 30 day months, subject
to deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
B-2
<PAGE> 107
Contract Adjustment Payments, if any, will be payable at the Corporate
Trust Office of the Agent and at the New York Office or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-3
<PAGE> 108
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
THE COASTAL CORPORATION
By:
--------------------------------
Name:
Title:
By:
--------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: THE BANK OF NEW YORK not individually
but solely as attorney-in-fact of
such Holder
By:
--------------------------------
Name:
Title:
Dated: o , 1999
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
--------------------------------
Authorized Signatory
B-4
<PAGE> 109
( Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of o, 1999 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and The Bank of
New York, as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Growth PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at the Purchase Price, a number of shares of Common
Stock of the Company equal to the Settlement Rate, unless, on or prior to the
Purchase Contract Settlement Date, there shall have occurred a Termination Event
or an Early Settlement with respect to the Security of which such Purchase
Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable
Market Value (as defined below) is equal to or greater than $o (the "Threshold
Appreciation Price"), o shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $o, the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided by the Applicable Market Value and (c) if the
Applicable Market Amount is less than or equal to $o, o shares of Common Stock
per Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement, shall obligate the Holder of the related Growth PRIDES to purchase
at the Purchase Price, and the Company to sell, a number of newly issued shares
of Common Stock equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date or, for purposes of determining cash payable in lieu of fractional shares
in connection with an Early Settlement, the third Trading Day immediately
preceding the relevant Early Settlement Date. The "Closing Price" of the Common
Stock on any date of determination means the closing sale price (or, if no
closing price is reported, the last reported sale price) of the Common Stock on
The New York Stock Exchange, Inc. (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock
B-5
<PAGE> 110
is so listed, or if the Common Stock is not so listed on a United States
national or regional securities exchange, as reported by the Nasdaq National
Market or, if the Common Stock is not so reported, the last quoted bid price for
the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock. A Holder of Growth PRIDES who does not
elect, on or prior to 5:00 p.m. New York City time on the second Business Day
immediately preceding the Purchase Contract Settlement Date, to make an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued on the related Purchase Contract by applying a principal amount of the
Pledged Treasury Securities as aforesaid.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Debentures or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for Treasury Securities, thereby creating or recreating Income
PRIDES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract underlying a Growth PRIDES remains in effect, such Growth
PRIDES shall not be separable into its constituent parts, and
B-6
<PAGE> 111
the rights and obligations of the Holder of such Growth PRIDES in respect of the
Treasury Security and the Purchase Contract constituting such Growth PRIDES may
be transferred and exchanged only as a Growth PRIDES. A Holder of Growth PRIDES
may create or recreate Income PRIDES by delivering to the Collateral Agent
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, with an aggregate principal amount, in the case of such Debentures,
or with the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio, in the case of
such appropriate Applicable Ownership Interest of the Treasury Portfolio, equal
to the aggregate principal amount of the Pledged Treasury Securities in exchange
for the release of such Pledged Treasury Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement. From and after such
substitution, the Security for which such Pledged Debentures or appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
secures the Holder's obligation under the Purchase Contract shall be referred to
as an "Income PRIDES." A Holder may make such a substitution only in integral
multiples of 40 Growth PRIDES for 40 Income PRIDES; provided, however, that if a
Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, a Holder may make such substitution only in
integral multiples of Growth PRIDES for Income PRIDES. Such
substitution may cause the equivalent aggregate Stated Amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate Stated Amount outstanding under this Growth PRIDES Certificate shall
not exceed $o. All such adjustments to the equivalent aggregate Stated Amount of
this Growth PRIDES Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of an Income PRIDES may create or recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount of the Pledged Debentures or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, in exchange for the release of such
Pledged Debentures or the appropriate Applicable Owner ship Interest of the
Treasury Portfolio, as the case may be, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. Any such creation or
recreation of a Growth PRIDES may be effected only in multiples of 45 Income
PRIDES for 45 Growth PRIDES; provided, however, if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income PRIDES,
a Holder may make such Collateral Substitution only in integral multiples of
Income PRIDES for Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on
each Payment Date, the Contract Adjustment Payments, if any, payable in respect
of each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment Payments,
if any, will be payable at the Corporate Trust Office of the Agent and the New
York Office or, at the option of the Company, by check mailed to
B-7
<PAGE> 112
the address of the Person entitled thereto at such address as it appears on the
Growth PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of per annum (computed on the basis
of a 360-day year of twelve 30 day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of Contract
Adjustment Payments, if any, together with the additional Contract Adjustment
Payments accrued thereon, are referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be
due on the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment
Payments, if any, may be deferred to a date that is after the Purchase Contract
Settlement Date and no such deferral period may end other than on a Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock equal to the Settlement Rate) equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Growth
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the
B-8
<PAGE> 113
Company, (ii) as a result of a reclassification of the Company's capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (iv) dividends or distributions in
capital stock of the Company (or rights to acquire capital stock) or repurchases
or redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan or a declaration thereunder of a dividend of rights in
the future).
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Growth PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early Settlement") as provided
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office or the
New York Office duly endorsed for transfer to the Company or in blank with the
form of Election to Settle Early set forth below duly completed and accompanied
by payment in the form of immediately available funds payable to the Company in
an amount (the "Early Settlement Amount") equal to (i) the product of (A) the
Stated Amount times (B) the number of Purchase Contracts with respect to which
the Holder has elected to effect Early Settlement, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts; provided
that no payment shall be required pursuant to clause (ii) of this sentence if
the Company shall have elected to defer the Contract Adjustment Payments which
would otherwise be payable on such Payment Date. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the Pledged Treasury
Securities underlying such
B-9
<PAGE> 114
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive a number of shares of Common Stock
on account of each Purchase Contract forming part of a Growth PRIDES as to which
Early Settlement is effected equal to the Early Settlement Rate; provided
however, that upon the Early Settlement of the Purchase Contracts, the Holder
thereof will forfeit the right to receive any Deferred Contract Adjustment
Payments and any future Contract Adjustment Payments on such Purchase Contracts,
except to the extent that the Early Settlement Date is after the close of
business on a Record Date and prior to the opening of business on the
corresponding Payment Date. The Early Settlement Rate shall initially be equal
to o shares of Common Stock and shall be adjusted in the same manner and at the
same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Growth PRIDES Certificate. The Company covenants and agrees, and the Holder, by
his acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying this Growth PRIDES
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the Stated Amount of the Pledged Treasury Securities on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
B-10
<PAGE> 115
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company
or the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the purpose
of receiving payments of interest on the Treasury Securities, receiving payments
of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, if any, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Agent.
B-11
<PAGE> 116
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship
and not as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s)
and transfer(s) unto
---------------------------------------------------------
- --------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
- --------------------------------------------------------------------------------
attorney to transfer said Growth PRIDES Certificates on the books of The Coastal
Corporation with full power of substitution in the premises.
Dated:
----------------- --------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Growth PRIDES
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee:
--------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent
B-12
<PAGE> 117
Medallion Program ("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
B-13
<PAGE> 118
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:
--------------------------- ----------------------------
Signature
------------------
Signature Guarantee:
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
If shares are to be registered REGISTERED HOLDER
in the name of and delivered to
a Person other than the Holder,
please (i) print such Person's name
and address and (ii) provide a
guarantee of your signature:
Please print name and address of
Registered Holder:
- ------------------------------------- -----------------------------------
Name Name
- ------------------------------------- -----------------------------------
Address Address
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
-----------------------------------
B-14
<PAGE> 119
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer or
similar tax payable incident thereto.
Dated:
------------------------------ -----------------------------
Signature
Signature Guarantee:
----------------------------------
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-15
<PAGE> 120
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock or Growth REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Treasury Securities are to
be transferred to a Person other than
the Holder, please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:
Please print name and address of
Registered Holder:
- ------------------------------------- -----------------------------------
Name Name
- ------------------------------------- -----------------------------------
Address Address
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
- ------------------------------------- -----------------------------------
Social Security or other
Taxpayer Identification
Number, if any
-----------------------------------
Transfer Instructions for Pledged Treasury
Securities Transferable Upon Early
Settlement or a Termination Event:
- -------------------------------------
- -------------------------------------
- -------------------------------------
B-16
<PAGE> 121
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
<TABLE>
<CAPTION>
==============================================================================================================
Signature of autho-
Amount of Amount of Stated Amount of this rized officer of Pur-
decrease in Stated increase in Stated Global Certificate chase Contract Agent
Amount of the Global Amount of the Global following such de- or Securities Custo-
Date Certificate Certificate crease or increase dian
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
==============================================================================================================
</TABLE>
B-17
<PAGE> 122
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
The Chase Manhattan Bank
[Address]
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of The Coastal Corporation (the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of , 1999, (the "Pledge Agreement") among the
Company, your selves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of the Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities] [$_______ aggregate
principal amount of Debentures or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] in exchange for an equal Value
of [Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] [Pledged Treasury Securities] held by
you in accordance with the Pledge Agreement and has delivered to us a notice
stating that the Holder has Transferred [Treasury Securities] [Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Pledged Treasury Securities] [Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,],
and upon the payment by such Holder of any applicable fees, to release the
[Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES] to us in accordance with the Holder's instructions.
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Date:
-------------------- ---------------------------------------
By:
----------------------------------
Name:
Title:
Signature Guarantee:
-------------------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio,
C-1
<PAGE> 123
as the case may be,] for the [Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Pledged
Treasury Securities]:
- --------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
- ---------------------------
C-2
<PAGE> 124
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
101 Barclay Street, Floor 12 East
New York, NY 10286
Attention: Corporate Trust Administration
Re: FELINE PRIDES of The Coastal Corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered
to , as Collateral Agent, [$_______ aggregate principal amount of
Treasury Securities] [$ aggregate principal amount of Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, the case
may be,] in exchange for an equal Value of [Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section [4.1], [4.2] of the Pledge Agreement, dated o, 1999 (the
"Pledge Agreement"), between you, the Company and the Collateral Agent. The
under signed Holder has paid the Collateral Agent all applicable fees relating
to such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio] [Pledged Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Dated:
------------------------------ ---------------------------------------
Signature
Signature Guarantee:
-------------------
Please print name and address of Registered Holder:
- --------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
- ---------------------------
D-1
<PAGE> 125
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The Bank of New York
101 Barclay Street, Floor 12 East
New York, NY 10286
Attention: Corporate Trust Administration
Re: FELINE PRIDES of The Coastal Corporation (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.4 of the Purchase Contract Agreement dated as of o, 1999 among
the Company and yourselves, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Collateral Agent, on or prior to 11:00 a.m. New York City time, on the
Business Day immediately preceding the Purchase Contract Settlement Date, (in
lawful money of the United States by [certified or cashiers check or] wire
transfer, in each case in immediately available funds), $_________ as the
Purchase Price for the shares of Common Stock issuable to such Holder by the
Company under the related Purchase Contract on the Purchase Contract Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holders election to make such cash
settlement with respect to the Purchase Contracts related to such Holder's
[Income PRIDES] [Growth PRIDES].
Dated:
------------------------------ ---------------------------------------
Signature
Signature Guarantee:
-------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
- --------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ---------------------------
Address
- ---------------------------
- ---------------------------
E-1
<PAGE> 1
EXHIBIT 4.22
THE COASTAL CORPORATION,
THE CHASE MANHATTAN BANK
as Collateral Agent, Custodial Agent
and Securities Intermediary
AND
THE BANK OF NEW YORK
as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of , 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS......................................................................1
Section 1. Definitions.......................................................3
Section 2. Pledge; Control and Perfection...................................10
Section 2.1. The Pledge...............................................10
Section 2.2. Control and Perfection...................................13
Section 3. Distributions on Pledged Collateral..............................15
Section 4. Substitution, Release, Repledge and Settlement
of Debentures....................................................17
Section 4.1. Substitution for Debentures and the
Creation of Growth PRIDES...............................17
Section 4.2. Substitution of Treasury Securities
and the Creation of Income PRIDES.......................18
Section 4.3. Termination Event........................................19
Section 4.4. Cash Settlement..........................................20
Section 4.5. Early Settlement.........................................22
Section 4.6. Application of Proceeds; Settlement......................23
Section 5. Voting Rights -- Debentures......................................26
Section 6. Rights and Remedies; Tax Event Redemption........................27
Section 6.1. Rights and Remedies of the Collateral Agent..............27
Section 6.2. Tax Event Redemption.....................................28
Section 6.3. Substitutions............................................29
Section 7. Representations and Warranties; Covenants........................29
Section 7.1. Representations and Warranties...........................29
Section 7.2. Covenants................................................30
Section 8. The Collateral Agent.............................................31
Section 8.1. Appointment, Powers and Immunities.......................31
Section 8.2. Instructions of the Company..............................32
Section 8.3. Reliance.................................................33
Section 8.4. Rights in Other Capacities...............................33
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 8.5. Non-Reliance ............................................34
Section 8.6. Compensation and Indemnity...............................34
Section 8.7. Failure to Act...........................................35
Section 8.8. Resignation..............................................36
Section 8.9. Right to Appoint Agent or Advisor........................37
Section 8.10. Survival.................................................37
Section 8.11. Exculpation..............................................37
Section 9. Amendment........................................................38
Section 9.1. Amendment Without Consent of
Holders.................................................38
Section 9.2. Amendment with Consent of Holders........................38
Section 9.3. Execution of Amendments..................................39
Section 9.4. Effect of Amendments.....................................40
Section 9.5. Reference to Amendments..................................40
Section 10. Miscellaneous...................................................40
Section 10.1. No Waiver...............................................40
Section 10.2. Governing Law...........................................41
Section 10.3. Notices.................................................41
Section 10.4. Successors and Assigns..................................42
Section 10.5. Counterparts............................................42
Section 10.6. Severability............................................42
Section 10.7. Expenses, etc...........................................42
Section 10.8. Security Interest Absolute..............................43
EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO
COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL
FROM REMARKETING
</TABLE>
ii
<PAGE> 4
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of , 1999 (this "Agreement"), among The
Coastal Corporation, a Delaware corporation (the "Company"), The Chase Manhattan
Bank, a New York banking corporation, not individually but solely as collateral
agent (in such capacity, together with its successors in such capacity, the
"Collateral Agent"), as custodial agent (in such capacity, together with its
successors in such capacity, the "Custodial Agent") and as "securities
intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein)
(in such capacity, together with its successors in such capacity, the
"Securities Intermediary"), and The Bank of New York, not individually but
solely as purchase contract agent and as attorney-in-fact of the Holders (as
defined in the Purchase Contract Agreement) from time to time of the Securities
(as hereinafter defined) (in such capacity, together with its successors in such
capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement
(as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued FELINE PRIDES of the
Company, having a stated amount of $ (the "Stated Amount") per FELINE PRIDES.
The FELINE PRIDES will initially consist of (A) units (referred to
as "Income PRIDES") with a stated amount, per Income PRIDES, equal to the Stated
Amount and (B) units (referred to as "Growth PRIDES" and, together with the
Income PRIDES, the "Securities") with a stated amount, per Growth PRIDES, equal
to the Stated Amount. Each Income PRIDES will initially consist of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the holder will
purchase from the Company not later than 16, 2002 (the "Purchase Contract
Settlement Date"), for an amount of cash equal to the Stated Amount, a number of
newly issued shares of common stock, $0.33 1/3 par value per share (the "Common
Stock"), of the Company equal to the Settlement Rate (as defined below) and (ii)
the Company will pay the Holder Contract Adjustment Payments at the rate of %
of the Stated Amount per annum and (b) either beneficial ownership of a
Debenture (as defined below) or, upon the occurrence of a Tax Event Redemption
the Applicable Ownership Interest of the Treasury Portfolio. Each Growth PRIDES
will initially consist of (a) a Purchase Contract under which (i) the holder
will purchase from the Company on the Purchase Contract Settlement Date, for an
amount in cash equal to the Stated Amount, a number of newly issued shares of
Common Stock of the Company, equal to the Settlement Rate, and (ii) the Company
will pay the Holder Contract Adjustment
<PAGE> 5
Payments at the rate of o% of the Stated Amount per annum, and (b) a 1/100
undivided beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP No.
o) having a principal amount at maturity equal to $1,000 and maturing on o 15,
2002 (the "Treasury Securities").
Pursuant to the terms of the Indenture (as defined below) the Company
will issue $ principal amount of Debentures (the "Debentures"), each
having a principal amount per Debenture equal to $25.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Debentures, any
Applicable Ownership Interest in the Treasury Portfolio and the Treasury
Securities to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge,
the Pledged Debentures or the Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, and the Pledged Treasury Securities will be
beneficially owned by the Holders but will be owned of record by the Purchase
Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own
behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
2
<PAGE> 6
Section 1. Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Certificate, (vi) Contract
Adjustment Payments, (vii) Debentures, (viii) Early Settlement, (ix)
Early Settlement Amount, (x) Early Settlement Date, (xi) Failed
Remarketing, (xii) Holder, (xiii) Opinion of Counsel, (xiv)
Outstanding Securities, (xv) Remarketing Agent, (xvi) Remarketing
Agreement, (xvii) Settlement Rate, and (xviii) Termination Event;
(xix) Income PRIDES; (xx) Growth PRIDES; and
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Ownership Interest" means, with respect to an Income
PRIDES and the Treasury Securities in the Treasury Portfolio, (A) a 1/25, or
2.5%, undivided beneficial ownership interest in a $1,000 principal or interest
amount of a principal or interest strip in a U.S. Treasury Security included in
such Treasury Portfolio which matures on or prior to o 15, 2002 and (B) for
each scheduled interest payment date on the Debentures that occurs after the Tax
Event Redemption Date, a % undivided beneficial ownership interest in a
$1,000 face amount of such U.S. Treasury Security which is a principal or
interest strip maturing on such date.
"Applicable Principal Amount" means either (i) if the Tax Event
Redemption Date occurs prior to o 16, 2002,
3
<PAGE> 7
the aggregate principal amount of the Debentures which are components of Income
PRIDES on the Tax Event Redemption Date or (ii) if the Tax Event Redemption
occurs on or after o 16, 2002, the aggregate principal amount of the Debentures
outstanding on such Tax Event Redemption Date.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State of
New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the securities account (number o)
maintained at o in the name "The Bank of New York, as Purchase Contract Agent on
behalf of the holders of certain securities of The Coastal Corporation,
Collateral Account subject to the security interest of The Chase Manhattan Bank,
as Collateral Agent, for the benefit of The Coastal Corporation, as pledgee" and
any successor account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Common Stock" has the meaning specified in the Recitals.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
4
<PAGE> 8
"Custodial Agent" has the meaning specified in the first paragraph of
this instrument.
"Debentures" has the meaning specified in the Recitals.
"Debenture Trustee" means Harris Trust and Savings Bank, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Indenture" means, collectively, the Base Indenture and the Seventh
Supplemental Indenture, and any other indentures supplemental thereto pursuant
to which the Debentures are to be issued.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day (i) any evidence of
indebtedness with an original maturity of 365 days or less issued, or directly
and fully guaranteed or insured, by the United States of America or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US $200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) investments in commercial paper, other than commercial paper
issued by the Company or its affiliates, of any corporation incorporated under
the laws of the United States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A- 1" by Standard & Poor's
Ratings Services ("S&P") or at least equal to "P-1" by Moody's Investors
Service, Inc. ("Moody's"); and (v) investments in money market funds registered
under the Investment Company Act of 1940, as amended, rated in the highest
applicable rating category by S&P or Moody's.
5
<PAGE> 9
"Person" and "person" means any individual, corporation, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Debentures" has the meaning specified in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section 2.1
hereof.
"Primary Treasury Dealer" means a primary U.S. government securities
dealer in The City of New York.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and
other property from time to time received, receivable or otherwise distributed
upon the sale, exchange, collection or disposition of the Collateral or any
proceeds thereof.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Purchase Contract Settlement Date" has the meaning specified in the
Recitals.
"Purchase Price" has the meaning specified in Section 5.1 of the
Purchase Contract Agreement.
"Quotation Agent" means (i) Merrill Lynch Government Securities, Inc.
and its respective successors, provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Company shall substitute therefor
another Primary Treasury Dealer or (ii) any other Primary Treasury Dealer
selected by the Company.
6
<PAGE> 10
"Redemption Amount" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
Treasury Portfolio Purchase Price and whose denominator is the Applicable
Principal Amount.
"Redemption Price" means the redemption price per Security equal to
the Redemption Amount plus any accrued and unpaid Distributions to the date of
redemption or, in the case of any redemption in connection with the final
maturity of the Debentures, an amount per Debenture equal to the redemption
price for $25 in principal amount of Debentures plus accrued and unpaid
Distributions to the date of redemption.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in Section
8-102(a)(17) of the Code.
"Separate Debentures" means any Debentures that are not Pledged
Debentures.
"Stated Amount" has the meaning specified in the Recitals.
"Supplemental Remarketing Agreement" means the Supplemental
Remarketing Agreement, as defined in the Remarketing Agreement.
"Tax Event" means the receipt by the Company of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, or change (including any
announced proposed change) in, the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any amendment to or change in an interpretation
or application of such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement that provides for a position with respect to such laws or
regulations that differs from the generally
7
<PAGE> 11
accepted position on the date the Securities are issued, which amendment, change
or proposed change is effective or which interpretation or pronouncement is
announced on or after the date of the first issuance of Debentures under the
Indenture, there is more than an insubstantial risk that (i) interest payable by
the Company on the Debentures would not be deductible, in whole or in part, by
the Company for United States federal income tax purposes.
"Tax Event Redemption" means, if a Tax Event shall occur and be
continuing, the redemption of the Debentures, at the option of the Company, in
whole but not in part, on not less than 30 days nor more than 60 days notice.
"Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, except as otherwise expressly provided herein, with
respect to the Collateral and in accordance with the instructions of the
Collateral Agent, the Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in
appropriate physical form to the recipient accompanied by
any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary
to constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form by causing a "securities
intermediary" (as defined in
8
<PAGE> 12
Section 8-102(a)(14) of the Code) to (i) credit a "security
entitlement" (as defined in Section 8-102(a)(17) of the
Code) with respect to such securities to a "securities
account" (as defined in Section 8-501(a) of the Code)
maintained by or on behalf of the recipient and (ii) to
issue a confirmation to the recipient with respect to such
credit. In the case of Collateral to be delivered to the
Collateral Agent, the Securities Intermediary shall be the
securities intermediary and the securities account shall be
the Collateral Account.
"Treasury Portfolio" means, with respect to the Applicable Principal
Amount of Debentures (a) if the Tax Event Redemption Date occurs prior to o 16,
2002, a portfolio of zero-coupon U.S. Treasury Securities consisting of (i)
principal or interest strips of U.S. Treasury Securities which mature on or
prior to o 15, 2002 in an aggregate amount equal to the Applicable Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date, principal or
interest strips of U.S. Treasury Securities which mature on or prior to such
date in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of the Debentures on such date, and
(b) if the Tax Event Redemption Date occurs after 16, 2002, a portfolio of
zero-coupon U.S. Treasury Securities consisting of (i) principal or interest
strips of U.S. Treasury Securities which mature on or prior to o 15, 2004 in an
aggregate amount equal to the Applicable Principal Amount and (ii) with respect
to each scheduled interest payment date on the Debentures that occurs after the
Tax Event Redemption Date, principal or interest strips of such U.S. Treasury
Securities which mature on or prior to such date in an aggregate amount equal to
the aggregate interest payment that would be due on the Applicable Principal
Amount of the Debentures on such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate price
quoted by the Primary Treasury Dealer to the Quotation Agent on the third
Business Day immediately preceding the Tax Event Redemption Date for the
purchase
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of the Treasury Portfolio for settlement on the Tax Event Redemption Date.
"Treasury Securities" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as
to (i) a Debenture, the stated liquidation amount thereof, (ii) Cash, the face
amount thereof and (iii) Treasury Securities, the aggregate principal amount
thereof at maturity.
Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. (a) The Holders from time to time as
beneficial owners of the Collateral (as defined below) acting through the
Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract
Agent, as nominal owner of the Collateral (as defined below), each hereby pledge
and grant to the Collateral Agent, for the benefit of the Company, as collateral
security for the performance when due by such Holders of their respective
obligations under the related Purchase Contracts, a security interest in all of
the right, title and interest of the Purchase Contract Agent and such Holders
(a) in the Debentures and Treasury Securities constituting a part of the
Securities and any Treasury Securities delivered in exchange for any Debentures
(or, if applicable, the Applicable Ownership Interest in the Treasury
Portfolio), any Debentures (or if applicable, the Applicable Ownership Interest
in the Treasury Portfolio) delivered in exchange for any Treasury Securities, in
accordance with Section 4 hereof, in each case that have been Transferred to or
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement; (b) in payments made by
Holders pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets, Cash and other property credited thereto and all
Security Entitlements related thereto; (d) in the Treasury Portfolio purchased
on behalf of the Holders of Income PRIDES by the Collateral Agent upon the
occurrence of a Tax Event Redemption as provided in Section 6.2 and (e) all
Proceeds of the foregoing (all of the foregoing, collectively, the
"Collateral"). Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial
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Holders of the Securities, shall cause the Debentures comprising a part of the
Income PRIDES, and the Treasury Securities comprising a part of the Growth
PRIDES, to be Transferred to the Collateral Agent for the benefit of the
Company. Such Debentures shall be Transferred by physically delivering such
Debentures to the Securities Intermediary endorsed in blank (or accompanied by a
stock or bond power indorsed in blank) and causing the Securities Intermediary
to credit the Collateral Account with such Debentures and sending the Collateral
Agent a confirmation of the deposit of such Debentures. In the event a Holder of
Income PRIDES so elects, such Holder may Transfer Treasury Securities to the
Collateral Agent for the benefit of the Company as provided in Section 4.1
hereof in exchange for the release by the Collateral Agent on behalf of the
Company of Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, with an aggregate stated liquidation
amount equal to the aggregate principal amount of the Treasury Securities so
Transferred, in the case of Debentures, or with an appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio equal to the aggregate principal amount of the
Treasury Securities so transferred, in the event that a Tax Event Redemption has
occurred, to the Purchase Contract Agent on behalf of such Holder. In the event
that a Holder of Growth PRIDES so elects, such Holder may Transfer Debentures or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio to the Collateral Agent for
the benefit of the Company as provided in Section 4.2 hereof in exchange for the
release by the Collateral Agent on behalf of the Company of Treasury Securities
with an aggregate principal amount at maturity equal to the aggregate stated
liquidation amount of the Debentures or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio so transferred to the Purchase Contract Agent on behalf of
such Holder. Treasury Securities and the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as applicable, shall be Transferred to the
Collateral Account maintained by the Collateral Agent at the Securities
Intermediary by book-entry transfer to the Collateral Account in accordance with
the TRADES Regulations and other applicable law and by the notation by the
Securities Intermediary on its
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books that a Security Entitlement with respect to such Treasury Securities or
appropriate Applicable Ownership Interest of the Treasury Portfolio, has been
credited to the Collateral Account.
(b) For purposes of perfecting the Pledge under applicable law,
including, to the extent applicable, the TRADES Regulations or the Uniform
Commercial Code as adopted and in effect in any applicable jurisdiction, the
Collateral Agent shall be the agent of the Company as provided herein. The
pledge provided in this Section 2.1 is herein referred to as the "Pledge" and
the Debentures or Treasury Securities subject to the Pledge, excluding any
Debentures that are delivered pursuant to Section 6.2 hereof or Treasury
Securities released from the Pledge as provided in Section 4 hereof, are
hereinafter referred to as "Pledged Debentures" or the "Pledged Treasury
Securities," respectively. Subject to the Pledge and the provisions of Section
2.2 hereof, the Holders from time to time shall have full beneficial ownership
of the Collateral. Whenever directed by the Collateral Agent acting on behalf of
the Company, the Securities Intermediary shall have the right to reregister the
Debentures or any other securities held in physical form in its name.
Except as may be required in order to release Debentures in connection
with a Holder's election to convert its investment from an Income PRIDES to a
Growth PRIDES, or except as otherwise required to release Debentures as
specified herein, neither the Collateral Agent nor the Securities Intermediary
shall relinquish physical possession of any certificate evidencing a Debentures
prior to the termination of this Agreement, except they may be held in any
clearing corporation in an account including only assets of customers of the
Collateral Agent or Securities Intermediary. If it becomes necessary for the
Securities Intermediary to relinquish physical possession of a certificate in
order to release a portion of the Debentures evidenced thereby from the Pledge,
the Securities Intermediary shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Debentures remaining
subject to the Pledge hereunder registered to it or indorsed in blank (or
accompanied by a stock or bond power indorsed in blank) within fifteen days of
the date it relinquished possession. The Securities Intermediary shall promptly
notify the Company
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and the Collateral Agent of the Securities Intermediary's failure to obtain
possession of any such replacement certificate as required hereby.
Section 2.2. Control and Perfection. (a) In connection with the Pledge
granted in Section 2.1, and subject to the other provisions of this Agreement,
the Holders from time to time acting through the Purchase Contract Agent, as
their attorney-in-fact, and the Purchase Contract Agent each hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), and the
Securities Intermediary agrees, to comply with and follow any instructions and
entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the
Collateral Agent on behalf of the Company may give in writing with respect to
the Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. Such instructions and entitlement
orders may, without limitation, direct the Securities Intermediary to transfer,
redeem, sell, liquidate, assign, deliver or otherwise dispose of the Debentures,
the Treasury Securities, the Treasury Portfolio, and any Security Entitlements
with respect thereto and to pay and deliver any income, proceeds or other funds
derived therefrom to the Company. The Holders from time to time acting through
the Purchase Contract Agent hereby further authorize and direct the Collateral
Agent, as agent of the Company, to itself issue instructions and entitlement
orders, and to otherwise take action, with respect to the Collateral Account,
the Collateral credited thereto and any security entitlements with respect
thereto, pursuant to the terms and provisions hereof, all without the necessity
of obtaining the further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the agent of the Company and shall act as
directed in writing by the Company. Without limiting the generality of the
foregoing, the Collateral Agent shall issue entitlement orders to the Securities
Intermediary when and as directed by the Company.
(b) The Securities Intermediary hereby confirms and agrees that: (i)
all securities or other property underlying any financial assets credited to the
Collateral Account shall be registered in the name of the Securities
Intermediary, indorsed to the Securities Intermediary or
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in blank or credited to another collateral account maintained in the name of the
Securities Intermediary and in no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract Agent, the
Collateral Agent, the Company or any Holder, payable to the order of, or
specially indorsed to, the Purchase Contract Agent, the Collateral Agent, the
Company or any Holder except to the extent the foregoing have been specially
indorsed to the Securities Intermediary or in blank; (ii) all property delivered
to the Securities Intermediary pursuant to this Pledge Agreement (including,
without limitation, any Debentures, the Treasury Portfolio or Treasury
Securities) will be promptly credited to the Collateral Account; (iii) the
Collateral Account is an account to which financial assets are or may be
credited, and the Securities Intermediary shall, subject to the terms of this
Agreement, treat the Purchase Contract Agent as entitled to exercise the rights
of any financial asset credited to the Collateral Account; (iv) the Securities
Intermediary has not entered into, and until the termination of the this
Agreement will not enter into, any agreement with any other person relating to
the Collateral Account and/or any financial assets credited thereto pursuant to
which it has agreed to comply with entitlement orders (as defined in Section
8-102(a)(8) of the Code) of such other person; and (v) the Securities
Intermediary has not entered into, and until the termination of this Agreement
will not enter into, any agreement with the Company, the Collateral Agent or the
Purchase Contract Agent purporting to limit or condition the obligation of the
Securities Intermediary to comply with entitlement orders as set forth in this
Section 2.2 hereof.
(c) The Securities Intermediary hereby agrees that each item of
property (whether investment property, financial asset, security, instrument or
cash) credited to the Collateral Account shall be treated as a "financial asset"
within the meaning of Section 8-102(a)(9) of the Code.
(d) In the event of any conflict between this Agreement (or any
portion thereof) and any other agreement now existing or hereafter entered into,
the terms of this Agreement shall prevail.
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(e) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of substitution,
as the Purchase Contract Agent's attorneys-in-fact to take on behalf of, and in
the name, place and stead of, the Purchase Contract Agent and the Holders, any
action necessary or desirable to perfect and to keep perfected the security
interest in the Collateral referred to in Section 2.1. The grant of such
power-of-attorney shall not be deemed to require of the Collateral Agent any
specific duties or obligations not otherwise assumed by the Collateral Agent
hereunder.
Section 3. Distributions on Pledged Collateral. So long as the
Purchase Contract Agent is the registered owner of the Pledged Debentures, it
shall receive all payments thereon. If the Pledged Debentures are reregistered,
such that the Collateral Agent becomes the registered holder, all payments of
interest or, if applicable, the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, or interest payments on, the Pledged Debentures or on the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and all payments of
the principal of, or cash distributions on, any Pledged Treasury Securities
received by the Collateral Agent that are properly payable hereunder shall be
paid by the Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) interest payments with respect to the
Pledged Debentures or the appropriate Applicable Ownership Interest
(as specified in clause (B) of the definition of such term) of the
Treasury Portfolio, as the case may be, and (B) any payments of the
Stated Amount or, if applicable, the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio with respect to any Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, that have been released from the Pledge pursuant
to Section 4.1 or 4.3 hereof, to the Purchase Contract Agent, for the
benefit of the relevant Holders of Securities, to the account
designated by the Purchase Contract Agent for such purpose, no later
than
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2:00 p.m., New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to any
Treasury Securities that have been released from the Pledge pursuant
to Section 4.2 or 4.3 hereof, to the Holders of the Growth PRIDES to
the accounts designated by them in writing for such purpose no later
than 2:00 p.m., New York City time, on the Business Day such payment
is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day); and
(iii) In the case of payments of interest on any Pledged
Debentures or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the
Treasury Portfolio, as the case may be, or the principal of any
Pledged Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in Section
4.6(a) or 4.6(b) hereof, in full satisfaction of the respective
obligations of the Holders under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as provided herein shall be
applied by the Purchase Contract Agent pursuant to the provisions of the
Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount or, if
applicable, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) on account of any Debenture or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as
applicable, that, at the time of such payment, is subject to the Pledge, or a
Holder of a
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Growth PRIDES shall receive any payments of principal on account of any Treasury
Securities that, at the time of such payment, are Pledged Treasury Securities,
the Purchase Contract Agent or such Holder shall hold the same as trustee of an
express trust for the benefit of the Company (and promptly deliver the same over
to the Company) for application to the obligations of the Holders under the
related Purchase Contracts, and the Holders shall acquire no right, title or
interest in any such payments of Stated Amount or principal so received.
Section 4. Substitution, Release, Repledge and Settlement of
Debentures.
Section 4.1. Substitution for Debentures and the Creation of Growth
PRIDES. At any time on or prior to the fifth Business Day immediately preceding
the Purchase Contract Settlement Date (or on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, if a Tax Event
Redemption has occurred), a Holder of Income PRIDES shall have the right to
substitute Treasury Securities for the Pledged Debentures (or, if a Tax Event
Redemption has occurred, the appropriate Applicable Ownership Interest (as
defined in clause (A) of the definition of such term) in the Treasury Portfolio)
securing such Holder's obligations under the Purchase Contract(s) comprising a
part of its Income PRIDES in integral multiples of 40 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities having a Value equal to
the aggregate principal amount of the Pledged Debentures (or appropriate
Applicable Ownership Interest in the Treasury Portfolio as the case may be), to
be released and (b)(i) delivering to the Purchase Contract Agent cash in an
amount equal to the excess of the Contract Adjustment Payments, that would have
accrued since the last date that Contract Adjustment Payments were made to the
date of substitution on the Growth PRIDES being created by the Holder, over the
Contract Adjustment Payments that have accrued over the same time period on the
related Income PRIDES, which amount the Purchase Contract Agent shall promptly
remit to the Company, and (ii) transferring the related Income PRIDES to the
Purchase Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has
Transferred the relevant Treasury Securities to the Collateral Agent pursuant to
clause (a) above (stating
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the Value of the Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent to release from
the Pledge the Pledged Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, related to such Income
PRIDES. The Purchase Contract Agent shall instruct the Collateral Agent in the
form provided in Exhibit A; provided, however, that if a Tax Event Redemption
has occurred and the Treasury Portfolio has become a component of the Income
PRIDES, Holders of Income PRIDES may make such substitution only in integral
multiples of Income PRIDES at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Upon receipt of
Treasury Securities from a Holder of Income PRIDES and the related instruction
from the Purchase Contract Agent, the Collateral Agent shall release the Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and shall promptly Transfer to the securities
account specified by the Purchase Contract Agent such Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, free and clear of any lien, pledge or security interest created hereby,
to the Purchase Contract Agent. All items Transferred and/or substituted by any
Holder pursuant to this Section 4.1, Section 4.2 or any other Section of this
Agreement shall be Transferred and/or substituted free and clear of all liens,
claims and encumbrances.
Section 4.2. Substitution of Treasury Securities and the Creation of
Income PRIDES. At any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date (or on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date, if a
Tax Event Redemption has occurred), a Holder of Growth PRIDES shall have the
right to create or recreate Income PRIDES in integral multiples of 40 Income
PRIDES by (a) Transferring to the Collateral Agent Debentures (or the
appropriate Applicable Ownership Interest (as defined in clause (A) of the
definition of such term) of the Treasury Portfolio) having a Value equal to the
Value of the Pledged Treasury Securities to be released and (b) delivering the
related Growth PRIDES to the Purchase Contract Agent, accompanied by a notice,
substantially in the form of Exhibit B hereto, to the Purchase Contract Agent
stating that such Holder has
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transferred the relevant amount of Debentures (or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be) to the
Collateral Agent pursuant to clause (a) above and requesting that the Purchase
Contract Agent instruct the Collateral Agent to release from the Pledge the
Pledged Treasury Securities underlying such Growth PRIDES. The Purchase Contract
Agent shall instruct the Collateral Agent in the form provided in Exhibit A;
provided, however, that if a Tax Event Redemption has occurred and the Treasury
Portfolio has become a component of the Income PRIDES, Holders of Growth PRIDES
may make such substitution only in integral multiples of Growth PRIDES, at any
time on or prior to the Business Day immediately preceding the Purchase Contract
Settlement Date. Upon receipt of the Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, from such
Holder and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities having a corresponding aggregate
principal amount from the Pledge and shall promptly Transfer such Treasury
Securities, free and clear of any lien, pledge or security interest created
hereby, to the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral Agent
of written notice from the Company or the Purchase Contract Agent that there has
occurred a Termination Event, the Collateral Agent shall release all Collateral
from the Pledge and shall promptly Transfer any Pledged Debentures (or the
Applicable Ownership Interest of the Treasury Portfolio if a Tax Event
Redemption has occurred) and Pledged Treasury Securities to the Purchase
Contract Agent for the benefit of the Holders of the Income PRIDES and the
Growth PRIDES, respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the Company's becoming a
debtor under the Bankruptcy Code, and if the Collateral Agent shall for any
reason fail promptly to effectuate the release and Transfer of all Pledged
Debentures, the Treasury Portfolio or of the Pledged Treasury Securities, as the
case may be, as provided by this Section 4.3, the Purchase Contract Agent shall
(i) use its best efforts to obtain an opinion of a nationally recognized law
firm reasonably acceptable to
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the Collateral Agent to the effect that, as a result of the Company's being the
debtor in such a bankruptcy case, the Collateral Agent will not be prohibited
from releasing or Transferring the Collateral as provided in this Section 4.3,
and shall deliver such opinion to the Collateral Agent within ten days after the
occurrence of such Termination Event, and if (y) the Purchase Contract Agent
shall be unable to obtain such opinion within ten days after the occurrence of
such Termination Event or (z) the Collateral Agent shall continue, after
delivery of such opinion, to refuse to effectuate the release and Transfer of
all Pledged Debentures, the Treasury Portfolio or the Pledged Treasury
Securities, as the case may be, as provided in this Section 4.3, then the
Purchase Contract Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court with
jurisdiction of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer of all
Pledged Debentures, the Treasury Portfolio or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3 or (ii) commence
an action or proceeding like that described in subsection (i)(z) hereof within
ten days after the occurrence of such Termination Event.
Section 4.4. Cash Settlement. (a) Upon receipt by the Collateral Agent
of (i) a notice from the Purchase Contract Agent promptly after the receipt by
the Purchase Contract Agent of such notice that a Holder of an Income PRIDES has
elected, in accordance with the procedures specified in Section 5.4(a)(i) or
(d)(i) of the Purchase Contract Agreement, respectively, to settle its Purchase
Contract with Cash and (ii) payment of the amount required to settle such
Purchase Contract by such Holder on or prior to 11:00 a.m., New York City time,
on the Business Day immediately preceding the Purchase Contract Settlement Date
in lawful money of the United States by certified or cashiers' check or wire
transfer in immediately available funds payable to or upon the order of the
Company, then the Collateral Agent shall, promptly invest any Cash received from
a Holder in connection with a Cash Settlement in Permitted Investments. Upon
receipt of the proceeds upon the maturity of the Permitted Investments on the
Purchase Contract Settlement Date, the Collateral Agent shall pay the portion of
such proceeds and deliver any certified or cashiers' checks received and any
funds
20
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so wired, in an aggregate amount equal to the Purchase Price, to the Company on
the Purchase Contract Settlement Date, and shall distribute any funds in respect
of the interest earned from the Permitted Investments to the Purchase Contract
Agent for payment to the relevant Holders.
(b) If a Holder of an Income PRIDES (if a Tax Event Redemption has not
occurred) fails to notify the Agent of its intention to make a Cash Settlement
in accordance with Section 5.4(a)(i) of the Purchase Contract Agreement, such
failure shall constitute an event of default under the Purchase Contract
Agreement and hereunder, and the Holder shall be deemed to have consented to the
disposition of the Pledged Debentures pursuant to the remarketing as described
in Section 5.4(b) of the Purchase Contract Agreement, which is incorporated
herein by reference. If a Holder of an Income PRIDES does notify the Agent as
provided in Section 5.4(a)(i) of the Purchase Contract Agreement of its
intention to pay the Purchase Price in cash, but fails to make such payment as
required by Section 5.4(a)(ii) of the Purchase Contract Agreement, the
Debentures of such a Holder will not be remarketed but instead the Collateral
Agent, for the benefit of the Company, will exercise its rights as a secured
party with respect to such Debentures at the direction of the Company to retain
or dispose of the Collateral in accordance with applicable law. In addition, in
the event of a Failed Remarketing as described in Section 5.4(b) of the Purchase
Contract Agreement, such Failed Remarketing shall constitute an additional event
of default hereunder by such Holder and the Collateral Agent, for the benefit of
the Company, will also exercise its rights as a secured party with respect to
such Debentures at the direction of the Company to retain or dispose of the
Collateral in accordance with applicable law.
(c) If a Holder of an Income PRIDES (if a Tax Event Redemption has
occurred) fails to notify the Purchase Contract Agent of such Holder's intention
to make a Cash Settlement in accordance with Section 5.4(d)(i) of the Purchase
Contract Agreement, or if a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) does notify the Agent as provided in paragraph 5.4
(d)(i) of the Purchase Contract Agreement of its intention to pay the Purchase
Price in cash, but fails to make such payment
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as required by paragraph 5.4(d)(ii) of the Purchase Contract Agreement, such
failure shall constitute an event of default hereunder by such Holder and upon
the maturity of the appropriate Applicable Ownership Interest of the Treasury
Portfolio, held by the Collateral Agent on the Business Day immediately
preceding the Purchase Contract Settlement Date, the principal amount of the
appropriate Applicable Ownership Interest of the Treasury Portfolio, received by
the Collateral Agent shall, upon written direction of the Company, be invested
promptly in overnight Permitted Investments. On the Purchase Contract Settlement
Date, an amount equal to the Purchase Price will be remitted to the Company as
payment thereof without receiving any instructions from the Holder. In the event
the sum of the proceeds from the appropriate Applicable Ownership Interest of
the Treasury Portfolio and the investment earnings earned from such investments
is in excess of the aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent shall distribute such excess to the
Purchase Contract Agent for the benefit of the Holder of the related Income
PRIDES when received.
Section 4.5. Early Settlement. Upon written notice to the Collateral
Agent by the Purchase Contract Agent that one or more Holders of Securities have
elected to effect Early Settlement of their respective obligations under the
Purchase Contracts forming a part of such Securities in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement (setting
forth the number of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the terms of the
Purchase Contracts and the Purchase Contract Agreement and that all conditions
to such Early Settlement have been satisfied, then the Collateral Agent shall
release from the Pledge, (a) Pledged Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio in the case of a Holder of Income
PRIDES or (b) Pledged Treasury Securities in the case of a Holder of Growth
PRIDES, as the case may be, in each case with an aggregate liquidation amount or
principal amount, as the case may be, equal to the product of (i) the Stated
Amount times (ii) the number of such Purchase Contracts as to which such Holders
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have elected to effect Early Settlement and shall Transfer all such Pledged
Debentures, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or the Pledged Treasury Securities, as the case may be, free and clear
of the Pledge created hereby, to the Purchase Contract Agent for the benefit of
such Holders.
Section 4.6. Application of Proceeds; Settlement. (a) In the event a
Holder of Income PRIDES (if a Tax Event Redemption has not occurred) has not
elected to make an effective Cash Settlement by notifying the Purchase Contract
Agent in the manner provided for in paragraph 5.4(a)(i) in the Purchase Contract
Agreement and has not made an Early Settlement of the Purchase Contracts
underlying its Income PRIDES, such Holder shall be deemed to have elected to pay
for the shares of Common Stock to be issued under such Purchase Contracts from
the Proceeds of the related Pledged Debentures. The Collateral Agent shall, by
10:00 a.m., New York City time, on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, without any instruction from such Holder
of Income PRIDES, present the related Pledged Debentures to the Remarketing
Agent for remarketing. Upon receiving such Pledged Debentures, the Remarketing
Agent, pursuant to the terms of the Remarketing Agreement and the Supplemental
Remarketing Agreement, will use its reasonable efforts to remarket such Pledged
Debentures on such date at a price of approximately % (but not less than 100%)
of the aggregate Value of such Pledged Debentures, plus accrued and unpaid
interest (including deferred interest), if any, thereon. After deducting as the
Remarketing Fee an amount not exceeding basis points ( %) of the aggregate Value
of the remarketed Pledged Debentures from any amount of such Proceeds in excess
of the aggregate Value, plus such accrued and unpaid interest (including
deferred interest) of the remarketed Pledged Debentures, the Remarketing Agent
will remit the entire amount of the Proceeds of such remarketing to the
Collateral Agent. On the Purchase Contract Settlement Date, the Collateral Agent
shall apply that portion of the Proceeds from such remarketing equal to the
aggregate Value of such remarketed Pledged Debentures to satisfy in full the
obligations of such Holders of Income PRIDES to pay the Purchase Price to
purchase the Common Stock under the related Purchase Contracts. The remaining
portion of such Proceeds, if any, shall be remitted by the Collateral
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Agent to the Purchase Contract Agent for payment to the Holders. If the
Remarketing Agent advises the Collateral Agent in writing that it cannot
remarket the related Pledged Debentures of such Holders of Income PRIDES at a
price not less than 100% of the aggregate Value of such Pledged Debentures plus
any accrued and unpaid interest (including deferred interest) or if the
remarketing shall not have occurred because a condition precedent to the
remarketing shall not have been fulfilled, thus resulting in a Failed
Remarketing and an event of default under the Purchase Contract Agreement and
hereunder, the Collateral Agent, for the benefit of the Company will, at the
written direction of the Company, retain or dispose of the Pledged Debentures in
accordance with applicable law and satisfy in full, from any such disposition or
retention, such Holder's obligation to pay the Purchase Price for the Common
Stock.
(b) In the event a Holder of Growth PRIDES or Income PRIDES (if a Tax
Event Redemption has occurred) has not made an Early Settlement of the Purchase
Contracts underlying its Growth PRIDES or Income PRIDES, or in the event a Tax
Event Redemption has occurred and a Holder of Income PRIDES has not elected to
make an effective Cash Settlement by notifying the Purchase Contract Agent in
the manner provided in paragraph 5.4(d)(i) of the Purchase Contract Agreement,
such Holder shall be deemed to have elected to pay for the shares of Common
Stock to be issued under such Purchase Contracts from the Proceeds of the
related Pledged Treasury Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be. On the Business Day
immediately prior to the Purchase Contract Settlement Date, the Collateral Agent
shall, at the written direction of the Purchase Contract Agent, invest the Cash
proceeds of the maturing Pledged Treasury Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
overnight Permitted Investments. Without receiving any instruction from any such
Holder of Growth PRIDES or Income PRIDES (if a Tax Event Redemption has
occurred), the Collateral Agent shall apply the Proceeds of the related Pledged
Treasury Securities or appropriate Applicable Ownership Interest of the Treasury
Portfolio to the settlement of such Purchase Contracts on the Purchase Contract
Settlement Date.
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In the event the sum of the Proceeds from the related Pledged Treasury
Securities or appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and the investment earnings from the investment
in overnight Permitted Investments is in excess of the aggregate Purchase Price
of the Purchase Contracts being settled thereby, the Collateral Agent shall
remit such excess, when received, to the Purchase Contract Agent for the benefit
of the Holders.
(c) Pursuant to the Remarketing Agreement and subject to the terms of
the Supplemental Remarketing Agreement, on or prior to the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, but no earlier than
the Payment Date immediately preceding the Purchase Contract Settlement Date,
holders of Separate Debentures may elect to have their Separate Debentures
remarketed by delivering their Separate Debentures, together with a notice of
such election, substantially in the form of Exhibit C hereto, to the Custodial
Agent. The Custodial Agent shall hold such Separate Debentures in an account
separate from the Collateral Account. A holder of Separate Debentures electing
to have its Separate Debentures remarketed will also have the right to withdraw
such election by written notice to the Custodial Agent, substantially in the
form of Exhibit D hereto, on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, upon which notice the Custodial
Agent shall return such Separate Debentures to such holder. On the fourth
Business Day immediately preceding the Purchase Contract Settlement Date, the
Custodial Agent shall notify the Remarketing Agent of the aggregate principal
amount of the separate Debentures to be remarketed and will deliver to the
Remarketing Agent for remarketing all separate Debentures delivered to the
Custodial Agent pursuant to this Section 4.6(c) and not withdrawn pursuant to
the terms hereof prior to such date. The portion of the proceeds from such
remarketing equal to the aggregate Value of such Separate Debentures will
automatically be remitted by the Remarketing Agent to the Custodial Agent for
the benefit of the holders of such Separate Debentures. In addition, after
deducting as the Remarketing Fee an amount not exceeding basis points ( %) of
the Value of the remarketed Separate Debentures, from any amount of such
proceeds in excess of the aggregate Value of the remarketed Separate Debentures
plus any accrued and unpaid interest (including deferred
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interest, if any), the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of such holders. If,
despite using its reasonable efforts, the Remarketing Agent advises the
Custodial Agent in writing that it cannot remarket the related Separate
Debentures of such holders at a price not less than 100% of the aggregate Value
of such Separate Debentures plus accrued and unpaid interest (including deferred
interest) or if the remarketing shall not have occurred because a condition
precedent to the remarketing shall not have been fulfilled, and thus resulting
in a Failed Remarketing, the Remarketing Agent will promptly return such
Debentures to the Custodial Agent for redelivery to such holders.
Section 5. Voting Rights -- Debentures. The Purchase Contract Agent
may exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Debentures or any part thereof for
any purpose not inconsistent with the terms of this Agreement and in accordance
with the terms of the Purchase Contract Agreement; provided, that the Purchase
Contract Agent shall not exercise or, as the case may be, shall not refrain from
exercising such right if, in the judgment of the Company, such action would
impair or otherwise have a material adverse effect on the value of all or any of
the Pledged Debentures; and provided, further, that the Purchase Contract Agent
shall give the Company and the Collateral Agent at least five days' prior
written notice of the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of any notices and
other communications in respect of any Pledged Debentures, including notice of
any meeting at which holders of Debentures are entitled to vote or solicitation
of consents, waivers or proxies of holders of Debentures, the Collateral Agent
shall use reasonable efforts to send promptly to the Purchase Contract Agent
such notice or communication, and as soon as reasonably practicable after
receipt of a written request therefor from the Purchase Contract Agent, execute
and deliver to the Purchase Contract Agent such proxies and other instruments in
respect of such Pledged Debentures (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with respect to
the Pledged Debentures.
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Section 6. Rights and Remedies; Tax Event Redemption
Section 6.1. Rights and Remedies of the Collateral Agent. (a) In
addition to the rights and remedies specified in Section 4.4 hereof or otherwise
available at law or in equity, after an event of default hereunder, the
Collateral Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time (the
"Code") (whether or not, to the extent permitted by law, the Code is in effect
in the jurisdiction where the rights and remedies are asserted) and the TRADES
Regulations and such additional rights and remedies to which a secured party is
entitled under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted. Wherever reference is made in this Agreement
to any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code which is a successor to, or amendment of,
such section. Without limiting the generality of the foregoing, such remedies
may include, to the extent permitted by applicable law, (i) retention of the
Pledged Debentures or other Collateral in full satisfaction of the Holders
obligations under the Purchase Contracts or (ii) sale of the Pledged Debentures
or other Collateral in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, in the event the Collateral Agent is unable
to make payments to the Company on account of the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio or on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in satisfaction of the
obligations of the Holder of the Securities of which such Pledged Treasury
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, is a part under the related Purchase Contracts, the inability to
make such payments shall constitute an event of default hereunder and the
Collateral Agent shall have and may exercise, with reference to such Pledged
Treasury Securities, or
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such appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as applicable, and such
obligations of such Holder, any and all of the rights and remedies available to
a secured party under the Code and the TRADES Regulations after default by a
debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this
Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably
authorized to receive and collect all payments of (i) the stated liquidated
amount of or, interest payments on, the Pledged Debentures, (ii) the principal
amount of the Pledged Treasury Securities, or (iii) the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, subject, in each case, to the provisions of Section
3, and as otherwise granted herein.
(d) The Purchase Contract Agent, individually and as attorney-in-fact
for each Holder of Securities, in the event such Holder becomes the Holder of a
Growth PRIDES, agrees that, from time to time, upon the written request of the
Collateral Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as the
Collateral Agent may reasonably request in order to maintain the Pledge, and the
perfection and priority thereof, and to confirm the rights of the Collateral
Agent hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Collateral Agent hereunder, except for liability for its own negligent act, its
own negligent failure to act or its own willful misconduct.
Section 6.2. Tax Event Redemption. Upon the occurrence of a Tax Event
Redemption prior to the Purchase Contract Settlement Date, the Redemption Price
payable on the Tax Event Redemption Date with respect to the Applicable
Principal Amount of Debentures shall be delivered to the Collateral Agent by the
Debenture Trustee on or prior to 12:00 p.m., New York City time, by check or
wire transfer in immediately available funds at such place and at such account
as may be designated by the Collateral Agent in exchange for the Pledged
Debentures. In the event the Collateral Agent receives such Redemption
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Price, the Collateral Agent will, at the written direction of the Company, apply
an amount equal to the Redemption Amount of such Redemption Price to purchase
from the Quotation Agent the Treasury Portfolio and promptly remit the remaining
portion of such Redemption Price to the Purchase Contract Agent for payment to
the Holders of Income PRIDES. The Collateral Agent shall Transfer the Treasury
Portfolio to the Collateral Account in the manner specified herein for Pledged
Debentures to secure the obligation of all Holders of Income PRIDES to purchase
Common Stock of the Company under the Purchase Contracts constituting a part of
such Income PRIDES, in substitution for the Pledged Debentures. Thereafter the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Treasury Portfolio as it had in respect of the Pledged Debentures
as provided in Sections 2, 3, 4, 5 and 6, and any reference herein to the
Debentures shall be deemed to be reference to such Treasury Portfolio, and any
reference herein to interest on the Debentures shall be deemed to be a reference
to distributions on such Treasury Portfolio.
Section 6.3. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, for Collateral
held by the Collateral Agent, such substitution shall not constitute a novation
of the security interest created hereby.
Section 7. Representations and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders from time to
time, acting through the Purchase Contract Agent as their attorney-in-fact (it
being understood that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder), hereby represent
and warrant to the Collateral Agent, which representations and warranties shall
be deemed repeated on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security interest in
and lien on the Collateral;
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(b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form,
is the sole holder of such Collateral and is the sole
beneficial owner of, or has the right to Transfer, the
Collateral it Transfers to the Collateral Agent, free and
clear of any security interest, lien, encumbrance, call,
liability to pay money or other restriction other than the
security interest and lien granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral
Account, the Collateral Agent, for the benefit of the
Company, will have a valid and perfected first priority
security interest therein (assuming that any central
clearing operation or any Intermediary or other entity not
within the control of the Holder involved in the Transfer of
the Collateral, including the Collateral Agent, gives the
notices and takes the action required of it hereunder and
under applicable law for perfection of that interest and
assuming the establishment and exercise of control pursuant
to Section 2.2 hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the
creation of any security interest, lien or other encumbrance
on the Collateral other than the security interest and lien
granted under Section 2 hereof or violate any provision of
any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking
to which it is a party or which is binding on it or any of
its assets.
Section 7.2. Covenants. The Holders from time to time, acting through
the Purchase Contract Agent as their attorney-in-fact (it being understood that
the Purchase Contract Agent shall not be liable for any covenant made
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by or on behalf of a Holder), hereby covenant to the Collateral Agent that for
so long as the Collateral remains subject to the Pledge:
(a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any
mortgage, charge, lien, pledge or any other security
interest whatsoever over the Collateral or any part of it
other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will
sell or otherwise dispose (or attempt to dispose) of the
Collateral or any part of it except for the beneficial
interest therein, subject to the pledge hereunder,
transferred in connection with the Transfer of the
Securities.
Section 8. The Collateral Agent. It is hereby agreed as follows:
Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as Agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. Each of
the Collateral Agent, the Custodial Agent and the Securities Intermediary: (a)
shall have no duties or responsibilities except those expressly set forth in
this Agreement and no implied covenants or obligations shall be inferred from
this Agreement against any of them, nor shall any of them be bound by the
provisions of any agreement beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or in any certificate
or other document referred to or provided for in, or received by it under, this
Agreement, the Securities or the Purchase Contract Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement (other than as against the Collateral Agent), the Securities or the
Purchase Contract Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any other Person (except
the Collateral Agent, the Custodial Agent
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or the Securities Intermediary, as the case may be) to perform any of its
obligations hereunder or thereunder or for the perfection, priority or, except
as expressly required hereby, maintenance of any security interest created
hereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder (except in the case of the Collateral Agent,
pursuant to directions furnished under Section 8.2 hereof, subject to Section
8.6 hereof); (d) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any other document or instrument referred to or
provided for herein or in connection herewith or therewith, except for its own
negligence, bad faith or willful misconduct; (e) shall not be required to advise
any party as to selling or retaining, or taking or refraining from taking any
action with respect to, the Securities or other property deposited hereunder;
and (f) shall not be responsible for the acts or omissions of any clearing
corporation with whom collateral is deposited. Subject to the foregoing, during
the term of this Agreement, the Collateral Agent shall take all reasonable
action in connection with the safekeeping and preservation of the Collateral
hereunder.
No provision of this Agreement shall require the Collateral Agent, the
Custodial Agent or the Securities Intermediary to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or
the Securities Intermediary be liable for any amount in excess of the Value of
the Collateral. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each
in its individual capacity, hereby waive any right of setoff, bankers lien,
liens or perfection rights as securities intermediary or any counterclaim with
respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as the
case may be, to direct the time, method and place of conducting any proceeding
for the realization of any right or remedy available to the Collateral Agent, or
of exercising any power conferred on the Collateral
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Agent, the Custodial Agent or the Securities Intermediary, as the case may be,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent, the Custodial Agent and the Securities Intermediary shall be adequately
indemnified as provided herein. Nothing in this Section 8.2 shall impair the
right of the Collateral Agent in its discretion to take any action or omit to
take any action which it deems proper and which is not inconsistent with such
direction.
Section 8.3. Reliance. Each of the Securities Intermediary, the
Custodial Agent and the Collateral Agent shall be entitled conclusively to rely
upon any certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be. As to
any matters not expressly provided for by this Agreement, the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Company in accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral Agent, the
Custodial Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept deposits from, lend
money to, make their investments in and generally engage in any kind of banking,
trust or other business with the Purchase Contract Agent, any Holder of
Securities and any holder of separate Debentures (and any of their respective
subsidiaries or affiliates) as if it were not acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and their
affiliates may accept fees and other consideration from the Purchase Contract
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Agent, any Holder of Securities or any holder of separate Debentures without
having to account for the same to the Company; provided that each of the
Securities Intermediary, the Custodial Agent and the Collateral Agent covenants
and agrees with the Company that it shall not accept, receive or permit there to
be created in favor of itself and shall take no affirmative action to permit
there to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral shall
be segregated or the books and records of the Collateral Agent and not
commingled with any other assets of any such Person.
Section 8.5. Non-Reliance. None of the Securities Intermediary, the
Custodial Agent or the Collateral Agent shall be required to keep itself
informed as to the performance or observance by the Purchase Contract Agent or
any Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase Contract Agent or any
Holder of Securities. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information concerning
the affairs, financial condition or business of the Purchase Contract Agent, any
Holder of Securities or any holder of separate Debentures (or any of their
respective subsidiaries or affiliates) that may come into the possession of the
Collateral Agent, the Custodial Agent or the Securities Intermediary or any of
their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company agrees: (i) to
pay each of the Collateral Agent and the Custodial Agent from time to time such
compensation as shall be agreed in writing between the Company and the
Collateral Agent or the Custodial Agent, as the case may be, for all services
rendered by each of them hereunder and (ii) to indemnify the Collateral Agent,
the Custodial Agent and the Securities Intermediary for, and to hold each of
them harmless from and against, any loss, liability or reasonable out-of-pocket
expense incurred without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or administration of
its powers and duties under
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this Agreement, including the reasonable out-of-pocket costs and expenses
(including reasonable fees and expenses of counsel) of defending itself against
any claim or liability in connection with the exercise or performance of such
powers and duties. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall each promptly notify the Company of any third party claim
which may give rise to the indemnity hereunder and give the Company the
opportunity to participate in the defense of such claim with counsel reasonably
satisfactory to the indemnified party, and no such claim shall be settled
without the written consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.7. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent and the Custodial Agent shall
be entitled, after prompt notice to the Company and the Purchase Contract Agent,
at its sole option, to refuse to comply with any and all claims, demands or
instructions with respect to such property or funds so long as such dispute or
conflict shall continue, and neither the Collateral Agent nor the Custodial
Agent shall be or become liable in any way to any of the parties hereto for its
failure or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent and the Custodial Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse claims or demands
shall have been finally determined by a court of competent jurisdiction or
settled by agreement between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or the Custodial Agent, as the case may be,
or (ii) the Collateral Agent or the Custodial Agent, as the case may be, shall
have received security or an indemnity reasonably satisfactory to the Collateral
Agent or the Custodial Agent, as the case may be, sufficient to save the
Collateral Agent or the Custodial Agent, as the case may be, harmless from and
against any and all loss, liability or reasonable out-of-pocket expense which
the Collateral Agent or the Custodial Agent, as the case may be, may incur by
reason of its acting without bad faith, willful misconduct or negligence. The
Collateral Agent or the Custodial Agent may in addition elect to commence an
interpleader action or seek other judicial relief or
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orders as the Collateral Agent or the Custodial Agent, as the case may be, may
deem necessary. Notwithstanding anything contained herein to the contrary,
neither the Collateral Agent nor the Custodial Agent shall be required to take
any action that is in its opinion contrary to law or to the terms of this
Agreement, or which would in its opinion subject it or any of its officers,
employees or directors to liability.
Section 8.8. Resignation. Subject to the appointment and acceptance of
a successor Collateral Agent or Custodial Agent as provided below, (a) the
Collateral Agent and the Custodial Agent may resign at any time by giving notice
thereof to the Company and the Purchase Contract Agent as attorney-in-fact for
the Holders of Securities, (b) the Collateral Agent and the Custodial Agent may
be removed at any time by the Company and (c) if the Collateral Agent or the
Custodial Agent fails to perform any of its material obligations hereunder in
any material respect for a period of not less than 20 days after receiving
written notice of such failure by the Purchase Contract Agent and such failure
shall be continuing, the Collateral Agent or the Custodial Agent may be removed
by the Purchase Contract Agent. The Purchase Contract Agent shall promptly
notify the Company of any removal of the Collateral Agent pursuant to clause (c)
of the immediately preceding sentence. Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent or
Custodial Agent, as the case may be. If no successor Collateral Agent or
Custodial Agent, as the case may be, shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
or Custodial Agent's giving of notice of resignation or such removal, then the
retiring Collateral Agent or Custodial Agent, as the case may be, may petition
any court of competent jurisdiction for the appointment of a successor
Collateral Agent or Custodial Agent, as the case may be. Each of the Collateral
Agent and the Custodial Agent shall be a bank which has an office in New York,
New York with a combined capital and surplus of at least $75,000,000. Upon the
acceptance of any appointment as Collateral Agent or Custodial Agent, as the
case may be, hereunder by a successor Collateral Agent or Custodial Agent, as
the case may be, such successor shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent or Custodial Agent, as the case may be, and the retiring Collateral Agent
or
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Custodial Agent, as the case may be, shall take all appropriate action to
transfer any money and property held by it hereunder (including the Collateral)
to such successor. The retiring Collateral Agent or Custodial Agent shall, upon
such succession, be discharged from its duties and obligations as Collateral
Agent or Custodial Agent hereunder. After any retiring Collateral Agent's or
Custodial Agent's resignation hereunder as Collateral Agent or Custodial Agent,
the provisions of this Section 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Collateral Agent or Custodial Agent. Any resignation or removal of the
Collateral Agent hereunder shall be deemed for all purposes of this Agreement as
the simultaneous resignation or removal of the Custodial Agent and the
Securities Intermediary.
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of its
duties hereunder, and the Collateral Agent shall not be liable for any action
taken or omitted by, or in reliance upon the advice of, such agents or advisors
selected in good faith. The appointment of agents pursuant to this Section 8.9
shall be subject to prior consent of the Company, which consent shall not be
unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent or the Custodial Agent.
Section 8.11. Exculpation. Anything in this Agreement to the contrary
notwithstanding, in no event shall any of the Collateral Agent, the Custodial
Agent or the Securities Intermediary or their officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Collateral
Agent, the Custodial Agent or the Securities Intermediary, or any of them,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the
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Collateral Agent, the Custodial Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the consent
of any Holders or the holders of any Separate Debentures, the Company, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract Agent,
for any of the following purposes:
(1) to evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company so long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security interests
granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the consent of
the Holders of not less than a majority of the Purchase Contracts at the time
outstanding, by Act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
duly authorized, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent
38
<PAGE> 42
and the Securities Intermediary may amend this Agreement for the purpose of
modifying in any manner the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PRIDES to substitute the
Treasury Securities for the Pledged Debentures or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, or the rights of Holders of Growth PRIDES to substitute
Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as applicable, for the Pledged Treasury
Securities), impair the right of the Holder of any Security to receive
distributions on the underlying Collateral or otherwise adversely
affect the Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require the consent of
the Holder of each Outstanding Security affected thereby pursuant to
the Purchase Contract Agreement if such action were effected by an
agreement supplemental thereto;
(3) reduce the amount payable or distributable to Holders upon
the remarketing of Debentures; or
(4) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent shall be entitled to
receive and (subject to Section 8.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the
Purchase Contract Agent) shall be fully protected in relying upon, an
39
<PAGE> 43
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent, if any, to the
execution and delivery of such amendment have been satisfied. All amendments
must be in writing, signed by all parties to this Agreement.
Section 9.4. Effect of Amendments. Upon the execution of any amendment
under this Section 9, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if required
by the Collateral Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral Agent as to any
matter provided for in such amendment. If the Company shall so determine, new
Security Certificates so modified as to conform, in the opinion of the
Collateral Agent, the Purchase Contract Agent and the Company, to any such
amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement and without charge or expense
to Holders in exchange for Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. To the extent permitted by law, no failure on
the part of any party hereto or any of its agents to exercise, and no course of
dealing with respect to, and no delay in exercising, any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise by any party hereto or any of its agents of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. To the extent permitted by law, the remedies
herein are
40
<PAGE> 44
cumulative and are not exclusive of any remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting
the foregoing, the above choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, in connection
with the establishment and maintenance of the Collateral Account. The Company,
the Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, hereby submit to
the nonexclusive jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court sitting in New
York City for the purposes of all legal proceedings arising out of or relating
to this Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Securities, acting
through the Purchase Contract Agent as their attorney-in-fact, irrevocably
waive, to the fullest extent permitted by applicable law, any objection which
they may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum, as well as to trial by jury.
Section 10.3. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to the
intended recipient at the "Address for Notices" specified below its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
41
<PAGE> 45
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary
and the Purchase Contract Agent, and the Holders from time to time of the
Securities, by their acceptance of the same, shall be deemed to have agreed to
be bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be construed in order to carry out the intentions of the
parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to reimburse the
Collateral Agent and the Custodial Agent for: (a) all reasonable out-of-pocket
costs and expenses of the Collateral Agent and the Custodial Agent (including,
without limitation, the reasonable fees and expenses of counsel to the
Collateral Agent and the Custodial Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms of
this Agreement; (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
42
<PAGE> 46
revenue authority in respect of this Agreement or any other document referred to
herein and all costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of
the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other agreement or
instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
43
<PAGE> 47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
THE COASTAL CORPORATION
By:
--------------------------------------
Name:
Title:
Address for Notices:
THE COASTAL CORPORATION
Coastal Tower
Nine Greenway Plaza
Houston, TX 77046-0995
Attention: Chief Financial Officer
Telephone: (713) 877-1400
The Bank of New York,
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By:
--------------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Corporate Trust Administration
Telecopy: (212) 815-7157
<PAGE> 48
The Chase Manhattan Bank,
as Collateral Agent, Custodial
Agent and as Securities Intermediary
By:
--------------------------------------
Name:
Title:
Address for Notices:
o
o
o
o
Attention: Corporate Trust Administration
Telecopy: o
<PAGE> 49
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
THE CHASE MANHATTAN BANK
[ADDRESS]
Attention:
Re: FELINE PRIDES of The Coastal Corporation
(the "Company")
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of ____________, 1999, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of the Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities] [$_______stated
liquidation amount of Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for an
equal Value of [Pledged Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,], and upon the payment by such Holder of any
applicable fees, to release the [Debentures or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES]
<PAGE> 50
to us in accordance with the Holder's instructions. Capitalized terms used
herein but not defined shall have the meaning set forth in the Pledge Agreement.
Date:
-------------------- -----------------------------------------
By:
--------------------------------------
Name:
Title:
Signature Guarantee:
---------------------
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Debentures or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] for the [Pledged
Debentures or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities]:
- ------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
<PAGE> 51
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
101 Barclay Street
Floor 12 East
New York, NY 10286
Attention: Corporate Trust Administration
Re: FELINE PRIDES of The Coastal Corporation (the
"Company")
The undersigned Holder hereby notifies you that it has delivered to
The Chase Manhattan, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities] [$ aggregate stated liquidation amount of Debentures or
the appropriate Applicable Ownership Interest of the Treasury Portfolio, the
case may be,] in exchange for an equal Value of [Pledged Debentures or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be,] [Pledged Treasury Securities] held by the Collateral Agent, in
accordance with Section [4.1][4.2] of the Pledge Agreement, dated ______, 1999
(the "Pledge Agreement"), between you, the Company and the Collateral Agent. The
undersigned Holder has paid the Collateral Agent all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Debentures or the appropriate Applicable Ownership Interest of the
Treasury Portfolio] [Pledged Treasury Securities] related to such [Income
PRIDES] [Growth PRIDES]. Capitalized terms used herein but not defined shall
have the meaning set forth in the Pledge Agreement.
Dated:
-------------------- -----------------------------------------
Signature
Signature Guarantee:
---------------------
<PAGE> 52
Please print name and address of Registered Holder:
- ------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
<PAGE> 53
EXHIBIT C
INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING
The Chase Manhattan Bank
[ADDRESS]
Attention:
Re: Debentures of The Coastal Corporation (the
"Company")
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ________, 1999 (the "Pledge Agreement"),
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent, and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES from time to
time, that the undersigned elects to deliver $ stated liquidation amount of
Debentures for delivery to the Remarketing Agent on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date for remarketing
pursuant to Section 4.6(c) of the Pledge Agreement. The undersigned will, upon
request of the Remarketing Agent, execute and deliver any additional documents
deemed by the Remarketing Agent or by the Company to be necessary or desirable
to complete the sale, assignment and transfer of the Debentures tendered hereby.
The undersigned hereby instructs you, upon receipt of the Proceeds of
such remarketing from the Remarketing Agent to deliver such Proceeds to the
undersigned in accordance with the instructions indicated herein under "A.
Payment Instructions". The undersigned hereby instructs you, in the event of
Failed Remarketing, upon receipt of the Debentures tendered herewith from the
Remarketing Agent, to be delivered to the person(s) and the address(es)
indicated herein under "B. Delivery Instructions."
With this notice, the undersigned hereby (i) represents and warrants
that the undersigned has full power and authority to tender, sell, assign and
transfer the Debentures tendered hereby and that the undersigned is the record
owner of any Debentures tendered herewith in physical form or a participant in
The Depositary Trust Company ("DTC") and the beneficial owner of any Debentures
tendered herewith by book-entry transfer to your account at DTC and (ii) agrees
to be bound by the terms and conditions of Section 4.6(c) of the Pledge
Agreement. Capitalized terms
<PAGE> 54
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Date:
-------------------- -----------------------------------------
By:
--------------------------------------
Name:
Title:
Signature Guarantee:
---------------------
Please print name and address:
- ------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
- --------------------------------------------------------------------------------
A. PAYMENT INSTRUCTIONS
Proceeds of the remarketing should be paid by check in the name of the person(s)
set forth below and mailed to the address set forth below.
Name(s)
-------------------------------------------------------------------------
(Please Print)
Address
-------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
Name(s)
-------------------------------------------------------------------------
(Please Print)
Address
-------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depositary Trust Company set forth
below.
-------------------
DTC Account Number
Name of Account Party:
-----------------
- --------------------------------------------------------------------------------
<PAGE> 55
EXHIBIT D
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
The Chase Manhattan Bank
[ADDRESS]
Attention:
Re: Debentures of The Coastal Corporation (the
"Company"), and KBHC Financing I
The undersigned hereby notifies you in accordance with Section 4.6(c)
of the Pledge Agreement, dated as of ________, 1999 (the "Pledge Agreement")
among the Company, yourselves, as Collateral Agent, Securities Intermediary and
Custodial Agent and The Bank of New York, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Income PRIDES and Growth PRIDES from time to
time, that the undersigned elects to withdraw the $_____ aggregate stated
liquidation amount of Debentures delivered to the Custodial Agent on ________,
2002 for remarketing pursuant to Section 4.6(c) of the Pledge Agreement. The
undersigned hereby instructs you to return such Debentures to the undersigned in
accordance with the undersigned's instructions. With this notice, the
Undersigned hereby agrees to be bound by the terms and conditions of Section
4.6(c) of the Pledge Agreement. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date:
-------------------- -----------------------------------------
By:
--------------------------------------
Name:
Title:
Signature Guarantee:
---------------------
<PAGE> 56
Please print name and address:
- ------------------------------ -----------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
- --------------------------------------------------------------------------------
A. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Debentures which are in physical form
should be delivered to the person(s) set forth below and mailed to the address
set forth below.
Name(s)
-------------------------------------------------------------------------
(Please Print)
Address
-------------------------------------------------------------------------
(Please Print)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Zip Code)
- --------------------------------------------------------------------------------
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Debentures which are in book-entry form
should be credited to the account at The Depositary Trust Company set forth
below.
-------------------
DTC Account Number
Name of Account Party:
---------------
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 4.23
-------------------------------------------------
SEVENTH SUPPLEMENTAL INDENTURE
Dated as of , 1999
between
THE COASTAL CORPORATION
AS ISSUER
and
HARRIS TRUST & SAVINGS BANK
AS TRUSTEE
-------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS................................................................. 1
SECTION 1.1. Definition of Terms.......................................... 1
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES.............................. 3
SECTION 2.1. Designation and Principal Amount............................. 3
SECTION 2.2. Maturity..................................................... 3
SECTION 2.3. Form and Payment............................................. 3
SECTION 2.4. Global Debenture............................................. 3
SECTION 2.5. Interest..................................................... 4
ARTICLE III
REDEMPTION OF THE DEBENTURES................................................ 4
SECTION 3.1. Tax Event Redemption......................................... 4
SECTION 3.2. Redemption Procedure for Debentures.......................... 5
SECTION 3.3. No Sinking Fund.............................................. 5
SECTION 3.4. Option to Put Debentures upon a Failed Remarketing........... 5
SECTION 3.5. Repurchase Procedure for Debentures.......................... 5
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD........................................ 6
SECTION 4.1. Extension of Interest Payment Period......................... 6
SECTION 4.2. Notice of Extension.......................................... 6
ARTICLE V
EXPENSES.................................................................... 7
SECTION 5.1. Payment of Expenses.......................................... 7
ARTICLE VI
NOTICE...................................................................... 7
SECTION 6.1. Notice by the Company........................................ 7
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VII
FORM OF DEBENTURE........................................................... 7
SECTION 7.1. Form of Debenture............................................ 7
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES................................................ 16
SECTION 8.1. Original Issue of Debentures................................. 16
ARTICLE IX
MISCELLANEOUS............................................................... 16
SECTION 9.1. Ratification of Indenture.................................... 16
SECTION 9.2. Trustee Not Responsible for Recitals......................... 16
SECTION 9.3. Governing Law................................................ 16
SECTION 9.4. Separability................................................. 16
SECTION 9.5. Counterparts................................................. 16
SECTION 9.6. Guarantee and Declaration.................................... 17
ARTICLE X
REMARKETING................................................................. 17
SECTION 10.1. Intentionally Left Blank..................................... 17
SECTION 10.2. Remarketing Procedures....................................... 17
</TABLE>
ii
<PAGE> 4
SEVENTH SUPPLEMENTAL INDENTURE, dated as of , 1999 (the "Seventh
Supplemental Indenture"), between The Coastal Corporation, a corporation duly
organized and existing under the laws of the State of Delaware (the "Company"),
and Harris Trust and Savings Bank, as trustee (the "Trustee").
WHEREAS, the Company executed and delivered the Indenture dated as of
February 24, 1997 (the "Base Indenture") to the Trustee to provide for the
issuance of the Company's senior unsecured debentures, notes or other evidence
of indebtedness (the "Securities"), to be issued from time to time in one or
more series as might be determined by the Company under the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to
be known as its % Debentures due 16, 2004 (the "Debentures"), the form and
terms of such Debentures and the terms, provisions and conditions thereof to be
set forth as provided in the Base Indenture and this Seventh Supplemental
Indenture (together, the "Indenture");
WHEREAS, the Company has requested that the Trustee execute and
deliver this Seventh Supplemental Indenture and all requirements necessary to
make this Seventh Supplemental Indenture a valid, binding and enforceable
instrument in accordance with its terms, and to make the Debentures, when
executed, authenticated and delivered by the Company, the valid, binding and
enforceable obligations of the Company, have been done and performed, and the
execution and delivery of this Seventh Supplemental Indenture has been duly
authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Debentures by the Holders thereof, and for the purpose of setting forth, as
provided in the Base Indenture, the form and terms of the Debentures, the
Company covenants and agrees with the Company as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
Unless the context otherwise requires:
(a) a term defined in the Base Indenture has the same meaning when
used in this Seventh Supplemental Indenture;
(b) a term defined anywhere in this Seventh Supplemental Indenture has
the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect
interpretation;
(e) the following terms have the meanings given to them in the
Purchase Contract Agreement: (i) Applicable Principal Amount; (ii) Authorized
Newspaper; (iii) Cash Settlement; (iv) Clearing Agency; (v) DTC; (vi) FELINE
PRIDES; (vii) Growth PRIDES; (viii) Income PRIDES; (ix) Debenture Certificate;
(x) Distributions; (xi) Purchase Contract Agreement; (xii) Purchase Contract
Agent; (xiii) Quotation Agent; (xiv) Regular Trustees; (xv) Redemption Amount,
(xvi) Reset Agent; (xvii) Reset Announcement Date; (xviii) Reset Rate (xix)
Reset Spread; (xx) Tax Event; (xxi) Tax Event Redemption Date; (xxii) Treasury
Portfolio Purchase Price; (xxiii) Treasury Portfolio; (xxiv) Treasury
Securities, (xxv) Two-Year Benchmark Treasury; and (xxvi) Underwriting
Agreement.
<PAGE> 5
(f) the following terms have the meanings given to them in this
Section 1.1(f):
"Compound Interest" shall have the meaning set forth in Section 4.1.
"Coupon Rate" shall have the meaning set forth in Section 2.5.
"Custodial Agent" means The Chase Manhattan Bank, as Custodial Agent.
"Debentures" shall have the meaning specified in Section 2.1.
"Debenture Repayment Price" shall have the meaning set forth in
Section 3.4.
"Deferred Interest" shall have the meaning set forth in Section 4.1
hereof.
"Exchange Agent" means the Trustee.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Failed Remarketing" shall have the meaning set forth in Section
10.2(h).
"Global Debentures" shall have the meaning set forth in Section 2.4.
"Maturity Date" shall have the meaning specified in Section 2.2.
"Pledge Agreement" means the Pledge Agreement dated as of o, 1999,
among the Company, The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent"), custodial agent and securities intermediary and The Bank
of New York, as purchase contract agent and attorney-in-fact.
"Purchase Contract" shall have the meaning set forth in the Purchase
Contract Agreement.
"Purchase Contract Settlement Date" means o 16, 2002.
"Put-Option" shall have the meaning set forth in Section 3.4.
"Put-Option Exercise Date" shall have the meaning set forth in Section
3.4.
"Regular Record Date" means, with respect to any Interest Payment Date
for the Debentures, the close of business on the first day of the month in
which such Interest Payment Date falls.
"Remarketing Agent" means Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated or any successor thereto or replacement Remarketing
Agent under the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing Agreement, dated as of
o, 1999, among the Company, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated, as remarketing agent and The Bank of New York, as
purchase contract agent and attorney-in-fact.
"Remarketing" and "Remarketing Date" shall have the meanings set forth
in the Remarketing Agreement.
The terms "Seventh Supplemental Indenture," "Base Indenture," and
"Debentures" shall have the respective meanings set forth in the recitals to
this Seventh Supplemental Indenture and the paragraph preceding such recitals.
2
<PAGE> 6
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE DEBENTURES
SECTION 2.1. Designation and Principal Amount.
There is hereby authorized a series of Securities designated the o%
Debentures due o 16, 2004, (the "Debentures") limited (except as otherwise
provided in Article 2 of the Indenture) in aggregate principal amount to $o
(or, $ , if the Underwriters' over-allotment option is exercised in full). The
Debentures may be issued from time to time upon written order of the Company
for the authentication and delivery of Debentures pursuant to Section 2.03 of
the Base Indenture.
SECTION 2.2. Maturity. The date upon which the Debentures shall become due
and payable at final maturity is o 16, 2004 (the "Maturity Date").
SECTION 2.3. Form and Payment.
Except as provided in Section 2.4, the Debentures shall be issued in
fully registered certificated form without interest coupons, bearing identical
terms. Principal of and premium, if any, and interest on the Debentures will be
payable, the transfer of such Debentures will be registrable and such
Debentures will be exchangeable for Debentures bearing identical terms and
provisions at the office or agency of the Company maintained for such purpose
as described below; provided, however, that payment of interest may be made at
the option of the Company by check mailed to the Holder at such address as
shall appear in the Security Register.
The Company hereby designates each of o and the Borough of Manhattan,
The City of New York as a place of payment ("Place of Payment") for the
Debentures, and the office or agency maintained by the Company in each such
Place of Payment for the purposes contemplated by this Section 2.3 shall
initially be the office of the Trustee located at c/o [NAME - ADDRESS], and the
Corporate Trust Office of the Trustee in c/o Bank of Montreal Trust Company, 77
Water Street, New York, New York 10005, Attention: Trust Officer.
The Debentures shall be issuable in denominations of $25 and integral
multiples of $25 in excess thereof.
The Debentures may be issued, in whole or in part, in permanent global
form and, if issued in permanent global form, the U.S. Depositary shall be The
Depository Trust Company or such other depositary as any officer of the Company
may from time to time designate.
The Registrar and the Paying Agent and transfer agent for the
Debentures shall be The Bank of New York.
SECTION 2.4. Global Debenture.
(a) Unless and until it is exchanged for the Debentures in registered
form, a global Debenture in principal amount equal to the aggregate principal
amount of all outstanding Debentures ("Global Debenture") may be transferred,
in whole but not in part, only to the Clearing Agency or a nominee of the
Clearing Agency, or to a successor Clearing Agency selected or approved by the
Company or to a nominee of such successor Clearing Agency.
(b) If at any (i) time the Clearing Agency notifies the Company that
it is unwilling or unable to continue as a Clearing Agency for the Global
Debentures and no successor Clearing Agency shall have been appointed within 90
days after such notification, (ii) the Clearing Agency at any time ceases to be
a clearing agency registered under the Securities Exchange Act of 1934 at any
time the Clearing Agency is required to be so registered to act as such
Clearing Agency and no successor Clearing Agency shall have been appointed
within 90 days after the Company becoming aware of the Clearing Agency's
ceasing to be so registered, (iii) the Company, in its sole discretion,
determines that the Global Debentures shall be so exchangeable or (iv) there
shall have occurred and be continuing an Event of Default,
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the Company will execute, and, subject to Article II of the Base Indenture, the
Trustee, upon written notice from the Company, will authenticate and deliver
the Debentures in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. Upon the
exchange of the Global Debenture for such Debentures in definitive registered
form without coupons, in authorized denominations, the Global Debenture shall
be cancelled by the Trustee. Such Debentures in definitive registered form
issued in exchange for the Global Debenture shall be registered in such names
and in such authorized denominations as the Clearing Agency, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the Clearing
Agency for delivery to the Persons in whose names such Securities are so
registered.
SECTION 2.5. Interest.
(a) Each Debenture will bear interest initially at the rate of o% per
annum (the "Coupon Rate") from the original date of issuance through and
including o 15, 2002 and at the Reset Rate thereafter until the principal
thereof is paid or duly made available for payment and, shall bear interest, to
the extent permitted by law, compounded quarterly, on any overdue principal and
premium, if any, and on any overdue installment of interest at the Coupon Rate
through and including o 15, 2002 and at the Reset Rate thereafter, payable
(subject to the provisions of Article IV herein) quarterly in arrears on
February 16, May 16, August 16 and November 16 of each year (each, an "Interest
Payment Date") commencing on o 16, , to the Person in whose name such
Debenture, or any predecessor Debenture, is registered at the close of business
on the Regular Record Date for such interest installment.
(b) The interest rate on the Debentures will be reset on the third
Business Day immediately preceding the Purchase Contract Settlement Date to the
Reset Rate (which Reset Rate will become effective on and after the Purchase
Contract Settlement Date); provided that the Reset Rate shall not exceed the
maximum amount permitted by applicable law. On the Reset Announcement Date, the
Reset Spread and the relevant Two-Year Benchmark Treasury will be announced by
the Company. On the Business Day immediately following such Reset Announcement
Date, the Holders of Debentures will be notified of such Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be sufficiently
given to such Holders of Debentures if published in an Authorized Newspaper.
(c) Not later than seven calendar days nor more than 15 calendar days
immediately preceding the Reset Announcement Date, the Company will request
that the Clearing Agency or its nominee (or any successor Clearing Agency or
its nominee) or the Trustee, notify the Holders of Debentures of such Reset
Announcement Date and the procedures to be followed by such holders of
Debentures wishing to settle the related Purchase Contracts with separate cash
on the Business Day immediately preceding the Purchase Contract Settlement
Date.
(d) The amount of interest payable for any period will be computed on
the basis of a 360-day year consisting of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed in such a
90-day period. In the event that any date on which interest is payable on the
Debentures is not a Business Day, then payment of interest payable on such date
will be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall
be made on the immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
ARTICLE III
REDEMPTION OF THE DEBENTURES
SECTION 3.1. Tax Event Redemption.
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If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest thereon, including Compound Interest to the date of such
redemption (the "Tax Event Redemption Date"). If, following the occurrence of a
Tax Event prior to the Purchase Contract Settlement Date, the Company exercises
its option to redeem the Debentures, the Company shall appoint the Quotation
Agent to assemble the Treasury Portfolio in consultation with the Company.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the Tax Event Redemption Date to each registered Holder of the
Debentures to be prepaid at its registered address. Unless the Company defaults
in payment of the Redemption Price, on and after the Tax Event Redemption Date
interest shall cease to accrue on such Debentures.
SECTION 3.2. Redemption Procedure for Debentures.
Payment of the Redemption Price to each Holder of Debentures shall be
made by the Company, no later than 12:00 noon, New York City time, on the Tax
Event Redemption Date, by check or wire transfer in immediately available funds
at such place and to such account as may be designated by each such Holder of
Debentures, including the Trustee or the Collateral Agent, as the case may be.
If the Trustee holds immediately available funds sufficient to pay the
Redemption Price of the Debentures, then, on such Tax Event Redemption Date,
such Debentures will cease to be outstanding and interest thereon will cease to
accrue, whether or not such Debentures have been received by the Company, and
all other rights of the Holder in respect of the Debentures shall terminate and
lapse (other than the right to receive the Redemption Price upon delivery of
such Debentures but without interest on such Redemption Price).
SECTION 3.3. No Sinking Fund.
The Debentures are not entitled to the benefit of any sinking fund.
SECTION 3.4. Option to Put Debentures upon a Failed Remarketing.
If a Failed Remarketing (as described in Section 5.4(b) of the
Purchase Contract Agreement and incorporated herein by reference) has occurred,
each holder of Debentures who holds such Debentures on the day immediately
following the Purchase Contract Settlement Date shall have the right (the "Put
Option") on the Business Day immediately following o 16, 2002, to require the
Exchange Agent to put such Debentures to the Company, on behalf of such holders
on o 1, 2002 (the "Put Option Exercise Date"), upon at least three Business
Days prior notice, at a repayment price of $25 per Debenture plus an amount
equal to the accrued and unpaid interest (including deferred interest, if any)
thereon to the date of payment (the "Debenture Repayment Price").
SECTION 3.5. Repurchase Procedure for Debentures.
(a) In order for the Debentures to be repurchased on the Put
Option Exercise Date, the Trustee must receive on or prior to 5:00 p.m. New
York City time on the third Business Day immediately preceding the Put Option
Exercise Date, at its Corporate Trust Office or at an office or agency
maintained by the Company in the Borough of Manhattan, The City of New York as
contemplated by Section 2.3 hereof, the Debentures to be repurchased with the
form entitled "Option to Elect Repayment" on the reverse of or otherwise
accompanying such Debentures duly completed. Any such notice received by the
Trustee shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of the Debentures for repayment
shall be determined by the Company, whose determination shall be final and
binding.
(b) Payment of the Debenture Repayment Price to the Exchange
Agent shall be made through the Trustee, subject to the Trustee's receipt of
payment from the Company in accordance with the terms of the Indenture, no
later than 12:00 noon, New York City time, on the Put Option Exercise Date, and
to such account as may be designated by the Exchange Agent. If the Trustee
holds immediately available funds sufficient to pay the Debenture Repayment
Price of the Debentures presented for repayment, then, immediately prior to the
close of business on the
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Put Option Exercise Date, such Debentures will cease to be outstanding and
interest thereon will cease to accrue, whether or not such Debentures have been
received by the Company, and all other rights of the Holder in respect of the
Debentures, including the Holder's right to require the Company to repay such
Debentures, shall terminate and lapse (other than the right to receive the
Debenture Repayment Price upon delivery of such Debentures but without interest
on such Debenture Repayment Price). Neither the Trustee nor the Company will be
required to register or cause to be registered the transfer of any Debenture
for which repayment has been elected.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period.
The Company shall have the right at any time, and from time to time,
during the term of the Debentures to defer payments of interest by extending
the interest payment period of such Debentures for a period not extending, in
the aggregate, beyond the Maturity Date of the Debentures (the "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable; provided that each Extended Interest Payment
period must end on an Interest Payment Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1, will
bear interest thereon at the rate of o% per annum through and including o 15,
2002, and at the Reset Rate thereafter, compounded quarterly on each Interest
Payment Date of the Extended Interest Payment Period ("Compound Interest"). At
the end of the Extended Interest Payment Period, the Company shall pay all
interest accrued and unpaid on the Debentures and Compound Interest, ("Deferred
Interest") that shall be payable to the Holders of the Debentures in whose
names the Debentures are registered in the Security Register at the close of
business on the Regular Record Date next preceding the Interest Payment Date on
which such Extended Interest Payment Period ends; provided, however, that
during any such Extended Interest Payment Period, (a) the Company shall not
declare or pay dividends on, or make any distribution with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of capital stock of
the Company in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security outstanding on the date
of such event requiring the Company to purchase capital stock of the Company,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock, (iii) the purchase
of fractional interests in shares of the Company's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (iv) dividends or distributions in capital stock
of the Company (or rights to acquire capital stock) or repurchases or
redemptions of capital stock solely from the issuance or exchange of capital
stock or (v) redemptions or repurchases of any rights outstanding under a
shareholder rights plan or the declaration thereunder of a dividend of rights
in the future), and (b) the Company shall not make any guarantee payments with
respect to the foregoing (other than payments pursuant to the Guarantee). Prior
to the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such
previous and further extensions thereof shall not extend beyond the Maturity
Date of the Debentures or end other than on an Interest Payment Date for the
Debentures. Upon the termination of any Extended Interest Payment Period and
the payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company, at its option, may prepay on any
Interest Payment Date all or any portion of the Deferred Interest accrued
during the then elapsed portion of an Extended Interest Payment Period.
SECTION 4.2. Notice of Extension.
The Company shall give the Holders of the Debentures and the Trustee
written notice of its selection of such Extended Interest Payment Period at
least 10 Business Days before the earlier of (i) the next succeeding Interest
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Payment Date, or (ii) the date the Company is required to give notice of the
record or payment date of such interest payment to the NYSE or other applicable
self-regulatory organization or to Holders of the Debentures.
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses.
In connection with the offering, sale and issuance of the Debentures
to the Holders, the Company, in its capacity as borrower with respect to the
Debentures, shall pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including commissions to the underwriters payable
pursuant to the Underwriting Agreement and compensation of the Trustee under
the Indenture in accordance with the provisions of Section 607 of the Base
Indenture.
ARTICLE VI
NOTICE
SECTION 6.1. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company that would prohibit the making
of any payment of monies to or by the Trustee in respect of the Debentures.
Notwithstanding any of the provisions of the Base Indenture, the First through
Sixth Supplemental Indenture and this Seventh Supplemental Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures; provided, however, that if the Trustee shall not
have received the notice provided for in this Article VI at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of (or premium, if any) or interest on any Debenture), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purposes
for which they were received, and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such
date.
ARTICLE VII
FORM OF DEBENTURE
SECTION 7.1. Form of Debenture.
The Debentures and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the following forms, with such
changes therein as the officers of the Company executing the Debentures (by
manual or facsimile signature) may approve, such approval to be conclusively
evidenced by their execution thereof:
(FORM OF FACE OF DEBENTURE)
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT - THIS DEBENTURE
IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED
TO AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE OF THE
CLEARING AGENCY. THIS DEBENTURE IS EXCHANGEABLE FOR DEBENTURES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN THE
LIMITED
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CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS DEBENTURE
(OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE CLEARING AGENCY TO A
NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE CLEARING AGENCY TO THE
CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY OR TO A SUCCESSOR
CLEARING AGENCY OR TO A NOMINEE OF SUCH SUCCESSOR) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.]
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No.
-------------------------
$
---------------------------
THE COASTAL CORPORATION
o% DEBENTURE
DUE o 16, 2004
THE COASTAL CORPORATION, a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , as Trustee or
registered assigns, the principal sum of Dollars ($______________) on o 16,
2004 (such date is hereinafter referred to as the "Maturity Date"), and to pay
interest on said principal sum from o 16, o, or from the most recent date to
which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein) in arrears on February 16, May 16, August 16 and
November 16 of each year (each such date, an "Interest Payment Date"),
commencing on o 16, o, initially at the rate of o% per annum through and
including o 15, 2002 and at the Reset Rate thereafter until the principal
hereof shall have been paid or duly made available for payment and, to the
extent permitted by law, to pay interest, compounded quarterly, on any overdue
principal and premium, if any, and on any overdue installment of interest at
the rate per annum of o% through and including o 15, 2002 and at the Reset Date
thereafter. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year consisting of twelve 30-day months
and, except as provided in the Indenture (as defined below), the amount of
interest payable for any period shorter than a full quarterly period for which
interest is computed will be computed on the basis of the actual number of days
elapsed in such 90-day period. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such Interest Payment Date. The
interest installment so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
person in whose name this Debenture (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest installment which shall be the close of business on the first day of
the month in which such Interest Payment Date falls. Any such interest
installment not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the registered Holders at the close
of business on such Regular Record Date and may be paid to the Person in whose
name this Debenture (or one or more Predecessor Securities) is registered at
the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted
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interest, notice whereof shall be given to the registered Holders of this
series of Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of
New York and in o, in any coin or currency of the United States of America that
at the time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall
appear in the Security Register or by wire transfer to an account appropriately
designated by the Holder entitled thereto.
The indebtedness evidenced by this Debenture is, to the extent
provided in the Indenture, senior and unsecured and will rank in right of
payment on parity with all other senior unsecured obligations of the Company.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to or be valid or obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: , 1999
--------------
THE COASTAL CORPORATION
By:
---------------------------------------
Name:
Title:
Attest:
By:
-------------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series of Debentures described in the
within-mentioned Indenture.
Dated
-----------------------------
HARRIS TRUST AND SAVINGS BANK
as Trustee
By
--------------------------------
Authorized Signatory
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(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Debentures"), issued and to be
issued in one or more series under and pursuant to an Indenture dated as of
February 24, 1997 (the "Base Indenture") between the Company and Harris Trust
and Savings Bank, as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), as supplemented by a Seventh Supplemental
Indenture, dated as of o, 1999 (the "Seventh Supplemental Indenture") between
the Company and the Trustee (the Base Indenture as so supplemented, the
"Indenture"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the Holders of the Debentures. By the terms of the Indenture, the
Securities are issuable in series that may vary as to amount, date of maturity,
rate of interest and in other respects as provided in the Indenture. This
series of Securities is limited in aggregate principal amount as specified in
said Seventh Supplemental Indenture.
If a Tax Event shall occur and be continuing, the Company may, at its
option, redeem the Debentures in whole (but not in part) at any time at a
Redemption Price per Debenture equal to the Redemption Amount plus accrued and
unpaid interest thereon, including Compound Interest and expenses and taxes of
the Trust to the Tax Event Redemption Date. The Redemption Price shall be paid
to each Holder of the Debentures by the Company, no later than 12:00 noon, New
York City time, on the Tax Event Redemption Date, by check or wire transfer in
immediately available funds, at such place and to such account as may be
designated by each such Holder.
The Debentures are not entitled to the benefit of any sinking fund.
If a Failed Remarketing (as described in Section 5.4(b) of the Purchase
Contract Agreement and incorporated herein by reference) has occurred, each
holder of Debentures who holds such Debentures on the day immediately following
the Purchase Contract Settlement Date shall have the right (the "Put Option")
on the Business Day immediately following o, 2002, to require the Exchange
Agent to put such Debentures to the Company, on behalf of such holders on o,
2002 (the "Put Option Exercise Date"), upon at least three Business Days prior
notice), at a repayment price of $25 per Debenture plus an amount equal to the
accrued and unpaid interest (including deferred interest, if any) thereon to
the date of payment (the "Debenture Repayment Price").
In order for the Debentures to be so repurchased, the Trustee must
receive, on or prior to 5:00 p.m. New York City Time on the third Business Day
immediately preceding the Put Option Exercise Date, at its Corporate Trust
Office in Chicago, Illinois or at an office or agency maintained by the Company
in the Borough of Manhattan, The City of New York as contemplated by Section
2.3 of the Seventh Supplemental Indenture, the Debentures to be repurchased
with the form entitled "Option to Elect Repayment" on the reverse of or
otherwise accompanying such Debentures duly completed. Any such notice received
by the Trustee shall be irrevocable. All questions as to the validity,
eligibility (including time of receipt) and acceptance of the Debentures for
repayment shall be determined by the Company, whose determination shall be
final and binding. The payment of the Debenture Repayment Price in respect of
such Debentures shall be made no later than 12:00 noon, New York City time, on
the Put Option Exercise Date.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable (or, in
certain circumstances shall ipso facto become due and payable), in the manner,
with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting, with certain exceptions
therein provided, the Company and the Trustee, with the consent of the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Securities of each series affected to execute supplemental indentures for the
purpose of, among other things, adding any provisions to or changing or
eliminating any of the provisions of the Indenture or of any supplemental
indenture
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<PAGE> 15
or of modifying the rights of the Holders of the Securities. The Indenture also
contains provisions permitting the Holders of a majority in aggregate principal
amount of the Securities of any series at the time Outstanding, on behalf of
all of the Holders of all Securities of such series, to waive a Default or
Event of Default with respect to such series and its consequences, except a
Default or Event of Default in the payment of the principal of or premium, if
any, or interest on any of the Securities of such series or in respect of a
covenant or other provision which, under the terms of the Indenture, cannot be
modified or amended without the consent of the Holder of each Outstanding
Security of such series affected. Any such consent or waiver by the registered
Holder of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Debenture and of any Debenture issued in exchange for or in place hereof
(whether by registration of transfer or otherwise), irrespective of whether or
not any notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
So long as the Company is not in default in the payment of interest on the
Debentures, the Company shall have the right at any time, and from time to time
during the term of the Debentures to extend the interest payment period of the
Debentures for a period not extending, in the aggregate, beyond the Maturity
Date of the Debentures (an "Extended Interest Payment Period"); provided that
each Extended Interest Payment Period must end on an Interest Payment Date. To
the extent permitted by applicable law, interest, the payment of which has been
deferred because of the extension of the interest payment period pursuant to
this paragraph, will bear interest at the rate of o% per annum through and
including o 15, 2002 and at the Reset Rate thereafter, compounded quarterly on
each Interest Payment Date of the Extended Interest Payment Period ("Compound
Interest"). At the end of an Extended Interest Payment Period, the Company
shall pay all interest then accrued and unpaid on the Debentures (the "Deferred
Interest"), that shall be payable to the Holders of the Debentures in whose
names the Debentures are registered in the Security Register at the close of
business on the Regular Record Date next preceding the Interest Payment Date on
which such Extended Interest Payment Period ends. In the event that the Company
exercises this right, then (a) the Company shall not declare or pay dividends
on, or make any distribution with respect to, or redeem, purchase, acquire or
make a liquidation payment with respect to, any of its capital stock (other
than (i) purchases or acquisitions of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged, (iv) dividends or distributions in capital stock of the
Company (or rights to acquire capital stock) or repurchases or redemptions of
capital stock solely from the issuance or exchange of capital stock or (v)
redemptions or purchases of any rights outstanding under a shareholder rights
plan or the declaration thereunder of a dividend of rights in the future) and
(b) the Company shall not make any guarantee payments with respect to the
foregoing. Prior to the termination of any such Extended Interest Payment
Period, the Company may further extend the interest payment period; provided,
that such Extended Interest Payment Period, together with all such previous and
further extensions thereof, may not extend beyond the Maturity Date of the
Debenture or end other than on an Interest Payment Date for the Debentures. At
the termination of any such Extended Interest Payment Period and upon the
payment of all accrued and unpaid Deferred Interest and any additional amount
then due, the Company may commence a new Extended Interest Payment Period,
subject to the above requirements.
As provided in the Indenture and subject to certain limitations therein
set forth, this Debenture is transferable by the registered Holder hereof on
the Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Company maintained for
such purpose in the Borough of Manhattan, The City of New York and o,
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the registered
Holder hereof or his attorney duly authorized in writing, and
12
<PAGE> 16
thereupon one or more new Debentures of authorized denominations and for the
same aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any Paying Agent and the Security Registrar may deem
and treat the registered Holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any Paying Agent nor any Security
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issuance hereof,
expressly waived and released.
The Indenture imposes certain limitations on the ability of the Company
to, among other things, merge or consolidate with any other Person or sell,
assign, transfer or lease all or substantially all of its properties or assets,
and requires that the Company comply with certain further covenants. All such
covenants and limitations are subject to a number of important qualifications
and exceptions. The Company must report periodically to the Trustee on
compliance with the covenants in the Indenture.
The Debentures of this series are issuable only in registered form without
coupons in denominations of $25 and any integral multiple thereof. As provided
in the Indenture and subject to certain limitations therein set forth,
Debentures are exchangeable for a like aggregate principal amount of Debentures
of a different authorized denomination, as requested by the Holder surrendering
the same.
All terms used in this Debenture that are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The Debentures are subject to Defeasance and Covenant Defeasance upon
the terms and subject to the conditions set forth in the Indenture.
This Debenture shall be governed by and construed in accordance with
the internal laws of the State of New York.
13
<PAGE> 17
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Company
to repay $_____ principal amount of the within Debenture, pursuant to its
terms, on the "Put Option Exercise Date," together with any interest thereon
accrued but unpaid to the date of repayment, to the undersigned at:
(Please print or type name and address of the undersigned)
and to issue to the undersigned, pursuant to the terms of the Indenture, a new
Debenture or Debentures representing the remaining aggregate principal amount
of this Debenture.
For this Option to Elect Repayment to be effective, this Debenture with the
Option to Elect Repayment duly completed must be received by the Trustee at
either c/o Harris Trust and Savings Bank, c/o Bank of Montreal Trust Company,
77 Water Street, New York, New York 10005, Attention: Trust Officer, no later
than 5:00 p.m. on the third Business Day immediately preceding o, 2002.
Dated: Signature:
---------------------- --------------------------------------
Signature Guarantee:
----------------------------
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Debenture without alternation or
enlargement or any change whatsoever.
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
14
<PAGE> 18
----------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Debenture to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Debenture on the books of the Company. The agent may
substitute another to act for him or her.
Date:
-----------------------
Signature:
--------------------------------------
Signature Guarantee:
----------------------------
(Sign exactly as your name appears on the other side of this Debenture)
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
15
<PAGE> 19
ARTICLE VIII
ORIGINAL ISSUE OF DEBENTURES
SECTION 8.1. Original Issue of Debentures.
Debentures in the aggregate principal amount of $o (or, $ , if the
Underwriters' overallotment option is exercised in full) may from time to time,
upon execution of this Seventh Supplemental Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures to or upon the written order
of the Company pursuant to Section 2.03 of the Base Indenture without any
further action by the Company.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued on Outstanding
Securities as of the end of the year and (ii) such other specific information
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Ratification of Indenture.
The Indenture as supplemented by this Seventh Supplemental Indenture,
is in all respects ratified and confirmed, and this Seventh Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the extent
herein and therein provided.
SECTION 9.2. Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Seventh Supplemental Indenture.
SECTION 9.3. Governing Law.
This Seventh Supplemental Indenture and each Debenture shall be deemed
to be a contract made under the internal laws of the State of New York, and for
all purposes shall be governed by and construed in accordance with the laws of
said State.
SECTION 9.4. Separability.
In case any one or more of the provisions contained in this Seventh
Supplemental Indenture or in the Debentures shall for any reason be held to be
invalid, illegal or unenforceable in any respect, then, to the extent permitted
by law, such invalidity, illegality or unenforceability shall not affect any
other provisions of this Seventh Supplemental Indenture or of the Debentures,
but this Seventh Supplemental Indenture and the Debentures shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.
SECTION 9.5. Counterparts.
This Seventh Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
16
<PAGE> 20
SECTION 9.6. Guarantee and Declaration
The Guarantee and the Declaration shall be deemed to be specifically
described in this Seventh Supplemental Indenture for purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE X
REMARKETING
SECTION 10.1. Intentionally Left Blank
SECTION 10.2. Remarketing Procedures.
(a) The Company will request, not later than 7 nor more than
15 calendar days prior to the Remarketing Date that the Clearing Agency notify
the Holders of the Debentures and the holders of Income PRIDES and Growth
PRIDES of the Remarketing and of the procedures that must be followed if a
Holder of Debentures wishes to exercise such Holder's rights with respect to
the Put Option if there is a Failed Remarketing.
(b) Not later than 5:00 P.M., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
each Holder of the Debentures may elect to have Debentures held by such Holder
remarketed. Under Section 5.4 of the Purchase Contract Agreement, Holders of
Income PRIDES that do not give notice of intention to make a Cash Settlement of
their related Purchase Contracts shall be deemed to have consented to the
disposition of the Debentures comprising a component of such Income PRIDES.
Holders of Debentures that are not a component of Income PRIDES shall give
notice of their election to have such Debentures remarketed to the Custodial
Agent pursuant to the Pledge Agreement. Any such notice shall be irrevocable
after 5:00 P.M., New York City time, on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date and may not be conditioned upon
the level at which the Reset Rate is established. Promptly after 5:30 P.M., New
York City time, on such fifth Business Day, the Trustee, based on the notices
received by it prior to such time (including notices from the Purchase Contract
Agent as to Purchase Contracts for which Cash Settlement has been elected),
shall notify the Company and the Remarketing Agent of the number of Debentures
to be tendered for Remarketing.
(c) If any Holder of Income PRIDES does not give a notice of
its intention to make a Cash Settlement or gives a notice of election to tender
Debentures as described in Section 10.2(b), the Debentures of such Holder shall
be deemed tendered, notwithstanding any failure by such Holder to deliver or
properly deliver such Debentures to the Remarketing Agent for purchase.
(d) The right of each Holder to have Debentures tendered for
purchase shall be limited to the extent that (i) the Remarketing Agent conducts
a remarketing pursuant to the terms of the Remarketing Agreement, (ii)
Debentures tendered have not been called for redemption, (iii) the Remarketing
Agent is able to find a purchaser or purchasers for tendered Debentures at a
price of not less than 100% of the principal amount thereof, plus accrued and
unpaid interest thereon, and (iv) such purchaser or purchasers deliver the
purchase price therefor to the Remarketing Agent as and when required.
(e) On the Remarketing Date, the Remarketing Agent shall use
reasonable efforts to remarket at a price equal to approximately o% of the
aggregate principal amount thereof, Debentures tendered or deemed tendered for
purchase.
17
<PAGE> 21
(f) If none of the Holders elect to have Debentures held by
them remarketed, the Reset Rate shall be the rate determined by the Remarketing
Agent, subject to the terms of the Remarketing Agreement, as the rate that
would have been established had a remarketing been held on the Remarketing
Date.
(g) If the Remarketing Agent has determined that it will be
able to remarket all Debentures tendered or deemed tendered prior to 4:00 P.M.,
New York City time, on the Remarketing Date, the Remarketing Agent shall
determine the Reset Rate, which shall be the rate per annum (rounded to the
nearest one-thousandth (0.001) of one percent per annum) which the Remarketing
Agent determines, subject to the terms of the Remarketing Agreement, to be the
lowest rate per annum that will enable it to remarket all Debentures tendered
or deemed tendered for remarketing.
(h) If, by 4:00 P.M., New York City time, on the Remarketing
Date, the Remarketing Agent is unable to remarket all Debentures tendered or
deemed tendered for purchase or if the Remarketing shall not have occurred
because a condition precedent to the Remarketing shall not have been fulfilled,
a failed remarketing ("Failed Remarketing") shall be deemed to have occurred
and the Remarketing Agent shall so advise by telephone the Collateral Agent,
Company, Trustee, and Clearing Agency.
(i) By approximately 4:30 P.M., New York City time, on the
Remarketing Date, provided that there has not been a Failed Remarketing, the
Remarketing Agent shall advise, by telephone (i) the Collateral Agent, Company,
Trustee, and Clearing Agency of the Reset Rate determined in the Remarketing
and the aggregate principal amount of Debentures sold in the remarketing, (ii)
each purchaser (or the Clearing Agency Participant thereof) of the Reset Rate
and the aggregate principal amount of Debentures such purchaser is to purchase
and (iii) each purchaser to give instructions to its Clearing Agency
Participant to pay the purchase price on the Purchase Contract Settlement Date
in same day funds against delivery of the Debentures purchased through the
facilities of the Clearing Agency.
(j) In accordance with the Clearing Agency's normal
procedures, on the Purchase Contract Settlement Date, the transactions
described above with respect to each Debenture tendered for purchase and sold
in the remarketing shall be executed through the Clearing Agency, and the
accounts of the respective Clearing Agency Participants shall be debited and
credited and such Debentures delivered by book entry as necessary to effect
purchases and sales of such Debentures. The Clearing Agency shall make payment
in accordance with its normal procedures.
(k) If any Holder selling Debentures in the Remarketing fails
to deliver such Debentures, the Clearing Agency Participant of such selling
Holder and of any other Person that was to have purchased Debentures in the
Remarketing may deliver to any such other Person an aggregate principal amount
of Debentures that is less than the aggregate principal amount of Debentures
that otherwise was to be purchased by such Person. In such event, the aggregate
principal amount of Debentures to be so delivered shall be determined by such
Clearing Agency Participant, and delivery of such lesser aggregate principal
amount of Debentures shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any
Debentures in a Remarketing or otherwise. Neither the Trust, any Trustee, the
Company nor the Remarketing Agent shall be obligated in any case to provide
funds to make payment upon tender of Debentures for remarketing.
(m) The tender and settlement procedures set in this Section
10.2, including provisions for payment by purchasers of Debentures in the
Remarketing, shall be subject to modification, notwithstanding any provision to
the contrary set forth herein, to the extent required by the Clearing Agency or
if the book-entry system is no longer available for the Debentures at the time
of the Remarketing, to facilitate the tendering and Remarketing of Debentures
in certificated form. In addition, the Remarketing Agent may, notwithstanding
any provision to the contrary set forth herein, modify the settlement
procedures set forth herein in order to facilitate the settlement process.
(n) Anything herein to the contrary notwithstanding, the
Reset Rate shall in no event exceed the maximum rate permitted by applicable
law and, as provided in the Remarketing Agreement, neither the Remarketing
18
<PAGE> 22
Agent nor the Reset Agent (as defined in the Remarketing Agreement) shall have
any obligation to determine whether there is any limitation under applicable
law on the Reset Rate or, if there is any such limitation, the maximum
permissible Reset Rate on the Debentures and they shall rely solely upon
written notice from the Company (which the Company agrees to provide prior to
the 10th Business Day before the Purchase Contract Settlement Date) as to
whether or not there is any such limitation and, if so, the maximum permissible
Reset Rate.
19
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have caused this Seventh
Supplemental Indenture to be duly executed by their respective officers
thereunto duly authorized, on the date or dates indicated in the
acknowledgments and as of the day and year first above written.
THE COASTAL CORPORATION,
as Issuer
By:
----------------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
HARRIS TRUST & SAVINGS BANK
as Trustee
By:
----------------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 4.25
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of , 1999 (the "Agreement")
by and between The Coastal Corporation, a Delaware corporation (the "Company"),
The Bank of New York, a national banking association, not individually but
solely as Purchase Contract Agent (the "Purchase Contract Agent") and as
attorney-in-fact of the holders of Purchase Contracts (as defined in the
Purchase Contract Agreement (as defined herein)), and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Remarketing Agent").
WITNESSETH:
WHEREAS, the Company will issue $ aggregate Stated Amount of
its FELINE PRIDES (the "FELINE PRIDES") under the Purchase Contract Agreement,
dated as of , 1999, by and between the Purchase Contract Agent and the Company
(the "Purchase Contract Agreement"); and
WHEREAS, the FELINE PRIDES will initially consist of o units
referred to as "Income PRIDES" and units referred to as "Growth PRIDES."
WHEREAS, the Company will issue concurrently in connection
with the issuance of the FELINE PRIDES, $ aggregate principal amount of %
Debentures due 16, 2004 (the "Debentures") of the Company; and
WHEREAS, the Debentures forming a part of the Income PRIDES
will be pledged pursuant to the Pledge Agreement (the "Pledge Agreement"),
dated as of , 1999, by and among the Company, The Chase Manhattan Bank, as
collateral agent (the "Collateral Agent") and the Purchase Contract Agent, to
secure an Income PRIDES holder's obligations under the related Purchase
Contract on the Purchase Contract Settlement Date; and
WHEREAS, the Debentures, of such Debenture holders electing
to have their Debentures remarketed, or of such Income PRIDES holders who have
elected not to settle the Purchase Contracts related to their Income PRIDES
from the proceeds of a Cash Settlement and who have not early settled their
Purchase Contracts, will be remarketed by the Remarketing Agent on the third
Business Day immediately preceding the Purchase Contract Settlement Date; and
WHEREAS, the applicable interest rate on the Debentures that
remain out standing on and after the Purchase Contract Settlement Date will be
reset on the third Business Day immediately preceding the Purchase Contract
Settlement Date, to the Reset Rate to be determined by the Reset Agent as the
rate that such Debentures should bear in order to have an approximate market
value of % of the aggregate principal amount of the Debentures on the third
Business Day immediately preceding the Purchase Contract Settlement Date,
provided that in the determination of such Reset Rate, the Company may limit
the Reset Spread (a component
<PAGE> 2
of the Reset Rate) to be no higher than o basis points (o%) and the Company
shall, if applicable, limit the Reset Rate to the maximum rate permitted by
applicable law; and
WHEREAS, the Company has requested Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") to act as
the Reset Agent and as the Remarketing Agent, and as such to perform the
services described herein; and
WHEREAS, Merrill Lynch is willing to act as Reset Agent and
Remarketing Agent and as such to perform such duties on the terms and
conditions expressly set forth herein;
NOW, THEREFORE, for and in consideration of the covenants
herein made, and subject to the conditions herein set forth, the parties hereto
agree as follows:
Section 1. Definitions. Capitalized terms used and not
defined in this Agreement, in the recitals hereto or in the paragraph
preceding such recitals shall have the meanings assigned to them in the
Purchase Contract Agreement or, if not therein defined, the Pledge Agreement.
Section 2. Appointment and Obligations of Remarketing Agent.
(a) The Company hereby appoints Merrill Lynch and Merrill Lynch hereby accepts
such appointment, (i) as the Reset Agent to determine in consultation with the
Company, in the manner provided for herein and in the Indenture (as in effect
on the date of this Remarketing Agreement) with respect to the Debentures, the
Reset Rate that, in the opinion of the Reset Agent, will, when applied to the
Debentures, will enable a Debenture to have an approximate market value, as of
the third Business Day preceding the Purchase Contract Settlement Date, of o%
of the principal amount in the case of such Debenture (provided that the
Company, by notice to the Reset Agent prior to the tenth Business Day preceding
the Purchase Contract Settlement Date, (x) may limit such Reset Rate to be no
higher than the rate on the Two-Year Benchmark Treasury plus o basis points
(o%) and (y) shall, if applicable, limit the Reset Rate so that it does not
exceed the maximum rate permitted by applicable law), and (ii) as the exclusive
Remarketing Agent (subject to the right of Merrill Lynch to appoint additional
remarketing agents hereunder as described below) to remarket the Debentures, of
such Debenture holders electing to have their Debentures remarketed, or of such
Income PRIDES holders who have not early settled the related Purchase Contracts
and have failed to notify the Purchase Contract Agent, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, of
their intention to settle the related Purchase Contracts through Cash
Settlement, for settlement on the Purchase Contract Settlement Date. In
connection with the remarketing contemplated hereby, the Remarketing Agent will
enter into a Supplemental Remarketing Agreement (the "Supple mental Remarketing
Agreement") with the Company and the Purchase Contract Agent, which shall
either be (i) substantially in the form attached hereto as Exhibit A (with such
changes as the Company and the Remarketing Agent may agree upon, it being
understood that changes may be necessary in the representations, warranties,
covenants and other provisions of the Supplemental Remarketing Agreement due to
changes in law or facts and circumstances or in the event that Merrill Lynch is
not the sole remarketing agent, and with such further changes
2
<PAGE> 3
therein as the Remarketing Agent may reasonably request, or (ii) in such other
form as the Remarketing Agent may reasonably request, subject to the approval
of the Company (such approval not to be unreasonably withheld). Anything herein
to the contrary notwithstanding, Merrill Lynch shall not be obligated to act as
Remarketing Agent or Reset Agent hereunder unless the Supplemental Remarketing
Agreement is in form and substance reasonably satisfactory to Merrill Lynch.
The Company agrees that Merrill Lynch shall have the right, on 15 Business Days
notice to the Company, to appoint one or more additional remarketing agents so
long as any such additional remarketing agents shall be reasonably acceptable
to the Company. Upon any such appointment, the parties shall enter into an
appropriate amendment to this Agreement to reflect the addition of any such
remarketing agent.
(b) Pursuant to the Supplemental Remarketing Agreement, the
Remarketing Agent, either as sole remarketing agent or as representative of a
group of remarketing agents appointed as aforesaid, will agree, subject to the
terms and conditions set forth herein and therein, to use its reasonable
efforts to remarket, on the third Business Day immediately preceding the
Purchase Contract Settlement Date, the Debentures that the Trustee (as such
terms are defined in the Indenture) shall have notified the Remarketing Agent
have been tendered for, or otherwise are to be included in, the Remarketing
(such remarketing being hereinafter referred to as the "Remarketing"), at a
price of approximately 100.75% of the aggregate principal amount of such
Debentures, plus any accrued and unpaid interest (including any deferred
interest). Notwithstanding the preceding sentence, the Remarketing Agent shall
not remarket any Debentures for a price less than 100% of the aggregate
principal amount of such Debentures, respectively, plus accrued and unpaid
interest. After deducting the fee specified in Section 3 below, the proceeds of
such remarketing shall be paid to the Collateral Agent in accordance with
Section 4.6 of the Pledge Agreement and Section 5.4 of the Purchase Contract
Agreement (each of which Sections are incorporated herein by reference). The
right of each holder of Debentures, as the case may be, or Income PRIDES to
have Debentures, as the case may be, tendered for remarketing shall be limited
to the extent that (i) the Remarketing Agent conducts a remarketing pursuant to
the terms of this Agreement, (ii) Debentures tendered have not been called for
redemption, (iii) the Remarketing Agent is able to find a purchaser or
purchasers for tendered Debentures at a price of not less than 100% of the
stated liquidation or principal amount thereof, as the case may be, plus
accrued and unpaid distributions or interest, as applicable, thereon, and (iv)
such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent as and when required.
(c) It is understood and agreed that neither the Remarketing
Agent nor the Reset Agent shall have any obligation whatsoever to purchase any
Debentures, whether in the Remarketing or otherwise, and shall in no way be
obligated to provide funds to make payment upon tender of Debentures for
remarketing or to otherwise expend or risk their own funds or incur or be
exposed to financial liability in the performance of their respective duties
under this Agreement or the Supplemental Remarketing Agreement, and, without
limitation to the foregoing, the Remarketing Agent shall not be deemed an
underwriter of the remarketed Debentures. The Company shall be obligated in any
case to provide funds to make payment upon tender of Debentures for
remarketing.
3
<PAGE> 4
Section 3. Fees. With respect to the Remarketing, the
Remarketing Agent shall retain as a remarketing fee (the "Remarketing Fee") an
amount not exceeding o basis points (o%), of the principal amount of the
remarketed Debentures from any amount received in connection with such
Remarketing in excess of the aggregate principal amount of such re marketed
Debentures plus any accrued and unpaid interest (including any deferred
interest). In addition, the Reset Agent shall receive from the Company a
reasonable and customary fee (the "Reset Agent Fee"); provided, however, that
if the Remarketing Agent shall also act as the Reset Agent, then the Reset
Agent shall not be entitled to receive any such Reset Agent Fee. Payment of
such Reset Agent Fee shall be made by the Company on the third Business Day
immediately preceding the Purchase Contract Settlement Date in immediately
available funds or, upon the instructions of the Reset Agent, by certified or
official bank check or checks or by wire transfer.
Section 4. Replacement and Resignation of Remarketing Agent.
(a) The Company may in its absolute discretion replace Merrill Lynch as the
Remarketing Agent and as the Reset Agent hereunder by giving notice prior to
3:00 p.m., New York City time, on the eleventh Business Day immediately prior
to the Purchase Contract Settlement Date, provided that the Company must
replace Merrill Lynch both as Remarketing Agent and as Reset Agent unless
Merrill Lynch shall otherwise agree. Any such replacement shall become
effective upon the Company's appointment of a successor to perform the services
that would otherwise be per formed hereunder by the Remarketing Agent and the
Reset Agent. Upon providing such notice, the Company shall use all reasonable
efforts to appoint such a successor and to enter into a remarketing agreement
with such successor as soon as reasonably practicable.
(b) Merrill Lynch may resign at any time and be discharged
from its duties and obligations hereunder as the Remarketing Agent and/or as
the Reset Agent by giving notice prior to 3:00 p.m., New York City time, on the
eleventh Business Day immediately prior to the Purchase Contract Settlement
Date. Any such resignation shall become effective upon the Company's
appointment of a successor to perform the services that would otherwise be per
formed hereunder by the Remarketing Agent and/or the Reset Agent. Upon
receiving notice from the Remarketing Agent and/or the Reset Agent that it
wishes to resign hereunder, the Company shall appoint such a successor and
enter into a remarketing agreement with it as soon as reasonably practicable.
Section 5. Dealing in the Securities. Each of the Remarketing
Agent and the Reset Agent, when acting hereunder or, in the case of the
Remarketing Agent, under the Supplemental Remarketing Agreement, or when acting
in its individual or any other capacity, may, to the extent permitted by law,
buy, sell, hold or deal in any of the Debentures, Growth PRIDES, Income PRIDES
or any other securities of the Company. With respect to any Debentures, Growth
PRIDES, Income PRIDES or any other securities of the Company owned by it, each
of the Remarketing Agent and the Reset Agent may exercise any vote or join in
any action with like effect as if it did not act in any capacity hereunder.
Each of the Remarketing Agent and the Reset Agent, in its individual capacity,
either as principal or agent, may also engage in or have an interest in any
financial or other transaction with the Company as freely as if it did not act
in any capacity hereunder.
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<PAGE> 5
Section 6. Registration Statement and Prospectus. In
connection with the Remarketing, if and to the extent required in the view of
counsel (which need not be an opinion) for either the Remarketing Agent or the
Company) by applicable law, regulations or interpretations in effect at the
time of such Remarketing, the Company shall use its reasonable efforts to have
a registration statement relating to the Debentures effective under the
Securities Act of 1933 prior to the third Business Day immediately preceding
the Purchase Contract Settlement Date, if requested by the Remarketing Agent,
shall furnish a current preliminary prospectus and, if applicable, a current
preliminary prospectus supplement to be used in such Remarketing by the
Remarketing Agent not later than seven Business Days prior to the Purchase
Contract Settlement Date (or such earlier date as the Remarketing Agent may
reasonably request) and in such quantities as the Remarketing Agent may
reasonably request, and shall furnish a current final prospectus and, if
applicable, a final prospectus supplement to be used in such Remarketing by the
Remarketing Agent not later than the third Business Day immediately preceding
the Purchase Contract Settlement Date in such quantities as the Remarketing
Agent may reasonably request, and shall pay all expenses relating thereto. The
Company shall also take all such actions as may (upon advice of counsel to the
Company or the Remarketing Agent) be necessary or desirable under state
securities or blue sky laws in connection with the Remarketing.
Section 7. Conditions to the Remarketing Agent's Obligations.
(a) The obligations of the Remarketing Agent and the Reset Agent under this
Agreement and, in the case of the Remarketing Agent, the Supplemental
Remarketing Agreement shall be subject to the terms and conditions of this
Agreement and the Supplemental Remarketing Agreement, including, without
limitation, the following conditions: (i) the Debentures tendered for, or
otherwise to be included in such, Remarketing have not been called for
redemption, (ii) the Remarketing Agent is able to find a purchaser or
purchasers for tendered Debentures at a price not less than 100% of the stated
liquidation amount or principal amount thereof, as the case may be, plus
accrued and unpaid distributions or interest, as applicable, thereon, (iii) the
Purchase Contract Agent, the Collateral Agent, the Custodial Agent, the Company
and the Trustee shall have performed their respective obligations in connection
with the Remarketing pursuant to the Purchase Contract Agreement, the Pledge
Agreement, the Indenture, this Agreement and the Supplemental Remarketing
Agreement (including, without limitation, giving the Remarketing Agent notice
of the aggregate liquidation amount or principal amount, as the case may be, of
Debentures, as the case may be, to be remarketed no later than 10:00 a.m., New
York City time, on the fourth Business Day prior to the Purchase Contract
Settlement Date and concurrently delivering the Debentures to be remarketed to
the Remarketing Agent), (iv) no Event of Default (as defined in the Indenture)
shall have occurred and be continuing, (v) the accuracy of the representations
and warranties of the Company included and incorporated by reference in this
Agreement and the Supplemental Remarketing Agreement or in certificates of any
officer of the Company or any of its subsidiaries delivered pursuant to the
provisions included or incorporated by reference in this Agreement or the
Supplemental Remarketing Agreement, (vi) the performance by the Company of its
covenants and other obligations included and incorporated by reference in this
Agreement and the Supplemental Remarketing Agreement, and (vii) the
satisfaction of the other conditions set forth and incorporated by reference in
this Agreement and the Supplemental Remarketing Agreement.
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<PAGE> 6
(b) If at any time during the term of this Agreement, any
Indenture Event of Default or event that with the passage of time or the giving
of notice or both would become an Indenture Event of Default has occurred and
is continuing under the Indenture, then the obligations and duties of the
Remarketing Agent and the Reset Agent under this Agreement and the Supplemental
Remarketing Agreement shall be suspended until such default or event has been
cured. The Company will promptly give the Remarketing Agent notice of all such
defaults and events of which the Company is aware.
Section 8. Termination of Remarketing Agreement. This
Agreement shall terminate as to any Remarketing Agent or Reset Agent which is
replaced on the effective date of its replacement pursuant to Section 4(a)
hereof or pursuant to Section 4(b) hereof. Notwithstanding any such
termination, the obligations set forth in Section 3 hereof shall survive and
remain in full force and effect until all amounts payable under said Section 3
shall have been paid in full. In addition, each former Remarketing Agent and
Reset Agent shall be entitled to the rights and benefits under Section 10 of
this Agreement notwithstanding the replacement or resignation of such
Remarketing Agent or Reset Agent
Section 9. Remarketing Agent's Performance; Duty of Care. The
duties and obligations of the Remarketing Agent and the Reset Agent shall be
determined solely by the express provisions of this Agreement and, in the case
of the Remarketing Agent, the Supple mental Remarketing Agreement. No implied
covenants or obligations of or against the Remarketing Agent or the Reset Agent
shall be read into this Agreement or the Supplemental Remarketing Agreement. In
the absence of bad faith on the part of the Remarketing Agent or the Reset
Agent, as the case may be, the Remarketing Agent and the Reset Agent each may
conclusively rely upon any document furnished to it which purports to conform
to the requirements of this Agreement or the Supplemental Remarketing
Agreement, as the case may be, as to the truth of the statements expressed
therein. Each of the Remarketing Agent and the Reset Agent shall be protected
in acting upon any document or communication reasonably believed by it to be
signed, presented or made by the proper party or parties. Neither the
Remarketing Agent nor the Reset Agent shall have any obligation to determine
whether there is any limitation under applicable law on the Reset Rate on the
Debentures or, if there is any such limitation, the maximum permissible Reset
Rate on the Debentures, and they shall rely solely upon written notice from the
Company (which the Company agrees to provide prior to the tenth Business Day
before the Purchase Contract Settlement Date) as to whether or not there is any
such limitation and, if so, the maximum permissible Reset Rate. Neither the
Remarketing Agent nor the Reset Agent shall incur any liability under this
Agreement or the Supplemental Remarketing Agreement to any beneficial owner or
holder of Debentures, or other securities, either in its individual capacity or
as Remarketing Agent or Reset Agent, as the case may be, for any action or
failure to act in connection with the Remarketing or otherwise in connection
with the transactions contemplated by this Agreement or the Supplemental
Remarketing Agreement. The provisions of this Section 9 shall survive any
termination of this Agreement and shall also continue to apply to every
Remarketing Agent and Reset Agent notwithstanding their resignation or removal.
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<PAGE> 7
Section 10. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless the Remarketing Agent, the Reset Agent
and their respective directors, officers, employees, agents, affiliates and
each person, if any, who controls the Remarketing Agent or the Reset Agent
within the meaning of either Section 15 of the Securities Act of 1933, as
amended (the "1933 Act"), or Section 20 of the Securities Exchange Act of 1934,
as amended (the "1934 Act") (the Remarketing Agent, the Reset Agent and each
such person or entity being an "Indemnified Party"), as follows:
(i) from and against any and all losses, claims, damages,
liabilities and expenses whatsoever, joint or several, as incurred, to which
such Indemnified Party may be come subject under any applicable federal or
state law, or otherwise, and related to, arising out of, or based on (A) the
failure to have an effective Registration Statement (as defined in the
Supplemental Remarketing Agreement) under the 1933 Act relating to the
Debentures, as the case may be, if required, or the failure to satisfy the
prospectus delivery requirements of the 1933 Act because the Company failed to
provide the Remarketing Agent with a Prospectus (as defined in the Supplemental
Remarketing Agreement) for delivery, or (B) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any amendment thereto (including any information deemed to be a part of the
Registration Statement at the time it became effective pursuant to paragraph
(b) of Rule 430A under the 1933 Act, if applicable), or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (C) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus, or any amendment or supplement
thereto, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or (D) any untrue
statement or alleged untrue statement of a material fact contained in any other
information (whether oral or written) or documents (including, without
limitation, any documents incorporated or deemed to be incorporated by
reference in any such information or documents) provided by the Company for
use in connection with the remarketing of the Debentures or any of the
transactions related thereto, or (E) any breach by the Company of any of the
representations, warranties or agreements included or incorporated by reference
in this Agreement or the Supplemental Remarketing Agreement, or (F) any failure
by the Company to make or consummate the re marketing of the Debentures
(including, without limitation, any Failed Remarketing) or the withdrawal,
recission, termination, amendment or extension of the terms of such
remarketing, or (G) any failure on the part of the Company to comply, or any
breach by the Company of, any of the provisions included or incorporated by
reference in this Agreement, the Supplemental Remarketing Agreement, the
Purchase Contract Agreement, the Income PRIDES, the Growth PRIDES, the Pledge
Agreement, the Indenture or the Debenture (collectively, the "Operative
Documents") or (H) the remarketing of the Debentures, as the case may be, or
any other transaction contemplated by any of the Operative Documents, or the
engagement of the Remarketing Agent or the Reset Agent pursuant to, or the
performance by the Remarketing Agent or the Reset Agent of the respective
services contemplated by, this Agreement or the Supplemental Remarketing
Agreement;
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<PAGE> 8
(ii) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any claim
whatsoever related to, arising out of or based on any matter described in (i)
above; and
(iii) against any and all expense whatsoever, as
incurred (including the fees and disbursements of counsel chosen by Merrill
Lynch), incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever related to, arising out
or based on any matter described in (i) above, whether or not such Indemnified
Party is a party and whether or not such claim, action or proceeding is
initiated or brought by or on behalf of the Company to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that the Company shall not be liable under clause (i)(B),
(i)(C) or (i)(D) to the extent any such loss, claim, damage, liability or
expense arises out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and conformity with written
information furnished to the Company by the Remarketing Agent or the Reset
Agent expressly for use in the Registration Statement (or any amendment
thereto) or any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto) or any other documents used in connection with remarketing
of the Debentures, as the case may be.
The Company agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to the
Company or its respective security holders or creditors relating to or arising
out of the engagement of the Remarketing Agent or the Reset Agent pursuant to,
or the performance by the Remarketing Agent or the Reset Agent of their
respective services contemplated by, this Agreement or the Supplemental
Remarketing Agreement except to the extent that any loss, claim, damage,
liability or expense is found in a final judgment by a court of competent
jurisdiction to have resulted from the willful misconduct, gross negligence or
bad faith of the Remarketing Agent or the Reset Agent, as the case may be.
The Company agrees that, without Merrill Lynch's prior
written consent, it will not settle, compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any action or
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 10 (whether or not Merrill Lynch or any other
Indemnified Party is an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent (i) includes an
unconditional release of each Indemnified Party from all liability arising out
of such litigation, investigation, proceeding, 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 an Indemnified Party.
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<PAGE> 9
(b) If the indemnification provided for in Section 10(a)
hereof is for any reason unavailable to or insufficient to hold harmless an
Indemnified Party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then the Company shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such Indemnified Party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Remarketing Agent and the Reset Agent on the other hand from
the remarketing of the Debentures contemplated hereby or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one hand and
of the Remarketing Agent and the Reset Agent on the other hand in connection
with the statements, omissions or other matters which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Remarketing Agent and the Reset Agent on the other hand in
connection with the remarketing of the Debentures contemplated hereby shall be
deemed to be in the same respective proportions as the aggregate principal
amount of the Debentures which are or are to be remarketed bears to the
aggregate fees actually received by the Remarketing Agent and the Reset Agent
under Section 3 hereof. The relative fault of the Company on the one hand and
the Remarketing Agent and the Reset Agent on the other hand (i) in the case of
an untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, shall be determined by reference to, among
other things, whether such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or by the Remarketing Agent
or the Reset Agent on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission and (ii) in the case of any other action or omission
shall be determined by reference to, among other things, whether such action or
omission was taken or omitted to be taken by the Company on the one hand, or by
the Remarketing Agent or the Reset Agent, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to prevent or
correct such action or omission. The Company, the Remarketing Agent and the
Reset Agent agree that it would not be just and equitable if contribution
pursuant to this Section 10(b) were determined by pro rata allocation or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this Section 10(b). The aggregate amount of
losses, liabilities, claims, damages and expenses incurred by an Indemnified
Party and referred to above in this Section 10(b) shall be deemed to include
any legal or other expenses incurred by such Indemnified Party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue statement or any such omission or alleged omission or any other such
action or omission; provided, however, that to the extent permitted by
applicable law, in no event shall the Remarketing Agent or the Reset Agent be
required to contribute any amount which, in the aggregate, exceeds the
aggregate fees received by them under Section 3 of this Agreement. No
investigation or failure to investigate by any Indemnified Party shall impair
the foregoing indemnification and contribution agreement or any rights an
Indemnified Party may have. No person guilty of fraudulent misrepresentation
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<PAGE> 10
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(c) In the event an Indemnified Party is requested or
required to appear as a witness in any action brought by or on behalf of or
against the Company, the Company agrees to reimburse the Remarketing Agent or
the Reset Agent, as the case may be, for all reasonable expenses, as incurred,
which are incurred by the Remarketing Agent or the Reset Agent, as the case may
be, in connection with such Indemnified Party's appearing and preparing to
appear as such a witness, including, without limitation, the reasonable fees
and disbursements of its legal counsel, and to compensate the Remarketing Agent
or the Reset Agent, as the case may be, in an amount to be mutually agreed
upon. In addition, the Company agrees to compensate the Remarketing Agent or
the Reset Agent, as the case may be, in an amount to be mutually agreed upon
per person per day for each day that an officer, director or employee of the
Remarketing Agent or the Reset Agent, as the case may be, or any of their
respective affiliates is involved in preparation, discovery or testimony
pertaining to any litigation, discovery or investigation in connection with
this Agreement or the Supplemental Remarketing Agreement.
(d) Promptly after receipt by an Indemnification Party of
written notice of any claim or commencement of an action or proceeding with
respect to which indemnification may be sought hereunder, such Indemnified
Party will notify the Company in writing of such claim or of the commencement
of such action or proceeding, but failure so to notify the Company will not
relieve the Company from any liability which it may have to such Indemnified
Party under this indemnification and contribution agreement, and in any event
will not relieve the Company from any other liability that it may have to such
Indemnified Party. Merrill Lynch shall have the right to select counsel in
connection with any transaction for which any Indemnified Party may be entitled
to indemnification or contribution hereunder, provided that in no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all Indemnified Parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances.
(e) Anything herein or in the Supplemental Remarketing
Agreement to the contrary notwithstanding, the provisions of this Section 10,
and the rights of the Remarketing Agent, the Reset Agent and the other
Indemnified Parties hereunder, shall be in addition to, and not in limitation
of, any rights or benefits (including, without limitation, rights to
indemnification or contribution) which the Remarketing Agent, the Reset Agent
or any other Indemnified Party may have under any other instrument or
agreement.
Section 11. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
Section 12. Term of Agreement. (a) Unless otherwise
terminated in accordance with the provisions hereof and except as otherwise
provided herein, this Agreement shall remain in full force and effect from the
date hereof until the first day thereafter on which no Debentures are
outstanding, or, if earlier, the Business Day immediately following the
Purchase
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<PAGE> 11
Contract Settlement Date. Anything herein to the contrary notwithstanding, the
provisions of the last section of Section 8 hereof and the provisions of
Sections 3, 9, 10 and 12(b) hereof shall survive any termination of this
Agreement and remain in full force and effect.
(b) All representations and warranties included or
incorporated by reference in this Agreement, or the Supplemental Remarketing
Agreement, or contained in certificates of officers of the Company submitted
pursuant hereto or thereto, shall remain operative and in full force and
effect, regardless of any investigation made by or on behalf of the Remarketing
Agent, the Reset Agent or any of their controlling persons, or by or on behalf
of the Company or the Purchase Contract Agent, and shall survive the
remarketing of the Debentures.
Section 13. Successors and Assigns. The rights and
obligations of the Company and the Purchase Contract Agent (both in its
capacity as Purchase Contract Agent and as attorney-in-fact) hereunder may not
be assigned or delegated to any other person without the prior written consent
of the Remarketing Agent and the Reset Agent. The rights and obligations of the
Remarketing Agent and the Reset Agent hereunder may not be assigned or
delegated to any other person without the prior written consent of the Company,
except that the Remarketing Agent shall have the right to appoint additional
remarketing agents as provided herein. This Agreement shall inure to the
benefit of and be binding upon the Company, the Purchase Contract Agent, the
Remarketing Agent and the Reset Agent and their respective successors and
assigns and the other Indemnified Parties (as defined in Section 10 hereof) and
the successors, assigns, heirs and legal representatives of the Indemnified
Parties. The terms "successors" and "assigns" shall not include any purchaser
of Securities, Debentures merely because of such purchase.
Section 14. Headings. Section headings have been inserted in
this Agreement and the Supplemental Remarketing Agreement as a matter of
convenience of reference only, and it is agreed that such section headings are
not a part of this Agreement or the Supplemental Remarketing Agreement and will
not be used in the interpretation of any provision of this Agreement or the
Supplemental Remarketing Agreement.
Section 15. Severability. If any provision of this Agreement
or the Supplemental Remarketing Agreement shall be held or deemed to be or
shall, in fact, be invalid, inoperative or unenforceable as applied in any
particular case in any or all jurisdictions because it conflicts with any
provisions of any constitution, statute, rule or public policy or for any other
reason, then, to the extent permitted by law, such circumstances shall not have
the effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstances or jurisdiction, or of rendering
any other provision or provisions of this Agreement or the Supplemental
Remarketing Agreement, as the case may be, invalid, inoperative or
unenforceable to any extent whatsoever.
Section 16. Counterparts. This Agreement and the Supplemental
Remarketing Agreement may be executed in counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same
document.
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<PAGE> 12
Section 17. Amendments. This Agreement and the Supplemental
Remarketing Agreement may be amended by any instrument in writing signed by the
parties hereto. The Company and the Purchase Contract Agent agree that they
will not enter into, cause or permit any amendment or modification of the
Purchase Contract Agreement, the Indenture, the Pledge Agreement, the
Debentures, the FELINE PRIDES or any other instruments or agreements relating
to the Debentures or the FELINE PRIDES which would in any way affect the
rights, duties or obligations of the Remarketing Agent or the Reset Agent
without the prior written consent of the Remarketing Agent or the Reset Agent,
as the case may be.
Section 18. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or pursuant
hereto shall be made in writing or transmitted by any standard form of
telecommunication, including telephone or telecopy, and confirmed in writing.
All written notices and confirmations of notices by telecommunication shall be
deemed to have been validly given or made when delivered or mailed, registered
or certified mail, return receipt requested and postage prepaid. All such
notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to The Coastal Corporation, Coastal Tower, Nine
Greenway Plaza, Houston, TX 77046-0995, Attention: Chief Financial Officer; if
to the Remarketing Agent or Reset Agent, to Merrill Lynch & Co. at Merrill
Lynch, Pierce, Fenner & Smith Incorporated, World Financial Center, North
Tower, New York, New York 10281-1209, Attention: __________, with a copy to
Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York, New York
10022, Attention: John W. Osborn; and if to the Purchase Contract Agent, to The
Bank of New York, Corporate Trust Administration, 101 Barclay Street, Floor 12
East, New York, NY 10286, or to such other address as any of the above shall
specify to the other in writing.
Section 19. Information. The Company agrees to furnish the
Remarketing Agent and the Reset Agent with such information and documents as
the Remarketing Agent or the Reset Agent may reasonably request in connection
with the transactions contemplated by this Remarketing Agreement and the
Supplemental Remarketing Agreement, and make reason ably available to the
Remarketing Agent, the Reset Agent and any accountant, attorney or other
advisor retained by the Remarketing Agent or the Reset Agent such information
that parties would customarily require in connection with a due diligence
investigation conducted in accordance with applicable securities laws and
cause the Company's officers, directors, employees and accountants to
participate in all such discussions and to supply all such information reason
ably requested by any such person in connection with such investigation.
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<PAGE> 13
IN WITNESS WHEREOF, each of the Company, the Purchase
Contract Agent and the Remarketing Agent has caused this Agreement to be
executed in its name and on its behalf by one of its duly authorized
signatories as of the date first above written.
THE COASTAL CORPORATION
By:
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------------
Authorized Signatory
THE BANK OF NEW YORK
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders of
the Purchase Contracts
By:
------------------------------------
Name:
Title:
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<PAGE> 14
Exhibit A to
Remarketing Agreement
Form of Supplemental Remarketing Agreement
Supplemental Remarketing Agreement dated August o, 2002 among The
Coastal Corporation, a Delaware corporation (the "Company"), Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Remarketing
Agent"), and The Bank of New York, as Purchase Contract Agent and
attorney-in-fact for the Holders of the Purchase Contracts (as such terms are
defined in the Purchase Contract Agreement referred to in Schedule I hereto)
NOW, THEREFORE, for and in consideration of the covenants herein made,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Remarketing Agreement
dated as of o, 1999 (the "Remarketing Agreement") among the Company, the
Purchase Contract Agent and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner
& Smith Incorporated or, if not defined in the Remarketing Agreement, the
meanings assigned to them in the Purchase Contract Agreement (as defined in
Schedule I hereto).
2. Registration Statement and Prospectus. The Company has filed with
the Securities and Exchange Commission, and there has become effective, a
registration statement on Form S-3 (No. 333-81095; 333-81095-01 and
333-81095-02), including a prospectus, relating to the Securities (as such term
is defined on Schedule I hereto). Such Registration Statement, as amended, and
including the information deemed to be a part thereof pursuant to Rule 430A
under the Securities Act of 1933, as amended (the "1933 Act"), and the
documents incorporated or deemed to be incorporated by reference therein, are
hereinafter called, collectively, the "Registration Statement"; [the related
preliminary prospectus dated o , including the documents incorporated or deemed
to be incorporated by reference therein, [and preliminary prospectus
supplemented dated o ] are hereinafter called, [collectively] the "preliminary
prospectus";] and the related prospectus dated ______________, including the
documents incorporated or deemed to be incorporated by reference therein, [and
prospectus supplement dated ________________] are hereinafter called,
[collectively,] the "Prospectus." The Company has provided copies of the
Registration Statement [, the preliminary prospectus] and the Prospectus to the
Remarketing Agent, and hereby consents to the use of the [preliminary
prospectus] and the Prospectus in connection with the remarketing of the
Securities. [IN THE EVENT THAT A REGISTRATION STATEMENT IS NOT REQUIRED, INSERT
THE FOLLOWING: The Company has provided to the Remarketing Agent, for use in
connection with remarketing of the Securities (as such term is defined on
Schedule I hereto), a [preliminary remarketing memorandum and] remarketing
memorandum and [describe other materials, if any]. Such remarketing memorandum
(including the documents incorporated or deemed to be incorporated
<PAGE> 15
by reference therein, [and] [describe other materials] are hereinafter called,
collectively, the "Prospectus," [and such preliminary marketing memorandum
(including the documents incorporated or deemed to be incorporated by reference
therein) is hereinafter called a "preliminary prospectus")]. The Company hereby
consents to the use of the Prospectus [and the preliminary prospectus] in
connection with the remarketing of the Securities]. All references in this
Agreement to amendments or supplements to the Registration Statement [, the
preliminary prospectus] or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), which is incorporated or deemed to be incorporated by
reference in the Registration Statement [, the preliminary prospectus] or the
Prospectus, as the case may be.
3. Provisions Incorporated by Reference.
(a) Subject to Section 3(b), the provisions of the
Underwriting Agreement (other than Section 2, Section 6, Section 7 and Section
10 thereof) are incorporated herein by reference, mutatis mutandis, and the
Company hereby makes the representations and warranties, and agrees to comply
with the covenants and obligations, set forth in the provisions of the
Underwriting Agreement incorporated by reference herein, as modified by the
provisions of Section 3(b) hereof.
(b) With respect to the provisions of the Underwriting
Agreement incorporated herein, for the purposes hereof, (i) all references
therein to the "Underwriter" or "Underwriters" shall be deemed to refer to the
Remarketing Agent and all references to the "Representative" or the
"Representatives" shall be deemed to refer to Merrill Lynch, Pierce, Fenner &
Smith Incorporated, ("Merrill Lynch"); (ii) all references therein to the
"Securities" shall be deemed to refer to the Securities as defined herein;
(iii) all references therein to the "Closing Time" shall be deemed to refer to
the Remarketing Closing Date specified in Schedule I hereto; (iv) all
references therein to the "Registration Statement" [, any "preliminary
prospectus"] or the "Prospectus" shall be deemed to refer to [the Registration
Statement, the preliminary prospectus and] the Prospectus, respectively, as
defined herein; (v) all references therein to this "Agreement," the
"Underwriting Agreement," "hereof," "herein" and all references of similar
import, shall be deemed to mean and refer to this Supplemental Remarketing
Agreement; (vi) all references therein to "the date hereof," "the date of this
Agreement" and all similar references shall be deemed to refer to the date of
this Supplemental Remarketing Agreement; (vii) all references therein to the
Date of Delivery shall be disregarded; (viii) Section 5(e) of the Underwriting
Agreement shall be amended to refer solely to the Securities (as defined
herein) and the ratings set forth therein shall be o from Moody's and o from
S&P; (ix) the references in Section 1(a)(iv) of the Underwriting Agreement to
the "Registration Statement" and the "Prospectus" shall be deemed to refer to
[the Registration Statement (as defined herein and] the Prospectus (as defined
herein) in the form first provided to the Remarketing Agent for use in
connection with the remarketing of the Securities, [respectively], (x) the
reference in Section 9(a)(i) of the Underwriting Agreement to the "Registration
Statement" shall be deemed to refer to the Prospectus in the form first
provided to the Remarketing Agent for use in connection with the remarketing of
the Securities; (xi) Section 9(a)(iv) of the Underwriting Agreement
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<PAGE> 16
shall be deemed to also include a reference to the Securities (as defined
herein); and (xii) [other changes].
4. Remarketing. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth or incorporated by
reference herein and in the Remarketing Agreement, the Remarketing Agent agrees
to use its reasonable efforts to re market, in the manner set forth in Section
2(b) of the Remarketing Agreement, the aggregate stated liquidation or
principal amount, as the case may be, of Securities set forth in Schedule I
hereto at a purchase price not less than 100% of the aggregate stated
liquidation amount or aggregate principal amount of the Securities plus any
accrued and unpaid distributions or interest, as applicable, thereon. In
connection therewith, the registered holder or holders thereof agree, in the
manner specified in Section 5 hereof, to pay to the Remarketing Agent a
Remarketing Fee equal to an amount not exceeding o basis points (o%) of
such aggregate stated liquidation or principal amount, as the may be, payable
by deduction from any amount received in connection from such Remarketing in
excess of the aggregate principal amount of the Securities plus accrued and
unpaid interest. The right of each holder of Securities to have Securities
tendered for purchase shall be limited to the extent set forth in the last
sentence of Section 2(b) of the Remarketing Agreement (which is incorporated by
reference herein). As more fully provided in Section 2(c) of the Remarketing
Agreement (which is incorporated by reference herein), the Remarketing Agent is
not obligated to purchase any Securities in the remarketing or otherwise, and
neither the Sponsor nor the Remarketing Agent shall be obligated in any case
to provide funds to make payment upon tender of Securities for remarketing.
5. Delivery and Payment. Delivery of payment for the remarketed
Securities by the purchasers thereof identified by the Remarketing Agent and
payment of the Remarketing Fee shall be made on the Remarketing Closing Date at
the location and time specified in Schedule I hereto (or such later date not
later than five Business Days after such date as the Remarketing Agent shall
designate), which date and time may be postponed by agreement between the
Remarketing Agent and the Company. Delivery of the remarketed Securities and
payment of the Remarketing Fee shall be made to the Remarketing Agent against
payment by the respective purchasers of the remarketed Securities of the
consideration therefor as specified herein, which consideration shall be paid
to the Collateral Agent for the account of the persons entitled thereto by
certified or official bank check or checks drawn on or by a New York Clearing
House bank and payable in immediately available funds or in immediately
available funds by wire transfer to an account or accounts designated by the
Collateral Agent.
If the Securities are not represented by a Global Security held by or
on behalf of The Depositary Trust Company, certificates for the Securities
shall be registered in such names and denominations as the Remarketing Agent
may request not less than one full Business Day in advance of the Remarketing
Closing Date, and the Company, the Collateral Agent and the registered holder
or holders thereof agree to have such certificates available for inspection,
packaging and checking by the Remarketing Agent in New York, New York not later
than 1:00 p.m. on the Business Day prior to the Remarketing Closing Date.
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6. Notices. Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or pursuant hereto
shall be made in writing or transmitted by any standard form of
telecommunication, including telephone or telecopy, and confirmed in writing.
All written notices and confirmations of notices by telecommunication shall be
deemed to have been validly given or made when delivered or mailed, registered
or certified mail, return receipt requested and postage prepaid. All such
notices, requests, consents or other communications shall be addressed as
follows: if to the Company, to The Coastal Corporation, Coastal Tower, Nine
Greenway Plaza, Houston, TX 77046-0995, Attention: Chief Financial Officer; if
to the Remarketing Agent, to Merrill Lynch & Co. at Merrill Lynch, Pierce,
Fenner & Smith Incorporated, at World Financial Center, North Tower, 250 Vesey
Street, New York, NY 10281, Attention: o ; with a copy to Skadden, Arps, Slate,
Meagher & Flom LLP, 919 Third Avenue, New York, NY 10022, Attention: John W.
Osborn; and if to the Purchase Contract Agent, to The Bank of New York,
Corporate Trust Administration, 101 Barclay Street, Floor 12 East, New York, NY
10286, or to such other address as any of the above shall specify to the other
in writing.
7. Conditions to Obligations of Remarketing Agent. Anything herein to
the contrary notwithstanding, the parties hereto agree (and the holders and
beneficial owners of the Securities will be deemed to agree) that the
obligations of the Remarketing Agent under this Agreement and the Remarketing
Agreement are subject to the satisfaction of the conditions set forth in
Section 7 of the Remarketing Agreement (which are incorporated herein by
reference), and to the satisfaction, on the Remarketing Closing Date, of the
conditions incorporated by reference herein from Section 5 of the Underwriting
Agreement as modified by Section 3(b) hereof (including, without limitation,
the delivery of opinions of counsel, officers' certificates and accountants'
comfort letters in form and substance satisfactory to the Remarketing Agent,
the accuracy as of the Remarketing Closing Date of the representations and
warranties of the Company included and incorporated by reference herein and the
performance by the Company of its obligations under the Remarketing Agreement
and this Agreement as and when required hereby and thereby). In addition,
anything herein or in the Remarketing Agreement to the contrary
notwithstanding, the Remarketing Agreement and this Agreement may be terminated
by the Remarketing Agent, by notice to the Company at any time prior to the
time of settlement on the Remarketing Closing Date, if any of the events or
conditions set forth in Section 9 of the Underwriting Agreement, as modified by
Section 3(b) hereof, shall have occurred or shall exist.
8. Indemnity and Contribution. Anything herein to the contrary
notwithstanding, the Remarketing Agent shall be entitled to indemnity and
contribution on the terms and conditions set forth in the Remarketing
Agreement.
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<PAGE> 18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the Remarketing Agent.
Very truly yours,
THE COASTAL CORPORATION
By:
------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
------------------------------------
Authorized Signatory
[Add other Remarketing Agents, if any]
THE BANK OF NEW YORK
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders of
the Purchase Contracts
By:
------------------------------------
Name:
Title:
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<PAGE> 19
SCHEDULE I
Securities subject to the remarketing: o% Debentures
due o 16, 2004 of the Company (the "Securities").
Purchase Contract Agreement, dated as of o, 1999
(the "Purchase Contract Agreement") by and between The Coastal
Corporation, a Delaware corporation, and The Bank of New York, a
national banking association.
Pledge Agreement dated as of o, 1999 (the "Pledge Agreement")
by and between The Coastal Corporation, a Delaware corporation, The
Bank of New York a national banking association, and The Chase
Manhattan Bank.
Indenture dated as of February 24, 1997 (the "Base Indenture")
by and between The Coastal Corporation, a Delaware corporation, and
Harris Trust & Bank.
Seventh Supplemental Indenture, dated as of o, 1999
(the "Supplemental Indenture" and, together with the Base Indenture,
the "Indenture") by and between The Coastal Corporation, a Delaware
corporation, and Harris Trust & Savings Bank.
Aggregate [Liquidation Amount/Principal Amount] of Securities: $____________
Underwriting Agreement, dated o, 1999 (the "Underwriting Agreement")
among The Coastal Corporation and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Lehman Brothers and Bank of
America Securities LLC.
Remarketing Closing Date, Time and Location:
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