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FORM 8-A
Securities and Exchange Commission
Washington, D.C. 20549
For registration of certain classes of securities
pursuant to section 12(b) or (g) of the
Securities Exchange Act of 1934
The Williams Companies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 73-0569878
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(State of incorporation or organization) (I.R.S. Employer Identification No.)
One Williams Center Tulsa, Oklahoma 74172
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Income PACS New York Stock Exchange
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If this form relates to the registration of a class of securities pursuant
to Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [X]
If this form relates to the registration of a class of securities pursuant
to Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [ ]
Securities Act registration statement file number to which this form
relates: 333-73326 (if applicable).
Securities to be registered pursuant to Section 12(g) of the Act: None
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
The description of the Registrant's Income PACS (the "Income
PACS") to be registered hereunder is incorporated herein by reference to
the description included under the caption "Description of the FELINE PACS,"
"Description of Purchase Contracts," "Description of the Purchase Contract
and the Pledge Agreement," and "Description of the Notes," in the Preliminary
Prospectus Supplement, dated January 4, 2002, to the Prospectus dated
December 27, 2001, included as a part of the Registration Statement on Form
S-3 of The Williams Companies, Inc. (Registration No. 333-73326) (as the
same may be amended from time to time, the "Registration Statement"). For
purposes of such description, any prospectus supplement relating to the
Registration Statement filed pursuant to Rule 424(b) under the Securities
Act of 1933, as amended, which purports to describe the Income PACS shall
be deemed to be incorporated herein by reference.
Item 2. Exhibits.
1. Registration Statement on Form S-3 (Registration No. 333-73326) filed
with the Securities and Exchange Commission on November 14, 2001 by The
Williams Companies, Inc., as amended (the "Registration Statement") is
incorporated herein by reference.
2. Indenture to be used in connection with the issuance of the Notes
which are a component of the Income PACS (incorporated by reference to Exhibit
4.1 to the Registration Statement).
3. Form of Second Supplemental Indenture to be used in connection with
the issuance of the Notes which are a component of the Income PACS.
4. Form of Note (included in Exhibit 3).
5. Form of Purchase Contract Agreement between The Williams Companies,
Inc. and JPMorgan Chase Bank, as Purchase Contract Agent.
6. Form of Income PACS Certificate (included in Exhibit 5).
7. Form of Pledge Agreement among The Williams Companies, Inc., JPMorgan
Chase Bank, as Collateral Agent, and JPMorgan Chase Bank, as
Purchase Contract Agent.
8. Form of Remarketing Agreement among The Williams Companies, Inc.,
JPMorgan Chase Bank, as Purchase Contract Agent, and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Remarketing Agent.
Signature
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
THE WILLIAMS COMPANIES, INC.
Date: January 8, 2002
By: /s/ Suzanne H. Costin
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Suzanne H. Costin
Title: Secretary
EXHIBIT 3
SIXTH SUPPLEMENTAL INDENTURE
DATED AS OF __________, 2002
BETWEEN
THE WILLIAMS COMPANIES, INC.
AS ISSUER
AND
BANK ONE TRUST COMPANY, N.A.
AS TRUSTEE
SIXTH SUPPLEMENTAL INDENTURE, dated as of _________, 2002 (the
"Sixth Supplemental Indenture"), between The Williams Companies, Inc., a
corporation duly organized and existing under the laws of the State of
Delaware (the "Company"), and Bank One Trust Company, N.A. (successor in
interest to the First National Bank of Chicago), as trustee (the
"Trustee").
WHEREAS, the Company executed and delivered the Indenture dated as
of November 10, 1997 (the "Base Indenture") to the Trustee to provide for
the issuance from time to time of the Company's senior, unsecured
debentures, notes, or other evidences of indebtedness (the "Securities"),
to be issued from in one or more series as might be determined by the
Company under the Base Indenture; and
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 Senior Notes due 2007 (the "Notes"), the form and terms
of such Notes and the terms, provisions and conditions thereof to be set
forth as provided in the Base Indenture and this Sixth Supplemental
Indenture (together, the "Indenture"); and
WHEREAS, the Company has requested that the Trustee execute and
deliver this Sixth Supplemental Indenture and all requirements necessary to
make this Sixth Supplemental Indenture a valid, binding and enforceable
instrument in accordance with its terms, and to make the Notes, 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 Sixth Supplemental Indenture has
been duly authorized in all respects.
NOW THEREFORE, in consideration of the purchase and acceptance of
the Notes by the Holders thereof, and for the purpose of setting forth, as
provided in the Base Indenture, the form and terms of the Notes, the
Company covenants and agrees with the Trustee as follows:
Article 1
DEFINITIONS
Section 1.01. Definition Of Terms. Unless the context otherwise
requires:
(a) a term defined in the Base Indenture has the same
meaning when based in this Sixth Supplemental Indenture;
(b) a term defined anywhere in this Sixth 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)
Depositary; (v) Depositary Participant; (vi) Growth PACS; (vii)
Income PACS; (viii) Initial Remarketing; (ix) Initial Remarketing
Date; (x) Purchase Contract Agent; (xi) Quotation Agent; (xii)
Reset Agent; (xiii) Secondary Remarketing; (xiv) Secondary
Remarketing Date; (xv) Tax Event; (xvi) Treasury Portfolio; (xvii)
Treasury Portfolio Purchase Price; and (xviii) Underwriting
Agreement;
(f) the following terms have the meanings given to them
in this Section 1.01(f):
"Coupon Rate" shall have the meaning set forth in Section
2.05.
"Custodial Rate" shall have the meaning set forth in
Section 2.05.
"Custodial Agent" shall have the meaning set forth in the
Pledge Agreement.
"Notes" shall have the meaning specified in Section 2.01.
"Note Repayment Price" shall have the meaning set forth
in Section 3.04.
"Failed Initial Remarketing" shall have the meaning set
forth in Section 9.01(g).
"Failed Secondary Remarketing" shall have the meaning set
forth in Section 9.02 (h).
"Global Notes" shall have the meaning set forth in
Section 2.04.
"Maturity Date" shall have the meaning specified in
Section 2.02.
"Note Repayment Price" shall have the meaning set forth
in Section 3.04.
"Pledge Agreement" means the Pledge Agreement dated as of
[ ], 2002 among the Company, ____________________________, as
collateral agent (the "Collateral Agent"), custodial agent and
securities intermediary and ___________________, as purchase
contract agent and attorney-in-fact.
"Purchase Contract" shall have the meaning set forth in
the Purchase Contract Agreement.
"Purchase Contract Agreement" means the Purchase Contract
Agreement dated as of [ ], 2002, between the Company and [ ], as
purchase contract agent.
"Purchase Contract Settlement Date" means [ ].
"Put Option" shall have the meaning set forth in Section
3.04.
"Put Option Exercise Date" shall have the meaning set
forth in Section 3.04.
"Redemption Amount" shall mean, for each Note, the
product of the principal amount of such Note and a fraction, the
numerator of which shall be the Treasury Portfolio Purchase Price
and the denominator of which shall be the principal amount of such
Note.
"Redemption Price" means the redemption price per Note
equal to the Redemption Amount plus any accrued and unpaid
interest on such Note to the date of redemption.
"Regular Record Date" means, with respect to any Interest
Payment Date for the Notes, the close of business on the first day
of the month in which such Interest Payment Date falls.
"Remarketing Agent" means [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 [ ] , 2002, between the Company, [Merrill Lynch,
Pierce, Fenner & Smith Incorporated], as remarketing agent and [ ]
as purchase contract agent and attorney-in-fact.
"Reset Announcement Date" means, in the case of the Reset
Rate to be determined on the Initial Remarketing Date, the seventh
Business Day immediately preceding November 16, 2004 and, in the
case of the Reset Rate to be determined on the Secondary
Remarketing Date, the seventh Business Day immediately preceding
the Purchase Contract Settlement Date.
"Reset Effective Date" means (i) November 16, 2004 in
case the interest rate is reset on the Initial Remarketing Date,
or (ii) the Purchase Contract Settlement Date, in case the
interest rate is reset on the Secondary Remarketing Date.
"Reset Rate" means the interest rate per year (to be
determined by the Reset Agent), equal to the sum of (x) the Reset
Spread and (y) the rate of interest on (1) in the case of the
Reset Rate to be determined on the Initial Remarketing Date, the
Two and One-Quarter Year Benchmark Treasury in effect on the
Initial Remarketing Date or (2) in the case of the Reset Rate to
be determined on the Secondary Remarketing Date, the Two-Year
Benchmark Treasury in effect on the Secondary Remarketing Date.
"Reset Spread" means (a) in the case of the Reset Rate to
be determined on the Initial Remarketing Date, a spread amount to
be determined by the Reset Agent on the applicable Reset
Announcement Date as the appropriate spread so that the Reset Rate
will be the interest rate that the Notes should bear in order for
the Applicable Principal Amount of Notes to have an approximate
aggregate market value of 100.5% of the Treasury Portfolio
Purchase Price on the Initial Remarketing Date and (b) in the case
of the Reset Rate to be determined on the Secondary Remarketing
Date, a spread amount to be determined by the Reset Agent on the
applicable Reset Announcement Date as the appropriate spread so
that the Reset Rate will be the interest rate that the Notes
should bear in order for the Applicable Principal Amount of Notes
to have an approximate aggregate market value of 100.5% of the
Applicable Principal Amount of Notes on the Secondary Remarketing
Date.
"Tax Event Redemption Date" shall have the meaning set
forth in Section 3.01.
"Two-Year Benchmark Treasury" means direct obligations of
the United States (which may be obligations traded on a
when-issued basis only) having a maturity comparable to the
remaining term to maturity of the Notes, as agreed upon by the
Company and the Reset Agent. The rate for the Two-Year Benchmark
Treasury will be the bid side rate displayed at 10:00 A.M., New
York City time, on the 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 Secondary
Remarketing Date or (b) in the opinion of the Reset Agent (after
consultation with the Company) no longer an appropriate system
from which to obtain such rate, such other nationally recognized
quotation system as, in the opinion of the Reset Agent (after
consultation with the Company), is appropriate). If such rate is
not so displayed, the rate for the Two-Year Benchmark Treasury
shall be, as calculated by the Reset Agent, the yield to maturity
for the Two-Year Benchmark Treasury, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30
A.M., New York City time, on the Secondary Remarketing Date of
three leading United States government securities dealers selected
by the Reset Agent (after consultation with the Company)(which may
include the Reset Agent or an Affiliate thereof).
"Two and One-Quarter Year Benchmark Treasury" means
direct obligations of the United States(which may be obligations
traded on a when-issued basis only) having a maturity comparable
to the remaining term to maturity of the Notes, as agreed upon by
the Company and the Reset Agent. The rate for the Two and
One-Quarter Year Benchmark Treasury will be the bid side rate
displayed at 10:00 A.M., New York City time, on the Initial
Remarketing Date in the Telerate system (or if the Telerate system
is (a) no longer available on the Initial Remarketing Date or (b)
in the opinion of the Reset Agent (after consultation with the
Company) no longer an appropriate system from which to obtain such
rate, such other nationally recognized quotation system as, in the
opinion of the Reset Agent (after consultation with a the Company)
is appropriate). If such rate is not so displayed, the rate for
the Two and One-Quarter Year Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Two
and One-Quarter Year Benchmark Treasury, expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30
A.M., New York City time, on the Initial Remarketing Date of three
leading United States government securities dealers selected by
the Reset Agent (after consultation with the Company) (which may
include the Reset Agent or an Affiliate thereof).
The terms "Indenture," "Base Indenture," and "Notes"
shall have the respective meanings set forth in the recitals to
this Sixth Supplemental Indenture and the paragraph preceding such
recitals.
Article 2
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.01 . Designation and Principal Amount. There is hereby
authorized a series of Securities designated as the Senior Notes due 2007,
(the "Notes") limited (except as otherwise provided in Article II of the
Indenture) in aggregate principal amount to $[ ] (or, $[ ], if the
Underwriters' over-allotment option is exercised in full) . The Notes may
be issued from time to time upon written order of the Company for the
authentication and delivery of Notes pursuant to Section 2.4 of the Base
Indenture.
Section 2.02 . Maturity. The date upon which the Notes shall
become due and payable at final maturity, together with any accrued and
unpaid interest, is February 16, 2007 (the "Maturity Date").
Section 2.03 . Form, Payment and Appointment. Except as provided
in Section 2.04, the Notes shall be issued in fully registered,
certificated form, bearing identical terms. Principal of and premium, if
any, and interest on the Notes will be payable, the transfer of such Notes
will be registrable and such Notes will be exchangeable for Notes 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 Securities
Register or by wire transfer to an account appropriately designated by the
Holder entitled to payment.
The Company hereby designates the Borough of Manhattan, The City
of New York as the place of payment ("Place of Payment") for the Notes, and
the office or agency maintained by the Company in such Place of Payment for
the purposes contemplated by this Section 2.03 shall initially be [the
Corporate Trust Office of the Trustee in c/o ____________________________.]
The Security Registrar, transfer agent and Paying Agent for the
Notes shall be the Trustee.
The Notes shall be issuable in denominations of $[25] and integral
multiples of $[25] in excess thereof.
The Notes 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.
Section 2.04 . Global Notes. (a) Unless and until it is exchanged
for the Notes in registered form, one or more global Notes in principal
amount equal to the aggregate principal amount of all outstanding Notes
("Global Notes") may be transferred, in whole but not in part, only to the
Depositary or a nominee of the Depositary, or to a successor Depositary
selected or approved by the Company or to a nominee of such successor
Depositary.
(b) If at any (i) time the Depositary notifies the Company that it
is unwilling or unable to continue as a Depositary for the Global Notes and
no successor Depositary shall have been appointed within 90 days after such
notification, (ii) the Depositary at any time ceases to be a clearing
agency registered under the Securities Exchange Act of 1934 at any time the
Depositary is required to be so registered to act as such Depositary and no
successor Depositary shall have been appointed within 90 days after the
Company's becoming aware of the Depositary's ceasing to be so registered,
(iii) the Company, in its sole discretion, determines that the Global Notes
shall be so exchangeable or (iv) there shall have occurred and be
continuing an Event of Default, the Company will execute, and subject to
Article Five of the Base Indenture, the Trustee, upon written notice from
the Company, will authenticate and deliver the Notes in definitive
registered form without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Note
in exchange for such Global Note.
Upon exchange of the Global Note for such Notes in definitive
registered form without coupons, in authorized denominations, the Global
Note shall be cancelled by the Trustee. Such Notes in definitive registered
form issued in exchange for the Global Note shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are
so registered.
Section 2.05 . Interest. (a) The Note will bear interest initially
at the rate of ___% per year (the "Coupon Rate") from the original date of
issuance through and including the day immediately preceding the Reset
Effective Date 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 the day immediately preceding the Reset
Effective Date and at the Reset Rate thereafter, payable quarterly in
arrears on February 16, May 16, August 16 and November 16 of each year
(each, an "Interest Payment Date") commencing on February 16, 2002, to the
Person in whose name such Note, or any predecessor Note, is registered at
the close of business on the Regular Record Date for such interest
installment.
(b) The interest rate on the Notes will be reset on the Initial
Remarketing Date to the applicable Reset Rate (which Reset Rate will be
effective on and after November 16, 2004), except in the event of a Failed
Initial Remarketing. In the event of a Failed Initial Remarketing, the
interest rate on the Notes will be reset on the Secondary Remarketing Date
to the applicable Reset Rate (which Reset Rate will be effective on and
after the Purchase Contract Settlement Date), except that in the event of a
Failed Secondary Remarketing, the interest rate on the Notes will not be
reset. On the applicable Reset Announcement Date, the applicable Reset
Spread and the Two-Year Benchmark Treasury or Two and One-Quarter Year
Benchmark Treasury, as applicable, will be announced by the Company. On the
Business Day immediately following such Reset Announcement Date, the
Holders of Notes will be notified of such Reset Spread and Two-Year
Benchmark Treasury or Two and One-Quarter Year Benchmark Treasury, as
applicable, by the Company. Such notice shall be sufficiently given to such
Holders of Notes if published in an Authorized Newspaper.
(c) Not later than seven calendar days nor more than 15 calendar
days immediately preceding the applicable Reset Announcement Date, the
Company will request that the Depositary or its nominee (or any successor
Depositary or its nominee) notify the Holders of Notes of such Reset
Announcement Date and, in the case of a Secondary Remarketing, the
procedures to be followed by such holders of Notes 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. In the
event that any date on which interest is payable on the Notes 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).
Article 3
REDEMPTION OF THE NOTES
Section 3.01. Tax Event Redemption. If a Tax Event shall occur and
be continuing, the Company may, at its option, redeem the Notes in whole
(but not in part) at any time at a price per Note equal to the Redemption
Price. Installments of interest on Notes which are due and payable on or
prior to the date of redemption (the "Tax Event Redemption Date") will be
payable to the Holders of the Notes registered as such at the close of
business on the Regular Record Date. If, following the occurrence of a Tax
Event prior to the Purchase Contract Settlement Date, the Company exercises
its option to redeem the Notes, 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 Notes 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 the Notes.
Section 3.02. Redemption Procedures For Notes. Payment of the
Redemption Price to each Holder of Notes 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
Notes, including the Trustee or the Collateral Agent, as the case maybe. If
the Trustee holds immediately available funds sufficient to pay the
Redemption Price of the Notes, then, on such Tax Event Redemption Date,
such Notes will cease to be outstanding and interest thereon will cease to
accrue, whether or not such Notes have been received by the Company, and
all other rights of the Holder in respect of the Notes shall terminate and
lapse (other than the right to receive the Redemption Price upon delivery
of such Notes but without interest on such Redemption Price).
Section 3.03. No Sinking Fund. The Notes are not entitled to the
benefit of any sinking fund.
Section 3.04. Option To Put Notes Upon Failed Secondary
Remarketing. If a Failed Secondary Remarketing (as described in Section
5.02 of the Purchase Contract Agreement and incorporated herein by
reference) has occurred, holders of Notes who hold such Notes following the
Purchase Contract Settlement Date shall have the right (the "Put Option")
to put such Notes to the Company on April 1, 2005 (the "Put Option Exercise
Date"), upon at least three Business Days prior notice, at a repayment
price equal to the principal amount of such Notes plus an amount equal to
the accrued and unpaid interest thereon to the date of payment (the "Note
Repayment Price").
Section 3.05. Repurchase Procedure For Notes. (a) In order for the
Notes 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 2.03
hereof, the Notes to be repurchased with the form entitled "Option to Elect
Repayment" on the reverse of or otherwise accompanying such Notes 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 Notes for repayment shall be determined by the
Company, whose determination shall be final and binding.
(b) Payment of the Note Repayment Price 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. If the Trustee holds immediately available funds sufficient
to pay the Note Repayment Price of Notes presented for repayment, then,
immediately prior to the close of business on the Put Option Exercise Date,
such Notes will cease to be outstanding and Interest thereon will cease to
accrue, whether or not such Notes have been received by the Company, and
all other rights of the Holder in respect of the Notes, including the
Holder's right to require the Company to repay such Notes, shall terminate
and lapse (other than the right to receive the Note Repayment Price upon
delivery of such Notes but without interest on such Note Repayment Price) .
Neither the Trustee nor the Company will be required to register or cause
to be registered the transfer of any Note for which repayment has been
elected.
Article 4
EXPENSES
Section 4.01. Payment Of Expenses. In connection with the
offering, sale and issuance of the Notes to the Holders, the Company, in
its capacity as borrower with respect to the Notes shall pay all costs and
expenses relating to the offering, sale and issuance of the Notes,
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 6.6 of the Base Indenture.
Article 5
NOTICE
Section 5.01. 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 Notes. Notwithstanding any of the
provisions of the Base Indenture and this Sixth 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 Notes; provided, however, that if the Trustee
shall not have received the notice provided for in this Article 5 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 Note),
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 6
FORM OF NOTE
Section 6.01. Form Of Note. The Notes and the Trustee's
Certificate of Authentication to be endorsed thereon are to be
substantially in the forms attached as Exhibit A hereto, with such changes
therein as the officers of the Company executing the Notes (by manual or
facsimile signature) may approve, such approval to be conclusively
evidenced by their execution thereof.
Article 7
ORIGINAL ISSUE OF NOTES
Section 7.01. Original Issue Of Notes. Notes in the aggregate
principal amount of $[ ] (or, $[ ], if the Underwriters' over-allotment
option is exercised in full) may from time to time, upon execution of this
Sixth Supplemental Indenture, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of the
Company pursuant to Section 2.2 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 Notes 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 8
MISCELLANEOUS
Section 8.01. Ratification Of Indenture. The Indenture as
supplemented by this Sixth Supplemental Indenture, is in all respects
ratified and confirmed, and this Sixth Supplemental Indenture shall be
deemed part of the Indenture in the manner and to the extent herein and
therein provided.
Section 8.02. 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 Sixth
Supplemental Indenture.
Section 8.03. New York Law To Govern. THIS SIXTH SUPPLEMENTAL
INDENTURE, EACH NOTE AND EACH COUPON SHALL BE DEEMED TO BE NEW YORK
CONTRACTS, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID STATE (WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW).
Section 8.04. Separability. In case any one or more of the
provisions contained in this Sixth Supplemental Indenture or in the Notes
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 Sixth
Supplemental Indenture or of the Notes, but this Sixth Supplemental
Indenture and the Notes shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or therein.
Section 8.05. Counterparts. This Sixth 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.
Article 9
REMARKETING
Section 9.01. Initial Remarketing Procedures. The Company will
request, not later than seven nor more than 15 calendar days prior to the
Initial Remarketing Date that the Depositary notify the Holders of the
Notes and the Holders of Income PACS and Growth PACS of the Initial
Remarketing.
(b) Not later than 11:00 A.M., New York City time, on the second
Business Day immediately preceding the Initial Remarketing Date, each
Holder of the Notes not constituting components of Income PACS may elect to
have Notes held by such Holder remarketed. Holders of Notes that are not a
component of Income PACS shall give notice of their election to have such
Notes remarketed to the Collateral Agent pursuant to the Pledge Agreement.
Any such notice shall be irrevocable after 11:00 A.M., New York City time,
on the second Business Day immediately preceding the Initial Remarketing
Date and may not be conditioned upon the level at which the Reset Rate is
established. Promptly after 11:30 A.M., New York City time, on such second
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 principal amount of
Notes to be tendered for remarketing. Under Section 5.02 of the Purchase
Contract Agreement, Notes that constitute components of Income PACS will be
remarketed as provided therein and in this Section 9.01. The Notes
constituting components of Income PACS shall be deemed tendered,
notwithstanding any failure by the Holder of such Income PACS to deliver or
properly deliver such Notes to the Remarketing Agent for purchase.
(c) The right of each Holder to have Notes (including any Notes
that constitute components of Income PACS) 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) Notes tendered
have not been called for redemption, (iii) the Remarketing Agent is able to
find a purchaser or purchasers for tendered Notes at a price per Note such
that the aggregate price for the Applicable Principal Amount of Notes is
not less than 100% of the Treasury Portfolio Purchase Price, and (iv) such
purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent as and when required.
(d) On the Initial Remarketing Date, the Remarketing Agent shall
use reasonable efforts to remarket, at a price per Note such that the
aggregate price for the Applicable Principal Amount of Notes is equal to
approximately 100.5% of the Treasury Portfolio Purchase Price, Notes
tendered or deemed tendered for purchase.
(e) If there are no Income PACS outstanding and none of the
Holders elect to have Notes held my them remarketed, the Reset Rate shall
be the rate determined by the Reset Agent, subject to the terms of the
Remarketing Agreement, as the rate that would have been established had a
remarketing been held on the Initial Remarketing Date.
(f) If the Remarketing Agent has determined that it will be able
to remarket all Notes tendered or deemed tendered prior to 4:00 P.M., New
York City time, on the Initial Remarketing Date, the Reset Agent, subject
to the terms at the Remarketing Agreement, shall determine the Reset Rate.
(g) If, by 4:00 P.M., New York City time, on the Initial
Remarketing Date, the Remarketing Agent is unable to remarket all Notes
tendered or deemed tendered for purchase or if the Initial Remarketing
shall not have occurred because a condition precedent to the Remarketing
shall not have been fulfilled, a failed remarketing ("Failed Initial
Remarketing") shall be deemed to have occurred and the Remarketing Agent
shall so advise by telephone the Collateral Agent, Company, Trustee, and
Depositary.
(h) By approximately 4:30 P.M., New York City time, on the Initial
Remarketing Date, provided that there has not been a Failed Initial
Remarketing, the Remarketing Agent shall advise, by telephone (i) the
Collateral Agent, the Company, Trustee, and Depositary of the Reset Rate
determined in the Initial Remarketing and the aggregate principal amount of
Notes sold in the Initial Remarketing, (ii) each purchaser (or the
Depositary Participant thereof) of the Reset Rate and the aggregate
principal amount of Notes such purchaser is to purchase and (iii) each
purchaser to give instructions to its Depositary Participant to pay the
purchase price on November 16, 2004 in same day funds against delivery of
the Notes purchased through the facilities of the Depositary.
(i) In accordance with the Depositary's normal procedures, on
November 16, 2004, the transactions described above with respect to each
Note tendered for purchase and sold in the Initial Remarketing shall be
executed through the Depositary, and the accounts of the respective
Depositary Participants shall be debited and credited and such Notes
delivered by book entry as necessary to effect purchases and sales of such
Notes. The Depositary shall make payment in accordance with its normal
procedures.
(j) If any Holder selling Notes in the Initial Remarketing fails
to deliver such Notes, the Depositary Participant of such selling Holder
and of any other Person that was to have purchased Notes in the Initial
Remarketing may deliver to any such other Person an aggregate principal
amount of Notes that is less than the aggregate principal amount of Notes
that otherwise was to be purchased by such Person. In such event, the
aggregate principal amount of Notes to be so delivered shall be determined
by such Depositary Participant, and delivery of such lesser aggregate
principal amount of Notes shall constitute good delivery.
(k) The Remarketing Agent is not obligated to purchase any Notes
in the Initial 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 Notes for remarketing.
(l) The tender and settlement procedures set forth in this Section
9.01, including provisions for payment by purchasers of Notes in the
Initial Remarketing, shall be subject to modification, notwithstanding any
provision to the contrary set forth herein, to the extent required by the
Depositary or if the book-entry system is no longer available for the Notes
at the time of the Initial Remarketing, to facilitate the tendering and
remarketing of Notes 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.
(m) 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
Agent nor the Reset Agent 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 Notes and
they shall rely solely upon written notice from the Company (which the
Company agrees to provide prior to the tenth Business Day before November
16, 2004) as to whether or not there is any such limitation and, if so, the
maximum permissible Reset Rate.
Section 9.02. Secondary Remarketing Procedures. (a) If a Failed
Initial Remarketing has occurred, the Company will request, not later than
seven nor more than 15 calendar days prior to the Secondary Remarketing
Date that the Depositary notify the Holders of the Notes and the Holders of
Income PACS and Growth PACS of the Secondary Remarketing and of the
procedures that must be followed if a Holder of Notes wishes to exercise
such Holder's rights with respect to the Put Option if there is a Failed
Secondary Remarketing.
(b) Not later than 5:00 P.M., New York City time, on the second
Business Day immediately preceding the Secondary Remarketing Date, each
Holder of the Notes may elect to have Notes held by such Holder remarketed.
Under Section 5.02 of the Purchase Contract Agreement, Holders of Income
PACS that do not give notice of intention to make a Cash Settlement of
their related Purchase Contracts or who give such notice but fail to pay
the Purchase Price in cash as required by Section 5.02(b)(ii) of the
Purchase Contract Agreement shall be deemed to have consented to the
disposition of the Notes constituting a component of such Income PACS.
Holders of Notes that are not a component of Income PACS shall give notice
of their election to have such Notes 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 second Business Day immediately
preceding the Secondary Remarketing 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 second 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 principal amount of Notes to be tendered for remarketing.
(c) If any Holder of Income PACS does not give a notice of its
intention to make a Cash Settlement or gives a notice of election to tender
Notes as described in Section 9.02(b), the Notes of such Holder shall be
deemed tendered, notwithstanding any failure by such Holder to deliver or
properly deliver such Notes to the Remarketing Agent for purchase.
(d) The right of each Holder to have Notes (including any Notes
that constitute components of Income PACS) 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) Notes tendered
have not been called for redemption, (iii) the Remarketing Agent is able to
find a purchaser or purchasers for tendered Notes at a price of not less
than 100% of the principal amount thereof, and (iv) such purchaser or
purchasers deliver the purchase price therefor to the Remarketing Agent as
and when required.
(e) If a Failed Initial Remarketing has occurred, on the Secondary
Remarketing Date, the Remarketing Agent shall use reasonable efforts to
remarket, at a price equal to approximately 100.5% of the aggregate
principal amount thereof, Notes tendered or deemed tendered for purchase.
(f) If none of the Holders elect or are deemed to have elected to
have Notes held by them remarketed, the Reset Rate shall be the rate
determined by the Reset Agent, subject to the terms of the Remarketing
Agreement, as the rate that would have been established had a remarketing
been held on the Secondary Remarketing Date.
(g) If the Remarketing Agent has determined that it will be able
to remarket all Notes tendered or deemed tendered prior to 4:00 P.M., New
York City time, on the Secondary Remarketing Date, the Reset Agent shall,
subject to the terms of the Remarketing Agreement, determine the Reset
Rate.
(h) If, by 4:00 P.M., New York City time, on the Secondary
Remarketing Date, the Remarketing Agent is unable to remarket all Notes
tendered or deemed tendered for purchase or if the Secondary Remarketing
shall not have occurred because a condition precedent to the Secondary
Remarketing shall not have been fulfilled, a failed remarketing ("Failed
Secondary Remarketing") shall be deemed to have occurred, the interest rate
on the Notes shall not be reset and the Remarketing Agent shall so advise
by telephone the Collateral Agent, Company, Trustee, and Depositary.
(i) By approximately 4:30 P.M., New York City time, on the
Secondary Remarketing Date, provided that there has not been a Failed
Secondary Remarketing, the Remarketing Agent shall advise, by telephone (i)
the Collateral Agent, the Company, Trustee, and Depositary of the Reset
Rate determined in the Secondary Remarketing and the aggregate principal
amount of Notes sold in the Secondary Remarketing, (ii) each purchaser (or
the Depositary Participant thereof) of the Reset Rate and the aggregate
principal amount of Notes such purchaser is to purchase and (iii) each
purchaser to give instructions to its Depositary Participant to pay the
purchase price on the Purchase Contract Settlement Date in same day funds
against delivery of the Notes purchased through the facilities of the
Depositary.
(j) In accordance with the Depositary's normal procedures, on the
Purchase Contract Settlement Date, the transactions described above with
respect to each Note tendered for purchase and sold in the Secondary
Remarketing shall be executed through the Depositary, and the accounts of
the respective Depositary Participants shall be debited and credited and
such Notes delivered by book entry as necessary to effect purchases and
sales of such Notes. The Depositary shall make payment In accordance with
its normal procedures.
(k) If any Holder selling Notes in the Secondary Remarketing fails
to de1iver such Notes, the Depositary Participant of such selling Holder
and of any other Person that was to have purchased Notes in the Secondary
Remarketing may deliver to any such other Person an aggregate principal
amount of Notes that is less than the aggregate principal amount of Notes
that otherwise was to be purchased by such Person. In such event, the
aggregate principal amount of Notes to be so delivered shall be determined
by such Depositary Participant, and delivery of such lesser aggregate
principal amount of Notes shall constitute good delivery.
(l) The Remarketing Agent is not obligated to purchase any Notes
in the Secondary 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 Notes for remarketing.
(m) The tender and settlement procedures set in this Section 9.02,
including provisions for payment by purchasers of Notes in the Secondary
Remarketing, shall be subject to modification, notwithstanding any
provision to the contrary set forth herein, to the extent required by the
Depositary or if the book-entry system is no longer available for the Notes
at the time of the Secondary Remarketing, to facilitate the tendering and
remarketing of Notes 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
Agent nor the Reset Agent 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 Notes 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.
IN WITNESS WHEREOF, the parties hereto have caused this Second
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 WILLIAMS COMPANIES, INC., as Issuer
By: __________________________________
Name:
Title:
BANK ONE TRUST COMPANY, N.A., as Trustee
By: ___________________________________
Name:
Title:
EXHIBIT A
(FORM OF FACE OF NOTE)
[IF THE NOTE IS TO BE A GLOBAL NOTE, INSERT:] THIS NOTE IS A GLOBAL NOTE
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY OR A NOMINEE OF THE
DEPOSITORY TRUST COMPANY. THIS NOTE IS EXCHANGEABLE FOR NOTES REGISTERED IN
THE NAME OF A PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCED DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE
DEPOSITORY TRUST COMPANY TO A NOMINEE OF THE DEPOSITORY TRUST COMPANY OR BY
A NOMINEE OF THE DEPOSITORY TRUST COMPANY TO THE DEPOSITORY TRUST COMPANY
OR ANOTHER NOMINEE OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR
DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE 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 NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF TIE 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.
CUSIP No. ________________
$_____________________________________
THE WILLIAMS COMPANIES, INC.
_____% SENIOR NOTE
DUE 2007
THE WILLIAMS COMPANIES, INC., a Delaware corporation (the
"Company", which term includes any successor corporation under the
Indenture hereinafter referred to), for value received, hereby promises to
pay to Bank One Trust Company, National Association, or registered assigns,
the principal sum of ________________________ Dollars ($_________) on
February 16, 2007 (such date is hereinafter referred to as the "Maturity
Date"), and to pay interest on said principal sum from January __, 2002 or
from the next recent date to which interest has been paid or duly provided
for, quarterly in arrears on February 16, May 16, August 16 and November 16
of each year (each such date, an "Interest Payment Date"), commencing on
February 16, 2002 initially at the rate of ___% per year through and
including the day immediately preceding the Reset Effective Date and 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 year of
____% through and including the day immediately preceding the Reset
Effective Date and at the Reset Rate 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). In the event that any date on which
interest is payable on this Note 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). 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 Note (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 Note (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 interest, notice whereof shall be given to the registered Holders
of this series of Notes 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
Notes 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 Note 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 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 Note is, to the extent provided
in the Indenture, senior and unsecured and will rank equal in right of
payment to all other senior unsecured obligations of the Company.
This Note 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 shall have been signed by or on behalf of the
Trustee.
The provisions of this Note 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.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: [ ]
THE WILLIAMS COMPANIES, INC.
as Issuer
By: _____________________________
Name:
Title:
Attest:
By: __________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series of Notes described in the
within-- mentioned Indenture.
Dated ____________________________
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
By: __________________________________
Authorized Signatory
(FORM OF REVERSE OF NOTE)
This Note is one of a duly authorized series of Securities of the
Company (herein sometimes referred to as the "Notes"), issued and to be
issued in one or more series under and pursuant to an Indenture dated as of
November 10, 1997 (the "Base Indenture") between the Company and Bank One
Trust Company N.A. (successor in interest to The First National Bank of
Chicago), as Trustee (the "Trustee," which term includes any successor
trustee under the Indenture), as supplemented by a Sixth Supplemental
Indenture, dated as of January __, 2002 (the "Sixth 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 Notes. 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 Sixth Supplemental
Indenture.
If a Tax Event shall occur and be continuing, the Company may, at
its option, redeem the Notes in whole (but not in part) at any time at a
price per Note equal to the Redemption Price. The Redemption Price shall be
paid to each Holder of the Notes 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 Notes are not entitled to the benefit of any sinking fund.
If a Failed Secondary Remarketing (as described in Section 5.02 of
the Purchase Contract Agreement and incorporated herein by reference) has
occurred, each holder of Notes who holds such Notes on the day immediately
following the Purchase Contract Settlement Date shall have the right (the
"Put Option") on the Business Day immediately following the Purchase
Contract Settlement Date, to put such Notes to the Company, on April 1,
2005 (the "Put Option Exercise Date"), upon at least three Business Days
prior notice, at a repayment price equal to the principal amount of this
Note plus an amount equal to the accrued and unpaid interest thereon to the
date of payment (the "Note Repayment Price").
In order for the Notes 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, or at an office or agency maintained by the Company in the
Borough of Manhattan, The City of New York as contemplated by Section 2.03
of the Sixth Supplemental Indenture, the Notes to be repurchased with the
form entitled "Option to Elect Repayment" on the reverse of or otherwise
accompanying such Notes 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 Notes for repayment shall
be determined by the Company, whose determination shall be final and
binding. The payment of the Note Repayment Price in respect of such Notes
shall be made no later than 12:00 noon, New York City time, on the Put
Option Exercise Date.
Usury. The interest rate on the Securities of this series shall in
no event be higher than the maximum rate permitted by New York law as the
same may be modified by United States law of general application.
Defeasance. The Indenture contains provisions for defeasance of
(a) the entire Indebtedness of this Security and (b) certain restrictive
covenants upon compliance by the Company with certain conditions set forth
therein.
Events of Default. If an Event of Default with respect to
Securities of this series shall occur and be continuing, the principal of
the Securities of this series may be declared due and payable in the manner
and with the effect provided in the Indenture.
Amendment to Indenture; Waiver of Defaults. The Indenture permits
the Company and the Trustee, with the consent of the Holders of not less
than a majority in aggregate principal amount of the Securities of each
series issued under the Indenture then outstanding and affected, to execute
supplemental indentures adding any provisions to or changing in any manner
the rights of the Holders of each series so affected; provided that the
Company and the Trustee may not, without the consent of the Holder of each
outstanding Security affected thereby, (a) extend the final maturity of any
such Security, or reduce the principal amount thereof, or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount
payable on redemption or repayment thereof, or change the currency of
payment thereof, or impair or affect the rights of any Holder to institute
suit for the payment; or (b) reduce the aforesaid percentage in principal
amount of Securities. The Indenture contains provisions permitting the
Holders of not less than a majority in aggregate principal amount of the
Securities of all series with respect to which a default under the
Indenture shall have occurred and be continuing (voting as one class), on
behalf of the Holders of all Securities of all such series, to waive
certain past defaults under the Indenture and their consequences with
certain conditions set forth therein. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
Obligations Unconditional. No provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest, if any, on this Security at the time, place and rate, and in the
coin or currency, herein prescribed unless otherwise agreed between the
Company and the registered Holder of this Security.
Transfer and Exchange. As provided in the Indenture and subject to
certain limitations therein set forth, the transfer of this Security is
registerable in the registry books of the Company, upon surrender of this
Security for registration of transfer at the office or agency of the
Company in any place where the principal of (and premium, if any) and
interest, if any, on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Trustee and duly executed by the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new
Securities of this series and of like tenor, of authorized denominations
and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in minimum denominations of $25 or any integral multiple of
$25 over such minimum denomination. As provided in the Indenture and
subject to certain limitations therein set forth, Securities of this series
are exchangeable for a like aggregate principal amount of Securities of
this series and of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Issuer or the
Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Issuer, the Trustee nor any such agent shall be affected by
notice to the contrary.
Governing Law. This Security shall be governed by and construed in
accordance with the laws of the State of New York.
All terms used in this Security which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them
in the Indenture.
No reference herein to the Indenture and no provision of this Note
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 Note at the time and place and at the rate and
in the money herein prescribed.
No recourse shall be had for the payment of the principal of or
the interest on this Note, 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 my 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 Notes of this series are issuable only in registered form
without coupons denominations of $[25] and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Notes are exchangeable for a like aggregate principal amount of
Notes of a different authorized denomination, as requested by the Holder
surrendering the same.
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay $____ principal amount of the within Note, 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 Note or Notes representing the remaining aggregate principal amount of
this Note.
For this Option to Elect Repayment to be effective, this Note with
the Option to Elect Repayment duly completed must be received by the
Trustee at c/o _______________________________________________, no later
than 5:00 p.m. on the third Business Day immediately preceding [ ].
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 Note
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.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to:
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignee's social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
agent to transfer this Note 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 Note)
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.
By: ______________________
Name
Title:
___________________________
as Trustee
By: _______________________
Name
Title:
Attest:
By: ____________________________
Name
Title:
EXHIBIT 5
===============================================================================
THE WILLIAMS COMPANIES, INC.
and
JPMORGAN CHASE BANK,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of ___________, 2002
===============================================================================
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
SECTION 1.01. Definitions..........................................1
SECTION 1.03. Form of Documents Delivered to Purchase
Contract Agent......................................13
SECTION 1.04. Acts of Holders; Record Dates.......................14
SECTION 1.05. Notices.............................................15
SECTION 1.06. Notice to Holders; Waiver...........................16
SECTION 1.07. Effect of Headings and Table of Contents............17
SECTION 1.08. Successors and Assigns..............................17
SECTION 1.09. Separability Clause.................................17
SECTION 1.10. Benefits of Agreement...............................17
SECTION 1.11. Governing Law.......................................17
SECTION 1.12. Legal Holidays......................................17
SECTION 1.13. Counterparts........................................18
SECTION 1.14. Inspection of Agreement.............................18
SECTION 1.15. Appointment of Financial Institution as Agent
for the Company.....................................18
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.....................18
SECTION 2.02. Form of Purchase Contract Agent's Certificate
of Authentication...................................19
ARTICLE 3
THE SECURITIES
SECTION 3.01. Amount; Form and Denominations......................20
SECTION 3.02. Rights and Obligations Evidenced by the
Certificates........................................20
SECTION 3.03. Execution, Authentication, Delivery and Dating......21
SECTION 3.04. Temporary Certificates..............................21
SECTION 3.05. Registration; Registration of Transfer and
Exchange............................................22
SECTION 3.06. Book-Entry Interests................................23
SECTION 3.07. Notices to Holders..................................24
SECTION 3.08. Appointment of Successor Depositary.................24
SECTION 3.09. Definitive Certificates.............................24
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates........................................25
SECTION 3.11. Persons Deemed Owners...............................26
SECTION 3.12. Cancellation........................................26
SECTION 3.13. Creation of Growth PACS by Substitution of
Treasury Securities.................................27
SECTION 3.14. Reestablishment of Income PACS......................28
SECTION 3.15. Transfer of Collateral upon Occurrence of
Termination Event...................................30
SECTION 3.16. No Consent to Assumption............................30
ARTICLE 4
THE NOTES AND APPLICABLE OWNERSHIP INTEREST OF THE TREASURY
PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest
Payments Preserved..................................31
SECTION 4.02. Notice and Voting...................................32
SECTION 4.03. Tax Event Redemption................................32
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock..................33
SECTION 5.02. Initial Remarketing; Payment of Purchase Price......35
SECTION 5.03. Issuance of Shares of Common Stock..................41
SECTION 5.04. Adjustment of Settlement Rate.......................42
SECTION 5.05. Notice of Adjustments and Certain Other Events......49
SECTION 5.06. Termination Event; Notice...........................50
SECTION 5.07. Intentionally Omitted...............................50
SECTION 5.08. Intentionally Omitted...............................50
SECTION 5.09. No Fractional Shares................................50
SECTION 5.10. Charges and Taxes...................................50
SECTION 5.11. Purchase Contract Payments..........................51
SECTION 5.12. Deferral of Purchase Contract Payments..............56
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive
Purchase Contract Payments and to Purchase Shares
of Common Stock.....................................57
SECTION 6.02. Restoration of Rights and Remedies..................57
SECTION 6.03. Rights and Remedies Cumulative......................58
SECTION 6.04. Delay or Omission Not Waiver........................58
SECTION 6.05. Undertaking for Costs...............................58
SECTION 6.06. Waiver of Stay or Extension Laws....................58
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.................59
SECTION 7.02. Notice of Default...................................60
SECTION 7.03. Certain Rights of Purchase Contract Agent...........60
SECTION 7.04. Not Responsible for Recitals or Issuance of
Securities..........................................62
SECTION 7.05. May Hold Securities.................................62
SECTION 7.06. Money Held in Custody...............................62
SECTION 7.07. Compensation and Reimbursement......................62
SECTION 7.08. Corporate Purchase Contract Agent Required;
Eligibility.........................................63
SECTION 7.09. Resignation and Removal; Appointment of Successor...63
SECTION 7.10. Acceptance of Appointment by Successor..............65
SECTION 7.11. Merger, Conversion, Consolidation or Succession
to Business.........................................65
SECTION 7.12. Preservation of Information; Communications to
Holders.............................................66
SECTION 7.13. No Obligations of Purchase Contract Agent...........66
SECTION 7.14. Tax Compliance......................................66
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders..67
SECTION 8.02. Supplemental Agreements with Consent of Holders.....68
SECTION 8.03. Execution of Supplemental Agreements................69
SECTION 8.04. Effect of Supplemental Agreements...................69
SECTION 8.05. Reference to Supplemental Agreements................69
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey,
Transfer or Lease Property Except under Certain
Conditions..........................................70
SECTION 9.02. Rights and Duties of Successor Corporation..........70
SECTION 9.03. Officers' Certificate and Opinion of Counsel
Given to Purchase Contract Agent....................71
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts...............71
SECTION 10.02. Maintenance of Office or Agency....................71
SECTION 10.03. Company to Reserve Common Stock....................72
SECTION 10.04. Covenants as to Common Stock.......................72
SECTION 10.05. Statements of Officers of the Company as
to Default.........................................72
SECTION 10.06. ERISA..............................................72
PURCHASE CONTRACT AGREEMENT, dated as of __________, 2002, between
THE WILLIAMS COMPANIES, INC., a Delaware corporation (the "Company"), and
JPMorgan Chase Bank, an __________ banking corporation, acting as purchase
contract agent for the Holders of Securities (as defined herein) from time
to time (the "Purchase Contract Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the 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 Purchase Contract Agent, as
provided in this Agreement, the valid obligations of the Company, and to
constitute these presents a valid agreement of the Company, in accordance
with its terms, have been done. For and in consideration of the premises
and the purchase of the Securities by the Holders thereof, it is mutually
agreed as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
SECTION 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular, and
nouns and pronouns of the masculine gender include the feminine and neuter
genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Exhibit or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.01(d):
"Act" has the meaning, with respect to any Holder, set forth in
Section 1.04.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For the purposes of
this definition, "control" when used with respect to any specified Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.
"Applicable Market Value" has the meaning set forth in Section
5.01.
"Applicable Ownership Interest" shall mean, with respect to an
Income PACS that includes the Treasury Portfolio, (A) a [2.5]% undivided
beneficial ownership interest in a $1,000 face amount of a principal or
interest strip in a U.S. treasury security included in such Treasury
Portfolio that matures on or prior to February [15], 2005 and (B) for each
scheduled interest payment date on the Senior Deferrable Notes after the
Tax Event Redemption Date, a _____%, undivided beneficial ownership
interest in a $1,000 face amount of a principal or interest strip in a U.S.
treasury security included in such Treasury Portfolio that matures on or
prior to such date.
"Applicable Principal Amount" means the aggregate principal amount
of the Notes which are components of Income PACS on the Initial Remarketing
Date.
"Applicants" has the meaning set forth in Section 7.12(b).
"Appreciation Cap Price" has the meaning set forth in Section
5.01.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected
on the books of the Depositary or on the books of a Person maintaining an
account with such Depositary (directly as a Depositary Participant or as an
indirect participant, in each case in accordance with the rules of such
Depositary).
"Board of Directors" means the board of directors of the Company
or a duly authorized committee of that board.
"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 Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.06.
"Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in New York City, New York, or Chicago,
Illinois are authorized or required by law or executive order to remain
closed or a day on which the Indenture Trustee or the Property Trustee is
closed for business; provided that for purposes of the second paragraph of
Section 1.12 only, the term "Business Day" shall also be deemed to exclude
any day on which trading on the New York Stock Exchange, Inc. is closed or
suspended.
"Cash Merger" has the meaning set forth in Section 5.04(b)(2).
"Cash Settlement" has the meaning set forth in Section 5.02(b)(i).
"Certificate" means a Income PACS Certificate or a Growth PACS
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a
nominee of that organization, shall be registered a Global Certificate and
which shall undertake to effect book-entry transfers and pledges of the
Securities.
"Closing Price" has the meaning set forth in Section 5.01.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.
"Collateral Account" has the meaning set forth in Section 1.01(f)
of the Pledge Agreement.
"Collateral Agent" means [ ], as Collateral Agent under the Pledge
Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"Collateral Substitution" has the meaning set forth in Section
3.13.
"Common Stock" means the common stock, par value $1.00 of The
Williams Companies, Inc.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such
pursuant to the applicable provision of this Agreement, and thereafter
"Company" shall mean such successor.
"Constituent Person" has the meaning set forth in Section 5.04(b).
"Corporate Trust Office" means the principal corporate trust
office of the Purchase Contract Agent at which, at any particular time, its
corporate trust business shall be administered, which office at the date
hereof is located at [ ], Attention: Corporate Trust Department.
"Coupon Rate" means the percentage rate per annum at which each
Note will bear interest initially.
"Current Market Price" has the meaning set forth in Section
5.04(a)(8).
"Depositary" means a clearing agency registered under the Exchange
Act that is designated to act as Depositary for the Securities as
contemplated by Sections 3.06, 3.07, 3.08 and 3.09.
"Depositary Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Depositary effects book entry transfers and pledges of securities deposited
with the Depositary.
"DTC" means The Depository Trust Company.
"Early Settlement" means an early settlement of a Purchase
Contract pursuant to Section 5.04(b)(2).
"Early Settlement Date" has the meaning set forth in Section
5.04(b)(2).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and
the rules and regulations promulgated thereunder.
"Exchange Property" has the meaning set forth in Section
5.04(b)(1).
"Expiration Date" has the meaning set forth in Section 1.04(e).
"Expiration Time" has the meaning set forth in Section 5.04(a)(6).
"Failed Initial Remarketing" has the meaning set forth in Section
5.02(a).
"Failed Secondary Remarketing" has the meaning set forth in
Section 5.02(c).
"Global Certificate" means a Certificate that evidences all or
part of the Securities and is registered in the name of a Clearing Agency
or a nominee thereof.
"Growth PACS" means, following the substitution of Treasury
Securities for Notes as collateral to secure a Holder's obligations under
the Purchase Contract, the collective rights and obligations of a Holder of
a Growth PACS Certificate in respect of such Treasury Securities, subject
to the Pledge thereof, and the related Purchase Contract.
"Growth PACS Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Growth PACS
specified on such certificate.
"Holder" means, with respect to a Security, the Person in whose
name the Security evidenced by a Certificate is registered in the Security
Register; provided, however, that in determining whether the Holders of the
requisite number of Securities have voted on any matter, then for the
purpose of such determination only (and not for any other purpose
hereunder), if the Security remains in the form of one or more Global
Certificates and if the Depositary which is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Securities are credited on
the record date, the term "Holder" shall mean such Depositary Participant
acting at the direction of the Beneficial Owners.
"Income PACS" means the collective rights and obligations of a
Holder of a Income PACS Certificate in respect of the Notes 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; provided that the appropriate Applicable Ownership
Interest (as specified in clause (B) of the definition of such term) of the
Treasury Portfolio shall not be subject to the Pledge.
"Income PACS Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Income PACS
specified on such certificate.
"Indenture" means the Indenture, dated as of November 10, 1997,
between the Company and the Indenture Trustee (including any provisions of
the TIA that are deemed incorporated therein), as amended and supplemented
as of the date hereof, pursuant to which the Notes will be issued.
"Indenture Trustee" means Bank One Trust Company, N.A., as trustee
under the Indenture, or any successor thereto.
"Initial Remarketing" has the meaning set forth in Section
5.02(a).
"Initial Remarketing Date" means the third business day
immediately preceding November 16, 2004.
"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 one of its Vice Presidents, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Purchase Contract Agent.
"non-electing share" has the meaning set forth in Section 5.04(b).
"Notes" means the series of Notes designated the senior notes due
February 16, 2007 to be issued by the Company under the Indenture as of the
date hereof.
"NYSE" has the meaning set forth in Section 5.01.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, its President or one of its Vice Presidents, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary
of the Company, and delivered to the Purchase Contract Agent. Any Officers'
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Officers' Certificate;
(iii) a statement that, in the opinion of each such
officer, each such officer has made such examination or
investigation as is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition
has been complied with; and
(iv) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel to the Company (and who may be an employee of the Company), and
who shall be reasonably acceptable to the Purchase Contract Agent. An
opinion of counsel may rely on certificates as to matters of fact.
"Outstanding Securities" means, with respect to any Security and
as of the date of determination, all Securities evidenced by Certificates
theretofore authenticated, executed and delivered under this Agreement,
except:
(i) If a Termination Event has occurred, (i) Growth PACS
and (ii) Income PACS for which the underlying Notes have been
theretofore deposited with the Purchase Contract Agent in trust
for the Holders of such Income PACS;
(ii) Securities evidenced by Certificates theretofore
cancelled by the Purchase Contract Agent or delivered to the
Purchase Contract Agent for cancellation or deemed cancelled
pursuant to the provisions of this Agreement; and
(iii) Securities evidenced by Certificates in exchange
for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered
pursuant to this Agreement, other than any such Certificate in
respect of which there shall have been presented to the Purchase
Contract Agent proof satisfactory to it that such Certificate is
held by a protected purchaser in whose hands the Securities
evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
number of the Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the
Company or any Affiliate of the Company shall be disregarded and deemed not
to be Outstanding Securities, except that, in determining whether the
Purchase Contract Agent shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities that a Responsible Officer of the Purchase Contract Agent
actually knows to be so owned shall be so disregarded. Securities so owned
that have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the satisfaction of the Purchase
Contract Agent the pledgee's right so to act with respect to such
Securities 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 February 16, 2002.
"Permitted Investments" has the meaning set forth in the Pledge
Agreement.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other
entity of whatever nature.
"Plan" means an employee benefit plan that is subject to ERISA, a
plan or individual retirement account that is subject to Section 4975 of
the Code or any entity whose assets are considered assets of any such plan.
"Pledge" means the pledge under the Pledge Agreement of the Notes,
the Treasury Securities or the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, in each case constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of
__________, 2002, among the Company, the Collateral Agent, the Securities
Intermediary and the Purchase Contract Agent, on its own behalf and as
attorney-in-fact for the Holders from time to time of the Securities.
"Pledged Notes" has the meaning set forth in Section 1.01(f) of
the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Income PACS
Certificate or a Predecessor Growth PACS Certificate.
"Predecessor Income PACS Certificate" of any particular Income
PACS Certificate means every previous Income PACS Certificate evidencing
all or a portion of the rights and obligations of the Company and the
Holder under the Income PACS evidenced thereby; and, for the purposes of
this definition, any Income PACS Certificate authenticated and delivered
under Section 3.10 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Income PACS 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 PACS Certificate.
"Predecessor Growth PACS Certificate" of any particular Growth
PACS Certificate means every previous Growth PACS Certificate evidencing
all or a portion of the rights and obligations of the Company and the
Holder under the Growth PACS evidenced thereby; and, for the purposes of
this definition, any Growth PACS Certificate authenticated and delivered
under Section 3.10 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Growth PACS 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 PACS Certificate.
"Primary Treasury Dealer" shall mean a primary U.S. government
securities dealer in New York City.
"Proceeds" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.
"Pro Rata" shall mean pro rata to each Holder according to the
aggregate principal amount of the Securities held by such Holder in
relation to the aggregate principal amount of all Securities outstanding.
"Prospectus" means the prospectus relating to the delivery of
shares of Common Stock in connection with an Early Settlement of Purchase
Contracts pursuant to Section 5.04(b)(2), in the form in which first filed,
or transmitted for filing, with the Commission after the effective date of
the Registration Statement pursuant to Rule 424(b) under the Securities
Act, including the documents incorporated by reference therein as of the
date of such Prospectus.
"Purchase Contract" means, with respect to any Security, the
contract forming a part of such Security and obligating the Company to (i)
sell, and the Holder of such Security to purchase, shares of Common Stock
and (ii) pay the Holder thereof Purchase Contract Payments, in each case on
the terms and subject to the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter
"Purchase Contract Agent" shall mean such Person.
"Purchase Contract Payments" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract, at a
rate per year of____% of the Stated Amount per Purchase Contract.
"Purchase Contract Settlement Date" means February 16, 2005.
"Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.03.
"Purchase Price" has the meaning set forth in Section 5.01.
"Purchased Shares" has the meaning set forth in Section
5.04(a)(6).
"Quotation Agent" means (i) Merrill Lynch Government Securities
Inc. and its respective successors or any other Primary Treasury Dealer
selected by the Company.
"Record Date" for any distribution and Purchase Contract Payment
payable on any Payment Date means, as to any Global Certificate, the
Business Day next preceding such Payment Date, and as to any other
Certificate, the date selected by the Company, which shall be more than one
Business Day but less than sixty Business Days prior to such Payment Date.
"Redemption Amount" shall mean, for each Note, the product of the
principal amount of such Note and a fraction, the numerator of which shall
be the Treasury Portfolio Purchase Price and the denominator of which shall
be the principal amount of such Note.
"Reference Dealer" means a dealer engaged in trading of
convertible securities.
"Reference Price" has the meaning set forth in Section 5.01.
"Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery
by the Company of the shares of Common Stock in connection with an Early
Settlement under Section 5.07 or an early settlement of Purchase Contracts
during the Early Settlement Week under Section 5.04(b)(2), including all
exhibits thereto and the documents incorporated by reference in the
prospectus contained in such registration statement, and any post-effective
amendments thereto.
"Remarketing" means the remarketing of the Notes by the
Remarketing pursuant to the Remarketing Agreement.
"Remarketing Agent" has the meaning set forth in Section 5.02(c).
"Remarketing Agreement" means the Remarketing Agreement, dated as
of _____________ __, 2002, between the Company and the Remarketing Agent.
"Reorganization Event" has the meaning set forth in Section
5.04(b).
"Reset Rate" means the interest rate per year determined by the
Remarketing Agent as necessary for a successful completion of the
Remarketing.
"Responsible Officer" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer this Purchase Contract Agreement.
"Secondary Remarketing" has the meaning set forth in Section
5.02(c).
"Secondary Remarketing Date" means the third business day
immediately preceding the Purchase Contract Settlement Date.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules
and regulations promulgated thereunder.
"Securities Intermediary" means [ ], as Securities Intermediary
under the Pledge Agreement until a successor Securities Intermediary shall
have become such pursuant to the applicable provisions of the Pledge
Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"Security" means an Income PACS or a Growth PACS, as the case may
be.
"Security Register" and "Securities Registrar" have the respective
meanings set forth in Section 3.05.
["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 Purchase Contract Payments.]
"Settlement Rate" has the meaning set forth in Section 5.01.
"Sixth Supplemental Indenture" means the Sixth Supplemental
Indenture to the Indenture, entered into between the Company and the
Indenture Trustee on the date hereof.
"Stated Amount" means $[25].
"Successful Initial Remarketing" has the meaning set forth in
Section 5.02(a).
"Successful Secondary Remarketing" has the meaning set forth in
Section 5.02(c).
"Tax Event" shall mean the receipt by the Company of an opinion of
independent counsel, rendered by a law firm having a recognized national
tax practice, to the effect that, as a result of any amendment to, or
change, including any announced prospective change in, the laws or any
regulations of the United States or any political subdivision or taxing
authority or which affects taxation, any amendment to or change in an
interpretation or application of these laws or regulations by any
legislative body, court, governmental agency or regulatory authority or any
interpretation or pronouncement that provides for a position with respect
to these laws or regulations that differs from the generally accepted
position on the Closing Date, which amendment or change is effective or
which interpretation or pronouncement is announced on or after the Closing
Date, there is more than an insubstantial increase in the risk that
interest payable by the Company on the Notes is not, or within 90 days of
the date of such opinion will not be, deductible by the Company, in whole
or in part, for United States federal income tax purposes.
"Tax Event Redemption" shall mean that a Tax Event has occurred
and is continuing and the Notes have been called for redemption pursuant to
the Indenture.
"Tax Event Redemption Principal Amount" means either (i) if the
Tax Event Redemption Date occurs prior to November 16, 2004 or, in the
event of a Failed Initial Remarketing, prior to the Purchase Contract
Settlement Date, the aggregate principal amount of the Notes which are
components of Income PACS on the Tax Event Redemption Date or (ii) if the
Tax Event Redemption Date occurs on or after November 16, 2004 or, in the
event of a Failed Initial Remarketing, on or after the Purchase Contract
Settlement Date, the aggregate principal amount of the Notes outstanding on
such Tax Event Redemption Date.
"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events:
(i) at any time on or prior to the 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;
(ii) a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of the Company or of its property, or for
the termination or liquidation of its affairs, shall have been
entered, and, 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.
"TIA" means the Trust Indenture Act of 1939, as amended from time
to time, or any successor legislation.
"Trading Day" has the meaning set forth in Section 5.01.
"Treasury Portfolio" means (1) in connection with the Initial
Remarketing, a portfolio of zero-coupon U.S. Treasury Securities consisting
of (a) principal or interest strips of U.S. Treasury Securities that mature
on or prior to November 16, 2004 in an aggregate amount equal to the
Applicable Principal Amount and (b) with respect to the scheduled interest
payment date on the Notes that occurs on the Purchase Contract Settlement
Date, principal or interest strips of U.S. Treasury Securities that mature
on or prior to such date in an aggregate amount equal to the aggregate
interest payment that would be due on the Applicable Principal Amount on
such date if the applicable Coupon Rate on the Notes were not reset to the
Reset Rate as described in Section 5.02 and (2) in connection with a Tax
Event Redemption, (a) if the Tax Event Redemption Date occurs prior to
November 16, 2004 or, in the event of a Failed Initial Remarketing, prior
to the Purchase Contract Settlement Date, a portfolio of zero-coupon U.S.
Treasury Securities consisting of (i) principal or interest strips of U.S.
Treasury Securities which mature on or prior to February [15], 2005 in an
aggregate amount equal to the applicable Tax Event Redemption Principal
Amount and (ii) with respect to each scheduled interest payment date on the
Notes that occurs after the Tax Event Redemption Date and on or before the
Purchase Contract Settlement Date, principal or interest strips of U.S.
Treasury Securities that mature on or prior to such date in an aggregate
amount equal to the aggregate interest payment that would be due on the
applicable Tax Event Redemption Principal Amount of the Notes on such date,
and (b) if the Tax Event Redemption Date occurs on or after November 16,
2004 or, in the event of a Failed Initial Remarketing, on or after the
Purchase Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury
Securities consisting of (i) principal or interest strips of U.S. Treasury
Securities which mature on or prior to February 16, 2007 in an aggregate
amount equal to the applicable Tax Event Redemption Principal Amount and
(ii) with respect to each scheduled interest payment date on the Notes that
occurs after the Tax Event Redemption Date, principal or interest strips of
such U.S. Treasury Securities that mature on or prior to such date in an
aggregate amount equal to the aggregate interest payment that would be due
on the applicable Tax Event Redemption Principal Amount of the Notes on
such date.
"Treasury Portfolio Purchase Price" means the lowest aggregate
price quoted by the Primary Treasury Dealer to the Quotation Agent (a) in
the case of a Tax Event Redemption, on the third Business Day immediately
preceding the Tax Event Redemption Date for the purchase of the applicable
Treasury Portfolio for settlement on the Tax Event Redemption Date and (b)
in the case of the Initial Remarketing, on the Initial Remarketing Date for
the purchase of the applicable Treasury Portfolio for settlement on
November 16, 2004.
"Treasury Securities" means zero-coupon U.S. Treasury Securities
(CUSIP No. ______________) which mature on February 15, 2005.
"Underwriting Agreement" means the Underwriting Agreement, dated
as of __________, 2002, between the Company and the Underwriters identified
in Schedule A thereto.
"Vice President" means any vice president, whether or not
designated by a number or a word or words added before or after the title
"vice president."
SECTION 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to
take any action in accordance with any provision of this Agreement, the
Company shall furnish to the Purchase Contract Agent an Officers'
Certificate stating that all conditions precedent, if any, provided for in
this Agreement relating to the proposed action have been complied with and,
if requested by the Purchase Contract Agent, an Opinion of Counsel stating
that, in the opinion of such counsel, all such conditions precedent, if
any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement shall include:
(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation
as is necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied
with.
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent.
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 an officer of the Company
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Agreement, they may, but need not, be
consolidated and form one instrument.
SECTION 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or
taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or by an agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Purchase Contract Agent and, where it
is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of
this Agreement and (subject to Section 7.01) conclusive in favor of the
Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase
Contract Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Certificate
evidencing such Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Purchase Contract Agent or the
Company in reliance thereon, whether or not notation of such action is made
upon such Certificate.
(e) The Company may set any date as a record date for the purpose
of determining the Holders of Outstanding 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 PACS and the
Outstanding Growth PACS, 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 PACS or the Growth PACS, as the case may be, whether or not
such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken prior to or on the
applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing contained in this
paragraph shall be construed to prevent the Company from setting a new
record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and be of no
effect), and nothing contained in this paragraph shall be construed to
render ineffective any action taken by Holders of the requisite number of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Company, at its own
expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Purchase
Contract Agent in writing and to each Holder of Securities in the manner
set forth in Section 1.06.
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 Purchase Contract Agent in writing, and to
each Holder of Securities in the manner set forth in Section 1.06, prior to
or on the existing Expiration Date. If an Expiration Date is not designated
with respect to any record date set pursuant to this Section, the Company
shall be deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject to its
right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the
180th day after the applicable record date.
SECTION 1.05. Notices.
Any notice or communication is duly given if in writing and
delivered in Person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier (with receipt confirmed) or overnight
air courier guaranteeing next day delivery, to the others' address;
provided that notice shall be deemed given to the Purchase Contract Agent
only upon receipt thereof:
If to the Purchase Contract Agent:
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
If to the Company:
The Williams Companies, Inc.
Telecopier No.:
Attention:
with a copy to:
[ ]
[ ]
If to the Collateral Agent:
[ ]
[ ]
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
If to the Property Trustee:
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
If to the Indenture Trustee:
[ ]
[ ]
[ ]
[ ]
[ ]
Telecopier No.:
Attention:
SECTION 1.06. 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 Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or
after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Purchase Contract
Agent, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Purchase Contract Agent shall constitute a sufficient notification for
every purpose hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and
the Purchase Contract Agent shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 1.09. Separability Clause.
In case any provision in this Agreement or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in
any way be affected or impaired thereby.
SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the 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 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
(notwithstanding any other provision of this Agreement or the Securities),
Purchase Contract Payments or other distributions shall not be paid on such
date, but Purchase Contract Payments or such other distributions shall be
paid 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 to any Holder for the period from and after any
such Payment Date.
In any case where any Purchase Contract Settlement Date or Early
Settlement Date shall not be a Business Day (notwithstanding any other
provision of this Agreement or the Securities) Purchase Contracts shall not
be performed and Early Settlement shall not be effected on such date, but
Purchase Contracts shall be performed or Early Settlement effected, as
applicable, on the next succeeding Business Day with the same force and
effect as if made on such Purchase Contract Settlement Date or Early
Settlement Date, as applicable.
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 or Beneficial Owner.
SECTION 1.15. Appointment of Financial Institution as Agent for
the Company.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase
Contract Agent and the Holders, under this Agreement and the Purchase
Contracts, by giving notice of such appointment in the manner provided in
Section 1.05 hereof. Any such appointment shall not relieve the Company in
any way from its obligations hereunder.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming
part of each Security evidenced thereby) shall be in substantially the form
set forth in Exhibit A hereto (in the case of Certificates evidencing
Income PACS) or Exhibit B hereto (in the case of Certificates evidencing
Growth PACS), 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 Securities are listed or any depositary therefor, or as may,
consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
The definitive Certificates shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Securities
evidenced by such 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 HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE
IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT
AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED IN
THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN."
SECTION 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of
authentication of the Securities shall be in substantially the form set
forth on the form of the applicable Certificates.
ARTICLE 3
THE SECURITIES
SECTION 3.01. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to ______________ (_____________ if the over-allotment option
granted in the Underwriting Agreement is exercised in full), except for
Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Sections 3.04, 3.05, 3.10, 3.13, 3.14 or 8.05.
The Certificates shall be issuable only in registered form and
only in denominations of a single Income PACS or Growth PACS and any
integral multiple thereof.
SECTION 3.02. Rights and Obligations Evidenced by the Certificates.
Each Income PACS Certificate shall evidence the number of Income
PACS specified therein, with each such Income PACS representing (1) the
ownership by the Holder thereof of a beneficial interest in a Note or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, subject to the Pledge of such Note or the Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, by such Holder pursuant to the Pledge
Agreement, and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Purchase Contract Agent, as
attorney-in-fact for, and on behalf of, the Holder of each Income PACS
shall pledge, pursuant to the Pledge Agreement, the Note or the Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, as the case may be, forming a part of such
Income PACS, to the Collateral Agent and grant to the Collateral Agent a
security interest in the right, title and interest of such Holder in such
Note or the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) 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 shares of Common Stock.
Upon the formation of a Growth PACS pursuant to Section 3.13, each
Growth PACS Certificate shall evidence the number of Growth PACS specified
therein, with each such Growth PACS representing (1) the ownership by the
Holder thereof of a [1/40] undivided beneficial interest in a Treasury
Security with a principal amount equal to $1,000, subject to the Pledge of
such Treasury Security by such Holder pursuant to the Pledge Agreement, and
(2) the rights and obligations of the Holder thereof and the Company under
one Purchase Contract.
Prior to the purchase of shares of Common Stock under each
Purchase Contract, such Purchase Contracts shall not entitle the Holder of
a Security to any of the rights of a holder of shares of Common Stock,
including, without limitation, the right to vote or receive any dividends
or other payments or to consent or to receive notice as a shareholder in
respect of the meetings of shareholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as a
shareholder of the Company.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon
the execution and delivery of this Agreement, and at any time and from time
to time thereafter, the Company may deliver Certificates executed by the
Company to the Purchase Contract Agent for authentication, execution on
behalf of the Holders and delivery, together with its Issuer Order for
authentication of such Certificates, and the Purchase Contract Agent in
accordance with such Issuer Order shall authenticate, execute on behalf of
the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents. The
signature of any of these officers on the Certificates may be manual or
facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such
Certificates.
No 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 Purchase Contract Agent,
as such Holder's attorney-in-fact. Such signature by an authorized
signatory of the Purchase Contract Agent shall be conclusive evidence that
the Holder of such Certificate has entered into the Purchase Contracts
evidenced by such Certificate.
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 Purchase
Contract Agent by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Purchase Contract Agent, and the Purchase
Contract Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary Certificates
which are in substantially the form set forth in Exhibit A or Exhibit B
hereto, as the case may be, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PACS or Growth PACS, as the case
may be, are listed, or as may, consistently herewith, be determined by the
officers of the Company executing such Certificates, as evidenced by their
execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After
the preparation of definitive Certificates, the temporary Certificates
shall be exchangeable for definitive Certificates upon surrender of the
temporary Certificates at the Corporate Trust Office, at the expense of the
Company and without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Certificates, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent
shall authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, one or more definitive Certificates of like tenor and
denominations and evidencing a like number of Securities 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 Securities, evidenced thereby as
definitive Certificates.
SECTION 3.05. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust
Office a register (the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Purchase Contract Agent
shall provide for the registration of Certificates and of transfers of
Certificates (the Purchase Contract Agent, in such capacity, the "Security
Registrar"). The Security Registrar shall record separately the
registration and transfer of the Certificates evidencing Income PACS and
Growth PACS.
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations,
like tenor, and evidencing a like number of Income PACS or Growth PACS, 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 PACS or Growth PACS, as the case may be, upon surrender of
the Certificates to be exchanged at the Corporate Trust Office. Whenever
any Certificates are so surrendered for exchange, the Company shall execute
and deliver to the Purchase Contract Agent, and the Purchase Contract Agent
shall authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number
of Income PACS or Growth PACS, as the case may be, and be entitled to the
same benefits and subject to the same obligations, under this Agreement as
the Income PACS or Growth PACS, 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 exchange shall (if so required by the Purchase Contract Agent)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Purchase Contract Agent duly
executed, by the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of a Certificate, but the Company and the Purchase Contract
Agent may require payment from the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Certificates, other than any
exchanges pursuant to Sections 3.06 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Purchase Contract Agent, and the Purchase
Contract Agent shall not be obligated to authenticate, execute on behalf of
the Holder and deliver any Certificate in exchange for any other
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Business Day immediately preceding the earliest of
any Early Settlement Date for such Certificate, the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above
in this Section and receipt of appropriate registration or transfer
instructions from such Holder, the Purchase Contract Agent shall:
(i) if the Purchase Contract Settlement Date or an Early
Settlement Date with respect to such other Certificate has
occurred, deliver the shares of Common Stock issuable in respect
of the Purchase Contracts forming a part of the Securities
evidenced by such other Certificate; or
(ii) if a Cash Settlement or an Early Settlement Date
with respect to such other Certificate shall have occurred, or if
a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Notes, the Treasury
Securities, or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance
with the applicable provisions of Section 3.15 and Article Five
hereof.
SECTION 3.06. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form
of one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. The Company
hereby designates DTC as the initial Depositary. Such Global Certificates
shall initially be registered on the books and records of the Company in
the name of Cede & Co., the nominee of the Depositary, and no Beneficial
Owner will receive a definitive Certificate representing such Beneficial
Owner's interest in such Global Certificate, except as provided in Section
3.09. The Purchase Contract Agent shall enter into an agreement with the
Depositary if so requested by the Company. Unless and until definitive,
fully registered Certificates have been issued to Beneficial Owners
pursuant to Section 3.09:
(i) the provisions of this Section 3.06 shall be in full
force and effect;
(ii) the Company shall be entitled to deal with the
Depositary for all purposes of this Agreement (including making
Purchase Contract Payments and receiving approvals, votes or
consents hereunder) as the Holder of the Securities and the sole
holder of the Global Certificates and shall have no obligation to
the Beneficial Owners;
(iii) to the extent that the provisions of this Section
3.06 conflict with any other provisions of this Agreement, the
provisions of this Section 3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be
exercised only through the Depositary and shall be limited to
those established by law and agreements between such Beneficial
Owners and the Depositary or the Depositary Participants.
SECTION 3.07. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's
agent shall give such notices and communications to the Holders and, with
respect to any Securities registered in the name of the Depositary or the
nominee of the Depositary, the Company or the Company's agent shall, except
as set forth herein, have no obligations to the Beneficial Owners.
SECTION 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.
SECTION 3.09. Definitive Certificates.
If:
(i) the Depositary elects to discontinue its services as
securities depositary with respect to the Securities and a
successor Depositary is not appointed pursuant to Section 3.08
within 90 days after such discontinuance; or
(ii) the Company elects, after consultation with the
Purchase Contract Agent, to terminate the book-entry system for
the Securities, then (x) definitive Certificates shall be prepared
by the Company with respect to such Securities and delivered to
the Purchase Contract Agent and (y) upon surrender of the Global
Certificates representing the Securities by the Depositary,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in
accordance with the instructions of the Depositary. The Company
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. Each definitive Certificate so delivered shall
evidence Securities of the same kind and tenor as the Global
Certificate so surrendered in respect thereof.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase
Contract Agent, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute
on behalf of the Holder, and deliver in exchange therefor, a new
Certificate, evidencing the same number of Income PACS or Growth PACS, as
the case may be, and bearing a Certificate number not contemporaneously
outstanding.
If there shall be delivered to the Company and the Purchase
Contract Agent (i) evidence to their satisfaction of the destruction, loss
or theft of any Certificate, and (ii) such security or indemnity as may be
required by them to hold each of them and any agent of any of them
harmless, then, in the absence of notice to the Company or the Purchase
Contract Agent that such Certificate has been acquired by a protected
purchaser, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the
same number of Income PACS or Growth PACS, 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 Purchase Contract Agent, and the Purchase
Contract Agent shall not be obligated to authenticate, execute on behalf of
the Holder, and deliver to the Holder, a Certificate on or after the
Business Day immediately preceding the earliest of any Early Settlement
Date for such lost or mutilated Certificate, the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above
in this Section and receipt of appropriate registration or transfer
instructions from such Holder, the Purchase Contract Agent shall:
(i) if the Purchase Contract Settlement Date or an Early
Settlement Date with respect to such lost or mutilated Certificate
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; or
(ii) if a Cash Settlement with respect to such lost or
mutilated Certificate shall have occurred or if a Termination
Event shall have occurred prior to the Purchase Contract
Settlement Date, transfer the Notes, the Treasury Securities 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, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the
applicable provisions of Section 3.15 and Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the
Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Purchase Contract 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.
SECTION 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Purchase Contract Agent, and any agent of the
Company or the Purchase Contract Agent, may treat the Person in whose name
such Certificate is registered as the owner of the Security evidenced
thereby, for the purpose of receiving distributions on the Treasury
Securities, the Notes, or on the maturing quarterly interest strips of the
Treasury Portfolio, as applicable, receiving Purchase Contract Payments,
performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any distributions on the Treasury Securities,
the Notes, or Treasury Portfolio, as applicable, or Purchase Contract
Payments payable on the Purchase Contracts, each constituting a part of the
Security evidenced thereby shall be overdue and notwithstanding any notice
to the contrary, and neither the Company nor the Purchase Contract Agent,
nor any agent of the Company or the Purchase Contract Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing contained herein shall prevent the Company, the
Purchase Contract Agent or any agent of the Company or the Purchase
Contract Agent, from giving effect to any written certification, proxy or
other authorization furnished by the Depositary (or its nominee), as a
Holder, with respect to such Global Certificate or impair, as between such
Depositary and the related Beneficial Owner, the operation of customary
practices governing the exercise of rights of the Depositary (or its
nominee) as Holder of such Global Certificate.
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 Notes, the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of that term) 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 transfer or exchange of a Security, or a Collateral
Substitution or the reestablishment of Income PACS shall, if surrendered to
any Person other than the Purchase Contract Agent, be delivered to the
Purchase Contract Agent and, if not already cancelled, shall be promptly
cancelled by it. The Company may at any time deliver to the Purchase
Contract Agent for cancellation any Certificates previously authenticated,
executed and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Certificates so delivered shall, upon Issuer
Order, be promptly cancelled by the Purchase Contract Agent. No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as
provided in this Section, except as expressly permitted by this Agreement.
All cancelled Certificates held by the Purchase Contract Agent shall be
disposed of in accordance with its customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
SECTION 3.13. Creation of Growth PACS by Substitution of Treasury
Securities.
Subject to the conditions set forth in this Agreement, a Holder
may separate the Notes or Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, from the related Purchase Contracts in respect of such Holder's
Income PACS by substituting for such Notes or Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as applicable, Treasury Securities in an aggregate
principal amount equal to the aggregate principal amount of such Notes or
the principal amount of such Applicable Ownership Interests (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 prior to or on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date. To effect such
substitution, the Holder must:
(1) deposit with the Securities Intermediary Treasury
Securities having an aggregate principal amount equal to
the aggregate principal amount of the Notes comprising part
of such Income PACS, as the case may be; and
(2) transfer the related Income PACS to the Purchase Contract
Agent accompanied by a notice to the Purchase Contract
Agent, substantially in the form of Exhibit C hereto, (i)
stating that the Holder has transferred the relevant amount
of Treasury Securities to the Securities Intermediary and
(ii) requesting that the Purchase Contract Agent instruct
the Collateral Agent to release the Notes, as the case may
be, underlying such Income PACS, whereupon the Purchase
Contract Agent shall promptly provide an instruction to
such effect to the Collateral Agent, substantially in the
form of Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (1)
above and the instruction described in clause (2) above, in accordance with
the terms of the Pledge Agreement, the Collateral Agent will cause the
Securities Intermediary to effect the release of such Notes or Applicable
Ownership Interests (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 the transfer of
such Notes or Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
the case may be, to the Purchase Contract Agent on behalf of the Holder.
Upon receipt thereof, the Purchase Contract Agent shall promptly:
(i) cancel the related Income PACS;
(ii) transfer the Notes or Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) 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 PACS Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Income PACS.
Holders who elect to separate the Notes or Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio, as the case may be, from the related Purchase
Contracts and to substitute Treasury Securities for such Notes or
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) 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 only in integral
multiples of 40 Income PACS; provided that if the Treasury Portfolio has
replaced the Notes as a component of the Income PACS as a result of a
Successful Initial Remarketing or a Tax Event Redemption, Holders may make
Collateral Substitutions at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, but only in
integral multiples of ______ Income PACS.
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 PACS
or fails to deliver Income PACS Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Collateral Agent, any
distributions on the Notes or Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as
the case may be, constituting a part of such Income PACS shall be held in
the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until such Income PACS are so transferred or the
Income PACS Certificate is so delivered, as the case may be, or, such
Holder provides evidence satisfactory to the Company and the Purchase
Contract Agent that such Income PACS Certificate has been destroyed, lost
or stolen, together with any indemnity that may be required by the Purchase
Contract Agent and the Company.
Except as described in this Section 3.13 or in connection with a
Cash Settlement, for so long as the Purchase Contract underlying an Income
PACS remains in effect, such Income PACS shall not be separable into its
constituent parts, and the rights and obligations of the Holder in respect
of the Notes or Applicable Ownership Interests (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, as the case may
be, and the Purchase Contract comprising such Income PACS may be acquired,
and may be transferred and exchanged, only as an Income PACS.
SECTION 3.14. Reestablishment of Income PACS.
Subject to the conditions set forth in this Agreement, a Holder of
Growth PACS may reestablish Income PACS at any time (i) prior to or on the
fifth Business Day immediately preceding the Purchase Contract Settlement
Date, by:
(1) depositing with the Securities Intermediary Notes or
Applicable Ownership Interests (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio,
as the case may be, having an aggregate principal amount
equal to the aggregate principal amount at maturity of the
Treasury Securities comprising part of the Growth PACS; and
(2) transferring the related Growth PACS to the Purchase
Contract Agent accompanied by a notice to the Purchase
Contract Agent, substantially in the form of Exhibit C
hereto, (i) stating that the Holder has transferred the
relevant amount of Notes or Applicable Ownership Interests
(as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, to the
Securities Intermediary and (ii) requesting that the
Purchase Contract Agent instruct the Collateral Agent to
release the Treasury Securities underlying such Growth
PACS, whereupon the Purchase Contract Agent shall promptly
provide an instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit C to the Pledge
Agreement.
Upon receipt of the Notes or Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as
the case may be, described in clause (1) above and the instruction
described in clause (2) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding
aggregate principal amount at maturity from the Pledge, free and clear of
the Company's security interest therein, and the transfer to the Purchase
Contract Agent on behalf of the Holder. Upon receipt thereof, the Purchase
Contract Agent shall promptly:
(i) cancel the related Growth PACS;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver an Income PACS Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Growth PACS.
Holders who elect to reestablish Income PACS shall be responsible
for any fees or expenses payable to the Collateral Agent for its services
as Collateral Agent in respect of the reestablishment, and the Company
shall not be responsible for any such fees or expenses.
Holders of Growth PACS may only reestablish Income PACS in
integral multiples of 40 Growth PACS; provided that if the Treasury
Portfolio has replaced the Notes as a component of the Income PACS as a
result of a Successful Remarketing or a Tax Event Redemption, Holders may
convert their Growth PACS into Income PACS by substituting Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio for Treasury Securities at any time on or
prior to the second Business Day immediately preceding the Purchase
Contract Settlement Date, but only in integral multiples of ______ Growth
PACS.
Except as provided in this Section 3.14 or in connection with a
Cash Settlement, for so long as the Purchase Contract underlying a Growth
PACS remains in effect, such Growth PACS shall not be separable into its
constituent parts and the rights and obligations of the Holder of such
Growth PACS in respect of the [1/40] of a Treasury Security and the
Purchase Contract comprising such Growth PACS may be acquired, and may be
transferred and exchanged, only as a Growth PACS.
SECTION 3.15. Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Notes, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities, as the case
may be, underlying the Income PACS and the Growth PACS, as the case may be,
pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent
shall request transfer instructions with respect to such Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, from each Holder by written
request, substantially in the form of Exhibit D hereto, mailed to such
Holder at its address as it appears in the Security Register.
Upon book-entry transfer of the Income PACS or the Growth PACS or
delivery of an Income PACS Certificate or Growth PACS Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase
Contract Agent shall transfer the Notes, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the
case may be, underlying such Income PACS or Growth PACS, as the case may
be, to such Holder by book-entry transfer, or other appropriate procedures,
in accordance with such instructions. In the event a Holder of Income PACS
or Growth PACS fails to effect such transfer or delivery, the Notes, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Income PACS or
Growth PACS, as the case may be, and any distributions thereon, shall be
held in the name of the Purchase Contract Agent or its nominee in trust for
the benefit of such Holder, until the earlier to occur of:
(i) the transfer of such Income PACS or Growth PACS or
surrender of the Income PACS Certificate or Growth PACS
Certificate or receipt by the Company and the Purchase Contract
Agent from such Holder of satisfactory evidence that such Income
PACS Certificate or Growth PACS Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required
by the Purchase Contract Agent and the Company; and
(ii) the expiration of the time period specified in the
abandoned property laws of the relevant State in which the
Purchase Contract Agent holds such property.
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 or its trustee, receiver, liquidator or a person or entity
performing similar functions in the event that the Company becomes the
debtor under the Bankruptcy Code or subject to other similar state or
Federal law providing for reorganization or liquidation.
ARTICLE 4
THE NOTES AND APPLICABLE OWNERSHIP INTEREST OF THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments
Preserved.
Any distribution on any Note or on the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, which is
paid on any Payment Date shall, subject to receipt thereof by the Purchase
Contract Agent from the Collateral Agent as provided by the terms of the
Pledge Agreement, be paid to the Person in whose name the Income PACS
Certificate (or one or more Predecessor Income PACS Certificates) of which
such Note or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, is registered at the close of business on
the Record Date for such Payment Date. Any such distribution shall be
subject to deferral at the option of the Company in accordance with the
Indenture and the Declaration.
Each Income PACS Certificate evidencing Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio delivered under
this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Income PACS Certificate shall carry the right to accrued
and unpaid interest or distributions, and to accrue interest or
distributions, which were carried by the Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio underlying such
other Income PACS Certificate.
In the case of any Income PACS with respect to which Cash
Settlement of the underlying Purchase Contract is properly effected
pursuant to Section 5.02 hereof, or with respect to which Early Settlement
of the underlying Purchase Contract is properly effected pursuant to
Section 5.04(b)(2) hereof, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record
Date and prior to or on the next succeeding Payment Date, interest on the
Notes or distributions on the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, underlying such Income PACS
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 Purchase Contract Agent, be payable to the Person in whose name the
Income PACS Certificate (or one or more Predecessor Income PACS
Certificates) was registered at the close of business on the Record Date.
Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Income PACS with respect to which Cash
Settlement or Early Settlement of the underlying Purchase Contract is
properly effected, or with respect to which a Collateral Substitution has
been effected, distributions on the related Notes or 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, Early Settlement Date or the date of the Collateral Substitution, as
the case may be, shall not be payable hereunder to the Holder of such
Income PACS; provided, however, that to the extent that such Holder
continues to hold separated Notes that formerly comprised a part of such
Holder's Income PACS, such Holder shall be entitled to receive interest on
such separated Notes.
SECTION 4.02. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract
Agent will be entitled to exercise the voting and any other consensual
rights pertaining to the Pledged Notes, but only to the extent instructed
in writing by the Holders as described below. Upon receipt of notice of any
meeting at which holders of Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Notes, the
Purchase Contract Agent shall, as soon as practicable thereafter, mail,
first class, postage pre-paid, to the Holders of Income PACS a notice:
(i) containing such information as is contained in the
notice or solicitation;
(ii) stating that each Holder on the record date set by
the Purchase Contract Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Notes, as the case may be, entitled to
vote) shall be entitled to instruct the Purchase Contract Agent as
to the exercise of the voting rights pertaining to such Notes
underlying their Income PACS; and
(iii) stating the manner in which such instructions may
be given.
Upon the written request of the Holders of Income PACS on such record date
received by the Purchase Contract Agent at least six days prior to such
meeting, the Purchase Contract Agent shall endeavor insofar as practicable
to vote or cause to be voted, in accordance with the instructions set forth
in such requests, the maximum number of Notes, as the case may be, as to
which any particular voting instructions are received. In the absence of
specific instructions from the Holder of an Income PACS, the Purchase
Contract Agent shall abstain from voting the Notes underlying such Income
PACS. The Company hereby agrees, if applicable, to solicit Holders of
Income PACS to timely instruct the Purchase Contract Agent in order to
enable the Purchase Contract Agent to vote such Notes.
SECTION 4.03. Tax Event Redemption.
(a) Upon the occurrence of a Tax Event Redemption prior to
November 16, 2004, or in the event of a Failed Initial Remarketing, prior
to the Purchase Contract Settlement Date, an amount equal to the Redemption
Amount, plus any accrued and unpaid interest, payable on the Tax Event
Redemption Date with respect to the principal amount of the Notes shall be
deposited in the Collateral Account in exchange for the Pledged Notes.
Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral
Agent shall cause the Securities Intermediary to apply an amount equal to
the Redemption Amount of such funds to purchase on behalf of the Holders of
Income PACS the Treasury Portfolio and promptly remit the remaining portion
of such funds to the Purchase Contract Agent for payment to the Holders of
such Income PACS.
(b) The Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio will be
substituted as Collateral for the Pledged Notes 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 PACS to purchase the
Common Stock of the Company under the Purchase Contract constituting a part
of such Income PACS. Following the occurrence of a Tax Event Redemption
prior to the Purchase Contract Settlement Date, the Holders of Income PACS
and the Collateral Agent shall have such security interest rights and
obligations with respect to the Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio as
the Holders of Income PACS and the Collateral Agent had in respect of the
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement, and any reference herein to the Notes shall be deemed to
be reference to such Treasury Portfolio. The Company may cause to be made
in any Income PACS 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 Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio for
Notes as Collateral.
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall 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 shares of Common Stock (subject to Section
5.09) equal to the Settlement Rate unless an Early Settlement has occurred
in accordance with Section 5.04(b)(2) hereof or, prior to or on 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:
(i) if the Applicable Market Value (as defined below) is
greater than $______ (the "Appreciation Cap Price"), the number of
shares of Common Stock per Purchase Contract having a value, based
on the Applicable Market Value, equal to ____ multiplied by the
Appreciation Cap Price divided by the Applicable Market Value; and
(ii) if the Applicable Market Value is less than or equal
to the Appreciation Cap Price, ______ shares of Common Stock per
Purchase Contract;
in each case subject to adjustment as provided in Section 5.04 (and in each
case rounded upward or downward to the nearest 1/10,000th of a share).
The "Applicable Market Value" means the average of the Closing
Price per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the 4:15 p.m. close of
the principal trading session (or, if no closing price is
reported, the last reported sale price) per share on the New York
Stock Exchange, Inc. (the "NYSE") on such date;
(ii) if the Common Stock is not listed for trading on the
NYSE on any such date, the closing sale price per share as
reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United
States
national or regional securities exchange, the closing sale price
per share as reported by The Nasdaq Stock Market;
(iv) 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
(v) the market value of Common Stock on such date as
determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company.
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
(b) Each Holder of an Income PACS or a Growth PACS, by its
acceptance thereof:
(i) irrevocably authorizes the Purchase Contract 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);
(ii) agrees to be bound by the terms and provisions
thereof;
(iii) covenants and agrees to perform its obligations
under such Purchase Contract;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to
enter into and perform this Agreement and the Pledge Agreement on
its behalf as its attorney-in-fact; and
(vi) consents to, and agrees to be bound by, the Pledge
of such Holder's right, title and interest in and to the
Collateral Account, including the Notes, the Applicable Ownership
Interest (as specified in clause (A) of the definition of such
term) of 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.
(c) Each Holder of an Income PACS or a Growth PACS, by its
acceptance thereof, further covenants and agrees, that to the extent and in
the manner provided in Section 5.02 and the Pledge Agreement, but subject
to the terms thereof, Proceeds of the Notes, the Treasury Securities or the
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as applicable, on the Purchase
Contract Settlement Date, shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
Proceeds.
(d) Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee) by the terms of this Agreement, the Purchase
Contracts underlying such Certificate and the Pledge Agreement and the
transferor shall be released from the obligations under this Agreement, the
Purchase Contracts underlying the Certificate so transferred and the Pledge
Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to
be bound by the provisions of this paragraph.
SECTION 5.02. Initial Remarketing; Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred, the Company
shall engage Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
Remarketing Agent (the "Remarketing Agent") pursuant to the Remarketing
Agreement (and subject to removal as provided in the Remarketing Agreement)
to sell the Notes (the "Initial Remarketing") on the third Business Day
immediately preceding November 16, 2004 (the "Initial Remarketing Date").
In order to facilitate the Initial Remarketing, the Purchase Contract Agent
shall notify, by 11:00 a.m. (New York City time), on the Business Day
immediately preceding the Initial Remarketing Date, the Remarketing Agent
of the aggregate principal amount of Notes to be remarketed. Concurrently,
the Collateral Agent, pursuant to the terms of the Pledge Agreement, will
present for Remarketing such Notes to the Remarketing Agent. Upon receipt
of such notice form the Purchase Contract Agent and such Notes from the
Collateral Agent, the Remarketing Agent will, on the Initial Remarketing
Date, use its reasonable efforts to remarket such Notes on such date at a
price of approximately 100.5% (but not less than 100%) of the Treasury
Portfolio Purchase Price. If the Remarketing Agent is able to remarket the
Notes at a price equal to or greater than 100% of the Treasury Portfolio
Purchase Price (a "Successful Initial Remarketing"), the portion of the
proceeds from such Successful Initial Remarketing equal to the Treasury
Portfolio Purchase Price will be applied to purchase the Treasury
Portfolio. In addition, the Remarketing Agent may deduct as a remarketing
fee (the "Remarketing Fee") an amount equal to 25 basis points (0.25%) of
the Treasury Portfolio Purchase Price from any amount of such proceeds in
excess of the Treasury Portfolio Purchase Price. Any proceeds in excess of
those required to pay the Treasury Portfolio Purchase Price and the
Remarketing Fee will be remitted to the Purchase Contract Agent for payment
to the Holders of the related Income PACS. Income PACS Holders whose Notes
are so remarketed will not otherwise be responsible for the payment of any
Remarketing Fee in connection therewith. The Treasury Portfolio will be
substituted for the Notes of Holders of Income PACS and will be pledged to
the Collateral Agent to secure the Income PACS Holders' obligation to pay
the Purchase Price for the Common Stock under the related Purchase
Contracts on the Purchase Contract Settlement Date. Following the
occurrence of a Successful Initial Remarketing, the Holders of Income PACS
and the Collateral Agent shall have such security interests, rights and
obligations with respect to the Treasury Portfolio as the Holder of Income
PACS and the Collateral Agent had in respect of the Notes, subject to the
Pledge thereof as provided in the Pledge Agreement, and any reference
herein or in the Certificates to the Notes shall be deemed to be a
reference to such Treasury Portfolio and any reference herein or in the
Certificates to interest on the Notes shall be deemed to be a reference to
corresponding distributions on the Treasury Portfolio. The Company may
cause to be made in any Income PACS Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of the Treasury Portfolio for Notes
as Collateral.
If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Notes (other than to the Company) of such
Holders of Income PACS at a price not less than 100% of the Treasury
Portfolio Purchase Price or a condition precedent set forth in the
Remarketing Agreement is not fulfilled, the remarketing will be deemed to
have failed (a "Failed Initial Remarketing"). The Company will cause a
notice of a Failed Initial Remarketing to be published on the second
Business Day immediately preceding November 16, 2004 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.
(ii) A holder of a Note that is no longer part of an
Income PACS may elect to have such Note remarketed in the Initial
Remarketing. A holder making such an election must notify the
Indenture Trustee prior to 11:00 a.m. (New York City time) on the
second Business Day immediately preceding the Initial Remarketing
Date, of the aggregate number of Notes that are not part of Income
PACS to be remarketed. Any such notice will be irrevocable and may
not be conditioned upon the level at which the Reset Rate is
established in the Remarketing. Concurrently, the Indenture
Trustee shall cause such Notes to be presented to the Remarketing
Agent for Remarketing.
(iii) Not later than 7 calendar days nor more than 15
calendar days prior to the Initial Remarketing Date, the Company
shall request the Depositary to notify the Beneficial Owners or
Depositary Participants holding Securities of the procedures to be
followed in the Initial Remarketing.
(b) (i) Unless a Tax Event Redemption, Successful Initial
Remarketing, Termination Event or Early Settlement has occurred, each
Holder who intends to pay in cash to satisfy such Holder's obligations
under the Purchase Contract on the Purchase Contract Settlement Date shall
notify the Purchase Contract Agent by use of a notice in substantially the
form of Exhibit E hereto of his intention to pay in cash ("Cash
Settlement") the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract. Such notice shall be
given prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date. Prior to 11:00
a.m. (New York City time) on the next succeeding Business Day, the Purchase
Contract Agent shall notify the Collateral Agent and the Indenture Trustee
of the receipt of such notices from Holders intending to make a Cash
Settlement.
(ii) A Holder of an Income PACS who has so notified the
Purchase Contract Agent of his intention to effect a Cash
Settlement in accordance with paragraph 5.02(b)(i) above shall pay
the Purchase Price to the Securities Intermediary for deposit in
the Collateral Account prior to 11:00 a.m. (New York City time) on
the fourth Business Day immediately preceding the Purchase
Contract Settlement Date, in lawful money of the United States by
certified or cashiers' check or wire transfer, in each case in
immediately available funds payable to or upon the order of the
Securities Intermediary. Any cash received by the Collateral Agent
shall be invested promptly by the Securities Intermediary in
Permitted Investments and paid to the Company on the Purchase
Contract Settlement Date in settlement of the Purchase Contracts
in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in
respect of the investment earnings from such Permitted Investments
in excess of the Purchase Price for the shares of Common Stock to
be purchased by such Holder shall be distributed to the Purchase
Contract Agent when received for payment to the Holder.
(iii) If a Holder of an Income PACS fails to notify the
Purchase Contract Agent of his intention to make a Cash Settlement
in accordance with paragraph 5.02(b)(i) above, or does notify the
Purchase Contract Agent as provided in paragraph 5.02(b)(i) above
of his intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph 5.02(b)(ii) above, such
Holder shall be deemed to have consented to the disposition of the
Pledged Notes pursuant to the Secondary Remarketing as described
in paragraph 5.02(c) below.
(iv) Promptly after 11:00 a.m. (New York City time) on
the fourth Business Day preceding the Purchase Contract Settlement
Date, the Purchase Contract Agent, based on notices received by
the Purchase Contract Agent pursuant to Section 5.02(b) hereof and
notice from the Securities Intermediary regarding cash received by
it prior to such time, shall notify the Collateral Agent and the
Property Trustee or the Indenture Trustee, as applicable of the
aggregate number of Notes to be tendered for purchase in the
Remarketing in a notice substantially in the form of Exhibit F
hereto.
(v) Not later than 7 calendar days nor more than 15
calendar days prior to the Secondary Remarketing Date, the Company
shall request the Depositary to notify the Beneficial Owners or
Depositary Participants holding Securities of the procedures to be
followed in the Secondary Remarketing.
(c) (i) Unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred, the Notes of Income PACS Holders electing to have
their Notes remarketed or of Income PACS Holders who have not notified the
Purchase Contract Agent of their intention to effect a Cash Settlement as
provided in paragraph 5.02(b)(i) above, or who have so notified the
Purchase Contract Agent but failed to make such payment as required by
paragraph 5.02(b)(ii) above will be sold by the Remarketing Agent (the
"Secondary Remarketing") on the third Business Day immediately preceding
the Purchase Contract Settlement Date (the "Secondary Remarketing Date").
In order to facilitate the Secondary Remarketing, the Purchase Contract
Agent, based on the notices specified in Section 5.02(b)(iv), shall notify
the Remarketing Agent, promptly after 11:00 a.m. (New York City time) on
the Business Day immediately preceding the Secondary Remarketing Date, of
the aggregate number of Notes to be remarketed. Concurrently, the
Collateral Agent, pursuant to the terms of the Pledge Agreement, shall
cause such Notes to be presented to the Remarketing Agent for Remarketing.
(ii) A holder of a Note that is no longer part of an
Income PACS may elect to have such Note remarketed. A holder
making such an election must notify the Indenture Trustee prior to
11:00 a.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, of
the aggregate number of Notes that are not part of Income PACS to
be remarketed. Any such notice will be irrevocable and may not be
conditioned upon the level at which the Reset Rate is established
in the Remarketing. Concurrently, the Indenture Trustee shall
cause such Notes to be presented to the Remarketing Agent for
Remarketing.
(iii) Upon receipt of such notice from the Purchase
Contract Agent and such Notes, as set forth in clauses (i) and
(ii) above, the Remarketing Agent shall, on the Secondary
Remarketing Date, use reasonable efforts to remarket such Notes on
such date at a price equal to 100.5% (but not less than 100%) of
the aggregate principal amount of such Notes, as provided in the
Remarketing Agreement. If the Remarketing Agent is able to
remarket the Notes at a price equal to or greater than 100% of the
aggregate principal amount of Notes (a "Successful Secondary
Remarketing"), the Remarketing Agent will remit the proceeds from
such Successful Secondary Remarketing to the Collateral Agent;
provided that the Remarketing Agent may deduct as the Remarketing
Fee an amount equal to 25 basis points (0.25%) of the aggregate
principal amount of the remarketed Notes from any amount of the
proceeds of a Successful Secondary Remarketing in excess of the
aggregate principal amount of the remarketed Notes. The proceeds
from the Remarketing remitted to the Collateral Agent shall be
invested by the Collateral Agent in Permitted Investments, in
accordance with the Pledge Agreement, and then applied to satisfy
in full such Income PACS Holders' obligations to pay the Purchase
Price for the shares of Common Stock under the related 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 Purchase Contract Agent
for payment to the Holders of the related Income PACS. Income PACS
Holders whose Notes are so remarketed will not otherwise be
responsible for the payment of any Remarketing Fee in connection
therewith.
(iv) If, in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the related Notes of such
Holders of Income PACS at a price not less than 100.0% of the
Stated Amount or a condition precedent set forth in the
Remarketing Agreement is not fulfilled, the remarketing will be
deemed to have failed (a "Failed Secondary Remarketing"), an event
of default shall be deemed to have occurred under this Agreement
and the Pledge Agreement and in accordance with the terms of the
Pledge Agreement, the Collateral Agent, for the benefit of the
Company, shall exercise its rights as a secured party with respect
to such Notes, including those actions specified in paragraph
5.02(d) below; provided, that if upon a Failed Remarketing the
Collateral Agent exercises such rights for the benefit of the
Company with respect to such Notes, any accrued and unpaid
interest on such Notes shall become payable by the Company to the
Purchase Contract Agent for payment to the Beneficial Owner of the
Income PACS to which such Notes relate. The Company shall 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 and such notice shall include the
procedures that must be followed if a Holder of Notes (whether or
not as a component of Income PACS) wishes to exercise its right to
put the Notes to the Company following a Failed Secondary
Remarketing, as set forth in the Sixth Supplemental Indenture.
(d) With respect to any Notes which are subject to a Failed
Secondary Remarketing, the Collateral Agent for the benefit of the Company
reserves all of its rights as a secured party with respect thereto and,
subject to applicable law and paragraph 5.02(h) below, shall, in full
satisfaction of the Holders' obligations under the Purchase Contracts among
other things, (i) retain the Notes, (ii) sell the Notes in one or more
public or private sales or (iii) take, or choose not to take, any other
action with respect to the Notes, which in every case specified in (i),
(ii) and (iii) shall constitute payment in full for the aggregate Purchase
Price for the shares of Common Stock to be purchased under the Purchase
Contracts.
(e) (i) Unless a Holder of a Growth PACS or Income PACS (if a Tax
Event Redemption or a Successful Initial Remarketing has occurred) effects
an Early Settlement of the underlying Purchase Contract through the early
delivery of cash to the Purchase Contract Agent in the manner described in
Section 5.04(b)(2), each Holder of a Growth PACS or Income PACS (if a Tax
Event Redemption or a Successful Initial Remarketing has occurred) who
intends to pay in cash shall notify the Purchase Contract Agent by use of a
notice in substantially the form of Exhibit E hereto of his intention to
pay in cash the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract. Such notice shall be
given prior to 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the Purchase Contract Settlement Date. Prior to 11:00
a.m. (New York City time) on the next succeeding Business Day, the Purchase
Contract Agent shall notify the Collateral Agent of the receipt of such
notices from such Holders intending to make a Cash Settlement. Growth PACS
holders may make Cash Settlements only in integral multiples of 40 Growth
PACS.
(ii) A Holder of a Growth PACS or Income PACS (if a Tax
Event Redemption or a Successful Initial Remarketing has occurred)
who has so notified the Purchase Contract Agent of his intention
to make a Cash Settlement in accordance with paragraph 5.02(e)(i)
above shall pay the Purchase Price to the Securities Intermediary
for deposit in the Collateral Account prior to 11:00 a.m. (New
York City time) on the Business Day immediately preceding the
Purchase Contract Settlement Date, in lawful money of the United
States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order
of the Securities Intermediary. Any cash received by the
Collateral Agent shall be invested promptly by the Securities
Intermediary 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 Securities
Intermediary in respect of the investment earnings from the
investment in such Permitted Investments in excess of the Purchase
Price for the shares of Common Stock to be purchased by such
Holder shall be distributed to the Purchase Contract Agent when
received for payment to the Holder.
(iii) If a Holder of a Growth PACS or Holder of an Income
PACS (if a Tax Event Redemption or a Successful Initial
Remarketing has occurred) fails to notify the Purchase Contract
Agent of his intention to make a Cash Settlement in accordance
with paragraph 5.02(e)(i) above, or does notify the Purchase
Contract Agent as provided in paragraph 5.02(e)(i) above of his
intention to pay the Purchase Price in cash, but fails to make
such payment as required by paragraph 5.02(e)(ii) above, then upon
the maturity of the Pledged Treasury Securities or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio held by the
Securities Intermediary on the Business Day immediately preceding
the Purchase Contract Settlement Date, the principal amount of the
Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio received by the Securities
Intermediary shall be invested promptly in Permitted Investments.
On the Purchase Contract Settlement Date, an amount equal to the
Purchase Price shall 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 Pledged Treasury
Securities or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) 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 cause the Securities Intermediary to distribute such excess
to the Purchase Contract Agent for the benefit of the Holder of
the related Growth PACS or Income PACS when received.
(f) Any distribution to Holders of any payments described above
shall be payable at the office of the Purchase Contract Agent in New York
City maintained for that purpose or, at the option of the Holder, by check
mailed to the address of the Person entitled thereto at such address as it
appears on the Security Register.
(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 Notes, the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio or
the Pledged Treasury Securities, as the case may be, underlying
the relevant Security to be released from the Pledge, free and
clear of any security interest of the Company, and transferred to
the Purchase Contract Agent for delivery to the Holder thereof or
its designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase
Contract Agent shall, by book-entry transfer or other appropriate
procedures, in accordance with written instructions provided by
the Holder thereof, transfer such Notes, or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio or such
Treasury Securities, as the case may be (or, if no such
instructions are given to the Purchase Contract Agent by the
Holder, the Purchase Contract Agent shall hold such Notes, or the
appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio or
such Treasury Securities, as the case may be, and any interest
payment thereon, in the name of the Purchase Contract Agent or its
nominee in trust for the benefit of such Holder until the
expiration of the time period specified in the abandoned property
laws of the relevant state where such property is held).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement or Cash Settlement, are payable solely out of the proceeds of
any Collateral pledged to secure the obligations of the Holders and in no
event will Holders be liable for any deficiency between the proceeds of the
disposition of Collateral and the Purchase Price.
(i) The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any certificates
thereof to the Holder of the related Security unless the Company shall have
received payment in full for the aggregate Purchase Price for the Common
Stock to be purchased thereunder in the manner herein set forth.
SECTION 5.03. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have
occurred, subject to Section 5.04(b), on the Purchase Contract Settlement
Date upon receipt of the aggregate Purchase Price payable on all
Outstanding Securities, the Company shall issue and deposit with the
Purchase Contract 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 Purchase Contract Agent (or its
nominee) as custodian for the Holders (such certificates for shares of
Common Stock, together with any dividends or distributions for which a
record date and payment date for such dividend or distribution has occurred
after the Purchase Contract Settlement Date, being hereinafter referred to
as the "Purchase Contract Settlement Fund") to which the Holders are
entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date
or Early Settlement Date, as the case may be, together with settlement
instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive forthwith in exchange therefor a
certificate representing that number of newly issued whole shares of Common
Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Securities then held by
such Holder), together with cash in lieu of fractional shares as provided
in Section 5.09 and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so surrendered shall
forthwith be cancelled. Such shares shall be registered in the name of the
Holder or the Holder's designee as specified in the settlement instructions
provided by the Holder to the Purchase Contract Agent. If any shares of
Common 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 of such registration in a name other than
that of the registered Holder of the Certificate evidencing such Purchase
Contract or has established to the satisfaction of the Company that such
tax either has been paid or is not payable.
SECTION 5.04. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in effect
at the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a
fraction of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for
such determination; and
(ii) the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend
or other distribution,
such increase to become effective immediately 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 agrees that it shall not pay any dividend or make any distribution
on shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, warrants or options
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 shareholders
entitled to receive such rights, warrants or options, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of Common Stock on the date of announcement of such
issuance, the Settlement Rate in effect at the opening of business on the
day following the date of such announcement shall be increased by dividing
such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which
the aggregate of the offering price of the total number of shares
of Common Stock so offered for subscription or purchase would
purchase at such Current Market Price; and
(ii) 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 of such announcement. 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 agrees
that it shall not issue any such rights, warrants or options in respect of
shares of Common Stock held in the treasury of the Company.
(3) 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
or assets (including securities, but excluding any rights, warrants or
options referred to in paragraph (2) of this Section 5.04(a), any dividend
or distribution paid exclusively in cash and any dividend or distribution
referred to in paragraph (1) of this Section 5.04(a)), the Settlement Rate
shall be adjusted so that the same shall equal the rate determined by
dividing the Settlement Rate in effect immediately prior to the close of
business on the date fixed for the determination of shareholders entitled
to receive such distribution by a fraction of which:
(i) the numerator shall be the Current Market Price per
share of Common Stock on the date fixed for such determination
less the then fair market value (as reasonably determined by the
Board of Directors, whose determination shall be conclusive and
the basis for which shall be described in a Board Resolution) of
the portion of the assets or evidences of indebtedness so
distributed applicable to one share of Common Stock; and
(ii) the denominator shall be such Current Market Price
per share of Common Stock,
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of this Section 5.04(a)
shall not be applicable. In the event that such dividend or distribution is
not so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or
distribution had not been declared.
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that
is distributed in a Reorganization Event to which Section 5.6(b) applies or
as part of a distribution referred to in paragraph (4) of this Section) in
an aggregate amount that, combined together with (II) the aggregate amount
of any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section has been made and (III) the
aggregate of any cash plus the fair market value (as 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 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 multiplied by the number of shares of Common Stock outstanding
on such date, then, in such case, the Settlement Rate shall be increased so
that the same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on such record
date by a fraction of which:
(i) the numerator shall be the Current Market Price of
Common Stock on the record date less the amount of cash so
distributed (and not excluded as provided above) applicable to one
share of Common Stock; and
(ii) the denominator shall be the Current Market Price of
Common Stock,
such increase to be effective immediately prior to the opening of business
on the day following the record date; provided, however, that in the event
the portion of cash so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price per share of Common
Stock on the record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the
right to receive upon settlement of the Securities the amount of cash such
Holder would have received had such Holder settled each Security on the
record date. In the event that such dividend or distribution is not so paid
or made, the Settlement Rate shall again be adjusted to be the Settlement
Rate which would then be in effect if such dividend or distribution had not
been declared.
(6) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to shareholders (based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer)
of Purchased Shares as herein defined) of (I) an aggregate consideration
having a fair market value (as reasonably determined by the Board of
Directors, whose determination shall be conclusive and the basis for which
shall be described in a Board Resolution) that combined together with the
aggregate of the cash plus the fair market value (as reasonably determined
by the Board of Directors, whose determination shall be conclusive and the
basis for which shall be described in a Board Resolution), as of the
expiration of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of 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 this paragraph (6)
has been made, and (II) the aggregate amount of any distributions to all
holders of 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 (6) has been made, exceeds 15% of
the product of the Current Market Price per share of Common Stock as of the
last time (the "Expiration Time") tenders could have been made pursuant to
such tender or exchange offer (as it may be amended) times the number of
shares of Common Stock outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close
of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be equal to (A) the
product of (I) the Current Market Price per share of Common Stock
on the date of the Expiration Time and (II) the number of shares
of Common Stock outstanding (including any tendered shares) on the
Expiration Time less (B) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the transactions described in
clauses (I) and (II) above (assuming in the case of clause (I) the
acceptance, up to any maximum specified in the terms of the tender
or exchange offer, of Purchased Shares); and
(ii) the denominator of which shall be equal to the
product of (A) the Current Market Price per share of Common Stock
as of the Expiration Time and (B) the number of shares of Common
Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
"Purchased Shares").
(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 5.04(b)
applies) shall be deemed to involve:
(i) a distribution of such securities other than Common
Stock to all holders of Common Stock (and the effective date of
such reclassification shall be deemed to be "the date fixed for
the determination of shareholders entitled to receive such
distribution" and the "date fixed for such determination" within
the meaning of paragraph (4) of this Section); and
(ii) a subdivision, split or combination, as the case may
be, of the number of shares of Common Stock outstanding
immediately prior to such reclassification into the number of
shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the
day upon which such subdivision or split becomes effective" or
"the day upon which such combination becomes effective", as the
case may be, and "the day upon which such subdivision, split or
combination becomes effective" within the meaning of paragraph (3)
of this Section).
(8) The "Current Market Price" per share of Common Stock on any
date of determination means the average of the daily Closing Prices for the
ten consecutive Trading Days ending not later than the earlier of such date
of determination and the day before the "ex date" with respect to the
issuance or distribution requiring such computation. For purposes of this
paragraph, the term "ex date," when used with respect to any issuance or
distribution, shall mean the first date on which Common Stock trades
regular way on such exchange or in such market without the right to receive
such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated
to the nearest 1/10,000th of a share of Common Stock (or if there is not a
nearest 1/10,000th of a share, to the next lower 1/10,000th of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent thereof;
provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. If an adjustment is made to the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.04(a), an adjustment shall also be made to the
Applicable Market Value solely to determine which of clauses (i), (ii) or
(iii) of the definition of Settlement Rate in Section 5.01 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 5.04(a) and the denominator shall be the Settlement Rate
immediately prior to such adjustment; provided, however, that if such
adjustment to the Settlement Rate is required to be made pursuant to the
occurrence of any of the events contemplated by paragraph (1), (2), (3),
(4), (5), (6), (7) or (10) of this Section 5.04(a) during the period taken
into consideration for determining the Applicable Market Value, appropriate
and customary adjustments shall be made to the Settlement Rate.
(10) The Company may, but shall not be required to, make such
increases in the Settlement Rate, in addition to those required by this
Section, as 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 reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or
into another Person (other than a merger or consolidation in which
the Company is the continuing corporation and in which the shares
of Common Stock outstanding immediately prior to the merger or
consolidation are not exchanged for cash, securities or other
property of the Company or another corporation);
(ii) any 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 share exchange of the Company with
another Person (other than in connection with a merger or
acquisition); or
(iv) any liquidation, dissolution or termination of the
Company other than as a result of or after the occurrence of a
Termination Event, (any such event, a "Reorganization Event"),
[each Purchase Contract shall become, without the consent of the Holder of
the related Security, a contract to purchase only the kind of securities,
cash and other property receivable upon consummation of such Reorganization
Event by a holder of Common Stock immediately prior to the closing date of
such Reorganization Event.
The amount of such securities, cash and other property receivable
upon settlement of each such Purchase Contract after the consummation of
the Reorganization Event shall be based on the value as of such settlement
date of the hypothetical amount of securities, cash and other property that
would have been received upon consummation of the Reorganization Event in
exchange for the maximum number of shares of Common Stock deliverable under
a Purchase Contract immediately prior to the closing date of the
Reorganization Event (collectively, the "Exchange Property"). In
determining the kind and amount of the Exchange Property pursuant to the
foregoing, it will be assumed that such holder of Common Stock is not a
Person with which the Company consolidated or into which the Company merged
or which merged into the Company or to which such sale or transfer was
made, as the case may be (any such Person, a "Constituent Person"), or an
Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the
kind or amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of
election shall not have been exercised ("non-electing share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each non-electing
share shall be deemed to be the kind and amount so receivable per share by
a plurality of the non-electing shares).
The actual amount of Exchange Property receivable upon settlement
of each Purchase Contract shall be in the case of settlement on the
Purchase Contract Settlement Date or Early Settlement pursuant to Section
5.04(b)(2), a variable amount based upon the applicable Settlement Rate and
the Applicable Market Value of the Exchange Property at such time.
For purposes of this Section 5.04(b)(1) and Section 5.04(b)(2),
the term "Applicable Market Value" shall be deemed to refer to the
"Applicable Market Value" of the Exchange Property, and such value shall be
determined (A) with respect to any publicly traded securities that comprise
all or part of the Exchange Property, based on the Closing Price of such
securities, (B) in the case of any cash that comprises all or part of the
Exchange Property, based on the amount of such cash and (C) in the case of
any other property that comprises all or part of the Exchange Property,
based on the value of such property, as determined by a nationally
recognized independent investment banking firm retained by the Company for
this purpose, and the term "Closing Price" shall be deemed to refer to the
closing sale price, last quoted bid price or mid-point of the last bid and
ask prices, as the case may be, of any publicly traded securities that
comprise all or part of the Exchange Property.
In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person which acquires the
assets of the Company or, in the event of a liquidation, dissolution or
termination of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Purchase Contract
Agent an agreement supplemental hereto providing that each Holder of an
Outstanding Security shall have the rights provided by this Section
5.04(b). Such supplemental agreement shall provide for adjustments which,
for events subsequent to the effective date of such supplemental agreement,
shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 5.04. The above provisions of this Section
5.04 shall similarly apply to successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with
or into another Person, any merger of another Person into the Company
(other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock)
in which 30% or more of the total consideration paid to the Company's
shareholders consists of cash or cash equivalents (a "Cash Merger"), then a
Holder of a Security may settle his Purchase Contract for cash as described
in Section 5.02(b)(i) or 5.02(e)(i) hereof, as applicable, on or after the
date of such Cash Merger, at the applicable Settlement Rate. Within five
Business Days of the completion of a Cash Merger, the Company shall provide
written notice to Holders of Securities of such completion of a Cash
Merger, which shall specify the deadline for submitting a notice of Early
Settlement pursuant to this Section 5.04(b)(2), the date on which such
Early Settlement shall occur (the "Early Settlement Date"), the applicable
Settlement Rate and the amount (per share of common stock) of cash,
securities and other consideration receivable by the Holder upon
settlement. For the purposes of this Section 5.04(b)(2), the sixteenth
Business Day after the closing of the merger or consolidation shall be
deemed to be the Purchase Contract Settlement Date for the purpose of
determining the Applicable Market Value and the deadline for submitting the
notice to settle early and the related cash payment shall be 5:00 p.m. (New
York City time) on the tenth Business Day after the date the notice
relating to a Cash Merger is provided to the Holders by the Company. Growth
PACS Holders may only effect Early Settlement pursuant to this Section
5.04(b)(2) in integral multiples of [40] Purchase Contracts. If a Tax Event
Redemption or a Successful Initial Remarketing has occurred, Income PACS
Holders may only effect Early Settlement pursuant to this Section
5.04(b)(2) in integral multiples of [________] Purchase Contracts. Other
than the provisions relating to timing of notice and settlement, which
shall be as set forth above, the provisions of Section 5.01(a) shall apply
with respect to an Early Settlement following a Cash Merger pursuant to
this Section 5.04(b)(2). Notwithstanding the foregoing, no Early Settlement
will be permitted pursuant to this Section 5.04(b)(2) unless, at the time
such Early Settlement is effected, there is an effective Registration
Statement with respect to the shares of Common Stock to be issued and
delivered in connection with such early settlement, if such a Registration
Statement is required (in the view of counsel, which need not be in the
form of a written opinion, for either the Company or the Purchase Contract
Agent) under the Securities Act. If such a Registration Statement is so
required, the Company covenants and agrees to use its best efforts to (A)
have in effect a Registration Statement covering the shares of Common Stock
to be delivered in respect of the Purchase Contracts being settled and (B)
provide a Prospectus in connection therewith, in each case in a form that
the Purchase Contract Agent may use in connection with such early settlement.
(c) All calculations and determinations pursuant to this Section
5.04 shall be made by the Company or its agent and the Purchase Contract
Agent shall have no responsibility with respect thereto.
SECTION 5.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided,
the Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with Section 5.04 and prepare and transmit to the
Purchase Contract Agent an Officers' Certificate setting forth the
Settlement Rate, the method of calculation thereof in reasonable
detail, and the facts requiring such adjustment and upon which
such adjustment is based; and
(ii) within 10 Business Days following the occurrence of
an event that requires an adjustment to the Settlement Rate
pursuant to Section 5.04 (or if the Company is not aware of such
occurrence, as soon as practicable after becoming so aware),
provide a written notice to the Holders of the Securities of the
occurrence of such event and a statement in reasonable detail
setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement
Rate.
(b) The Purchase Contract 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
Purchase Contract Agent shall not be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or delivered
with respect to any Purchase Contract; and the Purchase Contract Agent
makes no representation with respect thereto. The Purchase Contract Agent
shall not be responsible for any failure of the Company to issue, transfer
or deliver any shares of Common Stock pursuant to a Purchase Contract or to
comply with any of the duties, responsibilities or covenants of the Company
contained in this Article.
SECTION 5.06. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
any Purchase Contract Payments (including any deferred or accrued and
unpaid Purchase Contract Payments), if the Company shall have such
obligation, and the rights and obligations of Holders to purchase Common
Stock, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, prior to or on the Purchase Contract Settlement Date, a
Termination Event shall have occurred.
Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Notes, the
Treasury Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, forming part of such Securities, in
accordance with the provisions of Section 5.04 of the Pledge Agreement.
Upon the occurrence of a Termination Event, the Company shall promptly but
in no event later than two Business Days thereafter give written notice to
the Purchase Contract Agent, the Collateral Agent and the Holders, at their
addresses as they appear in the Security Register.
SECTION 5.07. Intentionally Omitted.
SECTION 5.08. Intentionally Omitted.
SECTION 5.09. No Fractional Shares.
No fractional shares or scrip representing fractional shares of
Common Stock shall be issued or delivered upon settlement on the Purchase
Contract Settlement Date or upon Early Settlement 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 Purchase Contract 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 Purchase Contract Agent from time to
time with sufficient funds to permit the Purchase Contract Agent to make
all cash payments required by this Section 5.09 in a timely manner.
SECTION 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of Common
Stock pursuant to the Purchase Contracts; provided, however, that the
Company shall not be required to pay any such tax or taxes which may be
payable in respect of any exchange of or substitution for a Certificate
evidencing a 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
Purchase Contract Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer
or issuance thereof shall have paid to the Company the amount of such tax
or shall have established to the satisfaction of the Company that such tax
has been paid.
SECTION 5.11. Purchase Contract Payments.
(a) Subject to Section 5.12, the Company shall pay, on each
Payment Date, the Purchase Contract Payments payable in respect of each
Purchase Contract to the Person in whose name a Certificate is registered
at the close of business on the Record Date next preceding such Payment
Date. The Purchase Contract Payments will be payable at the office of the
Purchase Contract Agent in New York City maintained for that purpose or, at
the option of the Holder, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Security
Register. If any date on which Purchase Contract Payments are to be made is
not a Business Day, then payment of the Purchase Contract Payments payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest in respect of any such delay). Purchase Contract
Payments payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay future Purchase Contract Payments (including any accrued
or deferred Purchase Contract Payments) shall cease.
(c) Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including as
a result of a Collateral Substitution or the reestablishment of Income
PACS) any other Certificate shall carry the right to accrued or deferred
and unpaid Purchase Contract Payments and the right to accrue Purchase
Contract Payments, which rights were carried by the Purchase Contracts
underlying such other Certificates.
(d) Subject to Section 5.04(b)(2), in the case of any Security
with respect to which Early Settlement of the underlying Purchase Contract
is effected on a date that is after any Record Date and prior to or on the
next succeeding Payment Date, Purchase Contract Payments otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding
such Early Settlement, and such Purchase Contract Payments shall be paid to
the Person in whose name the Certificate evidencing such Security 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 Early Settlement of the
underlying Purchase Contract is effected, Purchase Contract Payments that
would otherwise be payable after the Early Settlement Date with respect to
such Purchase Contract shall not be payable.
(e) The Company's obligations with respect to Purchase Contract
Payments, if any, will be subordinated and junior in right of payment to
the Company's obligations under any Senior Indebtedness.
(f) In the event (x) of any payment by, or distribution of assets
of, the Company of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, or (y) subject
to the provisions of Section 5.11(h) below, that (i) a default shall have
occurred and be continuing with respect to the payment of principal,
interest or any other monetary amounts due and payable on any Senior
Indebtedness and such default shall have continued beyond the period of
grace, if any, specified in the instrument evidencing such Senior
Indebtedness (and the Purchase Contract Agent shall have received written
notice thereof from the Company or one or more holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Senior Indebtedness
may have been issued), or (ii) the maturity of any Senior Indebtedness
shall have been accelerated because of a default in respect of such Senior
Indebtedness (and the Purchase Contract Agent shall have received written
notice thereof from the Company or one or more holders of Senior
Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Senior Indebtedness
may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of clause (x) above, payment of
all amounts due or to become due upon all Senior Indebtedness and,
in the case of subclauses (i) and (ii) of clause (y) above,
payment of all amounts due thereon, or provision shall be made for
such payment in money or money's worth, before the Holders of any
of the Securities are entitled to receive any Purchase Contract
Payments on the Purchase Contracts underlying the Securities;
(ii) any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property or
securities, to which the Holders of any of the Securities would be
entitled except for the provisions of Section 5.11(e) through (q),
including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of
the Company being subordinated to the payment of such Purchase
Contract Payments on the Purchase Contracts underlying the
Securities, shall be paid or delivered by the Person making such
payment or distribution, whether a trustee in bankruptcy, a
receiver or liquidating trustee or otherwise, directly to the
holders of such Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior
Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Senior
Indebtedness held or represented by each, to the extent necessary
to make payment in full of all Senior Indebtedness remaining
unpaid after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders of such Senior
Indebtedness, before any payment or distribution is made of such
Purchase Contract Payments to the Holders of such Securities; and
(iii) in the event that, notwithstanding the foregoing,
any payment by, or distribution of assets of, the Company of any
kind or character, whether in cash, property or securities,
including any such payment or distribution which may be payable or
deliverable by reason of the payment of any other indebtedness of
the Company being subordinated to the payment of Purchase Contract
Payments on the Purchase Contracts underlying the Securities,
shall be received by the Purchase Contract Agent or the Holders of
any of the Securities when such payment or distribution is
prohibited pursuant to Section 5.11(e) through (q), such payment
or distribution shall be paid over to the holders of such Senior
Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of
all Senior Indebtedness remaining unpaid until all such Senior
Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution (or provision therefor) to
the holders of such Senior Indebtedness.
(g) For purposes of Section 5.11(e) through (q), the words "cash,
property or securities" shall not be deemed to include shares of stock of
the Company as reorganized or readjusted, or securities of the Company or
any other Person provided for by a plan of reorganization or readjustment,
the payment of which is subordinated at least to the extent provided in
Section 5.11(e) through (q) with respect to such Purchase Contract Payments
on the Securities to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the indebtedness or guarantee of
indebtedness, as the case may be, that constitutes Senior Indebtedness is
assumed by the Person, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Senior Indebtedness
are not, without the consent of each such holder adversely affected
thereby, altered by such reorganization or readjustment;
(h) Any failure by the Company to make any payment on or perform
any other obligation under Senior Indebtedness, other than any indebtedness
incurred by the Company or assumed or guaranteed, directly or indirectly,
by the Company for money borrowed (or any deferral, renewal, extension or
refunding thereof) or any indebtedness or obligation as to which the
provisions of Section 5.11(e) through (g) shall have been waived by the
Company in the instrument or instruments by which the Company incurred,
assumed, guaranteed or otherwise created such indebtedness or obligation,
shall not be deemed a default or event of default if (i) the Company shall
be disputing its obligation to make such payment or perform such obligation
and (ii) either (A) no final judgment relating to such dispute shall have
been issued against the Company which is in full force and effect and is
not subject to further review, including a judgment that has become final
by reason of the expiration of the time within which a party may seek
further appeal or review, and (B) in the event a judgment that is subject
to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay of
execution shall have been obtained pending such appeal or review.
(i) Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all obligations of the Company which by their express terms are
subordinated to Senior Indebtedness of the Company to the same extent as
payment of the Purchase Contract Payments in respect of the Purchase
Contracts underlying the Securities is subordinated and which are entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until all
such Purchase Contract Payments owing on the Securities shall be paid in
full, and as between the Company, its creditors other than holders of such
Senior Indebtedness and the Holders, no such payment or distribution made
to the holders of Senior Indebtedness by virtue of Section 5.11(e) through
(q) that otherwise would have been made to the Holders shall be deemed to
be a payment by the Company on account of such Senior Indebtedness, it
being understood that the provisions of Section 5.11(e) through (q) are and
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
(j) Nothing contained in Section 5.11(e) through (q) or elsewhere
in this Agreement or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness and the Holders, the obligation of the Company, which is
absolute and unconditional, to pay to the Holders such Purchase Contract
Payments on the Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect
the relative rights of the Holders and creditors of the Company other than
the holders of Senior Indebtedness, nor shall anything herein or therein
prevent the Purchase Contract Agent or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Agreement, subject to the rights, if any, under Section 5.11(e) through
(q), of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
(k) Upon payment or distribution of assets of the Company referred
to in Section 5.11(e) through (q), the Purchase Contract Agent and the
Holders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which any such dissolution, winding up,
liquidation or reorganization proceeding affecting the affairs of the
Company is pending or upon a certificate of the trustee in bankruptcy,
receiver, assignee for the benefit of creditors, liquidating trustee or
Purchase Contract Agent or other person making any payment or distribution,
delivered to the Purchase Contract Agent or to the Holders, for the purpose
of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto
or to these Section 5.11(e) through (q).
(l) The Purchase Contract Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee or representative on behalf of
such holder) to establish that such notice has been given by a holder of
Senior Indebtedness or a trustee or representative on behalf of any such
holder or holders. In the event that the Purchase Contract Agent determines
in good faith that further evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to Section 5.11(e) through (q), the
Purchase Contract Agent may request such Person to furnish evidence to the
reasonable satisfaction of the Purchase Contract Agent as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under Section 5.11(e) through (q),
and, if such evidence is not furnished, the Purchase Contract Agent may
defer payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
(m) Nothing contained in Section 5.11(e) through (q) shall affect
the obligations of the Company to make, or prevent the Company from making,
payment of the Purchase Contract Payments, except as otherwise provided in
these Section 5.11(e) through (q).
(n) Each Holder of Securities, by his acceptance thereof,
authorizes and directs the Purchase Contract Agent on his, her or its
behalf to take such action as may be necessary or appropriate to effectuate
the subordination provided in Subsections 5.2 (b) through (n) and appoints
the Purchase Contract Agent his, her or its attorney-in-fact, as the case
may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Purchase
Contract Agent of any fact known to the Company that would prohibit the
making of any payment of moneys to or by the Purchase Contract Agent in
respect of the Securities pursuant to the provisions of this Section.
Notwithstanding the provisions of Subsections 5.2(b) through (e) or any
other provisions of this Agreement, the Purchase Contract Agent shall not
be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of moneys to or by the Purchase Contract Agent,
or the taking of any other action by the Purchase Contract Agent, unless
and until the Purchase Contract Agent shall have received written notice
thereof mailed or delivered to the Purchase Contract Agent at its
Institutional Trust Services department from the Company, any Holder, any
paying Purchase Contract Agent or the holder or representative of any
Senior Indebtedness; provided that if at least two Business Days prior to
the date upon which by the terms hereof any such moneys may become payable
for any purpose, the Purchase Contract Agent shall not have received with
respect to such moneys the notice provided for in this Section, then,
anything herein contained to the contrary notwithstanding, the Purchase
Contract Agent shall have full power and authority to receive such moneys
and to apply the same to the purpose for which they were received and shall
not be affected by any notice to the contrary that may be received by it
within two Business Days prior to or on or after such date.
(p) The Purchase Contract Agent in its individual capacity shall
be entitled to all the rights set forth in this Section with respect to any
Senior Indebtedness at the time held by it, to the same extent as any other
holder of Senior Indebtedness and nothing in this Agreement shall deprive
the Purchase Contract Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in
any way be prejudiced or impaired by any act or failure to act on the part
of the Company or by any noncompliance by the Company with the terms,
provisions and covenants of this Agreement, regardless of any knowledge
thereof which any such holder may have or be otherwise charged with.
(r) Nothing in this Section 5.11 shall apply to claims of, or
payments to, the Purchase Contract Agent under or pursuant to Section 7.07.
(s) With respect to the holders of Senior Indebtedness, (i) the
duties and obligations of the Purchase Contract Agent shall be determined
solely by the express provisions of this Agreement; (ii) the Purchase
Contract Agent shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement;
(iii) no implied covenants or obligations shall be read into this Agreement
against the Purchase Contract Agent; and (iv) the Purchase Contract Agent
shall not be deemed to be a fiduciary as to such holders.
SECTION 5.12. Deferral of Purchase Contract Payments.
(a) The Company has the right to defer payment of all or part of
the Purchase Contract Payments in respect of each Purchase Contract until
no later than the Purchase Contract Settlement Date, but only if the
Company shall give the Holders and the Purchase Contract 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
Purchase Contract Payments to the NYSE or other applicable self-regulatory
organization or to Holders of the Securities, but in any event not less
than one Business Day prior to such Record Date. If the Company so elects
to defer Purchase Contract Payments, the Company shall pay additional
Purchase Contract Payments on such deferred installments of Purchase
Contract Payments at a rate equal to ___% per annum, compounding quarterly,
until such deferred installments are paid in full. Deferred Purchase
Contract Payments shall be due on the Payment Date except to the extent
that payment is deferred pursuant to this Section. Except as otherwise
provided in Section 5.11(d), in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on
an Early Settlement Date, the Holder will have no right to receive any
accrued or deferred Purchase Contract Payments.
(b) In the event the Company elects to defer the payment of
Purchase Contract Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date the aggregate amount of accrued and unpaid Purchase
Contract Payments. The Company shall pay such amounts on the Purchase
Contract Settlement Date in the manner described in Section 5.02(f).
(c) In the event the Company exercises its option to defer the
payment of Purchase Contract Payments, then, until all deferred Purchase
Contract Payments have been paid, the Company shall not, and shall not
permit any of its subsidiaries to (a) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities that rank junior to the Notes in the right of payment issued by
the Company or any subsidiary of the Company, or (b) make any guarantee
payments with respect to any guarantee by the Company of any securities of
any of its subsidiaries if such guarantee ranks junior to the Notes in the
right of payment, (c) declare or pay any dividends or distributions on any
of the Company's capital stock or (d) redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock.
Notwithstanding the foregoing, the Company may (1) purchase or acquire its
capital stock in connection with the satisfaction by it of its obligations
under any employee benefit plans or pursuant to any contract or security
outstanding on the first day of any such event requiring it to purchase its
capital stock; (2) reclassify its capital stock or exchange or convert one
class or series of its capital stock for another class or series of its
capital stock; (3) purchase fractional interests in shares of its capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; (4) declare dividends
or distributions in its capital stock; and (5) redeem or repurchase any
rights pursuant to a rights agreement.
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Purchase
Contract Payments and to Purchase Shares of Common Stock.
Each Holder of a Security shall have the right, which is absolute
and unconditional, (i) subject to the right of the Company to defer such
payments in accordance with Section 5.12, to receive each Purchase Contract
Payment with respect to the Purchase Contract comprising part of such
Security on the respective Payment Date for such Security and (ii) to
purchase shares of Common Stock pursuant to such Purchase Contract and, in
each such case, to institute suit for the enforcement of any such right to
receive Purchase Contract Payments and the right to purchase shares of
Common Stock, and such rights shall not be impaired without the consent of
such Holder.
SECTION 6.02. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right
or remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such
proceeding, the Company and such Holder shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of such Holder shall continue as though no such proceeding had
been instituted.
SECTION 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in 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 6.04. 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 6.05. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a
Security, by its acceptance of such Security shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit
against the Purchase Contract Agent for any action taken, suffered or
omitted by it as Purchase Contract Agent, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and costs against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Purchase Contract Agent, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% of the Outstanding Securities, or to any suit instituted by
any Holder for the enforcement of interest on any Notes or Purchase
Contract Payments 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 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Agreement; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Purchase
Contract Agent or the Holders, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) 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 or the Pledge Agreement against the Purchase
Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part,
may, with respect to the 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 Purchase Contract Agent and
conforming to the requirements of this Agreement or the Pledge Agreement,
as applicable, but in the case of any certificates or opinions which by any
provision hereof are specifically required to be furnished to the Purchase
Contract Agent, the Purchase Contract Agent shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Agreement or the Pledge Agreement, as applicable (but
need not confirm or investigate the accuracy of the mathematical
calculations or other facts stated therein).
(b) No provision of this Agreement or the Pledge Agreement shall
be construed to relieve the Purchase Contract Agent from liability for its
own grossly negligent action, its own grossly negligent failure to act, or
its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Purchase Contract Agent was negligent in
ascertaining the pertinent facts;
(3) no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
indemnity satisfactory to the Purchase Contract Agent is not provided to
it; and
(4) the Purchase Contract Agent shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority in principal
amount of the Outstanding Securities.
(c) Whether or not therein expressly so provided, every provision
of this Agreement and the Pledge Agreement relating to the conduct or
affecting the liability of or affording protection to the Purchase Contract
Agent shall be subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and
deliver the Pledge Agreement in its capacity as Purchase Contract Agent.
SECTION 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and addresses appear
in the Security Register, notice of such default hereunder, unless such
default shall have been cured or waived.
SECTION 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, Note, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate, Issuer Order
or Issuer Request, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the
Pledge Agreement the Purchase Contract Agent shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Purchase Contract Agent (unless other evidence be
herein specifically prescribed) may, in the absence of bad faith on its
part, conclusively rely upon an Officers' Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Purchase Contract Agent,
in its discretion, and at the expense of the Company, may make reasonable
further inquiry or investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as it may see
fit, and, if the Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable
opportunity to examine the relevant books, records and premises of the
Company, personally or by agent or attorney and shall incur no liability or
additional liability of any kind by reason of such inquiry or
investigation;
(6) the Purchase Contract 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 and the Purchase Contract 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;
(7) the Purchase Contract Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Holders pursuant to this Agreement,
unless such Holders shall have offered to the Purchase Contract Agent
security or indemnity satisfactory to the Purchase Contract Agent against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(8) the Purchase Contract Agent shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(9) the Purchase Contract Agent shall not be deemed to have
notice of any default hereunder unless a Responsible Officer of the
Purchase Contract Agent has actual knowledge thereof or unless written
notice of any event which is in fact such a default is received by the
Purchase Contract Agent at the Corporate Trust Office of the Purchase
Contract Agent, and such notice references the Securities and this
Agreement;
(10) the Purchase Contract Agent may request that the Company
deliver an Officers' Certificate setting forth the names of individuals
and/or titles of officers authorized at such time to take specified actions
pursuant to this Agreement, which Officers' Certificate may be signed by
any person authorized to sign an Officers' Certificate, including any
person specified as so authorized in any such certificate previously
delivered and not superseded; and
(11) the rights, privileges, protections, immunities and benefits
given to the Purchase Contract Agent, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by, the
Purchase Contract Agent in each of its capacities hereunder, and to each
agent, custodian and other Person employed to act hereunder.
SECTION 7.04. 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 Purchase Contract Agent
assumes no responsibility for their accuracy. The Purchase Contract 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 Purchase Contract Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase
Contracts.
SECTION 7.05. May Hold Securities.
Any Security Registrar or any other agent of the Company, or the
Purchase Contract Agent and its Affiliates, in their individual or any
other capacity, may become the owner or pledgee of 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 Security Registrar or
such other agent, or the Purchase Contract Agent. The Company may become
the owner or pledgee of Securities.
SECTION 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder
need not be segregated from the other funds except to the extent required
by law or provided herein. The Purchase Contract Agent shall be under no
obligation to invest or pay interest on any money received by it hereunder
except as otherwise provided hereunder or agreed in writing with the
Company.
SECTION 7.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the
Company and the Purchase Contract Agent shall from time to time agree in
writing;
(2) except as otherwise expressly provided for herein, to
reimburse the Purchase Contract Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Purchase
Contract Agent in accordance with any provision of this Agreement and the
Pledge 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 gross negligence,
willful misconduct or bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense incurred without gross 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 (whether asserted by the
Company, a Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The provisions of this Section shall survive the resignation and
removal of the Purchase Contract Agent and the termination of this
Agreement.
SECTION 7.08. Corporate Purchase Contract Agent Required;
Eligibility.
There shall at all times be a Purchase Contract Agent hereunder
which shall be a 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 member of a bank holding company having) a combined
capital and surplus of at least $50,000,000, subject to supervision or
examination by Federal or State authority and having a corporate trust
office in the Borough of Manhattan, New York City, if there be such a
corporation in the Borough of Manhattan, New York City, 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 Purchase Contract Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and
no appointment of a successor Purchase Contract Agent pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Purchase Contract Agent in accordance with the applicable
requirements of Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date
of such resignation. If the instrument of acceptance by a successor
Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after the giving of
such notice of resignation, the resigning Purchase Contract Agent may
petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act
of the Holders of a majority in number of the Outstanding Securities
delivered to the Purchase Contract Agent and the Company. If the instrument
of acceptance by a successor Purchase Contract Agent required by Section
7.10 shall not have been delivered to the Purchase Contract Agent within 30
days after the giving of such notice of resignation, the resigning Purchase
Contract Agent may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with
Section 310(b) of the TIA, as if the Purchase Contract Agent were
an indenture trustee under an indenture qualified under the TIA,
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;
(2) the Purchase Contract Agent shall cease to be
eligible under Section 7.08 and shall fail to resign after written
request therefor by the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver
of the Purchase Contract Agent or of its property shall be
appointed or any public officer shall take charge or control of
the Purchase Contract Agent or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Purchase Contract Agent, or (ii) any Holder who has been a bona fide
Holder of a 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 Purchase Contract Agent and the appointment of a
successor Purchase Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board Resolution,
shall promptly appoint a successor Purchase Contract Agent and shall comply
with the applicable requirements of Section 7.10. If no successor Purchase
Contract Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder who has been
a bona fide Holder of a Security for at least six months, on behalf of
itself and all others similarly situated, or the Purchase Contract Agent
may petition at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase
Contract Agent by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders as their names and addresses appear in the
applicable Register. Each notice shall include the name of the successor
Purchase Contract Agent and the address of its Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Purchase Contract Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Purchase Contract
Agent shall become effective and such successor Purchase Contract Agent,
without any further act, deed or conveyance, shall become vested with all
the rights, powers, agencies and duties of the retiring Purchase Contract
Agent; but, on the request of the Company or the successor Purchase
Contract Agent, such retiring Purchase Contract Agent shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Purchase Contract Agent all the rights, powers and trusts of the
retiring Purchase Contract Agent and shall duly assign, transfer and
deliver to such successor Purchase Contract Agent all property and money
held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent,
the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Purchase Contract
Agent all such rights, powers and agencies referred to in paragraph 7.10(a)
of this Section.
(c) No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Purchase Contract 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 Purchase Contract Agent shall be a party, or any corporation succeeding
to all or substantially all the corporate trust business of the Purchase
Contract Agent, shall be the successor of the Purchase Contract Agent
hereunder, provided that such 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 Purchase Contract Agent then in office,
any successor by merger, conversion or consolidation to such Purchase
Contract Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Purchase Contract Agent had itself authenticated and executed
such Securities.
SECTION 7.12. Preservation of Information; Communications to
Holders.
(a) The Purchase Contract Agent shall preserve, in as current a
form as is reasonably practicable, the names and addresses of Holders
received by the Purchase Contract Agent in its capacity as Security
Registrar.
(b) If three or more Holders (herein referred to as "Applicants")
apply in writing to the Purchase Contract Agent, and furnish to the
Purchase Contract Agent reasonable proof that each such applicant has owned
a 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 Purchase Contract Agent shall mail to all the Holders copies of
the form of proxy or other communication which is specified in such
request, with reasonable promptness after a tender to the Purchase Contract
Agent of the materials to be mailed and of payment, or provision for the
payment, of the reasonable expenses of such mailing.
SECTION 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this
Agreement, the Purchase Contract Agent assumes no obligations and shall not
be subject to any liability under this Agreement, the Pledge Agreement 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 or her acceptance thereof, shall be deemed to have agreed, that the
Purchase Contract Agent's execution of the Certificates on behalf of the
Holders shall be solely as agent and attorney-in-fact for the Holders, and
that the Purchase Contract Agent shall have no obligation to perform such
Purchase Contracts on behalf of the Holders, except to the extent expressly
provided in Article Five hereof. Anything contained in this Agreement to
the contrary notwithstanding, in no event shall the Purchase Contract Agent
or its officers, 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 Purchase Contract Agent,
incurred without any act or deed that is found to be attributable to gross
negligence or willful misconduct on the part of the Purchase Contract
Agent.
SECTION 7.14. Tax Compliance.
(a) The Company and the Purchase Contract Agent 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 Purchase Contract Agent shall comply in accordance with
the terms hereof with any written direction received from the Company with
respect to the execution or certification of any required documentation and
the application of such requirements to particular payments or Holders or
in other particular circumstances, and may for purposes of this Agreement
conclusively rely on any such direction in accordance with the provisions
of Section 7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make such
records available, on written request, to the Company or its authorized
representative within a reasonable period of time after receipt of such
request.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Purchase
Contract Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the Company
and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants
of the Company herein and in the Certificates;
(2) evidence and provide for the acceptance of
appointment hereunder by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit
of the Holders, or
surrender any right or power herein conferred upon the Company;
(4) make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.04(b); or -------
(5) except as provided for in Section 5.04, cure any
ambiguity, correct or supplement any provisions herein which may
be inconsistent with any other provisions herein, or make any
other provisions with respect to such matters or questions arising
under this Agreement, provided that such action shall not
adversely affect the interests of the Holders.
SECTION 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract Agent may enter
into an agreement or agreements supplemental hereto for the purpose of
modifying in any manner the terms of the Purchase Contracts, or the
provisions of this Agreement or the rights of the Holders in respect of the
Securities; provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the unanimous consent of the Holders
of each outstanding Purchase Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required
to be Pledged to secure a Holder's obligations under the Purchase
Contract, 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 PACS to substitute Treasury Securities
for the Pledged Notes or the rights of Holders of Growth PACS to
substitute Notes for the Pledged Treasury Securities) or otherwise
adversely affect the Holder's rights in or to such Collateral or
adversely alter the rights in or to such Collateral;
(3) impair the right to institute suit for the
enforcement of any Purchase Contract;
(4) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the price to
purchase shares of Common Stock upon settlement of any Purchase
Contract or change the Purchase Contract Settlement Date or the
right to Early Settlement following a Cash Merger or otherwise
adversely affect the Holder's rights under the Purchase Contract;
(5) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any such
supplemental agreement; or
(6) reduce any Purchase Contract Payments or change any
place where, or the coin or currency in which, any Purchase
Contract Payment is payable;
provided that if any amendment or proposal referred to above would
adversely affect only the Income PACS or the Growth PACS, then only the
affected class of Holders as of the record date for the Holders entitled to
vote thereon will be entitled to vote on such amendment or proposal, and
such amendment or proposal shall not be effective except with the consent
of Holders of not less than a majority of such class; and provided,
further, that the unanimous consent of the Holders of each outstanding
Purchase Contract of such class affected thereby shall be required to
approve any amendment or proposal specified in clauses (1) through (6)
above.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications
thereby of the agencies created by this Agreement, the Purchase Contract
Agent shall be provided, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement and that any and all conditions
precedent to the execution and delivery of such supplemental agreement have
been satisfied. The Purchase Contract Agent may, but shall not be obligated
to, enter into any such supplemental agreement which affects the Purchase
Contract Agent's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered hereunder,
shall be bound thereby.
SECTION 8.05. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to
this Article may, and shall if required by the Purchase Contract Agent,
bear a notation in form approved by the Purchase Contract Agent as to any
matter provided for in such supplemental agreement. If the Company shall so
determine, new Certificates so modified as to conform, in the opinion of
the Purchase Contract Agent and the Company, to any such supplemental
agreement may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract
Agent in exchange for outstanding Certificates.
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer
or Lease Property Except under Certain Conditions.
The Company covenants that it will not consolidate with or merge
into any other corporation or convey, transfer or lease all or
substantially all of its properties and assets to any Person, 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
Pledge Agreement, the Indenture (including any supplement thereto)
and the Remarketing Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Purchase
Contract Agent and the Collateral Agent, executed and delivered to
the Purchase Contract Agent and the Collateral Agent by such
corporation; and
(ii) the Company or such successor corporation, as the
case may be, shall not, immediately after such consolidation,
merger, conveyance, transfer or lease, be in default in the
performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
SECTION 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the
same effect as if it had been named herein as the Company. Such successor
corporation thereupon may cause to be signed, and may issue either in its
own name or in the name of The Williams Companies, Inc., any or all of the
Certificates evidencing Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Purchase
Contract Agent; and, upon the order of such successor corporation, instead
of the Company, and subject to all the terms, conditions and limitations in
this Agreement prescribed, the Purchase Contract Agent shall authenticate
and execute on behalf of the Holders and deliver any Certificates which
previously shall have been signed and delivered by the officers of the
Company to the Purchase Contract Agent for authentication and execution,
and any Certificate evidencing Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Purchase Contract
Agent for that purpose. All the Certificates issued shall in all respects
have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms
of this Agreement as though all of such Certificates had been issued at the
date of the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and
form (but not in substance) may be made in the Certificates evidencing
Securities thereafter to be issued as may be appropriate.
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given
to Purchase Contract Agent.
The Purchase Contract Agent, subject to Sections 7.01 and 7.03,
shall receive an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any such merger, consolidation, share exchange,
sale, assignment, transfer, lease or conveyance, and any such assumption,
complies with the provisions of this Article and that all conditions
precedent to the consummation of any such merger, consolidation, share
exchange, sale, assignment, transfer, lease or conveyance have been met.
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders
from time to time of the 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 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York
City an office or agency where Certificates may be presented or surrendered
for acquisition of shares of Common Stock upon settlement of the Purchase
Contracts on the Purchase Contract Settlement Date or 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 reestablishment of Income PACS 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 Purchase Contract Agent of the location, and any change in the
location, of such office or agency. The Company initially designates the
Corporate Trust Office of the Purchase Agent as such office of the Company.
If at any time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Purchase Contract Agent with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Company hereby
appoints the Purchase Contract Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for
any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, New York City for such
purposes. The Company will give prompt written notice to the Purchase
Contract Agent of any such designation or rescission and of any change in
the location of any such other office or agency. The Company hereby
designates as the place of payment for the Securities the Corporate Trust
Office and appoints the Purchase Contract Agent at its Corporate Trust
Office as paying agent in such city.
SECTION 10.03. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights,
out of its authorized but unissued Common Stock the full number of shares
of Common Stock issuable against tender of payment in respect of all
Purchase Contracts constituting a part of the Securities evidenced by
Outstanding Certificates.
SECTION 10.04. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Securities will, upon issuance, be
duly authorized, validly issued, fully paid and nonassessable.
SECTION 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within
120 days after the end of each fiscal year of the Company (which as of the
date hereof is December 31) ending after the date hereof, an Officers'
Certificate (one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Company), stating whether or not to the knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
terms, provisions and conditions hereof, and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 10.06. ERISA.
Each Holder from time to time of the Securities that is a Plan
hereby represents that its acquisition of the Income PACS and the holding
of the same satisfies the applicable fiduciary requirements of ERISA and
that it is entitled to exemption relief from the prohibited transaction
provisions of ERISA and the Code in accordance with one or more prohibited
transaction exemptions or otherwise will not result in a nonexempt
prohibited transaction.
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
THE WILLIAMS COMPANIES, INC.
By:
------------------------------
Name:
Title:
[ ],
as Purchase Contract Agent
By:
------------------------------
Name:
Title:
EXHIBIT A
FACE OF Income PACS CERTIFICATE
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF CEDE & CO., AS THE NOMINEE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY 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
DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
No. ____ CUSIP No._____________
Number of Income PACS:______________
THE WILLIAMS COMPANIES, INC.
Income PACS
This Income PACS Certificate certifies that ___________________ is
the registered Holder of the number of Income PACS set forth above. Each
Income PACS consists of (i) either (a) the beneficial ownership by the
Holder of $__ principal amount of Notes due 2007 (the "Notes") of The
Williams Companies, Inc., a Delaware corporation (the "Company"), subject
to the Pledge of such Note by such Holder pursuant to the Pledge Agreement,
or (b) upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date or a Successful Initial Remarketing, the
appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) 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 Company. All capitalized
terms used herein which are defined in the Purchase Contract Agreement (as
defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, constituting
part of each Income PACS evidenced hereby has been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising part of such Income
PACS.
The Pledge Agreement provides that all payments of the principal
amount with respect to any of the Pledged Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, or interest on
any Pledged Notes (as defined in the Pledge Agreement) or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition
of such term) of the Treasury Portfolio, as the case may be, constituting
part of the Income PACS received by the Securities Intermediary shall be
paid by wire transfer in same day funds (i) in the case of (A) interest on
Pledged Notes or cash distributions with respect to 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 principal amount of any Notes or liquidation amount with
respect to 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, that have been released from the Pledge pursuant to the
Pledge Agreement, to the Purchase Contract Agent to the account designated
by the Purchase Contract Agent, no later than 2:00 p.m., New York City
time, on the Business Day such payment is received by the Securities
Intermediary (provided that in the event such payment is received by the
Securities Intermediary on a day that is not a Business Day or after 12:30
p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the principal amount of
the Notes or the liquidation amount with respect to the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, to the Company on the Purchase
Contract Settlement Date (as described herein) in accordance with the terms
of the Pledge Agreement, in full satisfaction of the respective obligations
of the Holders of the Income PACS of which such Pledged Notes or the
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, are a part
under the Purchase Contracts forming a part of such Income PACS. Interest
on the Notes and 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 PACS
evidenced hereby, which are payable quarterly in arrears on
_______________, ___________________, ________________, and
________________ of each year, commencing ______________, 2002 (a "Payment
Date"), shall, subject to receipt thereof by the Purchase Contract Agent
from the Securities Intermediary, be paid to the Person in whose name this
Income PACS Certificate (or a Predecessor Income PACS 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 PACS Certificate to purchase, and the Company to sell, on
February 16, 2005 (the "Purchase Contract Settlement Date"), at a price
equal to $[25] (the "Stated Amount"), a number of shares of Common Stock,
par value $1.00 ("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 PACS 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 principal amount with
respect to any Pledged Notes pursuant to the Remarketing or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, pledged to
secure the obligations under such Purchase Contract of the Holder of the
Income PACS 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 PACS evidenced hereby, an
amount (the "Purchase Contract Payments") equal to ___% per year of the
Stated Amount. Such Purchase Contract Payments shall be payable to the
Person in whose name this Income PACS Certificate is registered at the
close of business on the Record Date for such Payment Date. The Company
may, at its option, defer such Purchase Contract Payments.
Interest on the Notes and distributions on the Applicable
Ownership Interest (as specified in clause (B) of the definition of such
term) and the Purchase Contract Payments will be payable at the office of
the Purchase Contract Agent in New York City or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Security 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 Purchase Contract Agent by manual signature, this Income PACS
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.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
THE WILLIAMS COMPANIES, INC.
By:
------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [ ],
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
DATED:__________________
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Income PACS Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: [ ],
as Purchase Contract Agent
By:
------------------------------------
Authorized Signatory
Dated: ____________________
(FORM OF REVERSE OF Income PACS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _____________, 2002 (as may be supplemented
from time to time, the "Purchase Contract Agreement"), between the Company
and [ ], as Purchase Contract Agent (including its successors hereunder,
the "Purchase Contract Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Income PACS Certificates are, and
are to be, executed and delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each
Purchase Contract evidenced hereby obligates the Holder of this Income PACS
Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of Common Stock equal to the Settlement Rate,
unless, prior to or on 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 or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is
greater than $______ (the "Appreciation Cap Price"), the number of
shares of Common Stock per Purchase Contract having a value, based
on the Applicable Market Value, equal to ____ multiplied by the
Appreciation Cap Price divided by the Applicable Market Value; and
(2) if the Applicable Market Value is less than or equal
to the Appreciation Cap Price, ______ shares of Common Stock per
Purchase Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
No fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts, as provided in Section 5.09 of the
Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of
the related Income PACS to purchase at the Purchase Price, and the Company
to sell, a number of shares of Common Stock equal to the 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.
The "Closing Price" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the close of the
principal trading session (or, if no closing price is reported,
the last reported sale price) per share on the New York Stock
Exchange, Inc. (the "NYSE") on such date;
(2) if Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price per share as reported in
the composite transactions for the principal United States
securities exchange on which Common Stock is so listed;
(3) if Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price
per share as reported by The Nasdaq Stock Market;
(4) if Common Stock is not so reported, the last quoted
bid price for Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization;
or
(5) if such bid price is not available, the market value
of Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this
purpose by the Company.
A "Trading Day" means a day on which Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Common Stock.
In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Income PACS Certificate may pay the Purchase Price for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby by effecting a Cash Settlement or an Early Settlement
following a Cash Merger or from the proceeds of the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio or a Remarketing of the related Pledged Notes. Unless a
Tax Event Redemption or a Successful Initial Remarketing has occurred, a
Holder of Income PACS who does not effect (1) on or prior to 11:00 a.m.
(New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, an effective Cash Settlement, or (2) on
or prior to 5:00 p.m. (New York City time) on the fifth Business Day prior
to the Purchase Contract Settlement Date an effective Early Settlement
following a Cash Merger, shall pay the Purchase Price for the shares of
Common Stock to be delivered under the related Purchase Contract from the
proceeds of the sale of the related Pledged Notes held by the Collateral
Agent. Unless a Tax Event Redemption or a Successful Initial Remarketing
has occurred, such sale will be made by the Remarketing Agent pursuant to
the terms of the Remarketing Agreement on the third Business Day prior to
the Purchase Contract Settlement Date. If a Tax Event Redemption or a
Successful Initial Remarketing has occurred, a Holder of Income PACS who
does not effect on or prior to 11:00 a.m. (New York City time) on the
second Business Day immediately preceding the Purchase Contract Settlement
Date, an effective Cash Settlement, shall pay the Purchase Price for the
shares of Common Stock to be delivered under the related Purchase Contract
from the proceeds at maturity of the Applicable Ownership Interests (as
defined in clause (A) of the definition of such term) of the Treasury
Portfolio.
If, as provided in the Purchase Contract Agreement, upon the
occurrence of a Failed Secondary Remarketing, the Collateral Agent, for the
benefit of the Company, exercises its rights as a secured creditor with
respect to the Pledged Notes related to this Income PACS certificate, any
accrued and unpaid interest on such Pledged Notes will become payable by
the Company to the holder of this Income PACS 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 of the
aggregate Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall occur. Upon the occurrence of a Termination Event,
the Company shall give written notice to the Purchase Contract Agent and to
the Holders, at their addresses as they appear in the Security Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Notes or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio forming a part of each Income PACS from the Pledge. An
Income PACS shall thereafter represent the right to receive the Note or the
appropriate Applicable Ownership Interest of the Treasury Portfolio forming
a part of such Income PACS in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
Under the terms of the Pledge Agreement, the Purchase Contract
Agent will be entitled to exercise the voting and any other consensual
rights pertaining to the Pledged Notes. Upon receipt of notice of any
meeting at which holders of Notes are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Notes, the
Purchase Contract Agent shall, as soon as practicable thereafter, mail to
the Income PACS Holders a notice:
(1) containing such information as is contained in the
notice or solicitation;
(2) stating that each Income PACS Holder on the record
date set by the Purchase Contract Agent therefor (which, to the
extent possible, shall be the same date as the record date for
determining the holders of Notes entitled to vote) shall be
entitled to instruct the Purchase Contract Agent as to the
exercise of the voting rights pertaining to the Notes constituting
a part of such Holder's Income PACS; and
(3) stating the manner in which such instructions may be
given.
Upon the written request of the Income PACS Holders on such record date,
the Purchase Contract Agent shall endeavor insofar as practicable to vote
or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum aggregate principal amount of Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of an Income PACS, the Purchase Contract Agent
shall abstain from voting the Note evidenced by such Income PACS.
Upon the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, an amount equal to the Redemption Amount
plus any accumulated and unpaid interest payable on the Tax Event
Redemption Date with respect to the principal amount of the Notes shall be
deposited in the Collateral Account in exchange for the Pledged Notes.
Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral
Agent shall cause the Securities Intermediary to apply an amount equal to
the Redemption Amount of such funds to purchase on behalf of the Holders of
Income PACS, the Treasury Portfolio and promptly (a) transfer the
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio to the Collateral Account to secure
the obligations of each Holder of Income PACS to purchase shares of Common
Stock under the Purchase Contracts constituting a part of such Income PACS,
(b) transfer the Applicable Ownership Interest (as specified in clause (B)
of the definition of such term) of the Treasury Portfolio to the Purchase
Contract Agent for the benefit of the Holders of such Income PACS and (C)
remit the remaining portion of such funds to the Purchase Contract Agent
for payment to the Holders of such Income PACS.
Upon the occurrence of a Successful Initial Remarketing, pursuant
to the terms of the Remarketing Agreement, the Remarketing Agent will apply
an amount equal to the Treasury Portfolio Purchase Price to purchase on
behalf of the Holders of Income PACS, the Treasury Portfolio, and, after
deducting the Remarketing Fee to the extent permitted under the terms of
the Remarketing Agreement, promptly remit the remaining portion of such
proceeds of the Successful Initial Remarketing to the Purchase Contract
Agent for payment to the Holders of such Income PACS.
Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, or following a Successful Initial
Remarketing, the Holders of Income PACS and the Collateral Agent shall have
such security interest rights and obligations with respect to the
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio as the Holder of Income PACS and
the Collateral Agent had in respect of the Notes, as the case may be,
subject to the Pledge thereof as provided in the Pledge Agreement and any
reference herein to the Notes shall be deemed to be a reference to such
Treasury Portfolio.
The Income PACS Certificates are issuable only in registered form
and only in denominations of a single Income PACS and any integral multiple
thereof. The transfer of any Income PACS Certificate will be registered and
Income PACS Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company
and the Purchase Contract Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A Holder who elects to substitute a Treasury Security for a Note, thereby
creating Growth PACS, 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 PACS
remains in effect, such Income PACS shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such
Income PACS in respect of the Notes and Purchase Contract constituting such
Income PACS may be transferred and exchanged only as an Income PACS.
The Holder of Income PACS may substitute for the Pledged Notes
securing such Holder's obligations under the related Purchase Contracts
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of the Pledged Notes in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, each Security for which such Pledged Treasury
Securities secures the Holder's obligation under the Purchase Contract
shall be referred to as a "Growth PACS". A Holder may make such Collateral
Substitution only in integral multiples of [40] Income PACS for [40] Growth
PACS.
If the Treasury Portfolio has replaced the Notes as a component of
the Income PACS as a result of a Tax Event Redemption or a Successful
Initial Remarketing, an Income PACS Holder may make such Collateral
Substitutions only in integral multiples of _____ Income PACS.
A Holder of Growth PACS may recreate Income PACS by delivering to
the Securities Intermediary Notes with an aggregate principal amount equal
to the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities
in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement. A Holder may recreate Income PACS only in integral
multiples of [40] Growth PACS for [40] Income PACS.
If the Treasury Portfolio has replaced the Notes as a component of
the Income PACS as a result of a Tax Event Redemption or a Successful
Initial Remarketing, a Growth PACS Holder may recreate Income PACS only in
integral multiples of _____ Growth PACS.
The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in
whose name the Income PACS Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment
Date. Purchase Contract Payments will be payable at the office of the
Purchase Contract Agent in New York City or, at the option of the Holder,
by check mailed to the address of the Person entitled thereto at such
address as it appears on the Security Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no
later than the Purchase Contract Settlement Date. If the Company so elects
to defer Purchase Contract Payments, the Company shall pay additional
Purchase Contract Payments on such deferred installments of Purchase
Contract Payments at a rate equal to ___% per annum, compounding quarterly,
until such deferred installments are paid. In the event that the Company
elects to defer the payment of Purchase Contract Payments on the Purchase
Contracts until the Purchase Contract Settlement Date, each Holder will
receive on the Purchase Contract Settlement Date the aggregate amount of
accrued and unpaid Purchase Contract Payments.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
any Purchase Contract Payments, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Purchase Contract Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no
event later than two Business Days thereafter give written notice to the
Purchase Contract Agent, the Collateral Agent and the Holders, at their
addresses as they appear in the Security Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Notes or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, as
the case may be, from the Pledge in accordance with the provisions of the
Pledge Agreement.
Upon the occurrence of a Cash Merger, a Holder of Income PACS may
effect Early Settlement of the Purchase Contract underlying such Income
PACS pursuant to the terms of Section 5.04(b)(2) of the Purchase Contract
Agreement. Upon Early Settlement of Purchase Contracts by a Holder of the
related Income PACS, the Pledged Notes or Pledged Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio underlying such Income PACS shall be released from
the Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Income PACS Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Income PACS 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 PACS Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform
the related Purchase Contracts forming part of the Income PACS evidenced
hereby on its behalf as its attorney-in-fact, expressly withholds any
consent to the assumption (i.e., affirmance) of the Purchase Contracts by
the Company or its trustee in the event that the Company becomes the
subject of a case under the Bankruptcy Code, agrees to be bound by the
terms and provisions thereof, covenants and agrees to perform his
obligations under such Purchase Contracts, consents to the provisions of
the Purchase Contract Agreement, authorizes the Purchase Contract Agent to
enter into and perform the Purchase Contract Agreement and the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge
of the Notes 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, underlying this Income PACS 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 Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, as the case may be, 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 be governed by, and construed in
accordance with, the laws of the State of New York, without regard to
conflicts of laws principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and
any agent of the Company or the Purchase Contract Agent may treat the
Person in whose name this Income PACS Certificate is registered as the
owner of the Income PACS evidenced hereby for the purpose of receiving
payments of interest payable on the Notes, receiving payments of Purchase
Contract Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be
overdue and notwithstanding any notice to the contrary, and neither the
Company, the Purchase Contract Agent nor any such agent shall be affected
by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common
Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ___________________ Custodian ___________________
(cust) (minor)
Under Uniform Gifts to Minors Act of __________
__________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
___________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PACS Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to
transfer said Income PACS Certificates on the books of The Williams
Companies, Inc., 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 PACS Certificates
in every particular, without
alteration or enlargement or any
change whatsoever.
Signature Guarantee: _________________________________________
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
PACS evidenced by this Income PACS Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.
Dated:______________________________ ___________________________________
Signature
Signature Guarantee:_______________
(if assigned to another person)
If shares are to be registered in
the name of and delivered to a Person REGISTERED HOLDER
other than the Holder, please (i)
print such Person's name and address Please print name and address of
and (ii) provide a guarantee of your Registered Holder:
signature:
____________________________________ ___________________________________
Name Name
____________________________________ ___________________________________
Address Address
____________________________________ ___________________________________
____________________________________ ___________________________________
____________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PACS Certificate hereby
irrevocably exercises the option to effect Early Settlement following a
Cash Merger in accordance with the terms of the Purchase Contract Agreement
with respect to the Purchase Contracts underlying the number of Income PACS
evidenced by this Income PACS Certificate specified below. 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
PACS Certificate representing any Income PACS 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 Notes or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated: _____________________________ ________________________________
Signature
Signature Guarantee: _________________________
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
PACS Certificates are to be registered
in the name of and delivered to and
Pledged Notes or the Applicable
Ownership Interest of the Treasury
Portfolio, as the case may be, are to
be transferred to a Person other than
the Holder, please print such Person's Please print name and address of
name and address: Registered Holder:
____________________________________ ___________________________________
Name Name
____________________________________ ___________________________________
Address Address
____________________________________ ___________________________________
____________________________________ ___________________________________
____________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
Transfer Instructions for Pledged Notes or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, transferable upon
Early Settlement or a Termination Event:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
[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:
=======================================================================================================================
Number of Income
Amount of increase in Amount of decrease in PACS evidenced by
Number of Income Number of Income this Global Certificate Signature of authorized
PACS evidenced by PACS evidenced by following such signatory of Trustee or
Date the Global Certificate the Global Certificate decrease or increase Securities Custodian
_______________________________________________________________________________________________________________________
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EXHIBIT B
FACE OF GROWTH PACS CERTIFICATE
[THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF
THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE
OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF
THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY 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
DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
No. ____ CUSIP No._____________
Number of Growth PACS:___________
THE WILLIAMS COMPANIES, INC.
Growth PACS
This Growth PACS Certificate certifies that __________________ is
the registered Holder of the number of Growth PACS set forth above. Each
Growth PACS consists of (i) a [1/40] undivided beneficial ownership
interest of a Treasury Security having a principal amount at maturity equal
to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of
the Holder under one Purchase Contract with The Williams Companies, Inc., a
Delaware corporation (the "Company"). All capitalized terms used herein
which are defined in the Purchase Contract Agreement (as defined on the
reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Growth PACS evidenced hereby have been pledged to
the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising part of
such Growth PACS. Each Purchase Contract evidenced hereby obligates the
Holder of this Growth PACS Certificate to purchase, and the Company, to
sell, on February 16, 2005 (the "Purchase Contract Settlement Date"), at a
price equal to $[25] (the "Stated Amount"), a number of shares of Common
Stock, par value $1.00 ("Common Stock"), of the Company, equal to the
Settlement Rate, unless prior to or on the Purchase Contract Settlement
Date there shall have occurred a Termination Event or an Early Settlement
with respect to the Growth PACS 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 at maturity pledged to secure the obligations of the Holder
under such Purchase Contract of the Growth PACS 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 a Growth PACS evidenced hereby, an amount
(the "Purchase Contract Payments") equal to ___% per year of the Stated
Amount. Such Purchase Contract Payments shall be payable to the Person in
whose name this Growth PACS Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Purchase Contract Payments.
The Purchase Contract Payments will be payable at the office of
the Purchase Contract Agent in New York City or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as
such address appears on the Security 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 Purchase Contract Agent by manual signature, this Growth PACS
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.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
THE WILLIAMS COMPANIES, INC.
By:__________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [ ],
not individually but solely as
Attorney-in-Fact of such Holder
By:__________________________________
Name:
Title:
Dated:_____________________
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Growth PACS referred to in the within-mentioned
Purchase Contract Agreement.
By: [ ],
as Purchase Contract Agent
By:______________________________
Authorized Signatory
Dated:_________________
(REVERSE OF Growth PACS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of ___________, 2002 (as may be supplemented
from time to time, the "Purchase Contract Agreement") between the Company
and [ ], as Purchase Contract Agent (including its successors thereunder,
herein called the "Purchase Contract Agent"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby
made for a description of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Purchase Contract
Agent, the Company and the Holders and of the terms upon which the Growth
PACS Certificates are, and are to be, executed and delivered.
Unless a Cash Settlement or an Early Settlement has occurred, each
Purchase Contract evidenced hereby obligates the Holder of this Growth PACS
Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase
Price") a number of shares of Common Stock equal to the Settlement Rate,
unless 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 or an Early Settlement shall have occurred. The
"Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is
greater than $______ (the "Appreciation Cap Price"), the number of
shares of Common Stock per Purchase Contract having a value, based
on the Applicable Market Value, equal to ____ multiplied by the
Appreciation Cap Price divided by the Applicable Market Value; and
(2) if the Applicable Market Value is less than or equal
to the Appreciation Cap Price ______ shares of Common Stock per
Purchase Contract,
in each case subject to adjustment as provided in the Purchase
Contract Agreement (and in each case rounded upward or downward to the
nearest 1/10,000th of a share).
No fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts, as provided in Section 5.09 of the
Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either
through Early Settlement or Cash Settlement, shall obligate the Holder of
the related Growth PACS to purchase at the Purchase Price for cash, and the
Company to sell, a number of shares of Common Stock equal to the Settlement
Rate.
The "Applicable Market Value" means the average of the Closing
Prices per share of Common Stock on each of the 20 consecutive Trading Days
ending on the third Trading Day immediately preceding the Purchase Contract
Settlement Date.
The "Closing Price" per share of Common Stock on any date of
determination means the:
(1) closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last
reported sale price) per share on the New York Stock Exchange,
Inc. (the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the
NYSE on any such date, the closing sale price per share as
reported in the composite transactions for the principal United
States securities exchange on which the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United
States national or regional securities exchange, the closing sale
price per share as reported by The Nasdaq Stock Market;
(4) if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar
organization; or
(5) if such bid price is not available, the market value
of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this
purpose by the Company.
A "Trading Day" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement,
the Holder of this Growth PACS shall pay the Purchase Price for the shares
of the Common Stock purchased pursuant to each Purchase Contract evidenced
hereby either by effecting a Cash Settlement or an Early Settlement of each
such Purchase Contract or by applying a principal amount of the Pledged
Treasury Securities underlying such Holder's Growth PACS equal to the
Stated Amount of such Purchase Contract to the purchase of the Common
Stock. A Holder of Growth PACS who does not effect, (1) on or prior to 5:00
p.m. (New York City time) on the second Business Day immediately preceding
the Purchase Contract Settlement Date, an effective Cash Settlement, or (2)
on or prior to 11:00 a.m. (New York City time) on the second Business Day
immediately preceding the Purchase Contract Settlement Date an effective
Early Settlement following a Cash Merger, shall pay the Purchase Price for
the shares of Common Stock to be issued under the related Purchase Contract
from the proceeds of the Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates
therefor to the Holder unless it shall have received payment of the
aggregate purchase price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
Each Purchase Contract evidenced hereby and all obligations and
rights of the Company and the Holder thereunder shall terminate if a
Termination Event shall occur. Upon the occurrence of a Termination Event,
the Company shall give written notice to the Purchase Contract Agent and to
the Holders, at their addresses as they appear in the Security Register.
Upon and after the occurrence of a Termination Event, the Collateral Agent
shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Growth PACS. A Growth PACS shall
thereafter represent the right to receive the Proceeds of the Treasury
Security forming a part of such Growth PACS, in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement.
The Growth PACS Certificates are issuable only in registered form
and only in denominations of a single Growth PACS and any integral multiple
thereof. The transfer of any Growth PACS Certificate will be registered and
Growth PACS Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company
and the Purchase Contract Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
A Holder who elects to substitute Notes, for Treasury Securities, thereby
recreating Income PACS, shall be responsible for any fees or expenses
associated therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract underlying a Growth PACS
remains in effect, such Growth PACS shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such
Growth PACS in respect of the Treasury Security and the Purchase Contract
constituting such Growth PACS may be transferred and exchanged only as a
Growth PACS.
A Holder of Growth PACS may recreate Income PACS by delivering to
the Securities Intermediary Notes or the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, with an aggregate principal amount, equal to
the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities
in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement. From and after such substitution, the Holder's Security
shall be referred to as a "Income PACS". Any such creation of Income PACS
may be effected only in multiples of [40] Growth PACS for [40] Income PACS.
If the Treasury Portfolio has replaced the Notes as a component of the
Income PACS as a result of a Tax Event Redemption or a Successful Initial
Remarketing, a Growth PACS Holder may recreate Income PACS only in integral
multiples of _____ Growth PACS.
A Holder of Income PACS may recreate Growth PACS by delivering to
the Securities Intermediary Treasury Securities in an aggregate principal
amount equal to the aggregate principal amount at maturity of the Pledged
Notes or the Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) 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 recreation of Growth PACS may be effected only
in multiples of [40] Income PACS for [40] Growth PACS. If the Treasury
Portfolio has replaced the Notes as a component of the Income PACS as a
result of a Tax Event Redemption or a Successful Initial Remarketing, an
Income PACS Holder may recreate Growth PACS only in integral multiples of
_____ Income PACS.
The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in
whose name the Growth PACS Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment
Date. Purchase Contract Payments will be payable at the office of the
Purchase Contract Agent in New York City or, at the option of the Holder,
by check mailed to the address of the Person entitled thereto at such
address as it appears on the Security Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no
later than the Purchase Contract Settlement Date. If the Company so elects
to defer Purchase Contract Payments, the Company shall pay additional
Purchase Contract Payments on such deferred installments of Purchase
Contract Payments at a rate equal to ___% per annum, compounding quarterly,
until such deferred installments are paid. In the event that the Company
elects to defer the payment of Purchase Contract Payments on the Purchase
Contracts until the Purchase Contract Settlement Date, each Holder will
receive on the Purchase Contract Settlement Date the aggregate amount of
accrued and unpaid Purchase Contract Payments.
The Purchase Contracts and all obligations and rights of the
Company and the Holders thereunder, including, without limitation, the
rights of the Holders to receive and the obligation of the Company to pay
any Purchase Contract Payments, shall immediately and automatically
terminate, without the necessity of any notice or action by any Holder, the
Purchase Contract Agent or the Company, if, on or prior to the Purchase
Contract Settlement Date, a Termination Event shall have occurred. Upon the
occurrence of a Termination Event, the Company shall promptly but in no
event later than two Business Days thereafter give written notice to the
Purchase Contract Agent, the Collateral Agent and the Holders, at their
addresses as they appear in the Security Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall release the
Treasury Securities from the Pledge in accordance with the provisions of
the Pledge Agreement. A Growth PACS shall thereafter represent the right to
receive the interest in the Treasury Security forming a part of such Growth
PACS, in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement.
Upon the occurrence of a Cash Merger, a Holder of Growth PACS may
effect Early Settlement of the Purchase Contract underlying such Growth
PACS pursuant to the terms of Section 5.04(b)(2) of the Purchase Contract
Agreement. Upon Early Settlement of Purchase Contracts by a Holder of the
related Growth PACS, the Pledged Treasury Securities underlying such Growth
PACS shall be released from the Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Growth PACS Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Growth PACS 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 Growth PACS Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform
the related Purchase Contracts forming part of the Growth PACS evidenced
hereby on its behalf as its attorney-in-fact, expressly withholds any
consent to the assumption (i.e., affirmance) of the Purchase Contracts by
the Company or its trustee in the event that the Company becomes the
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 Purchase Contract Agent to
enter into and perform the Purchase Contract Agreement and the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge
of the Treasury Securities underlying this Growth PACS Certificate pursuant
to the Pledge Agreement. The Holder further covenants and agrees, that, to
the extent and in the manner provided in the Purchase Contract Agreement
and the Pledge Agreement, but subject to the terms thereof, payments in
respect to the aggregate principal amount of the Pledged Treasury
Securities on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no
right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without
regard to conflicts of laws principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and
any agent of the Company or the Purchase Contract Agent may treat the
Person in whose name this Growth PACS Certificate is registered as the
owner of the Growth PACS evidenced hereby for the purpose of receiving
payments of interest on the Treasury Securities, receiving payments of
Purchase Contract Payments, performance of the Purchase Contracts and for
all other purposes whatsoever, whether or not any payments in respect
thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall
be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common
Stock.
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ___________________ Custodian ___________________
(cust) (minor)
Under Uniform Gifts to Minors Act of __________
__________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
___________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PACS Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ________________ attorney to
transfer said Growth PACS Certificates on the books of The Williams
Companies, Inc., 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 PACS Certificates
in every particular, without
alteration or enlargement or any
change whatsoever.
Signature Guarantee: _________________________________________
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
PACS evidenced by this Growth PACS Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional
share, to the undersigned at the address indicated below unless a different
name and address have been indicated below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will
pay any transfer tax payable incident thereto.
Dated:______________________________ ___________________________________
Signature
Signature Guarantee:_______________
(if assigned to another person)
If shares are to be registered in
the name of and delivered to a Person REGISTERED HOLDER
other than the Holder, please (i)
print such Person's name and address Please print name and address of
and (ii) provide a guarantee of your Registered Holder:
signature:
____________________________________ ___________________________________
Name Name
____________________________________ ___________________________________
Address Address
____________________________________ ___________________________________
____________________________________ ___________________________________
____________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PACS Certificate hereby
irrevocably exercises the option to effect Early Settlement following a
Cash Merger in accordance with the terms of the Purchase Contract Agreement
with respect to the Purchase Contracts underlying the number of Growth PACS
evidenced by this Growth PACS Certificate specified below. The option to
effect Early Settlement following a Cash Merger may be exercised only with
respect to Purchase Contracts underlying Growth PACS 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 PACS Certificate representing any Growth PACS 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 tax payable incident thereto.
Dated: _____________________________ ________________________________
Signature
Signature Guarantee: _________________________
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
PACS Certificates are to be registered
in the name of and delivered to and
Pledged Treasury Securities are to
be transferred to a Person other than
the Holder, please print such Person's Please print name and address of
name and address: Registered Holder:
____________________________________ ___________________________________
Name Name
____________________________________ ___________________________________
Address Address
____________________________________ ___________________________________
____________________________________ ___________________________________
____________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon or
Early Settlement or a Termination Event:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
[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:
=======================================================================================================================
Number of Growth
Amount of increase in Amount of decrease in PACS evidenced by
Number of Growth Number of Growth this Global Certificate Signature of authorized
PACS evidenced by PACS evidenced by following such signatory of Trustee or
Date the Global Certificate the Global Certificate decrease or increase Securities Custodian
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
_______________________________________________________________________________________________________________________
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
[ ]
[ ]
[ ]
Attention: Corporate Trust Department
Re: [_______ Income PACS] [_______ Growth PACS] of The Williams
Companies, Inc., a Delaware corporation (the "Company").
The undersigned Holder hereby notifies you that it has delivered to
[ ], as Securities Intermediary, for credit to the
Collateral Account, $______ aggregate principal amount of [Notes] [Applicable
Ownership Interests (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio] [Treasury Securities] in exchange for the [Pledged
Notes][Pledged Treasury Securities] held in the Collateral Account, in
accordance with the Pledge Agreement, dated as of ____________, 2002 (the
"Pledge Agreement"; unless otherwise defined herein, terms defined in the
Pledge Agreement are used herein as defined therein), between you, the Company,
the Collateral Agent and the Securities Intermediary. The undersigned
Holder has paid all applicable fees relating to such exchange. The
undersigned Holder hereby instructs you to instruct the Collateral Agent to
release to you on behalf of the undersigned Holder the [Pledged Notes]
[Pledged Applicable Ownership Interests] [Pledged Treasury Securities]
related to such [Income PACS] [Growth PACS].
Date: _________________________ __________________________________
Signature
Signature Guarantee:_______________________
Please print name and address of Registered Holder:
_______________________________ _________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
_______________________________
_______________________________
_______________________________
_______________________________
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_______________________________
_______________________________
Attention:
Telecopy: __________
Re: [__________ Income PACS] [______ Growth PACS] of
The Williams Companies, Inc., a Delaware corporation
(the "Company")
Please refer to the Purchase Contract Agreement, dated as of
__________, 2002 (the "Purchase Contract Agreement"; unless otherwise
defined herein, terms defined in the Purchase Contract Agreement are used
herein as defined therein), between the Company and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the holders of Income
PACS and Growth PACS from time to time.
We hereby notify you that a Termination Event has occurred and
that [the Notes] [Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio] [the
Treasury Securities] underlying your ownership interest in _____ [Income
PACS] [Growth PACS] have been released and are being held by us for your
account pending receipt of transfer instructions with respect to such
[Notes][Treasury Securities] (the "Released Securities").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we
hereby request written transfer instructions with respect to the Released
Securities. Upon receipt of your instructions and upon transfer to us of
your [Income PACS][Growth PACS] effected through book-entry or by delivery
to us of your [Income PACS Certificate][Growth PACS Certificate], we shall
transfer the Released Securities by book-entry transfer or other
appropriate procedures, in accordance with your instructions. In the event
you fail to effect such transfer or delivery, the Released Securities and
any distributions thereon, shall be held in our name, or a nominee in trust
for your benefit, until such time as such [Income PACS][Growth PACS] are
transferred or your [Income PACS Certificate] [Growth PACS Certificate] is
surrendered or satisfactory evidence is provided that such [Income PACS
Certificate][Growth PACS Certificate] has been destroyed, lost or stolen,
together with any indemnification that we or the Company may require.
Date: By: [ ]
_______________________________________
Name:
Title: Authorized Signatory
EXHIBIT E
NOTICE TO SETTLE BY CASH
[ ]
[ ]
[ ]
Attention: Corporate Trust Department
Re: [_______ Income PACS] [Growth PACS] of The Williams
Companies, Inc., a Delaware corporation (the
"Company")
The undersigned Holder hereby irrevocably notifies you in
accordance with Section 5.02 of the Purchase Contract Agreement, dated as
of ______________, 2002 (the "Purchase Contract Agreement"; unless
otherwise defined herein, terms defined in the Purchase Contract Agreement
are used herein as defined therein), between the Company and you, as
Purchase Contract Agent and as Attorney-in-Fact for the Holders of the
Purchase Contracts, that such Holder has elected to pay to the Securities
Intermediary for deposit in the Collateral Account, prior to or on 11:00
a.m. (New York City time) on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date (in lawful money of the United States
by certified or cashiers' check or wire transfer, in immediately available
funds), $______ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company under the related Purchase Contracts
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 PACS] [Growth PACS].
Date: _________________________ __________________________________
Signature
Signature Guarantee:_______________________
Please print name and address of Registered Holder:
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT AND PROPERTY TRUSTEE
(Settlement of Purchase Contract through Remarketing)
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: __________ Income PACS of The Williams Companies,
Inc., a Delaware corporation (the "Company")
Please refer to the Purchase Contract Agreement, dated as of
_________, 2002 (the "Purchase Contract Agreement"; unless otherwise
defined herein, terms defined in the Purchase Contract Agreement are used
herein as defined therein), between the Company and the undersigned, as
Purchase Contract Agent and as attorney-in-fact for the Holders of Income
PACS from time to time.
In accordance with Section 5.02 of the Purchase Contract Agreement
and, based on instructions and Cash Settlements received from Holders of
Income PACS as of 11:00 a.m. (New York City time), the Business Day
immediately preceding the [Initial Remarketing Date] [Secondary Remarketing
Date], we hereby notify you that ______ Notes are to be tendered for
purchase in the Remarketing.
Date: By: [ ]
____________________________________________
Name:
Title: Authorized Signatory
EXHIBIT 7
THE WILLIAMS COMPANIES, INC.
and
JPMORGAN CHASE BANK, as Collateral Agent, Custodial Agent and
Securities Intermediary
and
JPMORGAN CHASE BANK, as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of _________, 2002
TABLE OF CONTENTS
----------------------
Page
----
ARTICLE 1
Definitions
Section 1.01. Definitions.........................................2
ARTICLE 2
Pledge
Section 2.01. Pledge..............................................6
Section 2.02. Control; Financing Statement........................6
Section 2.03. Termination.........................................6
ARTICLE 3
Distributions on Pledged Collateral
Section 3.01. Income Distributions................................7
Section 3.02. Principal Payments Following Termination Event......7
Section 3.03. Principal Payments Prior to or on Purchase
Contract Settlement Date..................................7
Section 3.04. Payments to Purchase Contract Agent.................8
Section 3.05. Assets Not Properly Released........................8
ARTICLE 4
Control
Section 4.01. Establishment of Collateral Account.................8
Section 4.02. Treatment as Financial Assets.......................9
Section 4.03. Sole Control by Collateral Agent....................9
Section 4.04. Securities Intermediary's Location..................9
Section 4.05. No Other Claims....................................10
Section 4.06. Investment and Release.............................10
Section 4.07. Statements and Confirmations.......................10
Section 4.08. Tax Allocations....................................10
Section 4.09. No Other Agreements................................10
Section 4.10. Powers Coupled with an Interest....................10
ARTICLE 5
Initial Deposit; Establishment of Growth PACS and
Reestablishment of Stock Purchase units
Section 5.01. Initial Deposit of Notes...........................11
Section 5.02. Establishment of Growth PACS.......................11
Section 5.03. Reestablishment of Stock Purchase Units............12
Section 5.04. Termination Event..................................13
Section 5.05. Cash Settlement....................................14
Section 5.06. Application of Proceeds in Settlement of
Purchase Contracts.......................................16
Section 5.07. Tax Event Redemption...............................18
ARTICLE 6
Voting Rights - Pledged Notes
Section 6.01. Voting Rights......................................18
ARTICLE 7
Rights and Remedies
Section 7.01. Rights and Remedies of the Collateral Agent........19
Section 7.02. Tax Event Redemption...............................20
Section 7.03. Substitutions......................................21
ARTICLE 8
Representations and Warranties; Covenants
Section 8.01. Representations and Warranties.....................21
Section 8.02. Covenants..........................................22
ARTICLE 9
The Collateral Agent and the Securities Intermediary
Section 9.01. Appointment, Powers and Immunities.................22
Section 9.02. Instructions of the Company........................24
Section 9.03. Reliance by Collateral Agent and Securities
Intermediary.............................................24
Section 9.04. Rights in Other Capacities.........................24
Section 9.05. Non-Reliance on Collateral Agent and Securities
Intermediary.............................................25
Section 9.06. Compensation and Indemnity.........................25
Section 9.07. Failure to Act.....................................26
Section 9.08. Resignation of Collateral Agent and Securities
Intermediary.............................................26
Section 9.09. Right to Appoint Agent or Advisor..................28
Section 9.10. Survival...........................................28
Section 9.11. Exculpation........................................29
ARTICLE 10
Amendment
Section 10.01. Amendment Without Consent of Holders..............29
Section 10.02. Amendment with Consent of Holders.................29
Section 10.03. Execution of Amendments...........................30
Section 10.04. Effect of Amendments..............................31
Section 10.05. Reference of Amendments...........................31
ARTICLE 11
Miscellaneous
Section 11.01. No Waiver.........................................31
Section 11.02. Governing Law.....................................31
Section 11.03. Notices...........................................32
Section 11.04. Successors and Assigns............................32
Section 11.05. Counterparts......................................32
Section 11.06. Severability......................................32
Section 11.07. Expenses, Etc.....................................32
Section 11.08. Security Interest Absolute........................33
Section 11.09. Notice of Tax Event, Tax Event Redemption and
Termination Event........................................34
Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Establishment of Growth PACS)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Establishment of Growth PACS)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Reestablishment of Stock Purchase Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Stock Purchase Units)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Purchase Contract Agent (Cash Settlement Amounts)
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of _____________, 2002, among THE
WILLIAMS COMPANIES, INC., a Delaware corporation (the "Company"), [
], a _________ banking association, 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"), as
securities intermediary with respect to the Collateral Account (in such
capacity, together with its successors in such capacity, the "Securities
Intermediary"), and [ ], an
_________ banking corporation, as purchase contract agent and as
attorney-in-fact of the Holders from time to time of the Securities (as
defined in the Purchase Contract Agreement) (in such capacity, together with
its successors in such capacity, the "Purchase Contract Agent")under the
Purchase Contract Agreement.
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 _______________________ Income PACS (as
defined herein) will be issued (_____ Income PACS if the over-allotment
option granted in the Underwriting Agreement (as defined herein) is
exercised in full).
Each Income PACS, at issuance, consists of a unit comprised of (a)
a stock purchase contract (the "Purchase Contract") under which the Holder
will purchase from the Company on the Purchase Contract Settlement Date,
for an amount equal to $[25] (the "Stated Amount"), a number of shares of
The Williams Companies, Inc. common stock, par value $1.00 ("Common
Stock"), equal to the Settlement Rate, and (b) either beneficial ownership
of a Note (as defined below).
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders 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 herein of the
Collateral (as defined herein) to secure the Obligations (as defined
herein).
Accordingly, the Company, the Collateral Agent, the Securities
Intermediary 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:
ARTICLE 1
Definitions
Section 1.01. Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(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, Exhibit or other subdivision;
(c) the following terms which are defined in the UCC shall have
the meanings set forth therein: "certificated security," "control,"
"financial asset," "entitlement order," "securities account" and "security
entitlement";
(d) the following terms have the meanings assigned to them in the
Purchase Contract Agreement: "Act," "Applicable Ownership Interest",
"Bankruptcy Code," "Board Resolution," "Business Day," "Cash Merger", "Cash
Settlement," "Certificate," "Early Settlement," "Early Settlement Date,"
"Failed Initial Remarketing", "Failed Secondary Remarketing","Growth PACS,"
"Holder," "Income PACS," "Initial Remarketing", "Initial Remarketing Date",
" Notes," "Officers' Certificate," "Opinion of Counsel," "Outstanding
Securities," "Purchase Contract," "Purchase Contract Settlement Date,"
"Purchase Price," "Redemption Amount", "Remarketing Fee", "Remarketing
Agent," "Remarketing Agreement," "Remarketing Fee," "Secondary
Remarketing","Security", "Settlement Rate," "Successful Initial
Remarketing", "Tax Event", "Tax Event Redemption", "Tax Event Redemption
Date", "Termination Event," "Treasury Portfolio", and "Underwriting
Agreement"; and
(e) the following terms have the meanings given to them in this
Section 1.01(e):
"Agreement" means this Pledge Agreement, as the same may be
amended, modified or supplemented from time to time.
"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.
"Collateral" means the collective reference to:
(i) all investment property and other financial assets from time
to time credited to the Collateral Account, including, without
limitation, (A) the Notes and security entitlements relating
thereto which are a component of the Income PACS from time to
time, (B) the Applicable Ownership Interests (as specified in
Clause (A) of the definition of such term) of the Holders with
respect to the Treasury Portfolio which are a component of the
Income PACS from time to time; (C) any Treasury Securities and
security entitlements relating thereto delivered from time to time
upon establishment of Growth PACS in accordance with Section 5.02
hereof and (E) payments made by Holders pursuant to Section 5.05
hereof;
(ii) all Proceeds of any of the foregoing (whether such Proceeds
arise before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or
against the pledgor or with respect to the pledgor); and
(iii) all powers and rights now owned or hereafter acquired under
or with respect to the Collateral Account
"Collateral Account" means the securities account of [
], as Collateral Agent, maintained by the Securities
Intermediary and designated "[ ],
as Collateral Agent of The Williams Companies, Inc., as pledgee of
[ ], as the Purchase Contract Agent
on behalf of and as attorney-in-fact for the Holders";
"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.
"Growth PACS" means, following the substitution of Treasury
Securities for Notes as collateral to secure a Holder's obligations under
the Purchase Contract, the collective rights and obligations of a Holder of
a Growth PACS Certificate in respect of such Treasury Securities, subject
to the Pledge thereof, and the related Purchase Contract.
"Growth PACS Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Growth PACS
specified on such certificate.
"Income PACS" means the collective rights and obligations of a
Holder of an Income PACS Certificate in respect of a Note or an appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may
be, subject in each case to the Pledge thereof, and the related Purchase
Contract; provided that the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio shall not be subject to the Pledge.
"Income PACS Certificate " means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Income PACS
specified on such certificate.
"Obligations" means, with respect to each Holder, the collective
reference to all obligations and liabilities of such Holder under such
Holder's Purchase Contract, the Purchase Contract Agreement, and this
Agreement or any other document made, delivered or given in connection
herewith or therewith, in each case whether on account of principal,
interest (including, without limitation, interest accruing before and after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to such Holder,
whether or not a claim for post-filing or post-petition interest is allowed
in such proceeding), fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel to
the Company or the Collateral Agent or the Securities Intermediary that are
required to be paid by the Holder pursuant to the terms of any of the
foregoing agreements).
"Permitted Investments" means any one of the following which shall
mature not later than the next succeeding Business Day:
(1) 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 of the timely payment
thereof or such indebtedness constitutes a general obligation of
it);
(2) 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 $200.0 million at
the time of deposit (and which may include the Collateral Agent);
(3) 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 (2);
(4) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed as to timely payment by
the full faith and credit of the United States Government;
(5) 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
(6) investments in money market funds (including, but not limited
to, money market funds managed by the Collateral Agent or an
affiliate of the Collateral Agent) registered under the Investment
Company Act of 1940, as amended, rated in the highest applicable
rating category by S&P or Moody's.
"Person" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Pledge" means the lien and security interest created by this
Agreement.
"Pledged Applicable Ownership Interests" means the Applicable
Ownership Interests (as specified in clause (A) of the definition thereof)
of the Holders with respect to the Treasury Portfolio from time to time
credited to the Collateral Account and not then released from the Pledge.
"Pledged Notes" means Notes and security entitlements with respect
thereto from time to time credited to the Collateral Account and not then
released from the Pledge.
"Pledged Securities" means the Pledged Notes, the Pledged
Applicable Ownership Interest or the Pledged Treasury Securities,
collectively.
"Pledged Treasury Securities" means Treasury Securities and
security entitlements with respect thereto from time to time credited to
the Collateral Account and not then released from the Pledge.
"Proceeds" has the meaning ascribed thereto in the UCC and
includes, without limitation, all interest, dividends, cash, instruments,
securities, financial assets (as defined in ss.8-102(a)(9) of the UCC) and
other property received, receivable or otherwise distributed upon the sale,
exchange, collection or disposition of any financial assets from time to
time held in the Collateral Account.
"Purchase Contract Agent" has the meaning specified in the
paragraph preceding the recitals of this Agreement.
"Separate Notes" means Notes which are not components of Income
PACS.
"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, an amended
from time to time. Unless otherwise defined herein, all terms defined in
the TRADES Regulations are used herein as therein defined.
"Transfer" means in the case of certificated securities in
registered form, delivery as provided in ss.8-301(a) of the UCC, indorsed
to the transferee or in blank by an effective endorsement; in the case of
Treasury Securities, registration of the transferee as the owner of such
Treasury Securities on TRADES; and in the case of security entitlements,
including, without limitation, security entitlements with respect to
Treasury Securities, a securities intermediary indicating by book entry
that such security entitlement has been credited to the transferee's
securities account.
"Treasury Securities" means zero-coupon U.S. treasury securities
(CUSIP No. ___________) which mature on _______________.
"UCC" means the Uniform Commercial Code as in effect in the State
of New York from time to time.
"Value" means, with respect to any item of Collateral on any date,
as to (1) Cash, the face amount thereof, (2) Treasury Securities or Notes,
the aggregate principal amount thereof at maturity and (3) Applicable
Ownership Interest, the appropriate percentage (as specified in clause (A)
of the definition of such term) of the aggregate principal amount at
maturity of the Treasury Portfolio.
ARTICLE 2
Pledge
Section 2.01. Pledge. Each Holder, acting through the Purchase
Contract Agent as such Holder's attorney-in-fact, hereby pledges and grants
to the Collateral Agent, as agent of and for the benefit of the Company, a
continuing first priority security interest in and to, and a lien upon and
right of set-off against, all of such Holder's right, title and interest in
and to the Collateral to secure the prompt and complete payment and
performance when due (whether at stated maturity, by acceleration or
otherwise) of the Obligations. The Collateral Agent shall have all of the
rights, remedies and recourses with respect to the Collateral afforded a
secured party by the UCC, in addition to, and not in limitation of, the
other rights, remedies and recourses afforded to the Collateral Agent by
this Agreement.
Section 2.02. Control; Financing Statement.
(a) The Collateral Agent shall have control of the Collateral
Account pursuant to the provisions of Article 4 of this Agreement.
(b) Subsequent to the date of initial issuance of the Securities,
the Purchase Contract Agent shall deliver to the Collateral Agent a
financing statement prepared by the Company for filing in the Office of the
Secretary of State of the State of New York and any other jurisdictions
which the Company deems necessary, signed by the Purchase Contract Agent,
as attorney-in-fact for the Holders, as Debtors, and describing the
Collateral.
Section 2.03. Termination. As to each Holder, this Agreement and
the Pledge created hereby shall terminate upon the satisfaction of such
Holder's Obligations. Upon such termination, the Collateral Agent shall
Transfer such Holder's portion of the Collateral to the Purchase Contract
Agent for distribution to such Holder in accordance with his interest, free
and clear of any lien, pledge or security interest created hereby.
ARTICLE 3
Distributions on Pledged Collateral
Section 3.01. Income Distributions. All income distributions
received by the Collateral Agent on account of the Pledged Notes, the
Pledged Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio or Permitted Investments
from time to time held in the Collateral Account shall be distributed to
the Purchase Contract Agent (ABA No. [ ], GLA No. [ ], A/C No. [ ], Re: The
Williams Companies, Inc.) for the benefit of the applicable Holders as
provided in the Purchase Contracts or Purchase Contract Agreement.
Section 3.02. Principal Payments Following Termination Event. All
payments received by the Collateral Agent following a Termination Event of
(1) the aggregate principal amount of the Pledged Notes or securities
entitlements thereto, or (2) the Applicable Ownership Interests (as
specified in clause (A) of the definition thereof) of the aggregate
principal amount of the Treasury Portfolio, or (3) the principal amount of
the Pledged Treasury Securities, shall be distributed to the Purchase
Contract Agent for the benefit of the applicable Holders for distribution
to such Holders in accordance with their respective interests.
Section 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.
(a) Subject to the provisions of Sections 5.06, 5.07 and 7.03,
and except as provided in clause 3.03(b) below, if no Termination Event
shall have occurred, all payments received by the Collateral Agent of (1)
the aggregate principal amount with respect to the Pledged Notes or
security entitlements with respect thereto, (2) the Applicable Ownership
Interests (as specified in clause (A) of the definition thereof) of the
aggregate principal amount of the Treasury Portfolio, or (3) the principal
amount of Pledged Treasury Securities, shall be held and invested in
Permitted Investments until the Purchase Contract Settlement Date and on
the Purchase Contract Settlement Date distributed to the Company as
provided in Section 5.06 hereof. Any balance remaining in the Collateral
Account shall be distributed to the Purchase Contract Agent for the benefit
of the applicable Holders for distribution to such Holders in accordance
with their respective interests. The Company shall instruct the Collateral
Agent as to the type of Permitted Investments in which any payments made
under this Section shall be invested, provided, however, that if the
Company fails to deliver such instructions by 10:30 a.m. (New York City
time), the Collateral Agent shall invest such payments in the Permitted
Investments described in clause (6) of the definition of Permitted
Investments.
(b) All payments received by the Collateral Agent of (1) the
aggregate principal amount with respect to the Pledged Notes or security
entitlements with respect thereto, (2) the aggregate principal amount of
the Applicable Ownership Interests (as specified in clause (A) of the
definition thereof) of the Treasury Portfolio, or (3) the principal amount
of Treasury Securities or security entitlements with respect thereto, that,
in each case, have been released from the Pledge shall be distributed to
the Purchase Contract Agent for the benefit of the applicable Holders for
distribution to such Holders in accordance with their respective interests.
Section 3.04. Payments to Purchase Contract Agent. The Collateral
Agent shall use all commercially reasonable efforts to deliver payments to
the Purchase Contract Agent hereunder to the account designated by the
Purchase Contract Agent for such purpose not later than 12:00 p.m. (New
York City time) on the Business Day such payment is received by the
Collateral Agent; provided, however, that if such payment is received on a
day that is not a Business Day or after 11:00 a.m. (New York City time) on
a Business Day, then the Collateral Agent shall use all commercially
reasonable efforts to deliver such payment no later than 10:30 a.m. (New
York City time) on the next succeeding Business Day.
Section 3.05. Assets Not Properly Released. If the Purchase
Contract Agent or any Holder shall receive any principal payments on
account of financial assets credited to the Collateral Account and not
released therefrom in accordance with this Agreement, the Purchase Contract
Agent or such Holder shall hold the same as trustee of an express trust for
the benefit of the Company and, upon receipt of an Officers' Certificate of
the Company so directing, promptly deliver the same to the Collateral Agent
for credit to the Collateral Account or to the Company for application to
the Obligations of the Holders, and the Purchase Contract Agent and Holders
shall acquire no right, title or interest in any such payments of principal
amounts so received.
ARTICLE 4
Control
Section 4.01. Establishment of Collateral Account. The Securities
Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral
Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities
Intermediary shall identify in its records the Collateral Agent as the
entitlement holder entitled to exercise the rights that comprise any
financial asset credited to the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant
to this Agreement or the Purchase Contract Agreement will be credited
promptly to the Collateral Account;
(e) all securities or other property underlying any financial
assets credited to the Collateral Account shall be registered in the name
of the Collateral Agent, indorsed to the Collateral Account or in blank, or
credited to another securities account maintained in the name of the
Collateral Account, and in no case will any financial asset credited to the
Collateral Account be registered in the name of the Purchase Contract Agent
or any Holder, payable to the order of the Purchase Contract Agent or any
Holder or specially indorsed to the Purchase Contract Agent or any Holder.
Section 4.02. Treatment as Financial Assets. 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.
Section 4.03. Sole Control by Collateral Agent. Except as provided
in Section 6.01, at all times prior to the termination of the Pledge, the
Collateral Agent shall have sole control of the Collateral Account, and the
Securities Intermediary shall take instructions and directions with respect
to the Collateral Account solely from the Collateral Agent. If at any time
the Securities Intermediary shall receive an entitlement order issued by
the Collateral Agent and relating to the Collateral Account, the Securities
Intermediary shall comply with such entitlement order without further
consent by the Purchase Contract Agent or any Holder or any other Person.
Until termination of the Pledge, the Securities Intermediary will not
comply with any entitlement orders issued by the Purchase Contract Agent or
any Holder.
Section 4.04. Securities Intermediary's Location. The Collateral
Account, and the rights and obligations of the Securities Intermediary, the
Collateral Agent, the Purchase Contract Agent and the Holders with respect
thereto, shall be governed by the laws of the State of New York. Regardless
of any provision in any other agreement, for purposes of the UCC, New York
shall be deemed to be the Securities Intermediary's location.
Section 4.05. No Other Claims. Except for the claims and interest
of the Collateral Agent and of the Purchase Contract Agent and the Holders
in the Collateral Account, the Securities Intermediary (without making any
investigation) does not know of any claim to, or interest in, the
Collateral Account or in any financial asset credited thereto. If any
Person asserts any lien, encumbrance or adverse claim (including any writ,
garnishment, judgment, warrant of attachment, execution or similar process)
against the Collateral Account or in any financial asset carried therein,
the Securities Intermediary will promptly notify the Collateral Agent and
the Purchase Contract Agent.
Section 4.06. Investment and Release. All proceeds of financial
assets from time to time deposited in the Collateral Account shall be
invested and reinvested as provided in this Agreement. At all times prior
to termination of the Pledge, no property shall be released from the
Collateral Account except in accordance with this Agreement or upon written
instructions of the Collateral Agent.
Section 4.07. Statements and Confirmations. The Securities
Intermediary will promptly send copies of all statements, confirmations and
other correspondence concerning the Collateral Account and any financial
assets credited thereto simultaneously to each of the Purchase Contract
Agent and the Collateral Agent at their addresses for notices under this
Agreement.
Section 4.08. Tax Allocations. The Purchase Contract Agent shall
report all items of income, gain, expense and loss recognized in the
Collateral Account, to the extent such reporting is required by law, to the
Internal Revenue Service and all state and local taxing authorities under
the names and taxpayer identification numbers of the Holders which are the
beneficial owners thereof. Neither the Securities Intermediary nor the
Collateral Agent shall have any tax reporting duties hereunder.
Section 4.09. No Other Agreements. The Securities Intermediary has
not entered into, and prior to the termination of the Pledge will not enter
into, any agreement with any other Person relating to the Collateral
Account or any financial assets credited thereto, including, without
limitation, any agreement to comply with entitlement orders of any Person
other than the Collateral Agent.
Section 4.10. Powers Coupled with an Interest. The rights and
powers granted in this Article 4 to the Collateral Agent have been granted
in order to perfect its security interests in the Collateral Account, are
powers coupled with an interest and will be affected neither by the
bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of
time. The obligations of the Securities Intermediary under this Article 4
shall continue in effect until the termination of the Pledge.
ARTICLE 5
Initial Deposit; Establishment of Growth PACS and Reestablishment of
Income PACS
Section 5.01. Initial Deposit of Notes. Prior to or concurrently
with the execution and delivery of this Agreement, the Purchase Contract
Agent, on behalf of the initial Holders of the Income PACS, shall Transfer
to the Collateral Agent, for credit to the Collateral Account, the Notes or
security entitlements relating thereto, and the Securities Intermediary
shall indicate by book-entry that a securities entitlement to such Notes
has been credited to the Collateral Account.
Section 5.02. Establishment of Growth PACS.
(a) So long as the Treasury Portfolio has not replaced the Notes
as a component of the Income PACS as a result of a Successful Initial
Remarketing or a Tax Event Redemption, at any time prior to or on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Income PACS shall have the right to establish or reestablish
Growth PACS by substitution of Treasury Securities or security entitlements
with respect thereto for the Pledged Notes comprising a part of such
Holder's Income PACS in integral multiples of [40] Income PACS by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements
with respect thereto having a Value equal to the aggregate
liquidation amount of the Pledged Notes to be released,
accompanied by a notice, substantially in the form of Exhibit C to
the Purchase Contract Agreement, whereupon the Purchase Contract
Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit A hereto, (A) stating that
such Holder has Transferred Treasury Securities or security
entitlements with respect thereto to the Collateral Agent for
credit to the Collateral Account, (B) stating the Value of the
Treasury Securities or security entitlements with respect thereto
Transferred by such Holder and (C) requesting that the Collateral
Agent release from the Pledge the Pledged Notes that are a
component of such Income PACS; and
(ii) delivering the related Income PACS to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury
Securities or security entitlements with respect thereto have been credited
to the Collateral Account as described in such notice, the Collateral Agent
shall instruct the Securities Intermediary by a notice, substantially in
the form of Exhibit B hereto, to release such Pledged Notes from the Pledge
by Transfer to the Purchase Contract Agent for distribution to such Holder,
free and clear of any lien, pledge or security interest created hereby.
(b) If Treasury Portfolio has replaced the Notes as a component of
the Income PACS as a result of a Successful Initial Remarketing or a Tax
Event Redemption, a Holder of Income PACS shall have the right to establish
or reestablish Growth PACS by substitution of Treasury Securities or
security entitlements with respect thereto for the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio comprising a part of such Holder's Income PACS in
integral multiples of ______ Income PACS by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Treasury Securities or security entitlements
with respect thereto having a Value equal to the Value of the
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio to be released,
accompanied by a notice, substantially in the form of Exhibit C to
the Purchase Contract Agreement, whereupon the Purchase Contract
Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit A hereto, (A) stating that
such Holder has Transferred Treasury Securities or security
entitlements with respect thereto to the Collateral Agent for
credit to the Collateral Account, (B) stating the Value of the
Treasury Securities or security entitlements with respect thereto
Transferred by such Holder and (C) requesting that the Collateral
Agent release from the Pledge the Applicable Ownership Interests
(as specified in clause (A) of the definition of such term) of the
Treasury Portfolio that are a component of such Income PACS; and
(ii) delivering the related Income PACS to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Treasury
Securities or security entitlements with respect thereto have been credited
to the Collateral Account as described in such notice, the Collateral Agent
shall instruct the Securities Intermediary by a notice, substantially in
the form of Exhibit B hereto, to release such Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio from the Pledge by Transfer to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge
or security interest created hereby.
(c) Upon credit to the Collateral Account of Treasury Securities
or security entitlements with respect thereto delivered by a Holder of
Income PACS and receipt of the related instruction from the Collateral
Agent, the Securities Intermediary shall release the Pledged Notes, as the
case may be, and shall promptly transfer the same to the Purchase Contract
Agent for distribution to such Holder, free and clear of any lien, pledge
or security interest created hereby.
Section 5.03. Reestablishment of Income PACS.
(a) So long as the Treasury Portfolio has not replaced the Notes
as a component of the Income PACS as a result of a Successful Initial
Remarketing or a Tax Event Redemption, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, a
Holder of Growth PACS shall have the right to reestablish Income PACS by
substitution of Notes or security entitlements with respect thereto for
Pledged Treasury Securities in integral multiples of [40] Growth PACS by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Notes or security entitlements with respect
thereto having a principal amount equal to the Value of the
Pledged Treasury Securities to be released, accompanied by a
notice, substantially in the form of Exhibit C to the Purchase
Contract Agreement, whereupon the Purchase Contract Agent shall
deliver to the Collateral Agent a notice, substantially in the
form of Exhibit C hereto, stating that such Holder has Transferred
the Notes or security entitlements with respect thereto to the
Collateral Account for credit to the Collateral Account and
requesting that the Collateral Agent release from the Pledge the
Pledged Treasury Securities related to such Growth PACS; and
(ii) delivering the related Growth PACS to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that Notes or
security entitlements with respect thereto have been credited to the
Collateral Account as described in such notice, the Collateral Agent shall
instruct the Securities Intermediary by a notice in the form provided in
Exhibit D to release such Pledged Treasury Securities from Pledge by
Transfer to the Purchase Contract Agent for distribution to such Holder,
free and clear of any lien, pledge or security interest created hereby.
(b) If Treasury Portfolio has replaced the Notes as a component of
the Income PACS as a result of a Successful Initial Remarketing or a Tax
Event Redemption, a holder of a Growth PACS shall have the right to
reestablish a Income PACS by substitution of Treasury Securities or
security entitlements with respect thereto for the Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio comprising a part of such Holder's Growth PACS in
integral multiples of _______ Growth PACS by:
(i) Transferring to the Collateral Agent for credit to the
Collateral Account Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio having a
Value equal to the Treasury Securities or security entitlements with
respect thereto to be released, accompanied by a notice, substantially in
the form of Exhibit C to the Purchase Contract Agreement, whereupon the
Purchase Contract Agent shall deliver to the Collateral Agent a notice,
substantially in the form of Exhibit A hereto, (A) stating that such Holder
has Transferred Applicable Ownership Interests (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio to the Collateral
Agent for credit to the Collateral Account, (B) stating the Value of the
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio Transferred by such
Holder and (C) requesting that the Collateral Agent release from the Pledge
the Treasury Securities or security entitlements with respect thereto that
are a component of such Growth PACS; and
(ii) delivering the related Growth PACS to the Purchase Contract
Agent.
Upon receipt of such notice and confirmation that the Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio have been credited to the Collateral
Account as described in such notice, the Collateral Agent shall instruct
the Securities Intermediary by a notice, substantially in the form of
Exhibit B hereto, to release the Treasury Securities or security
entitlements with respect thereto from the Pledge by Transfer to the
Purchase Contract Agent for distribution to such Holder, free and clear of
any lien, pledge or security interest created hereby.
Section 5.04. Termination Event.
(a) Upon receipt by the Collateral Agent of written notice from
the Company or the Purchase Contract Agent that a Termination Event has
occurred, the Collateral Agent shall release all Collateral from the Pledge
and shall promptly Transfer:
(i) any Pledged Notes or security entitlements with respect
thereto or the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury
Portfolio (if the Treasury Portfolio has become a component of the
Income PACS as a result of a Successful Initial Remarketing or a
Tax Event Redemption);
(ii) any Pledged Treasury Securities, and
(iii) payments by Holders (or the Permitted Investments of such
payments) pursuant to Section 5.05 hereof,
to the Purchase Contract Agent for the benefit of the Holders for
distribution to such Holders in accordance with their respective interests,
free and clear of any lien, pledge or security interest or other interest
created hereby; provided, however, if any Holder shall be entitled to
receive less than $1,000 with respect to his interest in the Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, the Purchase Contract Agent shall have the
right to dispose of such interest for cash and deliver to such Holder cash
in lieu of delivering the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio.
(b) 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 Notes, the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, the
Pledged Treasury Securities or payments by Holders (or the Permitted
Investments of such payments) pursuant to Section 5.05 hereof, as the case
may be, as provided by this Section 5.04, the Purchase Contract Agent
shall:
(i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to 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 5.04, and shall deliver
such opinion to the Collateral Agent within ten days after the
occurrence of such Termination Event, and if (A) the Purchase
Contract Agent shall be unable to obtain such opinion within ten
days after the occurrence of such Termination Event or (B) the
Collateral Agent shall continue, after delivery of such opinion,
to refuse to effectuate the release and Transfer of all Pledged
Notes, Applicable Ownership Interests (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, the
Pledged Treasury Securities, the payments by Holders or the
Permitted Investments of such payments pursuant to Section 5.05
hereof or the Proceeds of any of the foregoing, as the case may
be, as provided in this Section 5.04, then the Purchase Contract
Agent shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the court
having 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 Notes, Applicable
Ownership Interests (as specified in clause (A) of the definition
of such term) of the Treasury Portfolio, the Pledged Treasury
Securities, or the payments by Holders or the Permitted
Investments of such payments pursuant to Section 5.05 hereof, or
as the case may be, as provided by this Section 5.04; or
(ii) commence an action or proceeding like that described
in clause 5.04(b)(i) hereof within ten days after the occurrence
of such Termination Event.
Section 5.05. Cash Settlement.
(a) Upon receipt by the Collateral Agent of (1) a notice from the
Purchase Contract Agent promptly after the receipt by the Purchase Contract
Agent of a notice from a Holder of Income PACS that such Holder has
elected, in accordance with the procedures specified in Section 5.02(a)(i)
or (d)(i) of the Purchase Contract Agreement, respectively, to effect a
Cash Settlement and (2) payment by such Holder by deposit in the Collateral
Account prior to 11:00 a.m. (New York City time) on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, in the case of
a Income PACS, unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred, or on the second Business Day immediately prior
to the Purchase Contract Settlement Date in the case of Treasury Stock
Purchase or a Income PACS, if a Tax Event Redemption or a Successful
Initial Remarketing has occurred, of the Purchase Price in lawful money of
the United States by certified or cashier's check or wire transfer of
immediately available funds payable to or upon the order of the Securities
Intermediary, then the Collateral Agent shall:
(i) instruct the Securities Intermediary promptly to
invest any such Cash in Permitted Investments;
(ii) release from the Pledge the Income PACS holder's or
the Growth PACS holder's related Pledged Notes, Pledged Applicable
Ownership Interests, or Pledged Treasury Securities, as
applicable, as to which such Holder has elected to effect a Cash
Settlement pursuant to this Section 5.05(a); and
(iii) instruct the Securities Intermediary to Transfer
all such Pledged Notes, Pledged Applicable Ownership Interests, or
the Pledged Treasury Securities, as the case may be, to the
Purchase Contract Agent for the benefit of such Holder, in each
case free and clear of the Pledge created hereby, for distribution
to such Holder.
The Company shall instruct the Collateral Agent in writing as to
the type of Permitted Investments in which any such Cash shall be invested;
provided, however, that if the Company fails to deliver such written
instructions by 10:30 a.m. (New York City time), the Collateral Agent shall
invest such Cash in the Permitted Investments described in clause (6) of
the definition of Permitted Investments.
Upon receipt of the proceeds upon the maturity of the Permitted
Investments on the Purchase Contract Settlement Date, the Collateral Agent
shall (A) instruct the Securities Intermediary to pay the portion of such
proceeds and deliver any certified or cashier's checks received, in an
aggregate amount equal to the Purchase Price, to the Company on the
Purchase Contract Settlement Date, and (B) instruct the Securities
Intermediary to release any amounts in excess of the Purchase Price earned
from such Permitted Investments to the Purchase Contract Agent for
distribution to such Holder.
(b) If a Holder of Income PACS (unless a Tax Event Redemption or a
Successful Initial Remarketing shall have occurred) (i) fails to notify
notifies the Purchase Contract Agent of its intention to make a Cash
Settlement as provided in paragraph 5.02(a)(i) or (ii) does notify the
Purchase Contract Agent as provided in paragraph 5.02(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 paragraph 5.02(a)(ii) of the
Purchase Contract Agreement, such Holder shall be deemed to have consented
to the disposition of such Holder's Pledged Notes in accordance with
paragraph 5.02(a)(iii) of the Purchase Contract Agreement.
(c) If a Holder of a Growth PACS or a Holder of Income PACS (if a
Tax Event Redemption or a Successful Initial Remarketing shall have
occurred) (i) fails to notify notifies the Purchase Contract Agent of its
intention to make a Cash Settlement as provided in paragraph 5.02(d)(i) or
(ii) does notify the Purchase Contract Agent as provided in paragraph
5.02(d)(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
paragraph 5.02(d)(ii) of the Purchase Contract Agreement, such Holder shall
be deemed to have elected to pay the Purchase Price in accordance with
paragraph 5.02(d)(iii) of the Purchase Contract Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time)
on the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, the Collateral Agent shall deliver to the Purchase
Contract Agent a notice, substantially in the form of Exhibit E hereto,
stating (i) the amount of cash that it has received with respect to the
Cash Settlement of Income PACS and (ii) the amount of Cash that it has
received with respect to the Cash Settlement of Growth PACS.
Section 5.06. Early Settlement upon a Cash Merger. Upon receipt by
the Collateral Agent of a notice from the Purchase Contract Agent that a
Holder of Securities has elected to effect Early Settlement of its
obligations under the Purchase Contracts forming a part of such Securities
in accordance with the terms of the Purchase Contracts and Section
5.04(b)(2) of the Purchase Contract Agreement (which notice shall set forth
the number of such Purchase Contracts as to which such Holder has elected
to effect Early Settlement), and that the Purchase Contract Agent has
received from such Holder, and paid to the Company as confirmed in writing
by the Company, the related Purchase Price 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, (1) Pledged Notes or the
appropriate Applicable Ownership Interests (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio in the case of a
Holder of Income PACS or (2) Pledged Treasury Securities, in the case of a
Holder of Growth PACS, in each case with a Value equal to the product of
(x) the Stated Amount times (y) the number of Purchase Contracts as to
which such Holder has elected to effect Early Settlement, and shall
instruct the Securities Intermediary to Transfer all such Pledged
Applicable Ownership Interests or Pledged Notes or Pledged Treasury
Securities, as the case may be, to the Purchase Contract Agent for the
benefit of such Holder, in each case free and clear of the Pledge created
hereby, for distribution to such Holder. A Growth PACS holder may settle
early only in integral multiples of [40] Purchase Contracts [and an Income
PACS holder, if a Tax Event Redemption or a Successful Initial Remarketing
has occurred, may settle early only in integral multiples of ______
Purchase Contracts].
Section 5.07. Application of Proceeds in Settlement of Purchase
Contracts.
(a) If a Holder of Income PACS (unless a Successful Initial
Remarketing or a Tax Event Redemption has occurred) has not elected to make
an effective Cash Settlement by notifying the Purchase Contract Agent in
the manner provided for in Section 5.02(a)(i) in the Purchase Contract
Agreement, or has given such notice but failed to deliver the required cash
prior to 11:00 a.m. (New York City time) on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, 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 remarketing
of the related Pledged Notes. Upon written notice of such event from the
Purchase Contract Agent, the Collateral Agent shall instruct the Securities
Intermediary to Transfer the related Pledged Notes to the Remarketing Agent
for remarketing. Upon receiving such Pledged Notes, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement, will use reasonable
efforts to remarket such Pledged Notes. The Remarketing Agent will deposit
the Proceeds of such Secondary Remarketing (less, to the extent permitted
by the Remarketing Agreement, the Remarketing Fee) in the Collateral
Account, and the Collateral Agent shall invest the Proceeds of the
remarketing in Permitted Investments set forth in clause (6) of the
definition of Permitted Investments. On the Purchase Contract Settlement
Date, the Purchase Contract Agent shall give written direction to the
Collateral Agent specifying the instruction the Collateral Agent shall give
to the Securities Intermediary in order to apply a portion of the Proceeds
from such remarketing equal to the aggregate principal amount of such
Pledged Notes to satisfy in full such Holder's obligations to pay the
Purchase Price to purchase the shares of Common Stock under the related
Purchase Contracts and the balance of the Proceeds from the remarketing, if
any, that shall be transferred to the Purchase Contract Agent for the
benefit of such Holder for distribution to such Holder.
If the Remarketing Agent advises the Collateral Agent in writing
that there has been a Failed Secondary Remarketing, thus resulting in an
event of default under the Purchase Contract Agreement and hereunder, the
Collateral Agent, for the benefit of the Company shall, at the written
direction of the Company, exercise its rights as a secured party with
respect to the Pledged Notes and use commercially reasonable efforts to
dispose of the Pledged Notes in accordance with applicable law and apply
the proceeds from such disposition towards such Holder's obligations to pay
the Purchase Price for the shares of Common Stock.
(b) If a Holder of a Growth PACS or a Holder of Income PACS (if a
Tax Event Redemption or a Successful Initial Remarketing has occurred) has
not elected to make an effective Cash Settlement by notifying the Purchase
Contract Agent in the manner provided for in Section 5.02(d)(i) of the
Purchase Contract Agreement, or has given such notice but failed to make
such payment in the manner required by Section 5.02(d)(ii) 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 such Applicable
Ownership Interests (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio, as the case may be. Promptly, after 11:00
a.m. (New York City time) on the Business Day immediately prior to the
Purchase Contract Settlement Date, the Collateral Agent shall invest the
Cash Proceeds of the maturing Pledged Treasury Securities or such
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
Permitted Investments set forth in clause 6 of the definition of Permitted
Investments, unless prior to 10:30 a.m. (New York City time), the Company
shall otherwise instruct the Collateral Agent as to the type of Permitted
Investments in which any such Cash Proceeds shall be invested. Without
receiving any instruction from any such Holder, the Collateral Agent shall
apply the Proceeds of the related Pledged Treasury Securities or such
Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, to
the settlement of such Purchase Contracts on the Purchase Contract
Settlement Date. In the event the sum of the Proceeds from the related
Pledged Treasury Securities or such Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio as the case may be, and the investment earnings from the
investment in Permitted Investments exceeds the aggregate Purchase Price of
the Purchase Contracts being settled thereby, the Collateral Agent shall
instruct the Securities Intermediary to distribute such excess, when
received, to the Purchase Contract Agent for the benefit of such Holder for
distribution to such Holder.
(c) Under the Remarketing Agreement and subject to the terms of
the Supplemental Remarketing Agreement, on or prior to the second Business
Day immediately preceding Initial Remarketing Date or the Secondary
Remarketing Date, as applicable, but no earlier than the Payment Date
immediately preceding the date, Holders of Separate Notes may elect to have
their Separate Notes remarketed by delivering their Separate Notes, along
with a notice of such election, substantially in the form of Exhibit F
hereto, to the Custodial Agent. The Custodial Agent shall hold Separate
Notes in an account separate from the Collateral Account in which the
Pledged Securities shall be held. Holders of Notes electing to have their
Separate Notes remarketed will also have the right to withdraw that
election by written notice to the Custodial Agent, substantially in the
form of Exhibit G hereto, on or prior to the second Business Day
immediately preceding the Initial Remarketing Date or the Secondary
Remarketing Date, as applicable, upon which notice the Custodial Agent
shall return such Separate Notes to such Holder.
On the Business Day immediately preceding Initial Remarketing Date
or the Secondary Remarketing Date, as applicable, the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of the
Separate Notes to be remarketed and will deliver to the Remarketing Agent
for remarketing all Separate Notes delivered to the Custodial Agent
pursuant to this Section 5.07(c) and not withdrawn pursuant to the terms
hereof prior to such date. After deducting the Remarketing Fee to the
extent permitted under the terms of the Remarketing Agreement, the
Remarketing Agent will remit to the Custodial Agent the remaining portion
of the proceeds of such Remarketing for the benefit of such Holders. In the
event of a Failed Initial Remarketing or a Failed Secondary Remarketing,
the Remarketing Agent will promptly return such Separate Notes to the
Custodial Agent for redelivery to such Holders.
Section 5.08. Tax Event Redemption. If the Collateral Agent
receives written notice that a Tax Event Redemption has occurred prior to
the Purchase Contract Settlement Date, the Collateral Agent shall apply the
Redemption Amount to purchase the Treasury Portfolio and the Collateral
Agent shall credit the Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio to the
Collateral Account and shall transfer the Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio to the Purchase Contract Agent for distribution to the Holders of
the Income PACS. Upon credit to the Collateral Account of the Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) of the Treasury Portfolio having a Value equal to the aggregate
principal amount of the Pledged Notes, the Collateral Agent shall cause the
Securities Intermediary to release the Pledged Notes from the Collateral
Account and shall promptly transfer the Pledged Notes to the Company.
ARTICLE 6
Voting Rights - Pledged Notes
Section 6.01. Voting Rights. The Purchase Contract Agent may
exercise, or refrain from exercising, any and all voting and other
consensual rights pertaining to the Pledged Notes 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 shall not refrain
from exercising such right, as the case may be, if, in the judgment of the
Purchase Contract Agent, such action would impair or otherwise have a
material adverse effect on the value of all or any of the Pledged Notes;
and provided, further, that the Purchase Contract Agent shall give the
Company and the Collateral Agent at least five Business 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 Notes, including notice of
any meeting at which holders of the Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of the Notes, 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 Notes (in
form and substance satisfactory to the Collateral Agent) as are prepared by
the Purchase Contract Agent with respect to the Pledged Notes.
ARTICLE 7
Rights and Remedies
Section 7.01. Rights and Remedies of the Collateral Agent.
(a) In addition to the rights and remedies specified in Section
5.06 hereof or otherwise available at law or in equity, after an event of
default (as specified in Section 7.01(b) below) hereunder, the Collateral
Agent shall have all of the rights and remedies with respect to the
Collateral of a secured party under the UCC (whether or not the UCC 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. Without limiting
the generality of the foregoing, such remedies may include, to the extent
permitted by applicable law, (1) retention of the Pledged Notes, Pledged
Treasury Securities or the appropriate Pledged Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) in
full satisfaction of the Holders' obligations under the Purchase Contracts
and the Purchase Contract Agreement or (2) sale of the Pledged Notes,
Pledged Treasury Securities or the appropriate Pledged Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) 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 Interests (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
Article 3 hereof, in satisfaction of the Obligations of the Holder of the
Securities of which such appropriate Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio or such Pledged Treasury Securities, 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 the appropriate Applicable Ownership Interests (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio, as
applicable, any and all of the rights and remedies available to a secured
party under the UCC 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
principal amount of the Pledged Notes, (ii) the principal amount of the
Pledged Treasury Securities and (iii) the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the principal
amount of the Treasury Portfolio, subject, in each case, to the provisions
of Article 3 hereof, and as otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities
agrees that, from time to time, upon the written request of the Collateral
Agent or the Purchase Contract Agent, 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 acts, its own negligent failure to act or its own willful
misconduct.
Section 7.02. Tax Event Redemption. Upon the occurrence of a Tax
Event Redemption prior to the Purchase Contract Settlement Date, the
Redemption Amount, plus any accrued and unpaid interest payable on the Tax
Event Redemption Date with respect to the Applicable Principal Amount shall
be credited to the Collateral Account by the Indenture Trustee, on or prior
to 12:30 p.m., New York City time on such Tax Event Redemption Date, by
federal funds check or wire transfer of immediately available funds. The
Collateral Agent is hereby authorized to present the Pledged Notes for
payment as may be required by their respective terms. Upon receipt of such
funds, the Pledged Notes, as the case may be, shall be released from the
Collateral Account. In the event such funds are credited to the Collateral
Account, the Collateral Agent, at the written direction of the Company,
shall instruct the Securities Intermediary to (a) apply an amount equal to
the Redemption Amount of such funds to purchase the Treasury Portfolio from
the Quotation Agent for credit to the Collateral Account and (b) promptly
remit the remaining portion of such funds, if any, to the Purchase Contract
Agent for payment to the Holders of Income PACS.
Section 7.03. Initial Remarketing. The Collateral Agent shall, by
11:00 a.m., New York City time, on the Business Day immediately preceding
the Initial Remarketing Date, without any instruction from any Holder of
Income PACS, present the related Pledged Notes to the Remarketing Agent for
remarketing. Upon receiving such Pledged Notes, the Remarketing Agent,
pursuant to the terms of the Remarketing Agreement, will use its reasonable
efforts to remarket such Pledged Notes on the Initial Remarketing Date at a
price of approximately 100.5% (but not less than 100%) of the Treasury
Portfolio Purchase Price. After deduction as the Remarketing Fee of an
amount not exceeding 25 basis points (.25%) of the Treasury Portfolio
Purchase Price from any amount of such Proceeds in excess of the Treasury
Portfolio Purchase Price, the Remarketing Agent will remit the entire
amount of the Proceeds of such remarketing to the Collateral Agent 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 Notes. In
the event the Collateral Agent receives such Proceeds, the Collateral Agent
will, at the written direction of the Company, apply an amount equal to the
Treasury Portfolio Purchase Price to purchase from the Quotation Agent the
Treasury Portfolio and promptly remit the remaining portion of such
Proceeds to the Purchase Contract Agent for payment to the Holders of
Income PACS. The Collateral Agent shall Transfer the Treasury Portfolio to
the Collateral Account to secure the obligation of all Holders of Income
PACS to purchase Common Stock of the Company under the Purchase Contracts
constituting a part of such Income PACS, in substitution for the Pledged
Notes. In the event of a Failed Initial Remarketing, the Notes presented to
the Remarketing Agent pursuant to this Section 7.03 for Remarketing shall
be redeposited into the Collateral Account.
Section 7.04. Substitutions. Whenever a Holder has the right to
substitute Treasury Securities, Notes or security entitlements for any of
them or the appropriate Applicable Ownership Interests of the Treasury
Portfolio, as the case may be, for financial assets held in the Collateral
Account, such substitution shall not constitute a novation of the security
interest created hereby.
ARTICLE 8
Representations and Warranties; Covenants
Section 8.01. Representations and Warranties. Each Holder from
time to time, acting through the Purchase Contract Agent as
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 represents and warrants to the Collateral Agent (with
respect to such Holder's interest in the Collateral), 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;
(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 for
credit to the Collateral Account, 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 Article 2 hereof;
(c) upon the Transfer of the Collateral to the Collateral Agent
for credit 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
securities intermediary or other entity not within the control of the
Holder involved in the Transfer of the Collateral, including the Collateral
Agent and the Securities Intermediary, 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 Article 4 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 Article 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 8.02. 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 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.
ARTICLE 9
The Collateral Agent, the Custodial Agent and the Securities
Intermediary
It is hereby agreed as follows:
Section 9.01. Appointment, Powers and Immunities. The Collateral
Agent, the Custodial Agent or Securities Intermediary shall act as agent
for the Company hereunder with such powers as are specifically vested in
the Collateral Agent, the Custodial Agent or Securities Intermediary, as
the case may be, by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Collateral Agent, the
Custodial Agent and Securities Intermediary shall:
(a) 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 the Collateral Agent, the Custodial
Agent and Securities Intermediary, nor shall the Collateral Agent, the
Custodial Agent and Securities Intermediary be bound by the provisions of
any agreement by any party hereto beyond the specific terms hereof;
(b) 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 Custodial Agent or Securities
Intermediary, as the case may be,), 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 or 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) not be required to initiate or conduct any litigation or
collection proceedings hereunder (except pursuant to directions furnished
under Section 9.02 hereof, subject to Section 9.06 hereof);
(d) 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 or willful misconduct; and
(e) not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to,
any securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral
Agent, the Custodial 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
or 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 or Securities
Intermediary be liable for any amount in excess of the Value of the
Collateral. Notwithstanding the foregoing, each of the Collateral Agent and
the Securities Intermediary in its individual capacity hereby waives any
right of setoff, bankers' lien, liens or perfection rights as securities
intermediary or any counterclaim with respect to any of the Collateral.
Section 9.02. Instructions of the Company. The Company shall have
the right, by one or more written instruments executed and delivered to the
Collateral Agent, 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
Agent, 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 shall be adequately indemnified as provided
herein. Nothing contained in this Section 9.02 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 9.03. Reliance by Collateral Agent and Securities
Intermediary. Each of the Securities Intermediary, the Custodial Agent and
the Collateral Agent shall be entitled to rely upon any certification,
order, judgment, opinion, notice or other written communication (including,
without limitation, any thereof by e-mail or similar electronic means,
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 consult with and rely upon advice, opinions 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 9.04. 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 other Person interested herein and any Holder of Securities (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, the
Securities Intermediary and their affiliates may accept fees and other
consideration from the Purchase Contract Agent and any Holder of Securities
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 other than the lien created by the Pledge.
Section 9.05. Non-Reliance on Collateral Agent, the Custodial
Agent and Securities Intermediary. 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. None of the Collateral Agent,
the Custodial Agent or the Securities Intermediary shall have any duty or
responsibility to provide the Company with any credit or other information
concerning the affairs, financial condition or business of the Purchase
Contract Agent or any Holder of Securities (or any of their respective
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 9.06. Compensation and Indemnity. The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the
Securities Intermediary from time to time such compensation as shall be
agreed in writing between the Company and the Collateral Agent or the
Securities Intermediary, as the case may be, for all services rendered by
them hereunder;
(b) indemnify and hold harmless the Collateral Agent, the
Custodial Agent, the Securities Intermediary and each of their respective
directors, officers, agents and employees (collectively, the
"Indemnitees"), harmless from and against any and all claims, liabilities,
losses, damages, fines, penalties and expenses (including reasonable fees
and expenses of counsel) (collectively, "Losses" and individually, a
"Loss") that may be imposed on, incurred by, or asserted against, the
Indemnitees or any of them for following any instructions or other
directions upon which either the Collateral Agent, the Custodial Agent or
the Securities Intermediary is entitled to rely pursuant to the terms of
this Agreement; and
(c) in addition to and not in limitation of paragraph (b)
immediately above, indemnify and hold the Indemnitees and each of them
harmless from and against any and all Losses that may be imposed on,
incurred by or asserted against, the Indemnitees or any of them in
connection with or arising out of the Collateral Agent's, the Custodial
Agent's or the Securities Intermediary's acceptance or performance of its
powers and duties under this Agreement, provided the Collateral Agent, the
Custodial Agent or the Securities Intermediary has not acted with
negligence or engaged in willful misconduct or bad faith with respect to
the specific Loss against which indemnification is sought.
Section 9.07. 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, then at its sole option, each of the
Collateral Agent, the Custodial Agent and the Securities Intermediary shall
be entitled, after prompt notice to the Company and the Purchase Contract
Agent, 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 the Collateral Agent, the Custodial Agent and the
Securities Intermediary shall not 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, the
Custodial Agent and the Securities Intermediary shall be entitled to refuse
to act until either:
(a) 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, the Custodial Agent or the Securities
Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities
Intermediary shall have received security or an indemnity satisfactory to
it sufficient to save it harmless from and against any and all loss,
liability or reasonable out-of-pocket expense which it may incur by reason
of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary
may in addition elect to commence an interpleader action or seek other
judicial relief or orders as the Collateral Agent, the Custodial Agent or
the Securities Intermediary may deem necessary. Notwithstanding anything
contained herein to the contrary, none of the Collateral Agent, the
Custodial Agent or the Securities Intermediary 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 9.08. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary.
(a) Subject to the appointment and acceptance of a successor Collateral
Agent, Custodial Agent or Securities Intermediary as provided below:
(i) if the Collateral Agent, the Custodial Agent or the
Securities Intermediary is the same Person and the Purchase
Contract Agent and an event of default occurs under the Purchase
Contract Agreement or this Agreement, the Collateral Agent, the
Custodial Agent or the Securities Intermediary shall resign
immediately;
(ii) the Collateral Agent, the Custodial Agent and the
Securities Intermediary 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;
(iii) the Collateral Agent, the Custodial Agent and the
Securities Intermediary may be removed at any time by the Company;
and
(iv) if the Collateral Agent, the Custodial Agent and the
Securities Intermediary 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 and the Securities Intermediary
may be removed by the Purchase Contract Agent, acting at the
direction of the Holders of Securities.
The Purchase Contract Agent shall promptly notify the Company of any
removal of the Collateral Agent, the Custodial Agent pursuant to clause
(iii) of this Section 9.08(a). Upon any such resignation or removal, the
Company shall have the right to appoint a successor Collateral Agent, the
Custodial Agent or Securities Intermediary, as the case may be. If no
successor Collateral Agent, the Custodial Agent or Securities Intermediary
shall have been so appointed and shall have accepted such appointment
within 30 days after the retiring Collateral Agent's, the Custodial Agent's
or Securities Intermediary's giving of notice of resignation or the Company
or the Purchase Contract Agent giving notice of such removal, then the
retiring Collateral Agent, Custodial Agent or Securities Intermediary may
petition any court of competent jurisdiction for the appointment of a
successor Collateral Agent, Custodial Agent or Securities Intermediary. The
Collateral Agent, the Custodial Agent and the Securities Intermediary shall
each be a bank or a national banking association which has an office (or an
agency office) in New York City with a combined capital and surplus of at
least $50,000,000. Upon the acceptance of any appointment as Collateral
Agent, Custodial Agent or Securities Intermediary hereunder by a successor
Collateral Agent or Securities Intermediary, as the case may be, such
successor Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent,
Custodial Agent or Securities Intermediary, as the case may be, and the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, 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, Custodial Agent or Securities
Intermediary shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent, Custodial Agent or Securities Intermediary
hereunder. After any retiring Collateral Agent's, Custodial Agent's or
Securities Intermediary's resignation hereunder as Collateral Agent,
Custodial Agent or Securities Intermediary, the provisions of this Article
9 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,
the Custodial Agent or Securities Intermediary. Any resignation or removal
of the Collateral Agent, the Custodial Agent or the Securities Intermediary
hereunder, at a time when such Person is acting as the Collateral Agent,
the Custodial Agent or the Securities Intermediary, shall be deemed for all
purposes of this Agreement as the simultaneous resignation or removal of
the Securities Intermediary or the Custodial Agent.
Section 9.09. 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 9.09 shall be subject to prior consent of the
Company, which consent shall not be unreasonably withheld.
Section 9.10. Survival. The provisions of this Article 9 shall
survive termination of this Agreement and the resignation or removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary.
Section 9.11. Exculpation. Anything contained in this Agreement to
the contrary notwithstanding, in no event shall the Collateral Agent, the
Custodial Agent or the Securities Intermediary or their officers,
directors, 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, but not limited to, 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.
ARTICLE 10
Amendment
Section 10.01. Amendment Without Consent of Holders. Without the
consent of any Holders, 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, to:
(a) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company;
(b) evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, , the Custodial Agent,
Securities Intermediary or Purchase Contract Agent;
(c) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the Company,
provided such covenants or such surrender do not adversely affect the
validity, perfection or priority of the Pledge created hereunder; or
(d) cure any ambiguity (or formal defect), correct or supplement
any provisions herein which may be inconsistent with any other such
provisions herein, or 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 10.02. 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 such Holders delivered to the Company, the
Purchase Contract Agent, , the Custodial Agent, the Securities Intermediary
or the Collateral Agent, as the case may be, the Company, when duly
authorized, the Purchase Contract Agent, the Securities Intermediary and
the Collateral Agent 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 unanimous consent of the Holders of each
Outstanding Security adversely affected thereby:
(a) Change the amount or type of Collateral underlying a Security
(except for the rights of holders of Income PACS to substitute the Treasury
Securities for the Pledged Notes or the Applicable Ownership Interest (as
specified in clause (A) of such term) of the Treasury Portfolio, as the
case may be, or the rights of Holders of Growth PACS to substitute Notes or
the Applicable Ownership Interest (as specified in clause (A) of such term)
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
(b) 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; or
(c) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for any such amendment;
provided that if any amendment or proposal referred to above would
adversely affect only the Income PACS or only the Growth PACS, then only
the affected class of Holders as of the record date for the Holders
entitled to vote thereon will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be effective except with
the consent of Holders of not less than a majority of such class; provided,
further, that the unanimous consent of the Holders of each outstanding
Purchase Contract of such class affected thereby shall be required to
approve any amendment or proposal specified in clauses (a) through (c)
above.
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 10.03. 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 7.01 of the Purchase Contract Agreement
with respect to the Purchase Contract Agent) shall be fully protected in
relying upon, an 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.
Section 10.04. Effect of Amendments. Upon the execution of any
amendment under this Section, 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 10.05. Reference of Amendments. 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
in exchange for Certificates representing Outstanding Securities.
ARTICLE 11
Miscellaneous
Section 11.01. No Waiver. No failure on the part of the Collateral
Agent, the Securities Intermediary or any of their respective agents to
exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Collateral Agent,
the Securities Intermediary or any of their respective agents of any right,
power or remedy hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or remedy. The remedies herein are
cumulative and are not exclusive of any remedies provided by law.
Section 11.02. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. The
Company, the Collateral Agent, the Custodial Agent, the Securities
Intermediary 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, the Securities Intermediary 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.
Section 11.03. 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.
Section 11.04. 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 11.05. 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 11.06. 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 liberally 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 11.07. Expenses, Etc.. The Company agrees to reimburse the
Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all reasonable costs and expenses of the Collateral Agent, the
Custodial Agent and the Securities Intermediary (including, without
limitation, the reasonable fees and expenses of counsel to the Collateral
Agent and the Securities Intermediary), 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 and
the Securities Intermediary (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 11.07;
(c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or 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;
(d) all fees and expenses of any agent or advisor appointed by the
Collateral Agent and consented to by the Company under 9.09 of this
Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred
by the Collateral Agent and the Securities Intermediary in connection with
the performance of their duties hereunder.
Section 11.08. 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 the 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
pledger.
Section 11.09. Notice of Tax Event, Tax Event Redemption and
Termination Event. Upon the occurrence of a Tax Event, a Tax Event
Redemption or a Termination Event, the Company shall deliver written notice
to the Collateral Agent and the Securities Intermediary. Upon the written
request of the Collateral Agent or the Securities Intermediary, the Company
shall inform such party whether or not a Tax Event, a Tax Event Redemption
or a Termination Event has occurred.
[SIGNATURES ON THE FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
THE WILLIAMS COMPANIES, INC. [ ] as
Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By:_____________________________ By:________________________________
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
The Williams Companies, Inc. [ ]
[ ]
[ ]
Attention: Attention:
Telecopy: Telecopy:
With a copy to:
[ ]
[ ]
[ ]
Attention:
Telecopy:
[ ] [ ]
as Collateral Agent as Securities Intermediary
By:_____________________________ By:__________________________
Name: Name:
Title: Title:
Address for Notices: Address for Notices:
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
[ ] [ ]
Attention: Attention:
Telecopy: Telecopy:
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Growth PACS)
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: Income PACS of The Williams Companies, Inc.
(the "Company")
The securities account of [ ], as Collateral Agent,
maintained by the Securities Intermediary and designated
"[ ], as Collateral Agent of The Williams
Companies, Inc., as pledgee of [ ], as the Purchase Contract
Agent on behalf of and as attorney-in- fact for the Holders"
(the "Collateral Account")
Please refer to the Pledge Agreement, dated as of __________, 2002
(the "Pledge Agreement"), among the Company, you, as Collateral Agent, [
], as Securities Intermediary, as Custodial Agent and the
undersigned, as Purchase Contract Agent and as attorney-in-fact for the
holders of Income PACS from time to time. Capitalized terms used herein but
not defined shall have the meaning set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.02 of the Pledge
Agreement that the holder of securities named below (the "Holder") has
elected to substitute $__________ Value of Treasury Securities or security
entitlements with respect thereto in exchange for an equal Value of
[Pledged Notes] [Pledged Applicable Ownership Interests] relating to
_________ Income PACS and has delivered to the undersigned a notice stating
that the Holder has Transferred such Treasury Securities or security
entitlements with respect thereto to the Securities Intermediary, for
credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary,
upon confirmation that such Treasury Securities or security entitlements
thereto have been credited to the Collateral Account, to release to the
undersigned an equal Value of [Pledged Notes] [Pledged Applicable Ownership
Interests] in accordance with Section 5.02 of the Pledge Agreement.
[ ],
Date: as Purchase Contract Agent and as
attorney-in-fact of the Holders from
time to time of the Securities
By:__________________________
Name:
Title:
Please print name and address of Holder electing to substitute Treasury
Securities or security entitlements with respect thereto for the [Pledged
Notes] [Pledged Applicable Ownership Interests]:
- ----------------------------- -------------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ------------------------------
Address
- ------------------------------
- ------------------------------
EXHIBIT B
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Establishment of Growth PACS)
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: Income PACS of The Williams Companies, Inc. (the
"Company")
The securities account of [ ], as
Collateral Agent, maintained by the Securities Intermediary and
designated "[ ], as Collateral Agent of
The Williams Companies, Inc., as pledgee of [ ], as the
Purchase Contract Agent on behalf of and as attorney-in-fact for the
Holders" (the "Collateral Account")
Please refer to the Pledge Agreement, dated as of
_________________, 2002 (the "Pledge Agreement"), among the Company, you,
as Securities Intermediary, [ ], as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PACS from time to time, and the
undersigned, as Collateral Agent. Capitalized terms used herein but not
defined shall have the meanings set forth in the Pledge Agreement.
When you have confirmed that $__________ Value of Treasury
Securities or security entitlements thereto has been credited to the
Collateral Account by or for the benefit of _________, as Holder of Income
PACS (the "Holder"), you are hereby instructed to release from the
Collateral Account an equal Value of [Notes or security entitlements with
respect thereto] [Applicable Ownership Interests (as specified in clause
(A) of the definition of such term)] relating to _____ Income PACS of the
Holder by Transfer to the Purchase Contract Agent.
[ ],
as Collateral Agent
Dated:_______________
By:_______________________
Name:
Title:
Please print name and address of Holder:
- -------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ---------------------------------
Address
- ---------------------------------
- ---------------------------------
EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Income PACS )
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: ____________ Income PACS of The Williams Companies, Inc.
(the "Company")
Please refer to the Pledge Agreement dated as of __________, 2002
(the "Pledge Agreement"), among the Company, you, as Collateral Agent, [
], as Securities Intermediary, as Custodial Agent and the
undersigned, as Purchase Contract Agent and as attorney-in-fact for the
holders of Income PACS from time to time. Capitalized terms used herein but
not defined shall have the meaning set forth in the Pledge Agreement.
We hereby notify you in accordance with Section 5.03(a) of the
Pledge Agreement that the holder of securities listed below (the "Holder")
has elected to substitute $ Value of [Notes or security entitlements with
respect thereto] [Applicable Ownership Interests (as specified in clause
(A) of the definition of such term] in exchange for $__________ Value of
Pledged Treasury Securities and has delivered to the undersigned a notice
stating that the holder has Transferred such [Notes or security
entitlements with respect thereto] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term] to the Securities
Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary,
upon confirmation that such [Notes or security entitlements with respect
thereto] [Applicable Ownership Interests (as specified in clause (A) of the
definition of such term] have been credited to the Collateral Account, to
release to the undersigned $__________ Value of Treasury Securities or
security entitlements with respect thereto related to _____ Income PACS of
such Holder in accordance with Section 5.03(a) of the Pledge Agreement.
[ ],
as Purchase Contract Agent
Dated:_______________ By:_______________________
Name:
Title:
Please print name and address of Holder electing to substitute [Pledged
Notes or security entitlements with respect thereto] [Pledged Applicable
Ownership Interests] for Pledged Treasury Securities:
- ---------------------------- -------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- ---------------------------------
Address
- ---------------------------------
- ---------------------------------
EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Income PACS)
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: ___________ Income PACS of The Williams Companies,
Inc. (the "Company")
The securities account of [ ], as
Collateral Agent, maintained by the Securities Intermediary
and designated "[ ], as
Collateral Agent of The Williams Companies, Inc., as pledgee
of [ ], as the Purchase Contract
Agent on behalf of and as attorney-in-fact for the Holders"
(the "Collateral Account")
Please refer to the Pledge Agreement dated as of
_________________, 2002 (the "Pledge Agreement"), among the Company, you,
as Securities Intermediary, Custodial Agent and Collateral Agent [ ], as
Purchase Contract Agent and as attorney-in-fact for the holders of Income
PACS from time to time, and the undersigned, as Collateral Agent.
Capitalized terms used herein but no defined shall have the meaning set
forth in the Pledge Agreement.
When you have confirmed that $ __________ Value of [Notes or
security entitlements with respect thereto] [Applicable Ownership Interests
(as specified in clause (A) of the definition of such term] has been
credited to the Collateral Account by or for the benefit of
________________, as Holder of Income PACS (the "Holder"), you are hereby
instructed to release from the Collateral Account $
________________ Value of Treasury Securities or security entitlements
thereto by Transfer to the Purchase Contract Agent.
[ ],
as Collateral Agent
Dated:_______________ By:_______________________
Name:
Title:
- ------------------------------- --------------------------
Name Social Security or other
Taxpayer Identification Number,
if any
- -------------------------------
Address
- -------------------------------
- -------------------------------
EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
[ ]
[ ]
[ ]
Attention:
Telecopy:
Re: __________ Income PACS of The Williams Companies, Inc.
(the "Company")
Please refer to the Pledge Agreement dated as of _______________,
2002 (the "Pledge Agreement"), by and among you, the Company, [ ], as
Collateral Agent, Custodial Agent and Securities Intermediary. Unless
otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein.
In accordance with Section 5.05(d) of the Pledge Agreement, we
hereby notify you that as of 11:00 a.m. (New York City time) on the fourth
Business Day immediately preceding ___________, we have received (i) $
_______________ in immediately available funds paid in an aggregate amount
equal to the Purchase Price due to the Company on the Purchase Contract
Settlement Date with respect to ________________ Income PACS and (ii) $
___________ in immediately available funds paid in an aggregate amount
equal to the Purchase Price due to the Company on the Purchase Contract
Settlement Date with respect to ______ Growth PACS.
[ ],
as Collateral Agent,
Dated:_______________ By:_______________________
Name:
Title:
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING
REMARKETING
[address of agent]
Re: Notes of The Williams Companies, Inc. (the "Company")
The undersigned hereby notifies you in accordance with Section
5.07(c) of the Pledge Agreement, dated as of _______ __, 2002 (the "Pledge
Agreement"), among the Company, you, as Collateral Agent, Custodial Agent
and Securities Intermediary, the Purchase Contract Agent and as
attorney-in-fact for the holders of Income PRIDES from time to time, that
the undersigned elects to deliver $______________ aggregate principal
amount of Separate Notes for delivery to the Remarketing Agent on the
Business Day immediately preceding the [Initial Remarketing Date]
[Secondary Remarketing Date] for remarketing pursuant to Section 5.07(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 Separate Notes tendered
hereby. Capitalized terms used herein but no defined shall have the meaning
set forth in the Pledge Agreement.
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 [Initial] [Secondary] Remarketing, upon receipt of the Separate
Notes 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 Separate Notes tendered hereby and that the undersigned is
the record owner of any Notes tendered herewith in physical form or a
participant in The Depositary Trust Company ("DTC") and the beneficial
owner of any Notes tendered herewith by book-entry transfer to your account
at DTC and (ii) agrees to be bound by the terms and conditions of Section
5.07(c) of the Pledge Agreement.
Date:_____________
_____________________________________
By:__________________________________
Name:
Title:
Signature Guarantee:_________________
___________________________
__________________________________
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, Notes 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, Notes 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:_________________________________
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
[address]
Re: Notes of The Williams Companies, Inc. (the "Company")
The undersigned hereby notifies you in accordance with Section
5.07(c) of the Pledge Agreement, dated as of ________ __, 2002 (the "Pledge
Agreement"), among the Company, you, as Collateral Agent, Custodial Agent
and Securities Intermediary, and as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PRIDES from time to time, that
the undersigned elects to withdraw the $_________ aggregate principal
amount of Separate Notes delivered to the Custodial Agent on _________,
200_ for remarketing pursuant to Section 5.07(c) of the Pledge Agreement.
The undersigned hereby instructs you to return such Notes 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 5.07(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:_______________
___________________________
___________________________________
Name Social Security or other Taxpayer
Identification Number, if any
___________________________
Address
___________________________
___________________________
EXHIBIT 8
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of __________, 2002 (the
"Agreement") by and between The Williams Companies, Inc., a Delaware
corporation (the "Company"), [Agent], a New York banking corporation, 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 $[ ] (or $[ ] if the underwriters'
overallotment option is exercised in full) aggregate Stated Amount of its
FELINE PACS (the "FELINE PACS") under the Purchase Contract Agreement,
dated as of __________, 2002, by and between the Purchase Contract Agent
and the Company (the "Purchase Contract Agreement"); and
WHEREAS, the FELINE PACS will initially consist of [ ] (or [
] if the underwriters' overallotment option is exercised in full) units
referred to as "Income PACS."
WHEREAS, the Company will issue concurrently in connection with
the issuance of the FELINE PACS $[ ] (or $[ ] if the underwriters'
overallotment option is exercised in full) aggregate principal amount of
Senior Notes due February 16, 2007 (the "Notes") of the Company; and
WHEREAS, the Notes forming a part of the Income PACS will be
pledged pursuant to the Pledge Agreement (the "Pledge Agreement"), dated as
of __________, 2002, by and among the Company, [Agent], as collateral agent
(the "Collateral Agent") and the Purchase Contract Agent, to secure an
Income PACS holder's obligations under the related Purchase Contract on the
Purchase Contract Settlement Date; and
WHEREAS, the Notes of the Income PACS holders and of the Note
holders electing to have their Notes remarketed will be remarketed by the
Remarketing Agent on the third Business Day immediately preceding November
16, 2004 (the "Initial Remarketing Date"); and
WHEREAS, in the event of a Failed Initial Remarketing, the Notes
of the Note holders electing to have their Notes remarketed and of the
Income PACS holders who have elected not to settle the Purchase Contracts
related to their Income PACS by Cash Settlement will be remarketed by the
Remarketing Agent on the third Business Day immediately preceding the
Purchase Contract Settlement Date; and
WHEREAS, in the event of a Successful Initial Remarketing, the
applicable interest rate on the Notes will be reset on the Initial
Remarketing Date, to the Reset Rate to be determined by the Reset Agent as
the rate that such Notes should bear in order for the Applicable Principal
Amount of the Notes to have an approximate aggregate market value of 100.5%
of the Treasury Portfolio Purchase Price on the Initial Remarketing Date,
provided that in the determination of such Reset Rate, the Company shall,
if applicable, limit the Reset Rate to the maximum rate permitted by
applicable law; and
WHEREAS, in the event of a Failed Initial Remarketing, the
applicable interest rate on the Notes that remain outstanding 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 Notes
should bear in order to have an approximate market value of 100.5% of the
aggregate principal amount of the Notes on the third Business Day
immediately preceding the Purchase Contract Settlement Date, provided that
in the determination of such Reset Rate, 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 defined in Schedule I hereto) (as in effect on the date of
this Remarketing Agreement) with respect to the Notes, (1) the Reset Rate
that, in the opinion of the Reset Agent, will, when applied to the Notes,
enable the Applicable Principal Amount of the Notes to have an approximate
aggregate market value of 100.5% of the Treasury Portfolio Purchase Price
as of the Initial Remarketing Date, and (2) in the event of a Failed
Initial Remarketing, the Reset Rate that, in the opinion of the Reset
Agent, will, when applied to the Notes, enable a Note to have an
approximate market value of 100.5% of its principal amount as of the third
Business Day preceding the Purchase Contract Settlement Date, provided, in
each case, that the Company, by notice to the Reset Agent prior to the
tenth Business Day preceding (x) November 16, 2004, in the case of the
Initial Remarketing (as defined below), or (y) the Purchase Contract
Settlement Date, in the case of the Secondary Remarketing (as defined
below), 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 (1)
remarket the Notes of the Note holders electing to have their Notes
remarketed and of the Income PACS holders on the Initial Remarketing Date,
for settlement on November 16, 2004 and (2) in the case of a Failed Initial
Remarketing, remarket the Notes of the Note holders electing to have their
Notes remarketed or of the Income PACS holders who 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.
In connection with the remarketing contemplated hereby, the Remarketing
Agent will enter into a Supplemental Remarketing Agreement (the
"Supplemental 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 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 (i) remarket, on the Initial Remarketing Date, the
Notes that the Trustee (as such term is defined in the Indenture) and the
Purchase Contract Agent shall have notified the Remarketing Agent have been
tendered for, or otherwise are to be included in, the Initial Remarketing,
at a price per Note such that the aggregate price for the Applicable
Principal Amount of the Notes is approximately 100.5% of the Treasury
Portfolio Purchase Price and (ii) in the event of a Failed Initial
Remarketing, remarket, on the third Business Day immediately preceding the
Purchase Contract Settlement Date, the Notes that the Trustee and the
Purchase Contract Agent shall have notified the Remarketing Agent have been
tendered for, or otherwise are to be included in, the Secondary
Remarketing, at a price of approximately 100.5% of the aggregate principal
amount of such Notes.
Notwithstanding the preceding sentence, the Remarketing Agent
shall not remarket any Notes for a price less than the price necessary for
the Applicable Principal Amount of the Notes to have an aggregate price
equal to 100% of the Treasury Portfolio Purchase Price (the "Minimum
Initial Remarketing Price"), in the case of the Initial Remarketing, or the
aggregate principal amount of such Notes, in the case of the Secondary
Remarketing. After deducting the fee specified in Section 3 below, the
proceeds of such Initial Remarketing or Secondary Remarketing, as the case
may be, shall be paid to the Collateral Agent in accordance with Section
5.07 of the Pledge Agreement and Section 5.02 of the Purchase Contract
Agreement (each of which Sections are incorporated herein by reference).
The right of each holder of Notes or Income PACS to have Notes tendered for
the Initial Remarketing or the Secondary Remarketing, as the case may be,
shall be limited to the extent that (i) the Remarketing Agent conducts an
Initial Remarketing and, in the event of a Failed Initial Remarketing, a
Secondary Remarketing pursuant to the terms of this Agreement, (ii) Notes
tendered have not been called for redemption, (iii) the Remarketing Agent
is able to find a purchaser or purchasers for tendered Notes at a price of
not less than the Minimum Initial Remarketing Price, in the case of the
Initial Remarketing, and 100% of the principal amount thereof, in the case
of the Secondary Remarketing 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
Notes, whether in the Initial Remarketing, Secondary Remarketing or
otherwise, and shall in no way be obligated to provide funds to make
payment upon tender of Notes 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 of the
foregoing, the Remarketing Agent shall not be deemed an underwriter of the
remarketed Notes. The Company shall not be obligated in any case to provide
funds to make payment upon tender of Notes for remarketing.
Section 3. Fees. In the event of a Successful Initial Remarketing,
the Remarketing Agent shall retain as a remarketing fee (the "Remarketing
Fee") an amount not exceeding 25 basis points (0.25%) of the Minimum
Initial Remarketing Price from any amount received in connection with such
Initial Remarketing in excess of the Minimum Initial Remarketing Price. In
the event of a Successful Secondary Remarketing, the Remarketing Agent
shall retain as the Remarketing Fee an amount not exceeding 25 basis points
(0.25%), of the principal amount of the remarketed Notes from any amount
received in connection with such Secondary Remarketing in excess of the
aggregate principal amount of such remarketed Notes. In addition, the Reset
Agent shall, in either case, 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 Initial Remarketing
Date, in the case of a Successful Initial Remarketing, or on the third
Business Day immediately preceding the Purchase Contract Settlement Date,
in the case of a Successful Secondary Remarketing, 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 (i) on the [eleventh] Business Day
immediately prior to November 16, 2004, or (ii) in the event of a Failed
Initial Remarketing, prior to 3:00 p.m., New York City time on the eleventh
Business Day immediately prior to the Purchase Contract Settlement Date,
provided, in either case, 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 performed 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 (i) on the
[eleventh] Business Day immediately prior to November 16, 2004, or (ii) in
the event of a Failed Initial Remarketing, 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 performed
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 Notes. 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 Notes, Growth PACS, Income PACS or any
other securities of the Company. With respect to any Notes, Growth PACS
Units, Income PACS 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.
Section 6. Registration Statement and Prospectus. (a) In
connection with the Initial 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 Initial Remarketing, the
Company (i) shall use its reasonable efforts to have a registration
statement relating to the Notes effective under the Securities Act of 1933
prior to the third Business Day immediately preceding November 16, 2004,
(ii) if requested by the Remarketing Agent shall furnish a current
preliminary prospectus and, if applicable, a current preliminary prospectus
supplement to be used by the Remarketing Agent in the Initial Remarketing
not later than seven Business Days prior to November 16, 2004 (or such
earlier date as the Remarketing Agent may reasonably request) and in such
quantities as the Remarketing Agent may reasonably request, and (iii) shall
furnish a current final prospectus and, if applicable, a final prospectus
supplement to be used by the Remarketing Agent in the Initial Remarketing
not later than the third Business Day immediately preceding November 16,
2004 in such quantities as the Remarketing Agent may reasonably request,
and shall pay all expenses relating thereto.
(b) In the event of a Failed Initial Remarketing and in connection
with the Secondary 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 Secondary Remarketing, the Company (i) shall use its
reasonable efforts to have a registration statement relating to the Notes
effective under the Securities Act of 1933 prior to the third Business Day
immediately preceding the Purchase Contract Settlement Date, (ii) if
requested by the Remarketing Agent, shall furnish a current preliminary
prospectus and, if applicable, a current preliminary prospectus supplement
to be used by the Remarketing Agent in the Secondary Remarketing 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 (iii)
shall furnish a current final prospectus and, if applicable, a final
prospectus supplement to be used by the Remarketing Agent in the Secondary
Remarketing 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.
(c) If in connection with the Initial Remarketing or, in the event
of a Failed Initial Remarketing, the Secondary Remarketing, it shall not be
possible, in the view of counsel (which need not be an opinion) for either
the Remarketing Agent or the Company, under applicable law, regulations or
interpretations in effect at the time of such Initial Remarketing or such
Secondary Remarketing to register the offer and sale by the Company of the
Notes under the Securities Act of 1933 as otherwise contemplated by this
Section 6, the Company (i) shall use its reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper and advisable to permit and effectuate the offer and sale
of the Notes in connection with the Initial Remarketing or the Secondary
Remarketing, as the case may be, without registration under the Securities
Act of 1933 pursuant to an exemption therefrom, if available, including the
exemption afforded by Rule l44A under the rules and regulations promulgated
under the Securities Act of 1933 by the Securities and Exchange Commission,
(ii) if requested by the Remarketing Agent shall furnish a current
preliminary remarketing memorandum to be used by the Remarketing Agent in
the Initial Remarketing or the Secondary Remarketing, as the case may be,
not later than seven Business Days prior to November 16, 2004, in the case
of the Initial Remarketing, or the Purchase Contract Settlement Date, in
the case of the Secondary Remarketing (or in either case such earlier date
as the Remarketing Agent may reasonably request) and in such quantities as
the Remarketing Agent may reasonably request and (iii) shall furnish a
current final remarketing memorandum to be used by the Remarketing Agent in
the Initial Remarketing or the Secondary Remarketing, as the case may be,
not later than the third Business Day immediately preceding November 16,
2004, in the case of the Initial Remarketing, or the Purchase Contract
Settlement Date, in the case of the Secondary Remarketing, in such
quantities as the Remarketing Agent may reasonably request, and shall pay
all expenses relating thereto.
(d) 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
Initial Remarketing and the Secondary 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 Notes tendered for, or
otherwise to be included in the Initial Remarketing or Secondary
Remarketing, as the case may be, have not been called for redemption, (ii)
the Remarketing Agent is able to find a purchaser or purchasers for
tendered Notes (1) in the case of the Initial Remarketing, at a price not
less than Minimum Initial Remarketing Price, and (2) in the case of the
Secondary Remarketing, at a price not less than 100% of the principal
amount thereof, (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 Initial Remarketing and, in
the event of a Failed Initial Remarketing, in connection with the Secondary
Remarketing, in each case 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 Treasury Portfolio Purchase Price no later
than 5:00 p.m., New York City time, on the fourth Business Day prior to
November 16, 2004, in the case of the Initial Remarketing, and giving the
Remarketing Agent notice of the aggregate principal amount, as the case may
be, of Notes to be remarketed, no later than 5:00 p.m., New York City time,
on the fourth Business Day prior to the Purchase Contract Settlement Date,
in the case of the Secondary Remarketing, and, in each case, concurrently
delivering the Notes 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.
(b) If at any time during the term of this Agreement, any Event of
Default (as defined in the Indenture) 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 that 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 Supplemental 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 Notes or, if there
is any such limitation, the maximum permissible Reset Rate on the Notes,
and they shall rely solely upon written notice from the Company (which the
Company agrees to provide prior to the tenth Business Day before November
16, 2004, in the case of the Initial Remarketing, and prior to the tenth
Business Day before Purchase Contract Settlement Date, in the case of the
Secondary Remarketing) 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
Notes, 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.
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 become 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 Notes, 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 preliminary
remarketing memorandum or any final remarketing memorandum, 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 or the circumstances under
which they were made, not misleading, or (E) 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 Notes or any of the transactions related
thereto, or (F) 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 (G) any failure by the Company to make or consummate
the remarketing of the Notes (including, without limitation, any
Failed Initial Remarketing or Failed Secondary Remarketing) or the
withdrawal, recession, termination, amendment or extension of the
terms of such remarketing, or (H) 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 PACS, the Growth PACS, the Pledge
Agreement, the Indenture or the Notes (collectively, the
"Operative Documents") or (I) the remarketing of the Notes, 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,
whether or not the Initial Remarketing or the Secondary
Remarketing or the reset of the interest rate on the Notes as
contemplated herein actually occur;
(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), (i) (D) or (i) (E) 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), any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or any preliminary or
final remarketing memorandum (or any amendment or supplement thereto) or
any other documents used in connection with remarketing of the Notes, as
the case may be; provided, further, that with respect to any untrue
statement or omission of a material fact made in any preliminary
prospectus, the indemnity agreement contained in this Section 10(a) shall
not inure to the benefit of the Remarketing Agent to the extent that any
such loss, claim, damage or liability of the Remarketing Agent occurs under
the circumstance where it shall have been determined by a court of
competent jurisdiction by final and nonappealable judgment that (w) the
Company had previously furnished copies of the Prospectus to [Merrill
Lynch], (x) delivery of the Prospectus was required to be made to such
person, (y) the untrue statement or alleged untrue statement of a material
fact or omission or alleged omission of a material fact contained in the
preliminary prospectus was corrected in the Prospectus, and (z) there was
not sent or given to such person, at or prior to the written confirmation
of the sale of Notes to such person, a copy of the Prospectus and the
delivery thereof would have constituted a complete defense to such person's
claim in respect of such untrue statement or omission or alleged untrue
statement or omission.
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.
(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 Notes 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
Notes contemplated hereby shall be deemed to be in the same respective
proportions as the aggregate principal amount of the Notes 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 (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 Indemnified 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 to so 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 without
regard to principles of conflicts of laws.
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 Notes are outstanding,
or, if earlier, the Business Day immediately following November 16, 2004,
in the case of a Successful Initial Remarketing, or the Business Day
immediately following the Purchase Contract Settlement Date, in the case of
a Successful Secondary Remarketing. 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 Notes.
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 Notes or Notes 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.
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
Notes, the FELINE PACS or any other instruments or agreements relating to
the Notes or the FELINE PACS 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
Williams Companies, Inc., One Williams Center, Tulsa, Oklahoma 74172
Attention: Chief Financial Officer; if to the Remarketing Agent or Reset
Agent, to [Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, at World Financial Center, North Tower, New York, New York
10281], Attention: [Hugh Sullivan], with a copy to Davis Polk & Wardwell,
450 Lexington Avenue New York, New York 10017, Attention: [ ]; and if to
the Purchase Contract Agent, to [ ], ___________________________________ 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 reasonably 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
reasonably requested by any such person in connection with such
investigation.
IN WITNESSWHEREOF, 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 WILLIAMS COMPANIES, INC.
By:
-------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
-----------------------------------------------
Authorized Signatory
[ ]
not individually but solely as Purchase Contract Agent and
as attorney-in-fact for the holders of the Purchase Contracts
By:
-----------------------------------------------
Name:
Title:
Exhibit A to
Remarketing Agreement
Form of Supplemental Remarketing Agreement
Supplemental Remarketing Agreement dated ______________, ____
among The Williams Companies, Inc., a Delaware corporation (the "Company"),
[Merrill Lynch, Pierce, Fenner & Smith Incorporated] (the "Remarketing
Agent"), and [ ], 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 [ ] (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, including a prospectus,
relating to the Notes (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
____________, including the documents incorporated or deemed to be
incorporated by reference therein, [and preliminary prospectus supplemented
dated __________] 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
Notes. (IN THE EVENT THAT A REGISTRATION STATEMENT IS NOT POSSIBLE OR NOT
REQUIRED, INSERT THE FOLLOWING: The Company has provided to the Remarketing
Agent, for use in connection with remarketing of the Notes (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 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
Notes]. 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 3, Section 4, Section 7, Section
8 and Section 9] 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
"Notes" or "Initial Notes" shall be deemed to refer to the Notes as defined
herein; (iii) all references therein to the "Closing Date" shall be deemed
to refer to the Remarketing Closing Date specified in Schedule I hereto;
(iv) all references therein to the "Registration Statement" [, the
"preliminary prospectus"] or the "Final 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 any "settlement date" shall be disregarded;
and (viii) [other changes, including changes relating to the offer and sale
of the Notes in connection with the Remarketing without registration under
the Securities Act of 1933 in reliance upon an exemption therefrom
(including the exemption afforded by Rule 144A)].]
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 remarket, in the
manner set forth in Section 2(b) of the Remarketing Agreement, the
aggregate principal amount, as the case may be, of Notes set forth in
Schedule I hereto at a purchase price not less than 100% of the [Minimum
Initial Remarketing Price] [aggregate principal amount of the Notes]. 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 25 basis points (0.25%) of
[the Minimum Initial Remarketing Price] [such aggregate principal amount,)
payable by deduction from any amount received in connection from such
[Initial] [Secondary] Remarketing in excess of the [Minimum Initial
Remarketing Price] [aggregate principal amount of the Notes]. The right of
each holder of Notes to have Notes 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 Notes in the remarketing or otherwise, and neither the
Company nor the Remarketing Agent shall be obligated in any case to provide
funds to make payment upon tender of Notes for remarketing.
5. Delivery and Payment. Delivery of payment for the remarketed
Notes 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
Notes and payment of the Remarketing Fee shall be made to the Remarketing
Agent against payment by the respective purchasers of the remarketed Notes
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 Notes are not represented by a Global Security held by or
on behalf of The Depository Trust Company, certificates for the Notes 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.
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
Williams Companies, Inc., [address] Attention: Chief Financial Officer; if
to the Remarketing Agent or Reset Agent, to [Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, at World Financial Center,
North Tower, New York, New York 10281, Attention: Hugh Sullivan], with a
copy to Davis Polk & Wardwell, 450 Lexington Avenue New York, New York
10017, Attention: [ ]; and if to the Purchase Contract Agent, to [ ] 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 Notes 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 6 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 10 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.
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 WILLIAMS COMPANIES, INC.
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------------------
Authorized Signatory
[Add other Remarketing Agents, if any]
[ ]
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the holders of
the Purchase Contracts
By:
-----------------------------------------------
Name:
Title:
SCHEDULE I
Notes subject to the remarketing: Senior Notes due 2007 of the
Company (the "Notes").
Purchase Contract Agreement, dated as of January __, 2002 (the
"Purchase Contract Agreement") by and between The Williams Companies, Inc.,
a Delaware corporation, and [ ], a New York banking corporation.
Pledge Agreement dated as of January __, 2002 (the "Pledge Agreement")
by and between The Williams Companies, Inc., a Delaware corporation,
[ ], a national banking association, and [ ].
Indenture dated as of November 10, 1997 (the "Base Indenture") by
and between The Williams Companies, Inc., a Delaware corporation, and Bank
One National Association (as successor in interest to the First National
Bank of Chicago).
Supplemental Indenture, dated as of January __, 2002 (the
"Supplemental Indenture" and, together with the Base Indenture, the
"Indenture") by and between The Williams Companies, Inc., a Delaware
corporation, and Bank One, National Association (as successor in interest
to the First National Bank of Chicago).
[Minimum Initial Remarketing Price]
[Aggregate Principal Amount of Notes: $ ____________]
Underwriting Agreement, dated January __, 2002 (the "Underwriting
Agreement") among The Williams Companies, Inc. and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, [ ], [ ]
and the other underwriters named therein.
Remarketing Closing Date, Time and Location: