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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 14, 2002
The Williams Companies, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-1471 73-0569878
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(State of incorporation (Commission File No.) (I.R.S. Employer
or organization) Identification No.)
One Williams Center Tulsa,
Oklahoma 74172
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(Address of principal executive offices) (Zip Code)
918-573-2000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Item 5. Other Events.
On January 14, 2002, The Williams Companies, Inc. closed the sale of its
publicly traded units that include a senior debt security with a term of
five years and an equity purchase contract which requires the company to
deliver common stock to holders after the 3 years based on an agreed upon
rate.
Item 7. Exhibits
The following exhibits are filed with reference to the Registration
Statement on Form S-3 (File No. 333-73326) of The Williams Companies, Inc.
Exhibit
Number Description
1.1 Underwriting Agreement, dated January 7, 2002, between
the Williams Companies, Inc. (the "Company") and the
several underwriters named therein.
4.1 Sixth Supplemental Indenture, dated January 14, 2002,
between the Company and Bank One Trust Company, National
Association, as Trustee.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Purchase Contract Agreement, dated January 14, 2002,
between the Company and JPMorgan Chase Bank, as Purchase
Contract Agent.
4.4 Form of Income PACS Certificate (included in Exhibit
4.3).
4.5 Pledge Agreement, dated January 14, 2002, among the
Company, JPMorgan Chase Bank, as Collateral Agent, and
JPMorgan Chase Bank, as Purchase Contract Agent.
4.6 Remarketing Agreement, dated January 14, 2002, among the
Company, JPMorgan Chase Bank, as Purchase Contract Agent,
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as Remarketing Agent.
8.1 Tax Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE WILLIAMS COMPANIES, INC.
Date: January 23, 2002
By: /s/ Suzanne H. Costin
______________________
Name: Suzanne H. Costin
Title: Corporate Secretary
Exhibit Index
Exhibit
Number Description
1.1 Underwriting Agreement, dated January 7, 2002, between
the Williams Companies, Inc. (the "Company") and the
several underwriters named therein.
4.1 Sixth Supplemental Indenture, dated January 14, 2002,
between the Company and Bank One Trust Company, National
Association, as Trustee.
4.2 Form of Note (included in Exhibit 4.1).
4.3 Purchase Contract Agreement, dated January 14, 2002,
between the Company and JPMorgan Chase Bank, as Purchase
Contract Agent.
4.4 Form of Income PACS Certificate (included in Exhibit 4.3).
4.5 Pledge Agreement, dated January 14, 2002, among the
Company, JPMorgan Chase Bank, as Collateral Agent, and
JPMorgan Chase Bank, as Purchase Contract Agent.
4.6 Remarketing Agreement, dated January 14, 2002, among the
Company, JPMorgan Chase Bank, as Purchase Contract Agent,
and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as Remarketing Agent.
8.1 Tax Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
EXHIBIT 1.1
40,000,000 FELINE PACS(sm)
(Initially Consisting of 40,000,000 Income PACS(sm))
The Williams Companies, Inc.
UNDERWRITING AGREEMENT
January 7, 2002
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Salomon Smith Barney Inc.
c/o MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
4 World Financial Center
North Tower
New York, New York 10080
Dear Sirs:
The Williams Companies, Inc., a Delaware corporation (the
"Company"), proposes to sell 40,000,000 FELINE PACS (the "Firm Securities")
of the Company to the several Underwriters (the "Underwriters") named in
Schedule 1 hereto, subject to the conditions hereinafter stated. Each
FELINE PACS initially will consist of a unit (referred to as "Income PACS")
with a stated amount of $25 (the "Stated Amount") comprised of (a) a stock
purchase contract (the "Purchase Contract") under which (i) the holder will
agree to purchase from the Company on February 16, 2005 (the "Purchase
Contract Settlement Date"), a number of shares of common stock, par value
$1.00 per share (the "Common Stock"), of the Company equal to the
Settlement Rate (as defined in the Purchase Contract Agreement referred to
below) and (ii) the Company will pay to the holder thereof contract
adjustment payments of 2.50% of the Stated Amount, and (b) a 6.50% Note due
2007 (the "Notes"), in a principal amount of $25. Merrill Lynch, Pierce,
Fenner & Smith Incorporated and Salomon Smith Barney Inc. shall act as
representatives (the "Representatives") of the several Underwriters.
(SM) Service mark of Merrill Lynch & Co., Inc.
In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 6,000,000 FELINE PACS on the terms
and for the purposes set forth in Section 3 (the "Option Securities"). The
Firm Securities and the Option Securities, if purchased, are hereinafter
collectively called the "Securities." This is to confirm the agreement
concerning the purchase of the Securities from the Company by the
Underwriters.
Capitalized terms used herein without definition shall be used as
defined in the Prospectus (as defined below).
In accordance with the terms of the Purchase Contract Agreement,
to be dated as of January 14, 2002 (the "Purchase Contract Agreement"),
between the Company and JP Morgan Chase Bank, as purchase contract agent
(the "Purchase Contract Agent"), the Notes constituting a part of the
Securities will be pledged by the Purchase Contract Agent, on behalf of the
holders of the Income PACS, to JP Morgan Chase Bank, as collateral agent
(the "Collateral Agent"), pursuant to the Pledge Agreement, to be dated as
of January 14, 2002 (the "Pledge Agreement"), among the Company, the
Purchase Contract Agent and the Collateral Agent, to secure the holders'
obligations to purchase Common Stock under the Purchase Contracts. The
shares of Common Stock issuable pursuant to the Purchase Contracts are
hereinafter called the "Shares." The rights and obligations of a holder of
Securities in respect of Notes, subject to the pledge thereof, and Purchase
Contracts will be evidenced by Security Certificates (the "Security
Certificates") to be issued pursuant to the Purchase Contract Agreement.
The Notes will be issued pursuant to the Senior Indenture, dated
as of November 10, 1997, between the Company and Bank One Trust Company,
National Association, as trustee (the "Trustee") and a Sixth Supplemental
Indenture thereto to be dated as of January 14, 2002 (the "Supplemental
Indenture"; such Indenture as amended and supplemented to the date hereof
and as further amended and supplemented by the Supplemental Indenture is
herein referred to as the "Indenture").
Pursuant to a Remarketing Agreement (the "Remarketing Agreement")
to be dated as of January 14, 2002, between the Company, the Purchase
Contract Agent and Merrill Lynch, certain Notes may be remarketed, subject
to the terms and conditions set forth in the Remarketing Agreement.
As used in this Agreement, the term "Operative Documents" means
this Agreement, the Purchase Contract Agreement (including the Purchase
Contracts), the Pledge Agreement, the Remarketing Agreement, the Senior
Notes and the Indenture.
SECTION 1. Representations, Warranties and Agreements of the
Company. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3 with respect to debt
securities, preferred and common stock of the Company, warrants, purchase
contracts and units (collectively, the "Shelf Securities"), including the
Securities, has (i) been prepared by the Company in conformity in all
material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. The
registration statement includes a prospectus relating to the Shelf
Securities. In addition, the Company has filed, or will file within the
applicable time period set forth in the Rules and Regulations, with the
Commission, a prospectus supplement specifically relating to the Securities
pursuant to Rule 424 of the Rules and Regulations. The term "Registration
Statement" means the registration statement as amended to the date of this
Agreement. The term "Basic Prospectus" means the prospectus included in the
Registration Statement. The term "Prospectus" means the Basic Prospectus
together with the prospectus supplement (other than a preliminary
prospectus supplement) specifically relating to the Securities, in the form
first used to confirm sales of the Securities. The term "Preliminary
Prospectus" means a preliminary prospectus supplement specifically relating
to the Securities, together with the Basic Prospectus. As used herein, the
terms "Registration Statement", "Basic Prospectus", "Prospectus" and
"Preliminary Prospectus" shall include, in each case, the material, if any,
incorporated by reference therein; "Effective Time" means the date and time
as of which the Registration Statement, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time; and the terms
"supplement", "amend" and "amendment", as used in this Agreement with
respect to the Registration Statement or the Prospectus, shall include all
documents subsequently filed by the Company with the Commission pursuant to
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that
are deemed to be incorporated by reference in the Prospectus. If the
Company has filed an abbreviated registration statement to register
additional Securities pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462
Registration Statement. To the best of the Company's knowledge, the
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms in all material respects,
and the Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, conform in all
material respects to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable Effective
Date (as to the Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any amendment or
supplement thereto) contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted from the
Registration Statement or the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(c) The Company and each of its significant subsidiaries (as
defined in Rule 1-02 of Regulation S-X under the Securities Act) (each, a
"Significant Subsidiary" and collectively, "Significant Subsidiaries"),
which are listed on Schedule 2 hereto, have been duly incorporated (in the
case of each Significant Subsidiary which is a corporation) or otherwise
validly formed and are validly existing in good standing under the laws of
their respective jurisdictions of organization, are duly qualified to do
business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, except where failure to
have such qualifications would not, singly or in the aggregate, have a
material adverse effect on the consolidated financial position, results of
operation, business or prospects of the Company and its subsidiaries, taken
as a whole, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are
engaged. The Company has full power to execute and deliver and perform its
obligations under this Agreement and each of the Operative Documents to
which it is a party.
(d) The Company has an authorized capitalization as set forth in
the Prospectus and all of the issued shares of capital stock of the Company
have been duly authorized and validly issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
Significant Subsidiary (in the case of each Significant Subsidiary which is
a corporation) have been duly authorized and validly issued and are fully
paid and non-assessable and (except for directors' qualifying shares and as
disclosed in the Prospectus) are owned directly or indirectly by the
Company, free and clear of all liens, encumbrances, equities or claims.
(e) The Indenture has been duly authorized and, upon execution and
delivery of the Supplemental Indenture relating to the Securities by the
Trustee and the Company, will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with its terms,
except as the enforceability thereof may be limited by (i) bankruptcy,
insolvency or other similar laws affecting creditors' rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
(f) The Notes have been duly authorized and, at each Delivery
Date, will have been validly executed and delivered by the Company. When
the Notes have been issued, executed and authenticated in accordance with
the provisions of the Indenture and delivered to the purchasers thereof
against payment for the stated consideration therefor, they will constitute
valid and binding obligations of the Company, entitled to the benefits of
the Indenture, and enforceable against the Company in accordance with their
terms, except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability. At each Delivery Date, the
Notes will conform as to legal matters to the description thereof contained
in the Prospectus.
(g) The Pledge Agreement and the Purchase Contract Agreement have
been duly authorized and, upon execution and delivery thereof, will
constitute valid and legally binding agreements of the Company enforceable
in accordance with their terms except as the enforceability thereof may be
limited by (i) bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and (ii) the availability of equitable remedies
may be limited by equitable principles of general applicability.
(h) The Remarketing Agreement has been duly authorized and, upon
execution and delivery thereof, will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms except as
(a) the enforceability thereof may be limited by (i) bankruptcy, insolvency
or other similar laws affecting creditors' rights generally and rights of
acceleration and (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability and (b) rights to
indemnification and contribution thereunder may be limited by applicable
law.
(i) The FELINE PACS (which include the Income PACS) have been duly
authorized and when executed and delivered by the Company will constitute
the valid and binding obligations of the Company, enforceable in accordance
with their terms except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability, and will conform in all
material respects to the description thereof in the Prospectus. The Income
PACS and the Shares have been duly registered under the Exchange Act and
have been authorized for listing on the New York Stock Exchange, subject to
official notice of issuance; and the issuance of the FELINE PACS will not
be subject to preemptive or other similar rights. All corporate action
required to be taken for the authorization, issuance and delivery of the
Income PACS has been validly taken.
(j) The Shares to be issued and sold by the Company pursuant to
the Purchase Contract Agreement have been duly authorized for issuance by
the Company and, when issued and delivered in accordance with the
provisions of the Purchase Contract Agreement, will be validly issued and
fully paid and non- assessable; and the issuance of the Shares is not and
will not be subject to preemptive or other similar rights, and the
preferred stock purchase rights under the Rights Agreement dated as of
February 6, 1996 (the "Rights Agreement") to which holders of the Shares
will be entitled, will be validly issued and the Shares will conform in all
material respects to the description thereof contained in the Prospectus.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) The execution, delivery and performance of each of the
Operative Documents by the Company and the consummation of the transactions
contemplated hereby or thereby will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its Significant
Subsidiaries is a party or by which the Company or any of its Significant
Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Significant Subsidiaries is subject, other than such
conflicts, breaches, violations or defaults which, singly or in the
aggregate, would not have a material adverse effect on the consolidated
financial position, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or any of its Significant Subsidiaries or any statute or any order,
rule or regulation known to the Company of any court or governmental agency
or body having jurisdiction over the Company or any of its Significant
Subsidiaries or any of their properties or assets; and except for the
registration of the Securities under the Securities Act and the Exchange
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act, the Securities
Act, applicable state securities laws and securities laws of foreign
jurisdictions in connection with the purchase and distribution of the
Securities by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance of
any of the Operative Documents and the consummation of the transactions
contemplated hereby or thereby.
(m) Except for that certain Williams Preferred Stock Remarketing,
Registration Rights and Support Agreement dated March 23, 2001 among the
Company, Williams Share Trust, WCG Note Trust, United States Trust Company
of New York and Credit Suisse First Boston Corporation and that certain
Joint Venture Sponsor Agreement dated December 28, 2000 among the Company,
Williams Field Services Company, Prairie Wolf Investors, L.L.C., Arctic Fox
Assets, L.L.C., Williams Energy (Canada), Inc. and other Indemnified
Parties (as defined therein), and except as described in the Prospectus,
there are no contracts, agreements or understandings between the Company
and any person granting such person the right to require the Company to
file a registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to require
the Company to include any securities of the Company in the securities
registered pursuant to the Registration Statement.
(n) Neither the Company nor any of its Significant Subsidiaries
has sustained, since the respective dates as of which information is given
in the Prospectus, any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree
that has resulted in, or is reasonably likely to result in, a material
adverse change in the consolidated financial position, results of
operations, business or prospects of the Company and its subsidiaries,
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus; and, since such date, there has not been any material change in
the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the consolidated
financial position, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated in the Prospectus.
(o) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included in the Prospectus present fairly, in all material respects, the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
may be indicated in the notes thereto.
(p) Ernst & Young LLP, who have certified certain financial
statements of the Company, whose report appears, or is incorporated by
reference, in the Prospectus and who have delivered the initial letter
referred to in Section 7(h) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(q) The Company and each of its Significant Subsidiaries carry, or
are covered by, insurance in such amounts and covering such risks as the
Company believes is adequate for the conduct of their respective businesses
and the value of their respective properties and as the Company believes is
customary for companies engaged in similar businesses in similar
industries.
(r) The Company and each of its Significant Subsidiaries own or
possess, or can acquire on reasonable terms, adequate rights to use all
material patents, patent applications, trademarks, service marks, trade
names, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others which,
singly or in the aggregate, in the judgment of the Company, is reasonably
likely to result in any material adverse change in the consolidated
financial position, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole.
(s) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
Significant Subsidiaries is a party or of which any property or assets of
the Company or any of its Significant Subsidiaries is the subject which
could reasonably be expected to have a material adverse effect on the
consolidated financial position, results of operations, business or
prospects of the Company and its subsidiaries, taken as a whole; and to the
best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(t) There are no contracts or other documents which are required
to be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement.
(u) No business or related party transaction exists which is
required by Item 404 of Regulation S-K to be described in the Prospectus
which is not so described.
(v) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
(w) The Company has filed all material federal, state and local
income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, other than those filings or
payments being contested in good faith, and the Company has not received
notice that any tax deficiency has been determined adversely to the Company
or any of its Significant Subsidiaries which has had or is reasonably
likely to have a material adverse effect on the consolidated financial
position, results of operations, business or prospects of the Company and
its subsidiaries, taken as a whole.
(x) Since the date as of which information is given in the
Prospectus through the date hereof, and except as may otherwise be
disclosed in the Prospectus or with respect to the subsequent issuance of
shares of Common Stock, if any, pursuant to employee or director benefit
plans, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business, except, in case of (ii) and (iii), for such liabilities,
obligations or transactions that have not had or are not reasonably
expected to have, a material adverse effect on the consolidated financial
condition, results of operations, business or prospects of the Company and
its subsidiaries, taken as a whole or (iv) declared or paid any dividend on
its capital stock.
(y) The Company (i) makes and keeps accurate books and records and
(ii) maintains internal accounting controls which provide reasonable
assurance that (A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain
accountability for its assets, (C) access to its assets is permitted only
in accordance with management's authorization and (D) the reported
accountability for its assets is compared with existing assets at
reasonable intervals.
(z) Neither the Company nor any of its Significant Subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in default in any
material respect, and no event has occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any material
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which any
of its properties or assets is subject or (iii) is in violation in any
material respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject or has
failed to obtain any material license, permit, certificate, franchise or
other governmental authorization or permit necessary to the ownership of
its property or to the conduct of its business except, in case of (ii) and
(iii), for such defaults, violations, or failures to obtain such
authorizations or permits that have not had or are not reasonably expected
to have, a material adverse effect on the consolidated financial condition,
results of operations, business or prospects of the Company and its
subsidiaries, taken as a whole.
(aa) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of
its Significant Subsidiaries (or, to the knowledge of the Company, any of
their predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its Significant Subsidiaries
in violation of any applicable law, ordinance, rule, regulation, order,
judgment, decree or permit or which would require remedial action under any
applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not have,
or could not be reasonably likely to have, singularly or in the aggregate
with all such violations and remedial actions, a material adverse effect on
the consolidated financial position, results of operations, business or
prospects of the Company and its subsidiaries, taken as a whole; there has
been no material spill, discharge, leak, emission, injection, escape,
dumping or release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the
Company or any of its Significant Subsidiaries or with respect to which the
Company or any of its Significant Subsidiaries have knowledge, except for
any such spill, discharge, leak, emission, injection, escape, dumping or
release which would not have or would not be reasonably likely to have,
singularly or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a material adverse
effect on the consolidated financial position, results of operations,
business or prospects of the Company and its subsidiaries, taken as a
whole; and the terms "hazardous wastes", "toxic wastes", "hazardous
substances" and "medical wastes" shall have the meanings specified in any
applicable local, state, federal and foreign laws or regulations with
respect to environmental protection.
(bb) The Company is not, and, after giving effect to the offering
contemplated hereby and the application of the net proceeds therefrom as
described in the Prospectus, will not be, an "investment company" as
defined in the Investment Company Act of 1940, as amended.
SECTION 2. Purchase of the Securities by the Underwriters. On the
basis of the representations and warranties contained in, and subject to
the terms and conditions of, this Agreement, the Company agrees to sell the
Firm Securities to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of Firm Securities
set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the
Firm Securities shall be rounded among the Underwriters to avoid fractional
shares, as the Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 6,000,000 Option Securities. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Securities and is
exercisable as provided in Section 4 hereof. Option Securities shall be
purchased severally for the account of the Underwriters in proportion to
the number of Firm Securities set forth opposite the name of such
Underwriter in Schedule 1 hereto.
The price of both the Firm Securities and any Option Securities to
be paid by the Underwriters shall be $24.25 per Income PACS.
The Company shall not be obligated to deliver any of the
Securities to be delivered on any Delivery Date (as hereinafter defined),
except upon payment for all the Securities to be purchased on such Delivery
Date as provided herein.
SECTION 3. Offering by the Underwriters.
Upon authorization by the Representatives of the release of the
Firm Securities, the several Underwriters propose to offer the Firm
Securities for sale upon the terms and conditions set forth in the
Prospectus.
SECTION 4. Delivery of and Payment for the Securities. Delivery of
and payment for the Firm Securities shall be made at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, at 10:00
A.M., New York City time, on January 14, 2002 or at such other date or
place as shall be determined by agreement between the Representatives and
the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company shall deliver or
cause to be delivered certificates representing the Firm Securities to the
Representatives for the account of each Underwriter, or deliver or cause to
be delivered to a securities intermediary designated by the Representatives
of such certificates and crediting to the securities account designated by
such Representatives at such securities intermediary for the account of
each Underwriter of security entitlements in respect of the Firm Securities
against, in each case, payment to or upon the order of the Company of the
purchase price by wire transfer in immediately available funds. Time shall
be of the essence, and delivery at the time and place specified pursuant to
this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Securities shall be registered in such
names and in such denominations as the Representatives shall request in
writing not less than two full business days prior to the First Delivery
Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Securities, the Company shall make the
certificates representing the Firm Securities available for inspection by
the Representatives in New York, New York, not later than 2:00 P.M., New
York City time, on the business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date
of this Agreement, subject to certain limitations separately agreed upon,
and may be exercised in whole or in part from time to time by written
notice being given to the Company by the Representatives. Such notice shall
set forth the aggregate number of shares of Option Securities as to which
the option is being exercised, the names in which the certificates
representing the Option Securities are to be registered, the denominations
in which such certificates representing the Option Securities are to be
issued and the date and time, as determined by the Representatives, when
the certificates representing the Option Securities are to be delivered;
provided, however, that this date and time shall not be earlier than the
First Delivery Date nor earlier than the second business day after the date
on which the option shall have been exercised nor later than the fifth
business day after the date on which the option shall have been exercised.
The date and time the certificates representing the Option Securities are
delivered are sometimes referred to as a "Second Delivery Date" and the
First Delivery Date and any Second Delivery Date are sometimes each
referred to as a "Delivery Date".
Delivery of and payment for the Option Securities shall be made at
the place specified in the first sentence of the first paragraph of this
Section 4 (or at such other place as shall be determined by agreement
between the Representatives and the Company) at 10:00 A.M., New York City
time, on such Second Delivery Date. On such Second Delivery Date, the
Company shall deliver or cause to be delivered the certificates
representing the Option Securities to the Representatives for the account
of each Underwriter against payment to or upon the order of the Company of
the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Securities shall be
registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of
expediting the checking and packaging of the certificates for the Option
Securities, the Company shall make the certificates representing the Option
Securities available for inspection by the Representatives in New York, New
York, not later than 2:00 P.M., New York City time, on the business day
prior to such Second Delivery Date.
The Notes will be pledged with the Collateral Agent to secure the
obligations of the holders to purchase Common Stock under the Purchase
Contracts. Such pledge shall be effected by the transfer to the Collateral
Agent of the relevant Notes at the relevant Date of Delivery in accordance
with the Pledge Agreement.
SECTION 5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this Agreement;
to make no further amendment or any supplement to the Registration
Statement or to the Prospectus except as permitted herein; to advise the
Representatives, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and to furnish the Representatives with copies thereof; to
advise the Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus, of
the suspension of the qualification of the Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information; and, in the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, to use
promptly its reasonable best efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to
counsel for the Underwriters a conformed copy of the Registration Statement
as originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or
sale of the Securities or any other securities relating thereto and if at
such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to
notify the Representatives and, upon their request, to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request of
an amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance.
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Representatives,
be required by the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules and Regulations, to furnish a copy
thereof to the Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing, which consent shall not
be unreasonably withheld;
(f) As soon as practicable after the date of this Agreement, to
make generally available to the Company's security holders and to deliver
to the Representatives an earnings statement of the Company and its
subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option
of the Company, Rule 158);
(g) Promptly from time to time to take such action, with the
cooperation of the Representatives, as the Representatives may reasonably
request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as the Representatives may reasonably
request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be
reasonably necessary to complete the distribution of the Securities;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(h) During the period of ninety (90) days from the date of this
Agreement, the Company will not, without the prior written consent of
Merrill Lynch, Pierce, Fenner & Smith Incorporated (A) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of
any FELINE PACS, purchase contracts, Common Stock or any similar securities
or any security convertible into or exercisable or exchangeable for or
repayable with FELINE PACS, purchase contracts, Common Stock or similar
securities; or (B) directly or indirectly, enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, the
economic equivalent of ownership of FELINE PACS, purchase contracts, Common
Stock or similar securities or any security convertible into or exercisable
or exchangeable for or repayable with FELINE PACS, purchase contracts,
Common Stock or similar securities whether any such swap or transaction is
to be settled by delivery of FELINE PACS, purchase contracts, Common Stock
or similar securities or other securities. The foregoing sentence shall not
apply (i) in connection with the offering and sale of any Securities to the
Underwriters pursuant to this Agreement; (ii) to any purchases, issuances
or grants of options, rights or warrants under the Company's employee or
director compensation and benefits plans, or used for similar employee
compensation or benefit purposes; (iii) to any purchases and issuances
under the Company's direct stock purchase and dividend reinvestment plan or
(iv) to shares of Common Stock used as consideration for acquisitions or
issued in connection with strategic alliances (provided that the recipient
of any such shares of Common Stock agrees to be bound by the transfer
restrictions set forth herein for the unexpired remaining term thereof);
(i) To apply for the listing of the Income PACS and the Shares on
the New York Stock Exchange, and to use its reasonable best efforts to
complete that listing, subject only to official notice of issuance, prior
to the First Delivery Date;
(j) To reserve and keep available at all times, free of preemptive
or other similar rights and liens and adverse claims, sufficient shares of
Common Stock to satisfy its obligation to issue Shares upon settlement of
the Purchase Contracts;
(k) To apply the net proceeds from the sale of the Securities as
set forth in the Prospectus; and
(l) To take such steps as shall be necessary to ensure that
neither the Company nor any subsidiary shall become an "investment company"
as defined in the Investment Company Act of 1940, as amended.
SECTION 6. Expenses. The Company agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the
Securities and any taxes payable in that connection; (b) the costs incident
to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the
costs of distributing the Registration Statement as originally filed and
each amendment thereto and any post-effective amendments thereof
(including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus, all as
provided in this Agreement; (d) the costs of producing and distributing the
Operative Documents and any other related documents in connection with the
offering, purchase, sale and delivery of the Securities; (e) any filing
fees incident to securing the review by the National Association of
Securities Dealers, Inc. of the terms of sale of the Securities; (f) any
applicable listing or other fees; (g) the fees and expenses (not in excess,
in the aggregate, of $10,000) of qualifying the Securities under the
securities laws of the several jurisdictions as provided in Section 5(g)
and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); (h)
the costs and expenses of the Company relating to investor presentations on
any "road show" undertaken in connection with the marketing of the offering
of the Securities, including, without limitation, expenses associated with
the production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered (with the approval of the Company) in
connection with the road show and (i) all other costs and expenses incident
to the performance of the obligations of the Company under this Agreement;
provided that, except as provided in this Section 6 and in Section 11, the
Underwriters shall pay their own costs and expenses, including the costs
and expenses of their counsel, any transfer taxes on the Securities which
they may sell and the expenses of advertising any offering of the
Securities made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters hereunder are subject to the accuracy, when
made and on each Delivery Date, of the representations and warranties of
the Company contained herein, to the performance by the Company of its
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 5(a); no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with.
(b) All corporate proceedings and other legal matters incident to
the authorization of the Operative Documents, the Securities, the
Registration Statement and the Prospectus, and all other legal matters
relating to such Operative Documents and the transactions contemplated
thereby shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to
enable them to pass upon such matters.
(c) William von Glahn, Senior Vice President and General Counsel
of the Company, shall have furnished to the Representatives his written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) The Company and each of its Significant Subsidiaries have
been duly incorporated (in the case of each Significant Subsidiary
that is a corporation) or otherwise validly formed and are validly
existing in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business
and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, except to the
extent such failure to be qualified or in good standing would not
have a material adverse effect on the consolidated financial
position, results of operations, business or prospects of the
Company and its subsidiaries, taken as a whole, and have all power
and authority necessary to own or hold their respective properties
and conduct the businesses in which they are engaged as described
in or contemplated by the Registration Statement; and all of the
issued shares of capital stock of each Significant Subsidiary (in
the case of each Significant Subsidiary that is a corporation)
have been duly and validly authorized and issued and are fully
paid, non-assessable and (except for directors' qualifying shares
and as disclosed in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims. The Company has full power to
execute and deliver and perform its obligations under this
Agreement and each of the Operative Documents to which it is a
party;
(ii) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its Significant
Subsidiaries is a party or of which any property or assets of the
Company or any of its Significant Subsidiaries is the subject
which could reasonably be expected to have a material adverse
effect on the consolidated financial position, results of
operations, business or prospects of the Company and its
subsidiaries, taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or pending by
governmental authorities or threatened by others;
(iii) To the best of such counsel's knowledge, except for that
certain Williams Preferred Stock Remarketing, Registration Rights
and Support Agreement dated March 23, 2001 among the Company,
Williams Share Trust, WCG Note Trust, United States Trust Company
of New York and Credit Suisse First Boston Corporation and that
certain Joint Venture Sponsor Agreement dated December 28, 2000
among the Company, Williams Field Services Company, Prairie Wolf
Investors, L.L.C., Arctic Fox Assets, L.L.C., Williams Energy
(Canada), Inc. and other Indemnified Parties (as defined therein),
and except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to
any securities of the Company owned or to be owned by such person
or to require the Company to include such securities in the
securities registered pursuant to the Registration Statement;
(iv) The Company is in compliance in all material respects with
all presently applicable provisions of ERISA; no "reportable
event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would
have any liability; the Company has not incurred and does not
expect to incur liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any "pension plan" or (ii)
Sections 412 or 4971 of the Code; and each "pension plan" for
which the Company would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified in all
material respects and nothing has occurred, whether by action or
by failure to act, which would cause the loss of such
qualification;
(v) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes,
medical wastes, hazardous wastes or hazardous substances by the
Company or any of its Significant Subsidiaries (or, to the
knowledge of such counsel, any of their predecessors in interest)
at, upon or from any of the property now or previously owned or
leased (but not including property on which the Company had or has
easements or similar rights) by the Company or its Significant
Subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit, except for any
violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all
such violations and remedial actions, a material adverse effect on
the consolidated financial position, results of operations,
business or prospects of the Company and its subsidiaries, taken
as a whole; there has been no material spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto
such property or into the environment surrounding such property of
any toxic wastes, medical wastes, solid wastes, hazardous wastes
or hazardous substances due to or caused by the Company or any of
its Significant Subsidiaries or with respect to which the Company
or any of its Significant Subsidiaries have knowledge, except for
any such spill, discharge, leak, emission, injection, escape,
dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such
spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the
consolidated financial position, results of operations, business
or prospects of the Company and its subsidiaries, taken as a
whole;
(vi) The Company has an authorized capitalization as set forth in
the Prospectus under the "Actual" column under the caption
"Capitalization," and all of the issued shares of capital stock of
the Company have been duly authorized and validly issued, are
fully paid and non-assessable and conform in all material respects
to the description thereof contained in the Prospectus;
(vii) The Indenture and the Supplemental Indenture have been duly
authorized, executed and delivered by the Company;
(viii) The Notes have been duly authorized, executed and delivered
by the Company;
(ix) The Pledge Agreement, the Purchase Contract Agreement and the
Remarketing Agreement have been duly authorized, executed and
delivered by the Company;
(x) The Income PACS have been duly authorized, executed and
delivered by the Company and all corporate action required to be
taken for the authorization, issuance and delivery of the FELINE
PACS has been validly taken;
(xi) The Shares to be issued and sold by the Company pursuant to
the Purchase Contract Agreement have been duly authorized for
issuance by the Company and, when issued and delivered in
accordance with the provisions of the Purchase Contract Agreement,
will be validly issued and fully paid and non-assessable; and the
issuance of the Shares is not and will not be subject to
preemptive or other similar rights, and the preferred stock
purchase rights under the Rights Agreement to which holders of the
Shares will be entitled, will be validly issued and the Shares
will conform in all material respects to the description thereof
contained in the Prospectus;
(xii) Except for that certain Williams Preferred Stock
Remarketing, Registration Rights and Support Agreement dated March
23, 2001 among the Company, Williams Share Trust, WCG Note Trust,
United States Trust Company of New York and Credit Suisse First
Boston Corporation and that certain Joint Venture Sponsor
Agreement dated December 28, 2000 among the Company, Williams
Field Services Company, Prairie Wolf Investors, L.L.C., Arctic Fox
Assets, L.L.C., Williams Energy (Canada), Inc. and other
Indemnified Parties (as defined therein) and except as described
in the Prospectus, there are no preemptive or other rights to
subscribe for or to purchase, nor any restriction upon the voting
or transfer of, any shares of the Common Stock pursuant to the
Company's charter or by-laws or any agreement or other instrument
to which the Company is a party;
(xiii) Neither the Company nor any of its Significant Subsidiaries
(i) is in violation of its charter or by-laws, (ii) is in default
in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default,
in the due performance or observance of any term, covenant or
condition contained in any material indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any
material respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets
may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization
or permit necessary to the ownership of its property or to the
conduct of its business except, in case of (ii) and (iii), for
such defaults, violations, or failures to obtain such
authorizations or permits that have not had or are not reasonably
expected to have, a material adverse effect on the consolidated
financial condition, results of operations, business or prospects
of the Company and its subsidiaries, taken as a whole;
(xiv) The execution, delivery and performance of the Operative
Documents by the Company and the consummation of the transactions
contemplated thereby will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or
any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound or to
which any of the property or assets of the Company or any of its
Significant Subsidiaries is subject, other than such conflicts,
agreements, breaches, violations or defaults which, singly or in
the aggregate, would not have a material adverse effect on the
consolidated financial position, results of operations, business
or prospects of the Company and its subsidiaries, taken as a
whole, nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of its
Significant Subsidiaries or any statute or any order, rule or
regulation known to the Company of any court or governmental
agency or body having jurisdiction over the Company or any of its
Significant Subsidiaries or any of their properties or assets; and
except for the registration of the Securities under the Securities
Act and the Exchange Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act, the Securities Act, applicable state
securities laws and securities laws of foreign jurisdictions in
connection with the purchase and distribution of the Securities by
the Underwriters, no consent, approval, authorization or order of,
or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and
performance of the Operative Documents and the consummation of the
transactions contemplated thereby;
(xv) The Company is not, and after giving effect to the offering
of the Securities and the application of the net proceeds
therefrom will not be, an "investment company" as defined in the
Investment Company Act of 1940, as amended;
(xvi) The statements (1) under the captions "Description of Debt
Securities", "Description of Common Stock", "Description of
Preferred Stock" and "Plan of Distribution" in the Basic
Prospectus, (2) in the Registration Statement under Item 15 and
(3) in the Company's most recent Annual Report on Form 10-K or
Form 10/K-A, as the case may be, and in the Company's most recent
Quarterly Report on Form 10-Q under "Business" and "Legal
Proceedings", in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with respect
to such legal matters, documents or proceedings and fairly
summarize the matters referred to therein;
(xvii) After due inquiry, such counsel does not know of any legal
or governmental proceeding pending or threatened to which the
Company or any of its subsidiaries is subject which is required to
be described or of any contract or other document which is
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required; and
(xviii) Such counsel (a) is of the opinion that (except as to the
financial statements and financial and statistical data included
therein, as to which such counsel need not express any opinion)
each document, if any, filed pursuant to the Exchange Act and
incorporated by reference into the Registration Statement and the
Prospectus complied when so filed as to form in all material
respects with the Exchange Act and the rules and regulations of
the Commission thereunder, (b) is of the opinion that the
Registration Statement and the Prospectus, as amended or
supplemented, if applicable (except as to the financial statements
included therein, as to which such counsel need not express any
opinion), comply as to form in all material respects with the
Securities Act and the Rules and Regulations, (c) believes that
(except as to the financial statements and financial and
statistical data included therein, as to which such counsel need
not express any belief), each part of the Registration Statement
when such part became effective or was incorporated by reference
into the Registration Statement did not contain, and as of the
date of such opinion, does not contain, any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or to make the statements therein not misleading,
and (d) believes that (except as to the financial statements and
financial and statistical data included therein, as to which such
counsel need not express any belief) the Prospectus, as amended or
supplemented, if applicable, do not contain any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may state that his opinion
is limited to matters governed by the Federal laws of the United States of
America, the laws of the State of New York and the State of Oklahoma and
the General Corporation Law of the State of Delaware.
(d) Skadden, Arps, Slate, Meagher & Flom LLP, special counsel to
the Company, shall have furnished to the Representatives their written
opinion, addressed to the Underwriters and dated such Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to the
effect that:
(i) The Indenture, upon execution and delivery of the
Supplemental Indenture relating to the Securities by the Trustee
and the Company, will constitute a valid and binding agreement of
the Company, enforceable against the Company in accordance with
its terms, except as the enforceability thereof may be limited by
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect
affecting creditors' rights generally and (ii) general principles
of equity (regardless of whether enforceability is considered in a
proceeding in law or in equity);
(ii) When the Notes have been issued, executed and authenticated
in accordance with the provisions of the Indenture and delivered
to the purchasers thereof against payment for the stated
consideration therefor, they will constitute valid and binding
obligations of the Company, entitled to the benefits of the
Indenture, and enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited
by (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect affecting creditors' rights generally and (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding in law or in equity). The Notes conform
as to legal matters to the description thereof contained in the
Prospectus;
(iii) The Pledge Agreement and the Purchase Contract Agreement,
upon execution and delivery thereof, will constitute valid and
legally binding agreements of the Company enforceable in
accordance with their terms except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect affecting creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability
is considered in a proceeding in law or in equity); provided,
however, that upon the occurrence of a Termination Event (as
defined in the Purchase Contract), Section 365(e)(1) of the
Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as amended) would not
substantively limit the provisions of Sections 3.15 and 5.06 of
the Purchase Contract Agreement or Section 5.4 of the Pledge
Agreement that require termination of the Purchase Contracts and
release of the Collateral Agent's security interest in (1) the
Notes, (2) the Treasury securities or (3) the applicable ownership
interest of the Treasury portfolio, as applicable, and the
transfer of such securities to the Purchase Contract Agent (for
the benefit of the holders of the Securities) and, provided,
further, however, that (i) the foregoing opinion is subject to the
equitable powers of the Bankruptcy Court and the Bankruptcy
Court's power under Section 105(a) of the Bankruptcy Code and (ii)
procedural restrictions respecting relief from the automatic stay
under Section 362 of the Bankruptcy Code may delay the timing of
the exercise of such rights and remedies;
(iv) The Remarketing Agreement, upon execution and delivery
thereof, will constitute a valid and legally binding agreement of
the Company enforceable in accordance with its terms except as (i)
the enforceability thereof may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect affecting creditors'
rights generally and (b) general principles of equity (regardless
of whether enforceability is considered in a proceeding in law or
in equity) and (ii) rights to indemnification and contribution
contained therein may be limited by state and federal securities
laws or the public policy underlying such laws;
(v) When the FELINE PACS have been issued, executed and
authenticated in accordance with the provisions of the Purchase
Contract Agreement and delivered to the purchasers thereof
pursuant to the terms of the Underwriting Agreement, they will
constitute the valid and binding obligations of the Company,
enforceable in accordance with their terms except as the
enforceability thereof may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws now or hereafter in effect affecting creditors'
rights generally and (ii) general principles of equity (regardless
of whether enforceability is considered in a proceeding in law or
in equity); provided, however, that upon the occurrence of a
Termination Event (as defined in the Purchase Contract), Section
365(e)(1) of the Bankruptcy Code (11 U.S.C. ss.ss. 101- 1330, as
amended) would not substantively limit the provisions of Sections
3.15 and 5.06 of the Purchase Contract Agreement or Section 5.4 of
the Pledge Agreement that require termination of the Purchase
Contracts and release of the Collateral Agent's security interest
in (1) the Notes, (2) the Treasury securities or (3) the
applicable ownership interest of the Treasury portfolio, as
applicable, and the transfer of such securities to the Purchase
Contract Agent (for the benefit of the holders of the Securities)
and, provided, further, however, that (i) the foregoing opinion is
subject to the equitable powers of the Bankruptcy Court and the
Bankruptcy Court's power under Section 105(a) of the Bankruptcy
Code and (ii) procedural restrictions respecting relief from the
automatic stay under Section 362 of the Bankruptcy Code may delay
the timing of the exercise of such rights and remedies;
(vi) Although the discussion set forth in the Prospectus
Supplement under the heading "Certain United States Federal Income
Tax Consequences" does not purport to discuss all possible United
States federal income tax consequences of the purchase, ownership
and disposition of FELINE PACS, such discussion constitutes, in
all material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership
and disposition of the FELINE PACS, based upon current United
States federal income tax law;
(vii) Such counsel has reviewed the discussion set forth under
"ERISA Considerations" in the Prospectus Supplement and are of the
opinion that to the extent the discussion relates to conclusions
of law, the discussion is accurate in all material respects; and
(viii) The statements in the Prospectus Supplement under the
captions "Description of the FELINE PACS", "Description of the
Purchase Contracts", "Description of the Purchase Contract
Agreement and the Pledge Agreement" and "Description of the
Notes", in each case insofar as such statements purport to
summarize certain provisions of the Indenture, the Purchase
Contracts, the Pledge Agreement and the Notes, fairly summarize
such provisions in all material respects.
Such counsel shall also state that they have been orally advised
by the Commission that the Indenture has been qualified under the Trust
Indenture Act.
(e) Cravath, Swaine & Moore, counsel for JP Morgan Chase Bank (the
"Bank"), as Purchase Contract Agent, shall have furnished to the
Representatives its written opinion, addressed to the Underwriters and
dated such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) the Bank has been duly incorporated and is validly existing as
a banking corporation in good standing under the laws of the State
of New York;
(ii) the Bank has the corporate trust power and authority to
execute, deliver and perform its duties under the Purchase
Contract Agreement and the Pledge Agreement, has duly executed and
delivered the Purchase Contract Agreement and the Pledge
Agreement, and , insofar as the laws governing the trust powers of
the Bank are concerned and assuming due authorization, execution
and delivery thereof by the other parties thereto, each of the
Purchase Contract Agreement and the Pledge Agreement constitutes a
legal, valid and binding agreement of the Bank, enforceable
against the Bank in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors'
rights generally from time to time in effect and to general
principles of equity (including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at
law;
(iii) no approval, authorization or other action by, or filing
with, any governmental authority of the United States of America
or the State of New York having jurisdiction over the trust powers
of the Bank is required in connection with the execution and
delivery by the Bank of the Purchase Contract Agreement or the
Pledge Agreement or the performance by the Bank of its duties
thereunder, except such as have been obtained, taken or made; and
(iv) the execution, delivery and performance by the Bank of the
Purchase Contract Agreement and the Pledge Agreement do not
conflict with or constitute a breach of the charter or bylaws of
the Bank.
(f) The Representatives shall have received from Davis Polk &
Wardwell, counsel for the Underwriters, such opinion or opinions, dated
such Delivery Date, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus and other related
matters as the Representatives may reasonably require, and the Company
shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(g) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young a letter, in form
and substance satisfactory to the Representatives, addressed to the
Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act and
are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as of
which specified financial information is given in the Prospectus, as of a
date not more than five days prior to the date hereof), the conclusions and
findings of such firm with respect to the financial information and other
matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(h) With respect to the letter of Ernst & Young referred to in the
preceding paragraph and delivered to the Representatives concurrently with
the execution of this Agreement (the "initial letter"), the Company shall
have furnished to the Representatives a letter (the "bring-down letter") of
such accountants, addressed to the Underwriters and dated such Delivery
Date (i) confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letters and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.
(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President, a Vice President or its chief financial officer or Treasurer
stating that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of such Delivery Date; the
Company has complied with all its agreements contained herein; and
the conditions set forth in Sections 7(a), 7(j), 7(k) and 7(l)
have been fulfilled; and
(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the date of this
Agreement, the Registration Statement and Prospectus did not
include any untrue statement of a material fact and did not omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (B)
since the date of this Agreement, no event has occurred which
should have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus.
(j) Since the date of the latest audited financial statements
included in the Prospectus (A) neither the Company nor any of the
Significant Subsidiaries shall have sustained any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus or (B) there shall not have been any material change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the consolidated financial position, results of operations,
business or prospects of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in clause (A) or (B), is, in
the judgment of the Representatives, so material and adverse as to make it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Securities being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(k) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (a) (i) trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange, or trading in any securities of the Company on any exchange,
shall have been suspended or minimum prices shall have been established on
any such exchange by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
general banking moratorium in New York shall have been declared by Federal
or New York state authorities, (iii) the United States shall have become
engaged in hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred a change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) that in the judgment of the Representatives is
material and adverse and (b) in the case of any of the events specified in
clauses (a)(i) through (a)(iv) above, such event, singly or together with
any other such event, makes it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the public offering or
delivery of the Securities being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(l) There shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by
any "nationally recognized statistical rating organization," as such term
is defined for purposes of Rule 436(g)(2) under the Securities Act.
(m) The New York Stock Exchange, Inc. shall have approved the
Income PACS and the Shares for listing, subject only to official notice of
issuance.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers and employees and each person, if any, who
controls any Underwriter within the meaning of the Securities Act, from and
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of the
Securities), to which that Underwriter, officer, employee or controlling
person may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in (A) any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto or
(B) in any materials or information provided to investors by, or with the
approval of, the Company in connection with the marketing of the offering
of the Securities ("Marketing Materials"), including any roadshow or
investor presentations made to investors by the Company (whether in person
or electronically) or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or in
any amendment or supplement thereto, or in any Marketing Materials, any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse each Underwriter and
each such officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with written information concerning such
Underwriter furnished to the Company through the Representatives by or on
behalf of any Underwriter specifically for inclusion therein, which
information consists solely of the information specified in Section 8(e);
and, provided further, that the Company will not be liable to any
Underwriter with respect to any Preliminary Prospectus to the extent the
Company shall sustain the burden of proving that any such loss, claim,
damage or liability resulted from the fact that such Underwriter, in
contravention of a requirement of applicable law, sold Securities to a
person to whom such Underwriter failed to send or give, at or prior to the
Closing Date, a copy of the Prospectus, as then amended or supplemented,
if: (i) the Company has previously furnished copies thereof (in sufficient
quantity and sufficiently in advance of the Closing Date to allow for
distribution by the Closing Date) to the Underwriter and the loss, claim,
damage or liability of such Underwriter resulted from an untrue statement
or omission of a material fact contained in or omitted from the Preliminary
Prospectus which was corrected in the Prospectus as, if applicable, amended
or supplemented prior to the Closing Date and such Prospectus was required
by law to be delivered at or prior to the written confirmation of sale to
such person and (ii) such Prospectus (as amended or supplemented) would
have fully cured the defect giving rise to such loss, claim, damage or
liability. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus
or in any amendment or supplement thereto, or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement
or the Prospectus, or in any amendment or supplement thereto, any material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives by or
on behalf of that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person
for any legal or other expenses reasonably incurred by the Company or any
such director, officer or controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company or any such director,
officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced by such
failure and, provided further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 8. If any such claim or
action shall be brought against an indemnified party, and it shall notify
the indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall
not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that the Representatives shall have the
right to employ counsel to represent jointly the Representatives and those
other Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the Underwriters against the Company
under this Section 8 if (i) the employment of such counsel has been
expressly authorized in writing by the Company; (ii) the Company has not
assumed the defense of and employed counsel reasonably satisfactory to the
Representatives within a reasonable time after notice of the commencement
of such action or (iii) the named parties to any such action or proceeding
(including impleaded parties) include both an indemnified party and the
Company and such indemnified party shall have been advised in writing by
counsel that there may be one or more legal defenses available to such
indemnified party, which are different from or additional to those
available to the Company, and such counsel's representation of such
indemnified party and the Company in such action or proceeding would give
rise to a conflict of interest which would make it improper for such
counsel to represent both the indemnified party and the Company (in which
case the Company shall not have the right to assume the defense of such
action or proceeding on behalf of such indemnified party). The Company
shall not, in connection with any one such action or proceeding, or
separate but substantially similar or related actions or proceedings in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than
one separate firm for the Underwriters and all such indemnified parties (in
addition to any local counsel), which firm will be designated by the
Representatives, as representative of the Underwriters, and the Company
shall reimburse all such reasonable fees and expenses as they are billed.
No indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld),
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) or 8(b) in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to therein,
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Securities or
(ii) if the allocation provided by clause (i) above 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 the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other with respect to
such offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities purchased under this Agreement
(before deducting expenses) received by the Company, on the one hand, and
the total underwriting discounts and commissions received by the
Underwriters with respect to the Securities purchased under this Agreement,
on the other hand, bear to the total gross proceeds from the offering of
the Securities under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined
by reference to whether the 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 or the Underwriters, the
intent of the parties and their relative knowledge, access to information
and opportunity to correct or prevent such statement or omission. The
Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 8(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d)
are several in proportion to their respective underwriting obligations and
not joint.
(e) The Underwriters severally confirm and the Company
acknowledges that the statements with respect to the public offering of the
Securities by the Underwriters set forth on the cover page of, and the
statements concerning over- allotments and the concession and reallowance
figures appearing under the caption "Underwriting" in, the Prospectus are
correct and constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the Underwriters
specifically for inclusion in the Registration Statement and the
Prospectus.
SECTION 9. Defaulting Underwriters.
If, on any Delivery Date, any Underwriter defaults in the
performance of its obligations under this Agreement, the remaining
non-defaulting Underwriters shall be obligated to purchase the Securities
which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of Firm
Securities set opposite the name of each remaining non-defaulting
Underwriter in Schedule 1 hereto bears to the total number of Firm
Securities set opposite the names of all the remaining non-defaulting
Underwriters in Schedule 1 hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the
Securities on such Delivery Date if the total number of Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase on
such date exceeds 9.09% of the total number of Securities to be purchased
on such Delivery Date, and any remaining non-defaulting Underwriter shall
not be obligated to purchase more than 110% of the number of Securities
which it agreed to purchase on such Delivery Date pursuant to the terms of
Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to
the Representatives and the Company who so agree, shall have the right, but
shall not be obligated, to purchase, in such proportion as may be agreed
upon among them, all the Securities to be purchased on such Delivery Date.
If the remaining Underwriters or other underwriters satisfactory to the
Representatives and the Company do not elect to purchase the Securities
which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the
Second Delivery Date, the obligation of the Underwriters to purchase, and
of the Company to sell, the Option Securities) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company,
except that the Company will continue to be liable for the payment of
expenses to the extent set forth in Sections 6 and 11. As used in this
Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases Securities
which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of
any liability it may have to the Company for damages caused by its default.
If other underwriters are obligated or agree to purchase the Securities of
a defaulting or withdrawing Underwriter, either the Representatives or the
Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the
Company or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or
arrangement.
SECTION 10. Termination. The obligations of the Underwriters
hereunder may be terminated by the Representatives by notice given to and
received by the Company prior to delivery of and payment for the Firm
Securities if, prior to that time, any of the events described in Sections
7(j), 7(k) or 7(l), shall have occurred or if the Underwriters shall
decline to purchase the Securities for any reason permitted under this
Agreement.
SECTION 11. Reimbursement of Underwriters' Expenses. If the
Company shall fail to tender the Securities for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of
the Company to perform any agreement on its part to be performed, or
because any other condition of the Underwriters' obligations hereunder
required to be fulfilled by the Company is not fulfilled, the Company will
reimburse the Underwriters for all reasonable out-of-pocket expenses
(including fees and disbursements of counsel) incurred by the Underwriters
in connection with this Agreement and the proposed purchase of the
Securities, and upon demand the Company shall pay the full amount thereof
to the Representatives. If this Agreement is terminated pursuant to Section
9 by reason of the default of one or more Underwriters, the Company shall
not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
SECTION 12. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Attention: Parker Weil, Managing Director (fax no.: (212)
449-8636) and confirmed to Merrill Lynch, Pierce, Fenner & Smith
Incorporated, at 4 World Financial Center, North Tower, New York, New York,
10080;
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: General Counsel (Fax: (918) 573-5942);
provided, however, that any notice to an Underwriter pursuant to Section
8(c) shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto
by the Representatives upon request. Any such statements, requests, notices
or agreements shall take effect at the time of receipt thereof. The Company
shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by Merrill Lynch,
Pierce, Fenner & Smith Incorporated on behalf of the Representatives.
SECTION 13. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Company, and their respective successors. This Agreement
and the terms and provisions hereof are for the sole benefit of only those
persons, except that (A) the representations, warranties, indemnities and
agreements of the Company contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any
Underwriter within the meaning of Section 15 of the Securities Act and (B)
the indemnity agreement of the Underwriters contained in Section 8(b) of
this Agreement shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement
and any person controlling the Company within the meaning of Section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this
Section 13, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in
this Agreement or made by or on behalf on them, respectively, pursuant to
this Agreement, shall survive the delivery of and payment for the Stock and
shall remain in full force and effect, regardless of any investigation made
by or on behalf of any of them or any person controlling any of them.
SECTION 15. Definition of the Terms "Business Day" and
"Subsidiary". For purposes of this Agreement, (a) "business day" means each
Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by
law or executive order to close and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
SECTION 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK.
SECTION 17. Counterparts. This Agreement may be executed in one or
more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
SECTION 18. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to
affect the meaning or interpretation of, this Agreement.
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
THE WILLIAMS COMPANIES, INC.
By /s/ James G. Ivey
------------------------------------
Name: James G. Ivey
Title: Treasurer
Accepted:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
SALOMON SMITH BARNEY INC.
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By /s/ Fred Brady Parish
---------------------------------
Authorized Representative
SCHEDULE 1
Number of Firm
Underwriters Securities to be Purchased
Merrill Lynch, Pierce, Fenner &
Smith Incorporated........................ 18,000,000
Salomon Smith Barney Inc..................... 18,000,000
Banc of America Securities LLC............... 4,500,000
Credit Suisse First Boston Corporation....... 4,500,000
Lehman Brothers Inc.......................... 4,500,000
Mizuho International plc..................... 4,500,000
BMO Nesbitt Burns Corp....................... 480,000
Barclays Bank PLC............................ 480,000
CIBC World Markets Corp...................... 480,000
Commerzbank Capital Markets Corp............. 480,000
Credit Lyonnais Securities (USA) Inc......... 480,000
RBC Dain Rausch Inc.......................... 480,000
The Royal Bank of Scotland plc............... 480,000
Scotia Capital (USA) Inc..................... 480,000
TD Securities (USA) Inc. .................... 480,000
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Total........................................ 40,000,000
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SCHEDULE 2
Significant Subsidiaries
Williams Gas Pipeline Company, LLC
Transcontinental Gas Pipe Line Corporation
Williams Gas Pipelines Central, Inc.
Northwest Pipeline Corporation
Texas Gas Transmission Corporation
Kern River Gas Transmission Company
Williams Energy Services, LLC
Williams Energy Marketing & Trading Company
EXHIBIT 4.1
SIXTH SUPPLEMENTAL INDENTURE
DATED AS OF JANUARY 14, 2002
BETWEEN
THE WILLIAMS COMPANIES, INC.,
AS ISSUER
AND
BANK ONE TRUST COMPANY, NATIONAL ASSOCIATION,
AS TRUSTEE
SIXTH SUPPLEMENTAL INDENTURE, dated as of January 14, 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, National Association
(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 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 6.50% 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
used 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 (as used in
Article 9); (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; and
(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 January
14, 2002 among the Company, JPMorgan Chase Bank, as collateral agent (the
"Collateral Agent"), custodial agent and securities intermediary and
JPMorgan Chase Bank, 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 January 14, 2002, between the Company and JPMorgan
Chase Bank, as purchase contract agent.
"Purchase Contract Settlement Date" means February 16, 2005.
"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 January14, 2002, among the Company, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, as remarketing agent and JPMorgan Chase Bank, 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.
"Security Register" means the Register in which the Company
provides for the registration of the Registered Securities of the series of
Notes issued pursuant to this Sixth Supplemental Indenture and the
registration of transfer of such series pursuant to Section 2.8 of the Base
Indenture.
"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 6.50% Senior Notes due
2007 (the "Notes") limited (except as otherwise provided in Article II of
the Indenture) in aggregate principal amount to $1,000,000,000 (or,
$1,150,000,000, 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 in the Borough of Manhattan, The City of New York; provided,
however, that payment of interest may be made at the option of the Company
by check mailed to the Holder at such address as shall appear in the
Security Register or by wire transfer to an account appropriately
designated by the Holder entitled to payment.
The registrar for the Notes, transfer agent and paying agent (as
such term is described in Section 3.4 of the Base Indenture) 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 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 time (i) 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 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
exchangeable for Notes in definitive registered form 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 6.50% 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 May 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. The
amount of interest payable for any period shorter than a full quarterly
period for which interest is computed will be computed on the basis of the
actual number of days elapsed in the 90-day period. 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 until 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
FORM OF NOTE
Section 4.01. 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 5
ORIGINAL ISSUE OF NOTES
Section 5.01. Original Issue Of Notes. Notes in the aggregate
principal amount of $1,000,000,000 (or, $1,150,000,000, 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 2.4 of the Base Indenture
without any further action by the Company.
ARTICLE 6
ORIGINAL ISSUE DISCOUNT
Section 6.01. Original Issue Discount. 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 Notes that are Outstanding 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 7
MISCELLANEOUS
Section 7.01. 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 7.02. 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 7.03. 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 7.04. 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 7.05. 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 8
REMARKETING
Section 8.01. Initial Remarketing Procedures. (a) 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 Custodial Agent and deliver such Notes to the
Custodial Agent pursuant to the Pledge Agreement. Any such notice and
delivery 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 8.01. 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 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 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 of 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
8.01, 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 8.02. 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, (i) Holders of
Income PACS that do not give notice of intention to make a Cash Settlement
of their related Purchase Contracts shall be deemed to have consented to
the disposition of the Notes constituting a component of such Income PACS
in accordance with Section 5.02(b)(iii) of the Purchase Contract Agreement,
and (ii) Holders of Income PACS 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 in accordance with
Section 5.02(d) of the Purchase Contract Agreement. 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 and deliver such Notes to
the Custodial Agent pursuant to the Pledge Agreement. Any such notice and
delivery 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 forth in this Section
8.02, 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.
ARTICLE 9
EXECUTION OF NOTES
Section 9.01. Execution Of Notes. The Notes shall be executed as
follows:
The Notes shall be signed on behalf of the Company by its Chairman
of the Board, its President, one of its Vice Presidents or its Treasurer,
under its corporate seal which may, but need not, be attested. Such
signatures may be the manual or facsimile signatures of the present or any
future such officers. The seal of the Company may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Notes. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect
the validity or enforceability of any Note that has been duly authenticated
and delivered by the Trustee.
In case any officer of the Company who shall have signed any of
the Notes shall cease to be such officer before the Note so signed shall be
authenticated and delivered by the Trustee or disposed of by the Company,
such Note nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Note had not ceased to be such officer of
the Company; and any Note may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Note, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Sixth Supplemental Indenture any such person was not such
an officer.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth
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: /s/ James G. Ivey
-----------------------------
Name: James G. Ivey
Title: Treasurer
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By: /s/ Benita A. Pointer
-------------------------------
Name: Benita A. Pointer
Title: Account Executive
EXHIBIT A
REGISTERED NO. _ REGISTERED CUSIP: _________
(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
COMPANY 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 THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. __ CUSIP No. __________
$ ----------
THE WILLIAMS COMPANIES, INC.
6.50% 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 _____________, or registered assigns, the principal sum of up to
_____________ Dollars ($__________), as set forth in the Schedule of
Increases or Decreases in Global Note attached hereto, on February 16, 2007
(such date is hereinafter referred to as the "Maturity Date"), and to pay
interest on said principal sum from January 14, 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 May 16, 2002
initially at the rate of 6.50% per year through and including the day
immediately preceding the Reset Effective Date and at the Reset Rate
thereafter until the principal hereof shall have been paid or duly made
available for payment and, to the extent permitted by law, to pay interest,
compounded quarterly, on any overdue principal and premium, if any, and on
any overdue installment of interest at the rate per year of 6.50% 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). The amount of interest payable for any period shorter than a full
quarterly period for which interest is computed will be computed on the
basis of actual number of days elapsed in the 90-day period. 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 Note and all the obligations of the Company hereunder are
direct, unsecured obligations of the Company, and rank without preference
or priority among themselves and pari passu with all other existing and
future unsecured and unsubordinated indebtedness 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 referred to 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 National Association (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 14, 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, until 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.
The Base Indenture provides that (a) if an Event of Default (as
defined in the Base Indenture) due to the default in payment of principal
of, premium, if any, or interest on, any series of debt securities issued
under the Base Indenture, including the series of Notes of which this Note
forms a part, or due to the default in the performance or breach of any
other covenant or warranty of the Company applicable to the debt securities
of such series but not applicable to all outstanding debt securities issued
under the Base Indenture shall have occurred and be continuing, either the
Trustee or the holders of not less than 25% in principal amount of the debt
securities of each affected series (voting as a single class) may then
declare the principal of all debt securities of all such series and
interest accrued thereon to be due and payable immediately and (b) if an
Event of Default due to a default in the performance of any other of the
covenants or agreements in the Base Indenture applicable to all outstanding
debt securities issued thereunder, including this Note, or due to certain
events of bankruptcy, insolvency and reorganization of the Company, shall
have occurred and be continuing, either the Trustee or the holders of not
less than 25% in principal amount of all debt securities issued under the
Base Indenture then outstanding (treated as one class) may declare the
principal of all such debt securities and interest accrued thereon to be
due and payable immediately, but upon certain conditions such declarations
may be annulled and past defaults may be waived (except a continuing
default in payment of principal (or premium, if any) or interest on such
debt securities) by the holders of a majority in principal amount of the
debt securities of all affected series then outstanding.
The Base 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 debt securities of each series issued under the Base
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 debt
security affected thereby, (a) extend the final maturity of any such debt
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 thereof without the consent of the holder of each debt
security so affected; or (b) reduce the aforesaid percentage in principal
amount of debt securities the consent of the holders of which is required
for any such supplemental indenture, without the consent of the holders of
each debt security so affected.
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 holder in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent shall be affected
by notice to the contrary.
Governing Law. This Security shall for all purposes 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 of
the Company or of any predecessor or successor corporation, either directly
or through the Company or any predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law or corporation, or by
the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
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:
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in a part of this Global Note have
been made:
- --------------------------------------------------------------------------------------------------
Amount of Amount of Principal amount
decrease in increase in of this Global
principal amount principal amount Note following Signature of
of this Global of this Global such decrease (or authorized
Date Note Note increase) officer of Trustee
- --------------------------------------------------------------------------------------------------
EXHIBIT 4.3
- ------------------------------------------------------------------------------
THE WILLIAMS COMPANIES, INC.
and
JPMorgan Chase Bank,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of January 14, 2002
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
SECTION 1.01. Definitions...............................................................................1
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SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent...................................14
SECTION 1.04. Acts of Holders; Record Dates............................................................14
SECTION 1.05. Notices..................................................................................15
SECTION 1.06. Notice to Holders; Waiver................................................................17
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............................................................................18
SECTION 1.12. Legal Holidays...........................................................................18
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
SECTION 1.16. No Waiver................................................................................18
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally..........................................................19
SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication..........................20
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...................................................................22
SECTION 3.05. Registration; Registration of Transfer and Exchange......................................22
SECTION 3.06. Book-Entry Interests.....................................................................24
SECTION 3.07. Notices to Holders.......................................................................24
SECTION 3.08. Appointment of Successor Depositary......................................................24
SECTION 3.09. Definitive Certificates..................................................................25
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.......................................25
SECTION 3.11. Persons Deemed Owners....................................................................26
SECTION 3.12. Cancellation.............................................................................27
SECTION 3.13. Creation of Growth PACS by Substitution of Treasury Securities...........................27
SECTION 3.14. Reestablishment of Income PACS...........................................................29
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event..............................31
SECTION 3.16. No Consent to Assumption.................................................................31
ARTICLE 4
THE NOTES AND APPLICABLE OWNERSHIP INTEREST OF THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved.................................32
SECTION 4.02. Notice and Voting........................................................................32
SECTION 4.03. Tax Event Redemption.....................................................................33
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock.......................................................34
SECTION 5.02. Initial Remarketing; Payment of Purchase Price...........................................36
SECTION 5.03. Issuance of Shares of Common Stock.......................................................43
SECTION 5.04. Adjustment of Settlement Rate............................................................43
SECTION 5.05. Notice of Adjustments and Certain Other Events...........................................50
SECTION 5.06. Termination Event; Notice................................................................51
SECTION 5.07. Intentionally Omitted....................................................................51
SECTION 5.08. Intentionally Omitted....................................................................51
SECTION 5.09. No Fractional Shares.....................................................................51
SECTION 5.10. Charges and Taxes........................................................................52
SECTION 5.11. Purchase Contract Payments...............................................................52
SECTION 5.12. Deferral of Purchase Contract Payments...................................................57
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Purchase Contract Payments
and to Purchase Shares of Common Stock.........................................................59
SECTION 6.02. Restoration of Rights and Remedies.......................................................59
SECTION 6.03. Rights and Remedies Cumulative...........................................................59
SECTION 6.04. Delay or Omission Not Waiver.............................................................59
SECTION 6.05. Undertaking for Costs....................................................................59
SECTION 6.06. Waiver of Stay or Extension Laws.........................................................60
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities......................................................60
SECTION 7.02. Notice of Default........................................................................61
SECTION 7.03. Certain Rights of Purchase Contract Agent................................................62
SECTION 7.04. Not Responsible for Recitals or Issuance of Securities...................................63
SECTION 7.05. May Hold Securities......................................................................64
SECTION 7.06. Money Held in Custody....................................................................64
SECTION 7.07. Compensation and Reimbursement...........................................................64
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility................................65
SECTION 7.09. Resignation and Removal; Appointment of Successor........................................65
SECTION 7.10. Acceptance of Appointment by Successor...................................................66
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business..............................67
SECTION 7.12. Preservation of Information; Communications to Holders...................................67
SECTION 7.13. No Obligations of Purchase Contract Agent................................................68
SECTION 7.14. Tax Compliance...........................................................................68
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.......................................69
SECTION 8.02. Supplemental Agreements with Consent of Holders..........................................69
SECTION 8.03. Execution of Supplemental Agreements.....................................................70
SECTION 8.04. Effect of Supplemental Agreements........................................................71
SECTION 8.05. Reference to Supplemental Agreements.....................................................71
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................................................................71
SECTION 9.02. Rights and Duties of Successor Corporation...............................................72
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract
Agent
..............................................................................................72
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts....................................................73
SECTION 10.02. Maintenance of Office or Agency.........................................................73
SECTION 10.03. Company to Reserve Common Stock.........................................................73
SECTION 10.04. Covenants as to Common Stock............................................................74
SECTION 10.05. Statements of Officers of the Company as to Default.....................................74
SECTION 10.06. ERISA...................................................................................74
SECTION 10.07. Tax Treatment...........................................................................74
PURCHASE CONTRACT AGREEMENT, dated as of January 14, 2002, between
THE WILLIAMS COMPANIES, INC., a Delaware corporation (the "Company"), and
JPMORGAN CHASE BANK, a New York 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 the scheduled interest payment date
on the Notes that occurs on February 16, 2005, in the case of a Successful
Initial Remarketing, or in the case of a Tax Event Redemption, for each
scheduled interest payment on the Notes that occurs after the Tax Event
Redemption Date and on or before the Purchase Contract Settlement Date, a
0.0406%, 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 prior to such date.
"Applicable Principal Amount" means the aggregate principal amount of
the Notes that 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" or "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 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 an 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(e) of the
Pledge Agreement.
"Collateral Account" has the meaning set forth in Section 1.01(e) of
the Pledge Agreement.
"Collateral Agent" means JPMorgan Chase Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning set forth in Section 3.13.
"Common Stock" means the common stock, par value $1.00, of the
Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Constituent Person" has the meaning set forth in Section 5.04(b).
"Corporate Trust Office" means the office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 450
West 33rd Street, New York, New York 10001, Attention: Institutional Trust
Services.
"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.
"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 that 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 an 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 of the Company, its President, one of its Vice Presidents, its
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 (other than the Officers' Certificate provided
for in Section 10.05) 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 or Applicable Ownership
Interests in the Treasury Portfolio 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 May 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 January
14, 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(e) 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(e) of the Pledge
Agreement.
"Pro Rata" shall mean pro rata to each Holder according to the
aggregate Stated Amount of the Securities held by such Holder in relation to
the aggregate Stated Amount of all Securities outstanding.
"Prospectus" means the prospectus relating to the delivery of shares
of any securities 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 or any subsequent
successor who is appointed pursuant to this Agreement.
"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 2.5% 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 (ii) 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 first day
of each month in which the relevant Payment Date falls, 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 any securities in connection with an Early Settlement of
Purchase Contracts on the Early Settlement Date 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
Agent pursuant to the Remarketing Agreement.
"Remarketing Agent" has the meaning set forth in Section 5.02(a).
"Remarketing Agreement" means the Remarketing Agreement, dated as of
January 14, 2002, among the Company, the Remarketing Agent and the Purchase
Contract Agent.
"Remarketing Fee" has the meaning set forth in Section 5.02(a).
"Remarketing Per Note Price" means the Treasury Portfolio Purchase
Price divided by the number of Notes held as components of Income PACS and
remarketed in the Initial Remarketing.
"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 JPMorgan Chase Bank, 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 or any subsequent successor who is appointed pursuant to the Pledge
Agreement.
"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.
"Separate Notes" means Notes that are no longer a component of Income
PACS.
"Separate Notes Purchase Price" means the amount in cash equal to the
product of the Remarketing Per Note Price multiplied by the number of Separate
Notes remarketed in the Initial Remarketing.
"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 thereof or
therein affecting 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 any such laws or
regulations that differs from the generally accepted position on January 7,
2002, which amendment, change or proposed change is effective or which
interpretation or pronouncement is announced on or after January 7, 2002,
there is more than an insubstantial increase in the risk that interest or
original issue discount on the Notes would 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 Date" means the date upon which a Tax Event
Redemption is to occur.
"Tax Event Redemption Principal Amount" means either (i) if the Tax
Event Redemption Date occurs prior to 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 that 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) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the 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 prior
to the Purchase Contract Settlement Date, 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
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
that 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 15,
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 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 if the interest rate of the Notes was not reset on the Initial
Remarketing Date or the Secondary Remarketing 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. 912820BM8) that mature on February 15, 2005.
"Underwriting Agreement" means the Underwriting Agreement, dated as
of January 7, 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 (other than the Officers'
Certificate provided for in Section 10.05) 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:
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Telecopier No.: (212) 946-8154
Attention: Institutional Trust Services
If to the Company:
The Williams Companies, Inc.
One Williams Center, Suite 5000
Tulsa, Oklahoma 74172
Telecopier No.: (918) 573-2065
Attention: Treasurer
with a copy to:
The Williams Companies, Inc.
One Williams Center, Suite 5000
Tulsa, Oklahoma 74172
Telecopier No.: (918) 573-4503
Attention: General Counsel
and a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telecopier No.: (212) 735-2000
Attention: John Osborn, Esq.
If to the Collateral Agent:
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Telecopier No.: (212) 946-8154
Attention: Institutional Trust Services
If to the Indenture Trustee:
Bank One Corporation
Global Trust Services
1 Bank One Plaza, Suite IL1-0823
Chicago, Illinois 60670
Telecopier No.: (312) 336-8840
Attention: Benita Pointer
The Purchase Contract Agent shall sent to the Indenture Trustee at
the telecopier number set forth above a copy of any notices in the form of
Exhibits C, D, E or F it sends or receives.
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 without regard to any
conflicts of law provision that would require the application of the law of
any other jurisdiction.
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.
SECTION 1.16. No Waiver. No failure on the part of the Company, the
Purchase Contract Agent, 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 Company, 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.
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 40,000,000 (46,000,000 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, its Treasurer 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 officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer 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 officer 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, without limitation, 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 and the Purchase Contract
Agent 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, stolen, destroyed 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 fees and expenses (including ,
without limitation, 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 (subject to any applicable record date) 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. None of the Company, the Purchase Contract Agent nor any agent of
the Company or the Purchase Contract Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Certificate or
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
SECTION 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock
on or after the Purchase Contract Settlement Date or upon the transfer of
Notes, or for delivery of 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 an 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 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 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 at maturity equal to the
aggregate principal amount of the Notes or the Applicable
Ownership Interests (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio 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 or the Applicable
Ownership Interests of the Treasury Portfolio, 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 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 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 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 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 of the Treasury Portfolio, as the case may be,
shall be responsible for any fees or expenses (including, without limitation,
fees and 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 32,000 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 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 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 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 of the Treasury Portfolio, as
the case may be, (i) in the case of Notes, having an aggregate
principal amount equal to the aggregate principal amount at
maturity of the Treasury Securities comprising part of the
Growth PACS and (ii) in the case of Applicable Ownership
Interests, such that the portion of such Applicable Ownership
Interests described in clause (A) of the definition of such
term represents an undivided beneficial ownership interest in
principal or interest strips of U.S. treasury securities
having an aggregate face 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 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 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 thereof 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 (including, without limitation, fees and 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 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 multiples of 32,000 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 (as specified in clause (B) of the definition thereof) 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,
forms a part is registered at the close of business on the Record Date for
such Payment Date.
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 Notes that are components of Income
PACS 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) Upon the occurrence of a Tax Event Redemption, 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 a reference to such Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of 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 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 newly issued 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 $41.25 (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 1.0000 multiplied by the quotient
of 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, 1.0000 share 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, without limitation, 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;
(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 and 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; and
(vii) agrees to treat itself as the owner, for United States federal
income tax purposes of the applicable interest in the Collateral
Account, including the Notes and the Applicable Ownership Interest of
the Treasury Portfolio or the Treasury Securities,
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 or
the Custodial 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 that are part of
Income PACS, or aggregate principal amount of Separate Notes that are to be
remarketed pursuant to clause (ii) below, as the case may be, that are to be
remarketed. Concurrently, the Collateral Agent, pursuant to the terms of the
Pledge Agreement, or the Custodial Agent, pursuant to clause (ii) below, will
present for Remarketing such Notes to the Remarketing Agent. Upon receipt of
such notice from the Purchase Contract Agent or Custodial Agent and such Notes
from the Collateral Agent or Custodial 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 sum of the Treasury Portfolio Purchase Price plus the Separate Notes
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
plus the Separate Notes 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 sum
of the Treasury Portfolio Purchase Price plus the Separate Notes Purchase
Price from any amount of such proceeds in excess of the sum of the Treasury
Portfolio Purchase Price plus the Separate Notes Purchase Price. With respect
to Separate Notes, any proceeds of the Initial Remarketing in excess of the
Remarketing Fee attributable to the Separate Notes will be remitted to the
Custodial Agent for payment to the holders of Separate Notes. With respect to
Notes that are part of Income PACS, any proceeds of the Initial Remarketing in
excess of the sum of the Treasury Portfolio Purchase Price plus the
Remarketing Fee with respect to such Notes will be remitted to the Purchase
Contract Agent for payment to the Holders of the related Income PACS. Neither
the Company nor any Income PACS Holders whose Notes are so remarketed will
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 the Applicable Ownership Interests (as specified in clause
(A) of the definition of such term) of the Treasury Portfolio 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 Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) in 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
Applicable Ownership Interests in the 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 such Applicable Ownership
Interests in 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 such Applicable Ownership Interests in the Treasury Portfolio
for Notes as Collateral.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the related Notes in the Initial Remarketing (other than to
the Company) at a price not less than 100% of the sum of the Treasury
Portfolio Purchase Price plus the Separate Notes 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 Custodial Agent and
deliver such Notes to the Custodial Agent prior to 11:00 a.m. (New
York City time) on the second Business Day immediately preceding the
Initial Remarketing Date, of the aggregate principal amount 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. By 11:00 a.m.
(New York City time) on the Business Day immediately preceding the
Initial Remarketing Date, the Custodial Agent 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.
(iv) If required by applicable law, the Company agrees to endeavor
to ensure that a registration statement with regard to the full
amount of the Notes to be remarketed in the Initial Remarketing shall
be effective with the Securities Exchange Commission in a form that
will enable the Remarketing Agent to rely on it in connection with
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 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, 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, shall notify the
Collateral Agent and the Indenture Trustee of the aggregate principal
amount 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.
(vi) If required by applicable law, the Company agrees to endeavor
to ensure that a registration statement with regard to the full
amount of the Notes to be remarketed in the Secondary Remarketing
shall be effective with the Securities Exchange Commission in a form
that will enable the Remarketing Agent to rely on it in connection
with the Secondary Remarketing.
(c) (i) Unless a Tax Event Redemption or a Successful Initial
Remarketing has occurred, the Notes 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, 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), or the Custodial Agent, based on the notices specified in Section
5.02(c)(ii), shall notify the Remarketing Agent, by 11:00 a.m. (New York City
time) on the Business Day immediately preceding the Secondary Remarketing
Date, of the aggregate principal amount of Notes that are part of Income PACS
or aggregate principal amount of Notes that are no longer part of Income PACS
that are to be remarketed pursuant to clause (ii) below, as the case may be,
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 Custodial Agent and deliver such Notes to the
Custodial Agent 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. By 11:00 a.m. (New York City time) on
the Business Day immediately preceding the Secondary Remarketing
Date, the Custodial Agent shall cause such Notes to be presented to
the Remarketing Agent for Remarketing.
(iii) Upon receipt of such notice from the Purchase Contract Agent
or the Custodial Agent and such Notes from the Collateral Agent or
Custodial Agent, 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, without
limitation, 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 (i) any Notes which are subject to a Failed
Secondary Remarketing or (ii) any Notes which are components of Income PACS
with respect to which the Holder notified the Purchase Contract Agent as
provided in Section 5.02(b)(i) of his intention to pay the Purchase Price in
cash, but failed to make such payment as required by Section 5.02(b)(ii), in
each case resulting in an event of default under this Agreement, 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,
other than pursuant to any dividend reinvestment plans or share purchase
plans, 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
Business 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 Business Day following the date of such announcement. The Company agrees
that it shall notify the Purchase Contract Agent if any issuance of such
rights, warrants or options is cancelled or not completed following the
announcement thereof and the Settlement Rate shall thereupon be readjusted to
the Settlement Rate in effect immediately prior to 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, (I) 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 5.04(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 amount 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 date of 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) or (ii) 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"),
the Settlement Rate will be adjusted to provide that each Holder of Securities
will receive on the Purchase Contract Settlement Date with respect to each
Purchase Contract forming a part thereof, the kind and amount of securities,
cash and other property receivable upon such Reorganization Event (without any
interest thereon, and without any right to dividends or distribution thereon
which have a record date that is prior to the Purchase Contract Settlement
Date) by a Holder of the number of shares of Common Stock issuable on account
of each Purchase Contract if the Purchase Contract Settlement Date had
occurred immediately prior to such Reorganization Event, assuming such Holder
of Common 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).
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 date
of 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 multiples of 32,000 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 any securities 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 the Company)
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 any securities 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 may be used 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 Section 5.11 (e) through (q) 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 Section 5.11(e) through (q) 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, 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 9.00% per annum,
compounding quarterly, until such deferred installments are paid in full.
Deferred Purchase Contract Payments shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to this
Section. No deferral period may end on a date other than a Payment Date.
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) except upon and following a
Termination Event, 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 upon a
default 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 or
the Remarketing 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 or the
Remarketing 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, the Pledge Agreement and the Remarketing 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 and the Remarketing 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 or the Remarketing 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 written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(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;
(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; and
(12) The Purchase Contract Agent shall not be required to initiate
or conduct any litigation or collection proceedings hereunder and shall have
no responsibilities with respect to any default hereunder except as expressly
set forth herein.
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 or the Collateral
and shall have no responsibility for perfecting or maintaining the perfection
of any security interest in the Collateral. 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, under the Pledge Agreement and under the
Remarketing 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, the Pledge Agreement and the
Remarketing 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 and under the Pledge Agreement and the
Remarketing Agreement, 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 or thereunder.
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 such Act,
the Purchase Contract Agent being removed 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
Security 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 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 and regardless of the form of action.
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) in the case of the Company and
the Purchase Contract Agent, any payments made with respect to the Securities
or (ii) in the case of the Company, 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, when authorized by a
Board Resolution, 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 in any material respect.
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 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, any Purchase Contract Payments or any deferred
Purchase Contract Payments;
(4) reduce the number of shares of Common Stock or the amount of
any other property to be purchased pursuant to any Purchase Contract,
increase the price to purchase shares of Common Stock or any other
property upon settlement of any Purchase Contract 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 any Purchase Contract Payments or deferred Purchase
Contract Payments or change any place where, or the coin or currency
in which, any Purchase Contract Payment is payable; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any modification or
amendment to the provisions of this Agreement, the Purchase Contracts
or the Pledge Agreement;
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 or this 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 Contract 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 or who
used assets of a Plan to purchase Securities 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.
SECTION 10.07. Tax Treatment. The Company covenants and agrees to
treat each Holder as the owner, for United States federal income tax purposes,
of the applicable interest in the Collateral Account, including the Notes and
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities.
[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: /s/James G. Ivey
--------------------------------
Name: James G. Ivey
Title: Treasurer
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: /s/Joanne Adamis
--------------------------------
Name: Joanne Adamis
Title: Vice President
EXHIBIT A
(FORM OF FACE OF Income PACS CERTIFICATE)
[For inclusion in Global Certificates only - 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 [For inclusion
in Global Certificates only - or such other number of Income PACS reflected in
the Schedule of Increases or Decreases in Global Certificate attached hereto].
Each Income PACS consists of (i) either (a) the beneficial ownership by the
Holder of $25 principal amount of 6.50% Senior 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 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 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 February 16, May 16, August 16, and November
16 of each year, commencing May 16, 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 newly issued 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 2.5% 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: JPMorgan Chase Bank,
not individually but solely as
Attorney-in-Fact of such Holder
By:
---------------------------------
Authorized Officer
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: JPMorgan Chase Bank,
as Purchase Contract Agent
By:
---------------------------------
Authorized Officer
Dated: ____________________
(FORM OF REVERSE OF Income PACS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of January 14, 2002 (as may be supplemented from
time to time, the "Purchase Contract Agreement"), between the Company and
JPMorgan Chase Bank, 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 $41.25 (the "Appreciation Cap Price"), the number of newly
issued shares of Common Stock per Purchase Contract having a value,
based on the Applicable Market Value, equal to 1.0000 multiplied by
the quotient of 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, 1.0000 share 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 newly issued 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 (1) on or prior to 11:00 a.m. (New York City time) on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, notify the
Purchase Contract Agent of its intention to effect a Cash Settlement, (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, make 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 notify the Purchase
Contract Agent, on or prior to 11:00 a.m. (New York City time) on the second
Business Day immediately preceding the Purchase Contract Settlement Date, of
its intention to effect a Cash Settlement or an 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 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, (i) upon the
occurrence of a Failed Secondary Remarketing or (ii) if a Holder notifies the
Purchase Contract Agent of its intention to effect a Cash Settlement but fails
to deliver the purchase price in cash on or prior to the Business Day
immediately preceding the Purchase Contract Settlement Date, 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 that are components of the Income
PACS 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 32,000 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 32,000 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 9.00% 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.
Prior to due presentment of this Certificate for registration of
transfer, 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
(subject to any applicable record date), 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 ___________________ Custodian ___________________
MIN ACT: (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:
----------------------------------------------------------------------
If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Name
Address
Social Security or other
Taxpayer Identification
Number, if any
Signature
Signature Guarantee:
-------------------------------
(if assigned to another person)
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name
Address
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 or other
securities 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 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 name and
address:
Name
Address
Social Security or other
Taxpayer Identification
Number, if any
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name
Address
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 Signature of authorized
Number of Income Number of Income this Global Certificate signatory of Purchase
PACS evidenced by PACS evidenced by following such Contract Agent or
Date the Global Certificate the Global Certificate decrease or increase Securities Custodian
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EXHIBIT B
(FORM OF FACE OF GROWTH PACS CERTIFICATE)
[For inclusion in Global Certificate only - 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 [For inclusion
in Global Certificates only - or such other number of Growth PACS reflected in
the Schedule of Increases or Decreases in Global Certificate attached hereto].
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 newly issued 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 2.50% 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: JPMorgan Chase Bank,
not individually but solely as
Attorney-in-Fact of such Holder
By:
---------------------------------
Authorized Officer
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: JPMorgan Chase Bank,
as Purchase Contract Agent
By:
-----------------------
Authorized Officer
Dated:_________________
(REVERSE OF Growth PACS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of January 14, 2002 (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and
JPMorgan Chase Bank, 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 newly issued 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 $41.25 (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 1.0000 multiplied by the quotient
of 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 1.0000 share 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 newly issued 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, (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, notify the Purchase Contract Agent of its intention to effect a Cash
Settlement, (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, make
an effective Early Settlement following a Cash Merger or (3) deliver the
Purchase Price in cash on the Business Day immediately preceding the Purchase
Contract Settlement Date after notifying the Purchase Contract Agent of its
intention to effect a Cash Settlement, shall pay the Purchase Price for the
shares of Common Stock to be issued under the related Purchase Contract from
the proceeds of the 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 32,000 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 32,000 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 9.00% 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.
Prior to due presentment of this Certificate for registration or
transfer, 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
(subject to any applicable record date), 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 ___________________ Custodian ___________________
MIN ACT: (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:
----------------------------------------------------------------------
If shares are to be registered in the name of and delivered to a Person other
than the Holder, please (i) print such Person's name and address and (ii)
provide a guarantee of your signature:
Name
Address
Social Security or other
Taxpayer Identification
Number, if any
Signature
Signature Guarantee:
-----------------------------------------------------
(if assigned to another person)
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name
Address
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 or other securities
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 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 name
and address:
Name
Address
Social Security or other
Taxpayer Identification
Number, if any
REGISTERED HOLDER
Please print name and address of Registered Holder:
Name
Address
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 Signature of authorized
Number of Growth Number of Growth this Global Certificate signatory of Purchase
PACS evidenced by PACS evidenced by following such Contract Agent or
Date the Global Certificate the Global Certificate decrease or increase Securities Custodian
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EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Attention: Institutional Trust Services
Re: [_______ Income PACS] [_______ Growth PACS] of
The Williams Companies, Inc., a Delaware corporation (the "Company").
The undersigned Holder hereby notifies you that it has Transferred 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 Applicable Ownership Interests] [Pledged Treasury Securities]
held in the Collateral Account, in accordance with the Pledge Agreement, dated
as of January 14, 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 and expenses
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 January
14, 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
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Attention: Institutional Trust Services
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 January 14,
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
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
(Settlement of Purchase Contract through Remarketing)
JPMorgan Chase Bank
450 West 33rd Street
New York, New York 10001
Attention: Institutional Trust Services
Telecopy: (212) 946-8154
Re: __________ Income PACS of The Williams Companies,
Inc., a Delaware corporation (the "Company")
Please refer to the Purchase Contract Agreement, dated as of January
14, 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 notices of Cash Settlements received from Holders of Income PACS
as of 11:00 a.m. (New York City time), on 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 4.5
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 January 14, 2002
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions.............................................................2
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge..................................................................7
SECTION 2.02. Control; Financing Statement............................................7
SECTION 2.03. Termination.............................................................7
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income Distributions....................................................8
SECTION 3.02. Principal Payments Following Termination Event..........................8
SECTION 3.03. Principal Payments Prior to or on Purchase Contract
Settlement Date.......................................................8
SECTION 3.04. Payments to Purchase Contract Agent.....................................9
SECTION 3.05. Assets Not Properly Released............................................9
ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account.....................................9
SECTION 4.02. Treatment as Financial Assets..........................................10
SECTION 4.03. Sole Control by Collateral Agent.......................................10
SECTION 4.04. Securities Intermediary's Location.....................................10
SECTION 4.05. No Other Claims........................................................11
SECTION 4.06. Investment and Release.................................................11
SECTION 4.07. Statements and Confirmations...........................................11
SECTION 4.08. Tax Allocations........................................................11
SECTION 4.09. No Other Agreements....................................................11
SECTION 4.10. Powers Coupled with an Interest........................................11
ARTICLE 5
INITIAL DEPOSIT; ESTABLISHMENT OF GROWTH PACS AND
REESTABLISHMENT OF INCOME PACS
SECTION 5.01. Initial Deposit of Notes...............................................12
SECTION 5.02. Establishment of Growth PACS...........................................12
SECTION 5.03. Reestablishment of Income PACS.........................................14
SECTION 5.04. Termination Event......................................................15
SECTION 5.05. Cash Settlement........................................................17
SECTION 5.06. Early Settlement upon a Cash Merger....................................19
SECTION 5.07. Application of Proceeds in Settlement of Purchase
Contracts............................................................19
SECTION 5.08. Tax Event Redemption...................................................22
ARTICLE 6
VOTING RIGHTS - PLEDGED NOTES
SECTION 6.01. Voting Rights..........................................................22
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent............................23
SECTION 7.02. Tax Event Redemption...................................................24
SECTION 7.03. Initial Remarketing....................................................25
SECTION 7.04. Substitutions..........................................................25
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties.........................................25
SECTION 8.02. Covenants..............................................................26
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
SECTION 9.01. Appointment, Powers and Immunities.....................................27
SECTION 9.02. Instructions of the Company............................................28
SECTION 9.03. Reliance by Collateral Agent and Securities Intermediary...............28
SECTION 9.04. Rights in Other Capacities.............................................29
SECTION 9.05. Non-Reliance on Collateral Agent, the Custodial Agent
and Securities Intermediary..........................................29
SECTION 9.06. Compensation and Indemnity.............................................29
SECTION 9.07. Failure to Act.........................................................30
SECTION 9.08. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary..............................................31
SECTION 9.09. Right to Appoint Agent or Advisor......................................32
SECTION 9.10. Survival...............................................................33
SECTION 9.11. Exculpation............................................................33
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders..................................33
SECTION 10.02. Amendment with Consent of Holders.....................................34
SECTION 10.03. Execution of Amendments...............................................35
SECTION 10.04. Effect of Amendments..................................................35
SECTION 10.05. Reference of Amendments...............................................35
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver.............................................................35
SECTION 11.02. Governing Law; Submission to Jurisdiction.............................36
SECTION 11.03. Notices...............................................................36
SECTION 11.04. Successors and Assigns................................................36
SECTION 11.05. Counterparts..........................................................37
SECTION 11.06. Severability..........................................................37
SECTION 11.07. Expenses, Etc.........................................................37
SECTION 11.08. Security Interest Absolute............................................38
SECTION 11.09. Notice of Tax Event, Tax Event Redemption and
Termination Event...................................................38
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 Income PACS)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Reestablishment of Income PACS)
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Purchase Contract Agent (Cash Settlement Amounts)
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of January 14, 2002, among THE WILLIAMS
COMPANIES, INC., a Delaware corporation (the "Company"), JPMorgan Chase
Bank, a New York banking corporation, 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 JPMorgan
Chase Bank, a New York 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 40,000,000 Income PACS (as defined herein)
will be issued (46,000,000 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 (a "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) or an Applicable Ownership Interest in the Treasury
Portfolio (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, the Custodial Agent and the Purchase Contract Agent, on its
own behalf and as attorney-in-fact of the Holders from time to time of the
Securities, agree as follows:
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", "Affiliate", "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", "Quotation Agent", "Redemption Amount",
"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", "Treasury Portfolio
Purchase Price" 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 that 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.
"Collateral Account" means the securities account of JPMorgan
Chase Bank, as Collateral Agent, maintained by the Securities Intermediary
and designated "JPMorgan Chase Bank, as Collateral Agent of The Williams
Companies, Inc., as pledgee of JPMorgan Chase Bank, 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
pursuant to the applicable provisions of the Purchase Contract Agreement,
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, as amended
from time to time. Unless otherwise defined herein, all terms defined in
the TRADES Regulations are used herein as therein defined.
"Transfer" means 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. 912820BM8) which mature on February 15, 2005.
"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, and the Purchase Contract
Agent, acting as such 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 Person'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 copy of
the financing statement prepared by the Company and filed in the Office of
the Secretary of State of the State of New York and any other jurisdictions
which the Company deems necessary, authorized by the Purchase Contract
Agent, as attorney-in-fact for the Holders, as Debtors, and describing the
Collateral, such filing to be undertaken by the Company.
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. 021000021, A/C No. 161352.1, 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, 5.08 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
5.07 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 Purchase Contract Agent and indorsed to the Collateral Agent or in
blank, registered in the name of the Collateral Agent or credited to
another securities account maintained in the name of the Collateral
Account.
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
file with the Internal Revenue Service and deliver to the Holders Forms
1099 (or successor or comparable forms), to the extent required by law,
with respect to payments received by the Holders. 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. (a) 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, in the
case of security entitlements, the Securities Intermediary shall indicate
by book-entry that a securities entitlement to such Notes has been credited
to the Collateral Account.
(b) Prior to any Event of Default, the Collateral Agent agrees to
hold any Notes or security interests relating thereto, constituting a
portion of the Collateral registered in the name of the Purchase Contract
Agent with appropriate indorsement in the form delivered to it and shall
not re-register such Notes or security interests relating thereto prior to
an Event of Default.
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 principal 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 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, at any time prior to or on the
second 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 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 32,000 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 Pledged
Applicable Ownership Interests 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 Applicable Ownership
Interests 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 such Pledged Applicable
Ownership Interests 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 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 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, at any time prior to or on the
second Business Day immediately preceding the Purchase Contract Settlement
Date, a holder of a Growth PACS shall have the right to reestablish an
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
32,000 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 C 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 D 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 Pledged Applicable Ownership Interests (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 or Growth PACS that such
Holder has elected, in accordance with the procedures specified in Section
5.02(b)(i) or (e)(i) of the Purchase Contract Agreement, respectively, to
effect a Cash Settlement and (2) payment by such Holder of Income PACS or
Growth PACS by 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 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) instruct the Securities Intermediary to 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 effected 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) 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)
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 the
Purchase Contract Agent of its intention to make a Cash Settlement as
provided in paragraph 5.02(b)(i) 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(b)(iii) of the
Purchase Contract Agreement or (ii) does notify the Purchase Contract Agent
of its intention to pay the Purchase Price in cash, but fails to make such
payment as required by paragraph 5.02(b)(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(d) 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 the Purchase Contract Agent of its intention
to make a Cash Settlement as provided in paragraph 5.02(e)(i) of the
Purchase Contract Agreement or (ii) does notify the Purchase Contract Agent
as provided in paragraph 5.02(e)(ii) 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(e)(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(e)(iii) of the Purchase Contract
Agreement.
(d) As soon as practicable after 11:00 a.m. (New York City time)
on the 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 32,000
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(b)(i) of the Purchase Contract
Agreement, such Holder shall be deemed to have elected to pay for the
shares of Common Stock to be issued under such Purchase Contracts from the
Proceeds of the 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 (i) the Remarketing Agent advises the Collateral Agent in
writing that there has been a Failed Secondary Remarketing or (ii) a Holder
of Income PACS has given notice of its intention to make a Cash Settlement
in the manner provided for in Section 5.02(b)(i) of the Purchase Contract
Agreement, but failed to deliver the required cash prior to 11:00 a.m. (New
York City time) on the Business Day immediately preceding the Purchase
Contract Settlement Date, thus, in each case, 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 in full satisfaction of 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(e)(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(e)(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 Pledged
Applicable Ownership Interests, 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 Pledged
Applicable Ownership Interests, 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 Pledged
Applicable Ownership Interests, 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 Pledged Applicable Ownership Interests, 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
any supplemental remarketing agreement, on or prior to 11:00 a.m. (New York
City time) on the second Business Day immediately preceding the 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 while
Notes are still credited to the Collateral Account, 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 the
benefit of 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
5.07 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 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 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
Pledged Applicable Ownership Interests, 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 Pledged Applicable Ownership Interests or such Pledged
Treasury Securities, as applicable, are 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 Pledged Applicable
Ownership Interests, 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 principal amount of the Pledged
Applicable Ownership Interest. 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 grossly negligent acts, its own grossly negligent failure to act or its
own willful misconduct.
SECTION 7.02. Tax Event Redemption. Upon the occurrence of a Tax
Event Redemption while Notes are still credited to the Collateral Account,
the Redemption Amount, plus any accrued and unpaid interest payable on the
Tax Event Redemption Date with respect to the principal amount of the
Pledged Notes 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 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, which shall be released from the Collateral Account. 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, any Collateral 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 and the Securities Intermediary 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,
Custodial 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, Custodial 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, Custodial Agent and 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 or
involve the Collateral Agent in personal liability 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.
The provisions of this Section and Section 11.07 shall survive the
resignation or removal of the Collateral Agent, Custodial Agent or
Securities Intermediary and the termination of this Agreement.
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, except an event of default
as a result of (x) a Failed Secondary Remarketing or (y) the event
referred to in clause (ii) of the second paragraph of Section
5.07(a) hereof, 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 or 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, the Custodial 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 or the Securities
Intermediary pursuant to clause (iv) of this Section 9.08(a). Upon any such
resignation or removal, the Company shall have the right to appoint a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, which, in the case of a resignation pursuant to clause (i)
of this Section 9.08(a), shall not be an Affiliate of the Purchase Contract
Agent. If no successor Collateral Agent, 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, Custodial
Agent's or Securities Intermediary's giving of notice of resignation or the
Company's or the Purchase Contract Agent's 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, Custodial 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, subject to payment of any amounts owed
to it hereunder, 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, Custodial Agent or Securities
Intermediary. Any resignation or removal of the Collateral Agent, Custodial
Agent or Securities Intermediary hereunder, at a time when such Person is
acting as the Collateral Agent, Custodial Agent or Securities Intermediary,
shall be deemed for all purposes of this Agreement as the simultaneous
resignation or removal of the Collateral Agent, Securities Intermediary or
Custodial Agent, as the case may be.
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 written 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
and regardless of the form of action.
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders. Without the
consent of any Holders, the Company, when authorized by a Board Resolution,
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, 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 in any material
respect.
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
and the Collateral Agent, as the case may be, the Company, when duly
authorized by a Board Resolution, the Purchase Contract Agent, the
Collateral 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 in any material respect:
(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 Pledged Applicable Ownership
Interest, 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 a modification
or amendment of the provisions of the Purchase Contract Agreement; or
(c) reduce the percentage of Purchase Contracts the consent of
whose Holders is required for the modification or amendment of the
provisions of this Agreement;
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. The Collateral Agent, Custodial Agent,
Securities Intermediary and Purchase Contract Agent may, but shall not be
obligated to, enter into any such amendment which affects their own
respective rights, duties or immunities under this Agreement or otherwise.
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 Company,
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 Company, 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; Submission to Jurisdiction. THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION
THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
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 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, 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, the Custodial 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, the
Custodial 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 Section 9.09 of this
Agreement; and
(e) any other out-of-pocket costs and expenses reasonably incurred
by the Collateral Agent, the Custodial 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. JPMorgan Chase Bank, as
Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ James G. Ivey By: /s/ Joanne Adamis
------------------------------ -----------------------------
Name: James G. Ivey Name: Joanne Adamis
Title: Treasurer Title: Vice President
Address for Notices: Address for Notices:
The Williams Companies, Inc. 450 W. 33rd Street
The Williams Companies, Inc. New York, New York 10001
One Williams Center, Suite 5000 Telecopier No.: (212) 946-8154
Tulsa, Oklahoma 74172 Attention: Institutional Trust
Telecopier No.: (918) 573-2065 Services
Attention: Treasurer
Telecopier No.:(918) 573-4503
Attention: General Counsel
With a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telecopier No.: (212) 735-2000
Attention: John Osborn, Esq.
JPMorgan Chase Bank,
as Collateral Agent, Custodial Agent and
Securities Intermediary
By: /s/ Joanne Adamis
--------------------------------
Name: Joanne Adamis
Title: Vice President
Address for Notices:
450 West 33rd Street
New York, New York 10001
Telecopier No.: (212) 946-8154
Attention: Institutional Trust Services
EXHIBIT A
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Establishment of Growth PACS)
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
Re: _______ Income PACS of The Williams Companies, Inc.
(the "Company")
The securities account of JPMorgan Chase Bank, as
Collateral Agent, maintained by the Securities
Intermediary and designated "JPMorgan Chase Bank, as
Collateral Agent of The Williams Companies, Inc., as
pledgee of JPMorgan Chase Bank, 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 January 14, 2002
(the "Pledge Agreement"), among the Company, you, as Collateral Agent, as
Securities Intermediary and 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.
JPMorgan Chase Bank,
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)
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
Re: __________ Income PACS of The Williams Companies, Inc. (the
"Company")
The securities account of JPMorgan Chase Bank, as Collateral
Agent, maintained by the Securities Intermediary and designated
"JPMorgan Chase Bank, as Collateral Agent of The Williams
Companies, Inc., as pledgee of JPMorgan Chase Bank, 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 January 14, 2002
(the "Pledge Agreement"), among the Company, you, as Securities
Intermediary, JPMorgan Chase Bank, 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 Growth
PACS (the "Holder"), you are hereby instructed to release from the
Collateral Account an equal Value of [Pledged Notes or security
entitlements with respect thereto] [Pledged Applicable Ownership Interests]
relating to _____ Income PACS of the Holder by Transfer to the Purchase
Contract Agent.
JPMorgan Chase Bank
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
- ---------------------------------
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EXHIBIT C
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Reestablishment of Income PACS )
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
Re: ____________ Growth PACS of The Williams Companies, Inc. (the
"Company")
Please refer to the Pledge Agreement dated as of January 14, 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)][(b)] 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 _____ Growth PACS of
such Holder in accordance with Section 5.03(a) of the Pledge Agreement.
JPMorgan Chase Bank,
as Purchase Contract Agent
Dated:_______________ By:_____________________________
Name:
Title:
Please print name and address of Holder electing to substitute [Notes or
security entitlements with respect thereto] [Applicable Ownership Interests
(as specified in clause (A) of the definition of such term] for Pledged
Treasury Securities:
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Name Social Security or other
Taxpayer Identification Number,
if any
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Address
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EXHIBIT D
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Reestablishment of Income PACS)
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
Re: ___________ Growth PACS of The Williams Companies, Inc. (the
"Company")
The securities account of JPMorgan Chase Bank, as Collateral
Agent, maintained by the Securities Intermediary and designated
"JPMorgan Chase Bank, as Collateral Agent of The Williams
Companies, Inc., as pledgee of JPMorgan Chase Bank, 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 January 14, 2002
(the "Pledge Agreement"), among the Company, you, as Securities
Intermediary, Custodial Agent and Collateral Agent and JPMorgan Chase Bank,
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.
JPMorgan Chase Bank,
as Collateral Agent
Dated:_______________ By:____________________________
Name:
Title:
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Name Social Security or other
Taxpayer Identification Number,
if any
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Address
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EXHIBIT E
NOTICE OF CASH SETTLEMENT FROM COLLATERAL
AGENT TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
Re: __________ Income PACS of The Williams Companies, Inc. (the
"Company")
__________ Growth PACS of the Company
Please refer to the Pledge Agreement dated as of January 14, 2002
(the "Pledge Agreement"), by and among you, the Company, and JPMorgan Chase
Bank, 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
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.
JPMorgan Chase Bank,
as Collateral Agent,
Dated:_______________ By:_______________________
Name:
Title:
EXHIBIT F
INSTRUCTION TO CUSTODIAL AGENT REGARDING
REMARKETING
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
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 January 14, 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 PACS 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 a 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:___________________
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Name Social Security or other Taxpayer
Identification Number, if any
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Address
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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 Depository Trust Company set forth
below.
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DTC Account Number
Name of Account Party:_________________________________
EXHIBIT G
INSTRUCTION TO CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
JPMorgan Chase Bank
450 West 33rd Street
New York, NY 10001
Telecopier No: (212) 946-8154
Attention: Institutional Trust Services
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 January 14, 2002 (the "Pledge
Agreement"), among the Company and you, as Collateral Agent, Custodial
Agent and Securities Intermediary, and as Purchase Contract Agent and as
attorney-in-fact for the holders of Income PACS 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:_____________
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By:_________________________________
Name:
Title:
Signature Guarantee:___________________
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Name Social Security or other Taxpayer
Identification Number, if any
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Address
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EXHIBIT 4.6
REMARKETING AGREEMENT
REMARKETING AGREEMENT, dated as of January 14, 2002 (the
"Agreement") by and between The Williams Companies, Inc., a Delaware
corporation (the "Company"), JPMorgan Chase Bank, 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 $1,000,000,000 (or up to
$1,150,000,000 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 January 14, 2002, by and
between the Purchase Contract Agent and the Company (the "Purchase Contract
Agreement"); and
WHEREAS, the FELINE PACS will initially consist of 40,000,000 (or
46,000,000 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 $1,000,000,000 (or up to $1,150,000,000 if
the underwriters' overallotment option is exercised in full) aggregate
principal amount of 6.50% Senior Notes due 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 January 14, 2002, by and among the Company, JPMorgan Chase Bank, 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 Custodial Agent (as such term is defined in the Pledge
Agreement) 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
Custodial Agent 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 per Note that is 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. The
Company shall notify the Purchase Contract Agent and the Collateral Agent
of the appointment of any such successor.
(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 Securities. Each of the Remarketing
Agent and the Reset Agent, when acting hereunder or, in the case of the
Remarketing Agent, under the Supplemental Remarketing Agreement, or when
acting in its individual or any other capacity, may, to the extent
permitted by law, buy, sell, hold or deal in any of the 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. The
Company may, to the extent permitted by law, purchase any Notes that are
remarketed by any Remarketing Agent.
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 use its reasonable effort to 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 per Note not less than 100% of the
principal amount thereof, (iii) the Purchase Contract Agent, the Collateral
Agent, the Custodial Agent, the Securities Intermediary, 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, the Quotation Agent 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 the Purchase Contract
Agent 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, the Collateral Agent and the Custodial Agent 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 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; provided, however, that if any Reset Agent resigns prior
to a successful remarketing, then the obligations set forth in Section 3
hereof shall not survive the termination of this Agreement and no fee shall
be payable to such Reset Agent in such capacity. 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, except to the extent that it shall have
been determined by a court of competent jurisdiction by final and
nonappealable judgment that such liability has resulted from the willful
misconduct, bad faith or gross negligence of the Remarketing Agent or the
Reset Agent or by their failure to fulfill in any material respect their
express obligations hereunder or, in the case of the Remarketing Agent,
under 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 "Agent 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 Agent 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), reasonably 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
Agent 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 (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; provided, further, that
the Company shall not be liable under clause (i)(G) or (i)(I) to the extent
that such loss, claim, damage, liability or expense has, by final judicial
determination, resulted from the willful misconduct, bad faith or gross
negligence of the Remarketing Agent or the Reset Agent or by their failure
to fulfill, in any material respect, their express obligations hereunder
or, in the case of the Remarketing Agent, under the Supplemental
Remarketing Agreement.
Other than as set forth in Section 10(b) below, the Company agrees
that no Agent 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(a) (whether or not Merrill Lynch or
any other Agent 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 Agent 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
Agent Indemnified Party.
(b) The Remarketing Agent and the Reset Agent, severally and not
jointly, agree to indemnify and hold harmless the Company, its directors
and its officers who sign the Registration Statement, and each person, if
any, who controls the Company within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act (the "Company Indemnified
Parties") to the same extent as the foregoing indemnity from the Company to
the Agent Indemnified Parties, but only with reference to information
relating to such Remarketing Agent and Reset Agent furnished to the Company
in writing by such Remarketing Agent and Reset Agent expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto or any other documents used in
connection with the Remarketing of the Notes, as the case may be.
Each of the Remarketing Agent and the Reset Agent agrees that,
without the Company'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(b) (whether or not the Company or any other Company 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 Company 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 a Company Indemnified Party.
(c) If the indemnification provided for in Section 10(a) or 10(b)
hereof is for any reason unavailable to or insufficient to hold harmless
any party seeking indemnification thereunder (an "Indemnified Party") in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then the Company, on the one hand, and the Remarketing Agent and
the Reset Agent on the other hand, 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(c)
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(c). The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an Indemnified Party and referred
to above in this Section 10(c) 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.
(d) Promptly after receipt by any 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 party will notify
the party from whom indemnification is sought (the "Indemnifying Party") in
writing of such claim or of the commencement of such action or proceeding,
but failure to so notify the Indemnifying Party will not relieve the
Indemnifying Party from any liability which it may have to such party
seeking indemnification under this indemnification and contribution
agreement, and in any event will not relieve the Indemnifying Party from
any other liability that it may have to such party. The Indemnified Party
(or Merrill Lynch in the case of any Agent Indemnified Party) 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 Company, 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 Company, 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 that would require the
application of the law of any other jurisdiction.
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;
provided, however, that if any Reset Agent resigns prior to a successful
remarketing, then the obligations set forth in Section 3 hereof shall not
survive the termination of this Agreement and no fee shall be payable to
such Reset Agent in such capacity.
(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. Except in the case of a
succession pursuant to the terms of the Purchase Contract Agreement, 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, which
consent shall not be unreasonably withheld and, except with respect to the
Purchase Contract Agent, in connection with the appointment of a successor
thereof pursuant to the Purchase Contract Agreement. 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 (except
with respect to the Indenture and the Notes, to which it is not a party)
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 adversely
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, Suite 5000, Tulsa, Oklahoma
74172 Attention: Treasurer, with a copy to Skadden, Arps, Slate, Meagher &
Flom, Four Times Square, New York, New York 10036, Attention John Osborn,
Esq.; 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: John Brandow; and if to the Purchase Contract Agent,
to JPMorgan Chase Bank, 450 West 33rd Street, New York, New York 10001, 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.
WITNESS WHEREOF, each of the Company, the Purchase Contract Agent
and the Remarketing Agent has caused this Agreement to be executed in its
name and on its behalf by one of its duly authorized signatories as of the
date first above written.
THE WILLIAMS COMPANIES, INC.
By: /s/ James G. Ivey
-------------------------------------
Name: James G. Ivey
Title: Treasurer
CONFIRMED AND ACCEPTED:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER
& SMITH INCORPORATED
By: /s/ Fred Brady Parish
------------------------------
Authorized Signatory
JPMORGAN CHASE BANK
not individually but solely as
Purchase Contract Agent and as
attorney-in-fact for the holders
of the Purchase Contracts
By: /s/ Joanne Adamis
----------------------------
Name: Joanne Adamis
Title: Vice President
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 JPMorgan Chase Bank, 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 January 14, 2002 (the "Remarketing Agreement") among
the Company, the Purchase Contract Agent and Merrill Lynch & Co. and
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 6, 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., One Williams Center, Suite 5000, Tulsa, Oklahoma
74172 Attention: Treasurer, with a copy to Skadden, Arps, Slate, Meagher &
Flom, Four Times Square, New York, New York 10036, Attention John Osborn,
Esq.; 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: John Brandow; and if to the Purchase Contract Agent,
to JPMorgan Chase Bank, 450 West 33rd Street, New York, New York 10001 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]
JPMORGAN CHASE BANK
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: 6.50% Senior Notes due 2007 of
the Company (the "Notes").
Purchase Contract Agreement, dated as of January 14, 2002 (the
"Purchase Contract Agreement") by and between The Williams Companies, Inc.,
a Delaware corporation, and JPMorgan Chase Bank, a New York banking
corporation.
Pledge Agreement dated as of January 14, 2002 (the "Pledge
Agreement") by and between The Williams Companies, Inc., a Delaware
corporation, JPMorgan Chase Bank, a New York banking corporation, as
Purchase Contract Agent and JPMorgan Chase Bank, a New York banking
corporation, as Collateral Agent, Custodial Agent and Securities
Intermediary.
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 14, 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 Trust Company, 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 7, 2002 (the "Underwriting
Agreement") among The Williams Companies, Inc. and Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith Barney
Inc. and the other underwriters named therein.
Remarketing Closing Date, Time and Location:
EXHIBIT 8.1
[Letterhead of Skadden, Arps, Slate, Meagher & Flom LLP]
January 14, 2002
The Williams Companies, Inc.
One Williams Center
Tulsa, Oklahoma 74172
Re: Offering of FELINE PACS
Ladies and Gentlemen:
We have acted as counsel to The Williams Companies, Inc.,
a Delaware corporation (the "Company"), in connection with the preparation
of the Prospectus Supplement, dated January 7, 2002 (the "Prospectus
Supplement"), relating to certain investment units (the "FELINE PACS"),
initially comprised of purchase contracts to purchase shares of common
stock of the Company, par value $1.00 per share, and senior notes due 2007
(the "Notes") issued by the Company.
In connection with this opinion, we have examined and
relied on originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Underwriting Agreement, dated January 7, 2002,
among Merrill Lynch, Pierce, Fenner & Smith Incorporated, Salomon Smith
Barney Inc. and the Company, (ii) the Registration Statement on Form S-3
(File No. 333-73326) of the Company filed with the Securities and Exchange
Commission (the "Commission") on November 14, 2001 under the Securities Act
of 1933, as amended (the "Securities Act"), and Amendment No. 1 thereto,
filed with the Commission on December 24, 2001 under the Securities Act,
(iii) the Prospectus of the Company, dated December 27, 2001, (iv) the
Prospectus Supplement, (v) the Indenture, dated November 10, 1997, between
the Company and Bank One Trust Company, N.A., as trustee (the "Trustee"),
as supplemented by the Sixth Supplemental Indenture, dated as of January
14, 2002, between the Company and the Trustee, (vi) the Purchase Contract
Agreement, dated January 14, 2002, between the Company and JPMorgan Chase
Bank, as Purchase Contract Agent, and (vii) such other documents,
certificates, and records as we have deemed necessary or appropriate as a
basis for the opinion set forth herein. We have also relied upon statements
and representations made to us by representatives of the Company. For
purposes of this opinion, we have assumed the validity and the initial and
continuing accuracy of the documents, certificates, records, statements,
and representations referred to above.
In our examination, we have assumed the legal capacity of
all natural persons, the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, conformed or
photostatic copies, and the authenticity of the originals of such latter
documents. In making our examination of documents executed, or to be
executed, by the parties indicated therein, we have assumed that each party
has, or will have, the power, corporate or other, to enter into and perform
all obligations thereunder, and we have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by
each party indicated in the documents and that such documents constitute,
or will constitute, valid and binding obligations of each party.
In rendering our opinion, we have considered the
applicable provisions of the Internal Revenue Code of 1986, as amended,
Treasury Department regulations promulgated thereunder, pertinent judicial
authorities, interpretive rulings of the Internal Revenue Service, and such
other authorities as we have considered relevant. It should be noted that
statutes, regulations, judicial decisions, and administrative
interpretations are subject to change or differing interpretations,
possibly with retroactive effect. There can be no assurance, moreover, that
the opinion expressed herein will be accepted by the Internal Revenue
Service or, if challenged, by a court of law. A change in the authorities
or the accuracy or completeness of any of the information, documents,
certificates, records, statements, representations, covenants, or
assumptions on which our opinion is based could affect our conclusions.
This opinion is expressed as of the date hereof, and we are under no
obligation to supplement or revise our opinion to reflect any changes
(including changes that have retroactive effect) in applicable law or any
information, document, certificate, record, statement, representation,
covenant, or assumption relied upon herein that becomes incorrect or
untrue.
Based upon the foregoing and in reliance thereon, and
subject to the qualifications, exceptions, assumptions, and limitations
contained therein, we are of the opinion that:
(1) although the discussion set forth in the Prospectus
Supplement under the heading "CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES" does not purport to discuss all possible United States
federal income tax consequences of the purchase, ownership, and disposition
of the FELINE PACS, such discussion constitutes, in all material respects,
a fair and accurate summary of the United States federal income tax
consequences of the purchase, ownership, and disposition of the FELINE
PACS, based upon current United States federal income tax law; and
(2) the Notes will be treated as indebtedness of the
Company for United States federal income tax purposes.
We express no opinion concerning any tax consequences
associated with the FELINE PACS other than those specifically set forth
herein.
This opinion is delivered to you solely for use in
connection with the Prospectus Supplement and is not to be used,
circulated, quoted, or otherwise referred to for any other purpose, or
relied upon by any other person, without our express written permission. In
accordance with the requirements of Item 601(b)(23) of Regulation S-K under
the Securities Act, we hereby consent to the filing of this opinion as an
exhibit to the Prospectus Supplement and to the reference to our firm in
the Prospectus Supplement. In giving such consent, we do not hereby admit
that we are in the category of persons whose consent is required under
Section 7 of the Securities Act or the rules or regulations of the
Commission thereunder.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP