EXHIBIT 4.6
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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of September 10, 2002
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Table of Contents
Page
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01 Definitions.....................................................1
SECTION 1.02 Compliance Certificates and Opinions...........................12
SECTION 1.03 Form of Documents Delivered to Purchase Contract Agent.........12
SECTION 1.04 Acts of Holders; Record Dates..................................13
SECTION 1.05 Notices........................................................14
SECTION 1.06 Notice to Holders; Waiver......................................15
SECTION 1.07 Effect of Headings and Table of Contents.......................16
SECTION 1.08 Successors and Assigns.........................................16
SECTION 1.09 Separability Clause............................................16
SECTION 1.10 Benefits of Agreement..........................................16
SECTION 1.11 Governing Law..................................................16
SECTION 1.12 Legal Holidays.................................................17
SECTION 1.13 Counterparts...................................................17
SECTION 1.14 Inspection of Agreement........................................17
SECTION 1.15 Appointment of Financial Institution as Agent
for the Company..............................................17
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01 Forms of Certificates Generally................................17
SECTION 2.02 Form of Purchase Contract Agent's Certificate
of Authentication............................................19
ARTICLE 3
THE SECURITIES
SECTION 3.01 Amount; Form and Denominations.................................19
SECTION 3.02 Rights and Obligations Evidenced by the Certificates...........19
SECTION 3.03 Execution, Authentication, Delivery and Dating.................20
SECTION 3.04 Temporary Certificates.........................................20
SECTION 3.05 Registration; Registration of Transfer and Exchange............21
SECTION 3.06 Book-Entry Interests...........................................22
SECTION 3.07 Notices to Holders.............................................23
SECTION 3.08 Appointment of Successor Depositary............................23
SECTION 3.09 Definitive Certificates........................................23
SECTION 3.10 Mutilated, Destroyed, Lost and Stolen Certificates.............24
SECTION 3.11 Persons Deemed Owners..........................................25
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SECTION 3.12 Cancellation...................................................25
SECTION 3.13 Creation of Treasury Units by Substitution
of Treasury Securities.......................................26
SECTION 3.14 Reestablishment of Corporate Units.............................28
SECTION 3.15 Transfer of Collateral upon Occurrence of Termination Event....29
SECTION 3.16 No Consent to Assumption.......................................30
ARTICLE 4
The Preferred Securities, Notes and Applicable Ownership
Interest of the Treasury Portfolio
SECTION 4.01 Distribution or Interest Payments; Rights to
Distribution or Interest Payments Preserved..................30
SECTION 4.02 Notice and Voting..............................................31
SECTION 4.03 Distribution of Notes; Tax Event Redemption....................32
ARTICLE 5
The Purchase Contracts
SECTION 5.01 Purchase of Shares of Common Stock.............................33
SECTION 5.02 Initial and Secondary Remarketing; Payment of Purchase Price...36
SECTION 5.03 Issuance of Shares of Common Stock.............................43
SECTION 5.04 Adjustment of Settlement Rate..................................44
SECTION 5.05 Notice of Adjustments and Certain Other Events.................52
SECTION 5.06 Termination Event; Notice......................................52
SECTION 5.07 Early Settlement...............................................53
SECTION 5.08 Intentionally Omitted..........................................55
SECTION 5.09 No Fractional Shares...........................................55
SECTION 5.10 Charges and Taxes..............................................55
SECTION 5.11 Purchase Contract Payments.....................................56
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.....58
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
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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......................61
SECTION 7.04 Not Responsible for Recitals or Issuance of Securities.........63
SECTION 7.05 May Hold Securities............................................63
SECTION 7.06 Money Held in Custody..........................................63
SECTION 7.07 Compensation and Reimbursement.................................63
SECTION 7.08 Corporate Purchase Contract Agent Required; Eligibility........64
SECTION 7.09 Resignation and Removal; Appointment of Successor..............64
SECTION 7.10 Acceptance of Appointment by Successor.........................65
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business....66
SECTION 7.12 Preservation of Information; Communications to Holders.........66
SECTION 7.13 No Obligations of Purchase Contract Agent......................67
SECTION 7.14 Tax Compliance.................................................67
ARTICLE 8
Supplemental Agreements
SECTION 8.01 Supplemental Agreements Without Consent of Holders.............68
SECTION 8.02 Supplemental Agreements with Consent of Holders................68
SECTION 8.03 Execution of Supplemental Agreements...........................69
SECTION 8.04 Effect of Supplemental Agreements..............................70
SECTION 8.05 Reference to Supplemental Agreements...........................70
ARTICLE 9
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 9.01 Covenant Not to Consolidate, Merge, Convey, Transfer
or Lease Property Except under Certain Conditions............70
SECTION 9.02 Rights and Duties of Successor Corporation.....................71
SECTION 9.03 Officer's Certificate and Opinion of Counsel Given
to Purchase Contract Agent...................................71
ARTICLE 10
Covenants
SECTION 10.01 Performance under Purchase Contracts...........................71
SECTION 10.02 Maintenance of Office or Agency................................72
SECTION 10.03 Company to Reserve Common Stock................................72
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SECTION 10.04 Covenants as to Common Stock...................................72
SECTION 10.05 Statements of Officers of the Company as to Default............72
SECTION 10.06 ERISA..........................................................73
SECTION 10.07 Tax Treatment..................................................73
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PURCHASE CONTRACT AGREEMENT, dated as of September 10, 2002, between
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED, a New Jersey corporation (the
"Company"), and Wachovia Bank, National Association (formerly known as First
Union National Bank), a banking association organized under the laws of the
United States, 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 APPLICATION
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;
(d) the following terms have the meanings given to them in the Declaration
(as defined below): (i) Applicable Ownership Interest; (ii) Applicable
Principal Amount; (iii) Guarantee; (iv) Liquidation Distribution; (v)
Redemption Amount; (vi) Reset Rate; (vii) Tax Event Redemption; (viii)
Tax Event Redemption Date; (ix) Treasury Portfolio; and (x) Treasury
Portfolio Purchase Price; and
(e) the following terms have the meanings given to them in this
Section 1.01(e):
"Act" has the meaning, with respect to any Holder, set forth in Section
1.04.
"Adjusted Exchange Property" has the meaning set forth in Section
5.04(b)(1).
"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 Exchange Property Market Value" has the meaning set forth in
Section 5.04(b)(1).
"Applicable Market Value" has the meaning set forth in Section 5.01.
"Applicants" has the meaning set forth in Section 7.12(b).
"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.
"Base Exchange Property" has the meaning set forth in Section 5.04(b)(1).
"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
or a duly authorized committee thereof, 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 or committee thereof and to be in full force
and effect on the date of such certification and delivered to the Purchase
Contract Agent.
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"Book-Entry Interest" means a beneficial interest in a Global Certificate,
registered in the name of a Depositary or a nominee thereof, ownership and
transfers of which shall be maintained and made through book entries by such
Depositary as described in Section 3.06.
"Business Day" means any day other than a Saturday or Sunday, or any other
day on which banking institutions in The City of New York are permitted or
required by any applicable law to close or a day on which the Indenture Trustee
or the Property Trustee is closed for business; provided that for purposes of
the second paragraph of Section 1.12 only, the term "Business Day" shall also be
deemed to exclude any day on which trading on the New York Stock Exchange, Inc.
is closed or suspended.
"Cash Merger" has the meaning set forth in Section 5.04(b)(2).
"Cash Settlement" has the meaning set forth in Section 5.02(b)(i).
"Certificate" means a Corporate Units Certificate or a Treasury Units
Certificate.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall be registered a Global Certificate and which shall undertake
to effect book-entry transfers and pledges of the Securities.
"Closing Price" has the meaning set forth in Section 5.01.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1.01(f) of the
Pledge Agreement.
"Collateral Agent" means The Bank of New York, 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, without par value, of the Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"Constituent Person" has the meaning set forth in Section 5.04(b).
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"Corporate Trust Office" means the principal corporate trust office of the
Purchase Contract Agent at which, at any particular time, its corporate trust
business shall be administered, which office at the date hereof is located at 00
Xxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: Corporate Trust Office.
"Corporate Unit" means the collective rights and obligations of a Holder
of a Corporate Units Certificate in respect of a Preferred Security, 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.
"Corporate Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"Current Market Price" has the meaning set forth in Section 5.04(a)(8).
"Custodial Agent" means The Bank of New York, as Custodial Agent under the
Pledge Agreement until a successor Custodial Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Custodial Agent" shall mean such successor.
"Declaration" means the Amended and Restated Trust Agreement of PSEG
Funding Trust I, dated as of September 10, 2002, among the Company as sponsor,
the trustees named therein and the holders from time to time of individual
beneficial interests in the assets of the Trust.
"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 the early settlement of a Purchase Contract
pursuant to Section 5.04(b)(2) or Section 5.07(a).
"Early Settlement Amount" has the meaning set forth in Section 5.07(a).
"Early Settlement Date" means the date on which an Early Settlement
occurs.
"Early Settlement Rate" has the meaning set forth in Section 5.07(c).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
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"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.
"Holder" means, with respect to a Security, the Person in whose name the
Security evidenced by a Certificate is registered in the Security Register;
provided, however, that in determining whether the Holders of the requisite
number of Securities have voted on any matter, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Security
remains in the form of one or more Global Certificates and if the Depositary
which is the registered holder of such Global Certificate has sent an omnibus
proxy assigning voting rights to the Depositary Participants to whose accounts
the Securities are credited on the record date, the term "Holder" shall mean
such Depositary Participant acting at the direction of the Beneficial Owners.
"Indenture" means the Indenture (including any provisions of the TIA that
are deemed incorporated therein), dated as of November 1, 1998, between the
Company and the Indenture Trustee, as amended by the First Supplemental
Indenture thereto, dated as of September 10, 2002, pursuant to which the Notes
will be issued .
"Indenture Trustee" means Wachovia Bank, National Association (formerly
known as First Union National Bank), a banking association organized under the
laws of the United States, as trustee under the Indenture, or any successor
thereto.
"Initial Remarketing" means the remarketing of the Preferred Securities or
Notes on the Initial Remarketing Date.
"Initial Remarketing Date" means the third Business Day immediately
preceding the Initial Reset Date.
"Initial Reset Date" means any Business Day selected by the Company in its
sole discretion during the period commencing May 16, 2005 through August 16,
2005 upon not less than eight (8) Business Days prior written notice to the
Remarketing Agent; provided that, in the event that the Company does not select
an Initial Reset Date, the Initial Reset Date shall be August 16, 2005.
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"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, any of
its Vice Presidents, its Treasurer, any of its Assistant Treasurers, its
Controller, or any of its assistant Controllers, its Secretary, or any of its
Assistant Secretaries, 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 Senior Deferrable Notes due 2007 issued by the
Company under the Indenture and held by the Property Trustee.
"NYSE" has the meaning set forth in Section 5.01.
"Officer's Certificate" means a certificate signed by the Chairman of the
Board, its Chief Executive Officer, the President, any Vice Presidents, the
Treasurer, or any Assistant Treasurers of the Company, and delivered to the
Purchase Contract Agent. Any Officer's Certificate delivered with respect to
compliance with a condition or covenant provided for in this Agreement shall
include:
(i) a statement that each officer signing the Officer's 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 Officer's
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) Treasury Units and (ii)
Corporate Units for which the underlying Preferred Securities or Notes
have been theretofore deposited with the Purchase Contract Agent in trust
for the Holders of such Corporate Units;
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(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, subject to Section 4.01, each February 16, May 16,
August 16 and November 16, commencing November 16, 2002; provided that, in the
event that the Initial Reset Date is not otherwise a Payment Date, the Initial
Reset Date shall be a Payment Date in respect of the distribution or interest
payment payable on such date on the Preferred Securities or Notes then
comprising components of Corporate Units.
"Permitted Investments" has the meaning set forth in Section 1.01(f) of
the Pledge Agreement.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated 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 Preferred
Securities, 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.
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"Pledge Agreement" means the Pledge Agreement, dated as of September 10,
2002, among the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time of the Securities.
"Pledged Notes" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Pledged Preferred Securities" has the meaning set forth in Section
1.01(f) of the Pledge Agreement.
"Predecessor Certificate" means a Predecessor Corporate Units Certificate
or a Predecessor Treasury Units Certificate.
"Predecessor Corporate Units Certificate" of any particular Corporate
Units Certificate means every previous Corporate Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Corporate Units evidenced thereby; and, for the purposes of this
definition, any Corporate Units Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate Units Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate Units Certificate.
"Predecessor Treasury Units Certificate" of any particular Treasury Units
Certificate means every previous Treasury Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Treasury Units evidenced thereby; and, for the purposes of this definition, any
Treasury Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Treasury
Units Certificate.
"Preferred Securities" means the Preferred Securities of the Trust, each
having a liquidation amount of $50, representing preferred undivided beneficial
interests in the assets of the Trust.
"Proceeds" has the meaning set forth in Section 1.01(f) of the Pledge
Agreement.
"Property Trustee" means Wachovia Bank, National Association, as initial
property trustee under the Declaration, or any successors thereto that is a
financial institution unaffiliated with the Company.
"Prospectus" means the prospectus relating to the delivery of shares of
Common Stock in connection with an Early Settlement, 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.
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"Purchase Contract" means, with respect to any Security, the contract
forming a part of such Security and obligating the Company to (i) sell, and the
Holder of such Security to purchase, shares of Common Stock and (ii) pay the
Holder thereof Purchase Contract Payments, in each case on the terms and subject
to the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase Contract
Agent" in the first paragraph of this Agreement until a successor Purchase
Contract Agent shall have become such pursuant to the applicable provisions of
this Agreement, and thereafter "Purchase Contract Agent" shall mean such Person.
"Purchase Contract Payments" means the payments payable by the Company on
the Payment Dates in respect of each Purchase Contract, at a rate per year of
4.00% of the Stated Amount per Purchase Contract.
"Purchase Contract Settlement Date" means November 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).
"Record Date" for any distribution and Purchase Contract Payment payable
on any Payment Date means, as to any Global Certificate, the Business Day next
preceding such Payment Date, and as to any other Certificate, the date selected
by the Company, which shall be more than one Business Day but less than sixty
Business Days prior to such Payment Date.
"Reference Price" has the meaning set forth in Section 5.01.
"Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of the shares of Common Stock in connection with an Early Settlement,
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 Preferred Securities or 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
September 10, 2002, between the Company and the Remarketing Agent.
"Remarketing Fee" has the meaning set forth in Section 5.02(a).
"Reorganization Event" has the meaning set forth in Section 5.04(b).
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"Remarketing Per Preferred Security or Note Price" means the Treasury
Portfolio Purchase Price divided by the number of Preferred Securities or Notes,
as the case may be, held as components of Corporate Units and remarketed in the
Initial 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 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 The Bank of New York, as Securities
Intermediary under the Pledge Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of the
Pledge Agreement, and thereafter "Securities Intermediary" shall mean such
successor.
"Security" means a Corporate Unit or a Treasury Unit, as the case may be.
"Security Register" and "Securities Registrar" have the respective
meanings set forth in Section 3.05.
"Senior Indebtedness" means all indebtedness of the Company outstanding at
any time except for such Indebtedness as to which, by its terms, is subordinated
to or ranks equally with the payment of the Purchase Contract Payments on the
Outstanding Securities or any other indebtedness ranking pari passu with the
payment of the Purchase Contract Payments on the Outstanding Securities.
"Separate Preferred Securities or Notes" means Preferred Securities or
Notes, as the case may be, that are no longer a component of Corporate Units.
"Separate Preferred Securities or Notes Purchase Price" means the amount
in cash equal to the product of the Remarketing Per Preferred Security or Note
Price multiplied by the number of Separate Preferred Securities or Notes
remarketed in the Initial Remarketing.
"Settlement Rate" has the meaning set forth in Section 5.01.
"Stated Amount" means $50.
"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).
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"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(iv) 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;
(v) 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
(vi) at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under the Bankruptcy
Code, or shall consent to the filing of a bankruptcy proceeding against
it, or shall file a petition or answer or consent seeking reorganization
or liquidation under the Bankruptcy Code or any other similar applicable
Federal or State law, or shall consent to the filing of any such petition,
or shall consent to the appointment of a receiver or liquidator or trustee
or assignee in bankruptcy or insolvency of it or of its property, or shall
make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning set forth in Section 5.01.
"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 Securities" means zero-coupon U.S. Treasury securities (CUSIP
No. 000000XX0 or 000000XX0) with a principal amount at maturity equal to $1,000
and maturing on November 15, 2005, the Business Day preceding the Purchase
Contract Settlement Date.
"Treasury Units" means, following the substitution of Treasury Securities
for Preferred Securities or Notes as collateral to secure a Holder's obligations
under the Purchase Contract, the collective rights and obligations of a Holder
of a Treasury Units Certificate in respect of such Treasury Securities, subject
to the Pledge thereof, and the related Purchase Contract.
"Treasury Units Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.
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"Trust" means PSEG Funding Trust I, a statutory trust formed under the
laws of the State of Delaware, or any successor thereto by merger or
consolidation.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
September 5, 2002, between the Company, the Trust 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 Officer's Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
or she has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03 Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give
12
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 Corporate Units and the Outstanding
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Treasury Units, 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 Corporate
Units or the Treasury Units, 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:
Wachovia Bank, National Association
00 Xxxxx Xxxxxx,
0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Corporate Trust Bond Administration
If to the Company:
Public Service Enterprise Group Incorporated
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00 Xxxx Xxxxx
X.X. Xxx 0000
Xxxxxx, Xxx Xxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Treasurer
with a copy to:
Public Service Enterprise Group Incorporated
00 Xxxx Xxxxx
X.X. Xxx 0000
Xxxxxx, Xxx Xxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Associate General Counsel
If to the Collateral Agent:
The Bank of New York 000 Xxxxxxx Xxxxxx Xxx Xxxx, Xxx
Xxxx 00000 Telecopier No.: 000-000-0000
Attention: Corporate Trust Administration
If to the Property Trustee:
Wachovia Bank, National Association
00 Xxxxx Xxxxxx,
0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Corporate Trust Bond Administration
If to the Indenture Trustee:
Wachovia Bank, National Association
00 Xxxxx Xxxxxx,
0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telecopier No.: 000-000-0000
Attention: Corporate Trust Bond Administration
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
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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.
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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,
except that, if such next succeeding Business Day falls the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day with the same force and effect as if made on 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 performed on such
Purchase Contract Settlement Date or Early Settlement Date, as applicable.
SECTION 1.13 Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 1.14 Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any Holder
or Beneficial Owner.
SECTION 1.15 Appointment of Financial Institution as Agent for the
Company.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01 Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming part of
each Security evidenced thereby) shall be in substantially the form set forth in
Exhibit A hereto (in the case of
17
Certificates evidencing Corporate Units) or Exhibit B hereto (in the case of
Certificates evidencing Treasury Units), 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."
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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 9,200,000, 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, 5.07 or
8.05.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.02 Rights and Obligations Evidenced by the Certificates.
Each Corporate Units Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing (1) the
ownership by the Holder thereof of a beneficial interest in a Preferred
Security, a Note or the Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, subject to the Pledge of such Preferred Security, 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
Corporate Unit shall pledge, pursuant to the Pledge Agreement, the Preferred
Security, 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 Corporate Unit, to the Collateral Agent and grant to
the Collateral Agent a security interest in the right, title and interest of
such Holder in such Preferred Security, 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 Treasury Unit pursuant to Section 3.13, each
Treasury Units Certificate shall evidence the number of Treasury Units specified
therein, with each such Treasury Unit representing (1) the ownership by the
Holder thereof of a 1/20 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
19
shares of Common Stock, including, without limitation, the right to vote or
receive any dividends or other payments or to consent or to receive notice as a
shareholder in respect of the meetings of shareholders or for the election of
directors of the Company or for any other matter, or any other rights whatsoever
as a shareholder of the Company.
SECTION 3.03 Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents. The
signature of any of these officers on the Certificates may be manual or
facsimile.
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Purchase Contract Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Purchase
Contract Agent shall be conclusive evidence that the Holder of such Certificate
has entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.04 Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Corporate Units or Treasury Units, as the case may be, are
20
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 Corporate Units and Treasury Units.
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 Corporate
Units or Treasury Units, 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
Corporate Units or Treasury Units, 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 Corporate Units
or Treasury Units, as the case may be, and be entitled to the same benefits and
subject to the same obligations, under this Agreement as the Corporate Units or
Treasury Units, as the case may be, evidenced by the Certificate surrendered
upon such registration of transfer or exchange.
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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 Preferred Securities, 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:
22
(i) the provisions of this Section 3.06 shall be in full force and
effect;
(ii) the Company shall be entitled to deal with the Depositary for
all purposes of this Agreement (including making Purchase Contract
Payments and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificates
and shall have no obligation to the Beneficial Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section 3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be exercised only
through the Depositary and shall be limited to those established by law
and agreements between such Beneficial Owners and the Depositary or the
Depositary Participants.
SECTION 3.07 Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of the Depositary or the nominee of the Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
SECTION 3.08 Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Depositary with respect to the Securities.
SECTION 3.09 Definitive Certificates.
If:
(i) the Depositary elects to discontinue its services as securities
depositary with respect to the Securities and a successor Depositary is
not appointed pursuant to Section 3.08 within 90 days after such
discontinuance; or
(ii) the Company elects, after consultation with the Purchase
Contract Agent, to terminate the book-entry system for the Securities,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Securities and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Securities by the
Depositary, accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in accordance with
the instructions of the Depositary. The Company shall not be liable for any
delay in delivery of such instructions and may conclusively rely on and shall be
protected in relying on, such instructions. Each definitive Certificate so
delivered shall evidence Securities of the same kind and tenor as the Global
Certificate so surrendered in respect thereof.
23
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 Corporate Units or Treasury Units, 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 Corporate Units or Treasury Units, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earliest of any Early Settlement Date for such lost or
mutilated Certificate, the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
(i) if the Purchase Contract Settlement Date or an Early Settlement
Date with respect to such lost or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate;
or
(ii) if a Cash Settlement or an Early Settlement Date 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 Preferred Securities, 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.
(iii) Upon the issuance of any new Certificate under this Section,
the Company and the Purchase Contract Agent may require the payment by the
Holder of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Purchase Contract Agent) connected therewith.
24
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11 Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Security evidenced thereby, for the purpose of
receiving distributions on the Preferred Securities, 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 Preferred Securities, the Treasury Securities, the Notes,
or Treasury Portfolio, as applicable, or Purchase Contract Payments payable on
the Purchase Contracts, each constituting a part of the Security evidenced
thereby shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Purchase Contract Agent, nor any agent of the
Company or the Purchase Contract Agent, shall be affected by notice to the
contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate.
SECTION 3.12 Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on or
after the Purchase Contract Settlement Date, upon the transfer of Preferred
Securities, Notes, the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of that term) of the Treasury Portfolio or
Treasury Securities, as the case may be, after the occurrence of a Termination
Event or pursuant to an Early Settlement, or upon the registration of transfer
or exchange of a Security, or a Collateral Substitution or the reestablishment
of Corporate Units shall, if surrendered to any Person other than the Purchase
Contract Agent, be delivered to the Purchase Contract Agent and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Purchase Contract Agent for cancellation any Certificates
previously authenticated, executed and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Certificates so delivered shall,
upon Issuer Order, be promptly cancelled by the Purchase Contract Agent. No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as provided
in this Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Purchase Contract Agent shall be disposed of in
accordance with its customary practices.
25
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 Treasury Units by Substitution of Treasury
Securities.
Subject to the conditions set forth in this Agreement, a Holder may
separate the Preferred Securities, the Notes or Applicable Ownership Interests
of the Treasury Portfolio, as applicable, from the related Purchase Contracts in
respect of such Holder's Corporate Units by substituting for such Preferred
Securities, Notes or Applicable Ownership Interests of the Treasury Portfolio,
as applicable, Treasury Securities in an aggregate principal amount equal to the
aggregate liquidation amount of such Preferred Securities, the principal amount
of such Applicable Ownership Interests (as specified in clause (A) of the
definition of such term) or the aggregate principal amount of such Notes, 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 (or the second Business
Day, if a Successful Initial Remarketing or a Tax Event Redemption Date has
occurred) 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
liquidation amount of the Preferred Securities, the aggregate principal
amount of the Notes or the Applicable Ownership Interests (as specified in
clause A of such term) of the Treasury Portfolio comprising part of such
Corporate Units, as the case may be; and
(2) transfer the related Corporate Units 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 Preferred Securities,
Notes or the Applicable Ownership Interests (as specified in clause A of
such term) of the Treasury Portfolio, as the case may be, underlying such
Corporate Units, 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.
26
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 Preferred Securities, the Applicable
Ownership Interests of the Treasury Portfolio or the Notes, as the case may be,
from the Pledge, free and clear of the Company's security interest therein, and
the transfer of such Preferred Securities, Applicable Ownership Interests of the
Treasury Portfolio or the Notes, 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 Corporate Units;
(ii) transfer the Preferred Securities, the Applicable Ownership
Interests of the Treasury Portfolio or the Notes, as the case may be, to
the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Units Certificate executed by the Company in accordance with
Section 3.03 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Corporate Units.
Holders who elect to separate the Preferred Securities, the Applicable
Ownership Interests of the Treasury Portfolio or the Notes, as the case may be,
from the related Purchase Contracts and to substitute Treasury Securities for
such Preferred Securities, the Applicable Ownership Interests of the Treasury
Portfolio or the Notes, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders may make Collateral Substitutions only in integral multiples of 20
Corporate Units; provided that, if the Treasury Portfolio has replaced the
Preferred Securities or the Notes, as the case may be, as a component of the
Corporate Units 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 such integral multiples of Corporate Units as will enable the
U.S. Treasury securities comprising the Applicable Ownership Interest of the
Treasury Portfolio to be released in whole multiples.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Corporate Units or
fails to deliver Corporate Units Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Collateral Agent, any
distributions on the Preferred Securities, the Notes or Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, constituting a part of
such Corporate Units shall be held in the name of the Purchase Contract Agent or
its nominee in trust for the benefit of such Holder, until such Corporate Units
are so transferred or the Corporate Units 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 Corporate Units
27
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 a Corporate Unit
remains in effect, such Corporate Unit shall not be separable into its
constituent parts, and the rights and obligations of the Holder in respect of
the Preferred Securities, the Applicable Ownership Interests of the Treasury
Portfolio or the Notes, as the case may be, and the Purchase Contract comprising
such Corporate Units may be acquired, and may be transferred and exchanged, only
as a Corporate Unit.
SECTION 3.14 Reestablishment of Corporate Units.
Subject to the conditions set forth in this Agreement, a Holder of
Treasury Units may reestablish Corporate Units at any time prior to or on,
subject to the third succeeding paragraph, the fifth Business Day (or the second
Business Day, if a Successful Initial Remarketing or a Tax Event Redemption Date
has occurred) immediately preceding the Purchase Contract Settlement Date, by:
(1) depositing with the Securities Intermediary Preferred
Securities, Applicable Ownership Interests of the Treasury
Portfolio or Notes, as the case may be, (i) in the case of
Preferred Securities or Notes, as the case may be, having an
aggregate liquidation amount (in the case of Preferred
Securities) or aggregate principal amount (in the case of
Notes), as the case may be, equal to the aggregate principal
amount at maturity of the Treasury Securities comprising part
of the Treasury Units 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 Treasury Units; and
(2) transferring the related Treasury Units 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 Preferred Securities, Applicable Ownership Interests
of the Treasury Portfolio or Notes, 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 Treasury Units, 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 Preferred Securities, Applicable Ownership Interests
of the Treasury Portfolio or the Notes, 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
28
Collateral Agent will cause the Securities Intermediary to effect the release of
the Treasury Securities having a corresponding aggregate principal amount at
maturity from the Pledge, free and clear of the Company's security interest
therein, and the transfer to the Purchase Contract Agent on behalf of the
Holder. Upon receipt thereof, the Purchase Contract Agent shall promptly:
(i) cancel the related Treasury Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Units Certificate executed by the Company in accordance with
Section 3.03 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Treasury Units.
Holders who elect to reestablish Corporate Units shall be responsible for
any fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the reestablishment, and the Company shall not be
responsible for any such fees or expenses.
Holders of Treasury Units may only reestablish Corporate Units in integral
multiples of 20 Treasury Units, provided that if the Treasury Portfolio has
replaced the Preferred Securities or the Notes, as the case may be, as a
component of the Corporate Units as a result of a Successful Initial Remarketing
or a Tax Event Redemption, Holders may convert their Treasury Units into
Corporate Units by making Collateral Substitutions at any time on or prior to
the second Business Day immediately preceding the Purchase Contract Settlement
Date, but only in such integral multiples of Treasury Units as will enable the
U.S. Treasury securities comprising the Applicable Ownership Interest of the
Treasury Portfolio to be purchased in whole multiples.
Except as provided in this Section 3.14 or in connection with a Cash
Settlement or an Early Settlement pursuant to either Section 5.04(b)(2) or
Section 5.07, for so long as the Purchase Contract underlying a Treasury Unit
remains in effect, such Treasury Unit shall not be separable into its
constituent parts and the rights and obligations of the Holder of such Treasury
Unit in respect of the 1/20 of a Treasury Security and the Purchase Contract
comprising such Treasury Unit may be acquired, and may be transferred and
exchanged, only as a Treasury Unit.
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 Preferred Securities, the Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, underlying the Corporate Units and the Treasury
Units, 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
Preferred Securities, Notes, 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.
29
Upon book-entry transfer of the Corporate Units or the Treasury Units or
delivery of a Corporate Units Certificate or Treasury Units Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer the Preferred Securities, the Notes, the appropriate
Applicable Ownership Interest of the Treasury Portfolio or the Treasury
Securities, as the case may be, underlying such Corporate Units or Treasury
Units, 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 Corporate Units or Treasury Units fails to effect such transfer or
delivery, the Preferred Securities, Notes, the appropriate Applicable Ownership
Interest of the Treasury Portfolio or Treasury Securities, as the case may be,
underlying such Corporate Units or Treasury Units, 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 Corporate Units or Treasury Units or
surrender of the Corporate Units Certificate or Treasury Units Certificate
or receipt by the Company and the Purchase Contract Agent from such Holder
of satisfactory evidence that such Corporate Units Certificate or Treasury
Units 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 Preferred Securities, Notes and Applicable Ownership
Interest of the Treasury Portfolio
SECTION 4.01 Distributions or Interest Payments; Rights to Distributions
or Interest Payments Preserved.
Any distribution on any Preferred Security or any interest payment on any
Note or on the appropriate Applicable Ownership Interest of the Treasury
Portfolio (as specified in clause (B) of the definition thereof), 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 Corporate Units
Certificate (or one or more Predecessor Corporate Units Certificates) of which
such Preferred
30
Security, Note or appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, is registered at the close of business on the
Record Date for such Payment Date. Any such distribution, other than a
distribution in respect of the Applicable Ownership Interest in the Treasury
Portfolio (as specified in clause (B) of the definition thereof), shall be
subject to deferral at the option of the Company in accordance with the
Indenture and the Declaration.
Each Corporate Units Certificate evidencing Preferred Securities, 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 Corporate Units Certificate shall carry the right to
accrued and unpaid interest or distributions, and to accrue interest or
distributions, which were carried by the Preferred Securities, the Notes or the
appropriate Applicable Ownership Interest of the Treasury Portfolio underlying
such other Corporate Units Certificate.
In the case of any Corporate Units 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) or Section
5.07 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, distributions on the Preferred Securities, the Notes or
on the appropriate Applicable Ownership Interest of the Treasury Portfolio, as
the case may be, underlying such Corporate Units 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 Corporate Units Certificate (or one
or more Predecessor Corporate Units 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 Corporate Units 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 Preferred Securities, 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 Corporate
Units; provided, however, that to the extent that such Holder continues to hold
separated Preferred Securities or Notes that formerly comprised a part of such
Holder's Corporate Units, such Holder shall be entitled to receive distributions
on such separated Preferred Securities or 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 Preferred Securities or 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 Preferred Securities or Notes are entitled to
vote or upon any solicitation of consents, waivers or proxies of holders of
Preferred
31
Securities or Notes, the Purchase Contract Agent shall, as soon as practicable
thereafter, mail, first class, postage pre-paid, to the Holders of Corporate
Units 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 Preferred
Securities or 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 Preferred Securities or Notes underlying
their Corporate Units; and
(iii) stating the manner in which such instructions may be given.
Upon the written request of the Holders of Corporate Units 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 Preferred Securities or 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 a Corporate Unit, the Purchase
Contract Agent shall abstain from voting the Preferred Securities or Notes
underlying such Corporate Unit. The Company hereby agrees, if applicable, to
solicit Holders of Corporate Units to timely instruct the Purchase Contract
Agent in order to enable the Purchase Contract Agent to vote such Preferred
Securities or Notes and the Trust shall covenant to this effect in the
Declaration.
SECTION 4.03 Distribution of Notes; Tax Event Redemption.
(a) Upon the dissolution and liquidation of the Trust in accordance with
the Declaration, an aggregate principal amount of Notes constituting the assets
of the Trust and underlying the Preferred Securities equal to the aggregate
liquidation amount of the Pledged Preferred Securities shall be delivered to the
Securities Intermediary in exchange for the Pledged Preferred Securities.
Thereafter, the Notes will be substituted for the Pledged Preferred Securities
as the Collateral, and will be held by the Securities Intermediary in the
Collateral Account in accordance with the terms of the Pledge Agreement to
secure the obligations of each Holder of a Corporate Unit to purchase the Common
Stock of the Company under the Purchase Contracts constituting a part of such
Corporate Unit.
(b) Intentionally Omitted.
(c) Following the dissolution and liquidation of the Trust, the Holders
and the Collateral Agent shall have such security interests, rights and
obligations with respect to the 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, as the Holders and the Collateral Agent had in
respect of the Preferred Securities subject to the Pledge thereof as provided in
the Pledge Agreement. The Company may cause to be made in any Corporate Units
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the dissolution and
liquidation of the Trust and the substitution of Notes or the Applicable
32
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, as the case may be, for Preferred Securities as
Collateral.
(d) Upon the occurrence of a Tax Event Redemption Date prior to the
Initial Reset Date, 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 accumulated and unpaid distributions or accrued and unpaid interest, as
the case may be, payable on the Tax Event Redemption Date with respect to the
Applicable Principal Amount or the principal amount of the Notes that are
components of Corporate Units, as the case may be, shall be deposited in the
Collateral Account in exchange for the Pledged Preferred Securities or the
Pledged Notes, as the case may be. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent shall cause the Securities Intermediary
to apply an amount of such funds equal to the Redemption Amount to purchase on
behalf of the Holders of Corporate Units the Treasury Portfolio and promptly
remit the remaining portion of such funds to the Purchase Contract Agent for
payment to the Holders of such Corporate Units. 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 Preferred
Securities or the Pledged Notes, as the case may be, 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 a Corporate Unit to purchase the Common Stock
of the Company under the Purchase Contract constituting a part of such Corporate
Unit.
(e) Following the occurrence of a Tax Event Redemption Date prior to the
Purchase Contract Settlement Date, the Holders of Corporate Units 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 Corporate
Units and the Collateral Agent had in respect of the Preferred Securities or
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement, and any reference herein to the Preferred Securities or the
Notes shall be deemed to be a reference to such Treasury Portfolio. The Company
may cause to be made in any Corporate Units Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be appropriate
to reflect the liquidation of the Trust and the substitution of the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio for Preferred Securities or Notes as Collateral.
ARTICLE 5
The Purchase Contracts
SECTION 5.01 Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement has occurred in accordance with
Section 5.04(b)(2) or 5.07 hereof or, prior to or on the Purchase Contract
Settlement Date,
33
there shall have occurred a Termination Event with respect to such Purchase
Contract. The "Settlement Rate" is equal to:
(i) if the Applicable Market Value (as defined below) is greater
than or equal to $40.2480 (the "Threshold Appreciation Price"), 1.2423
shares of Common Stock per Purchase Contract;
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $33.54 (the "Reference Price"), the
number of shares of Common Stock per Purchase Contract having a value
equal to the Stated Amount divided by the Applicable Market Value; and
(iii) if the Applicable Market Value is less than or equal to the
Reference Price, 1.4908 shares of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in Section 5.04 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).
The "Applicable Market Value" means the average of the Closing 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:
(i) 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;
(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) 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
34
exchange or association or over-the-counter market that is the primary market
for the trading of the Common Stock.
(b) Each Holder of a Corporate Unit or a Treasury Unit, 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 agent and
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 Preferred Securities, the Notes, the Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) of
the Treasury Portfolio or the Treasury Securities pursuant to the Pledge
Agreement;
(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 Preferred Securities, the Notes and the Applicable Ownership
Interest of the Treasury Portfolio or the Treasury Securities; and
(viii) agrees to treat the Notes as indebtedness for all United
States federal income tax purposes,
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 a Corporate Unit or a Treasury Unit, 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 Preferred Securities, 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
payments.
(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
35
Agreement, the Purchase Contracts underlying such Certificate, 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 and Secondary Remarketing; Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred, the Company shall
engage Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx 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 Preferred
Securities or Notes referred to in the next succeeding sentence in the Initial
Remarketing on the third Business Day immediately preceding the Initial Reset
Date. In order to facilitate the Initial Remarketing, the Purchase Contract
Agent and the Custodial Agent shall notify the Remarketing Agent, by 11:00 a.m.
(New York City time), on the Business Day immediately preceding the Initial
Remarketing Date, of the aggregate liquidation amount of Preferred Securities or
aggregate principal amount of Notes, as the case may be, that are part of
Corporate Units and the aggregate liquidation amount or aggregate principal
amount, as the case may be, of Separate Preferred Securities or Notes that are
to be remarketed pursuant to clause (ii) below. 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
and the Custodial Agent and such Preferred Securities or Notes from the
Collateral Agent and the Custodial Agent, the Remarketing Agent will, on the
Initial Remarketing Date, use its reasonable efforts to remarket such Preferred
Securities or Notes on such date at a price of approximately 100.25% (but not
less than 100%) of the sum of the Treasury Portfolio Purchase Price, the
Separate Preferred Securities or Notes Purchase Price, and deferred and unpaid
distributions or interest, if any, on the Preferred Securities or Notes, as the
case may be. If the Remarketing Agent is able to remarket the Preferred
Securities or Notes at a price equal to or greater than 100% of the sum of the
Treasury Portfolio Purchase Price, the Separate Preferred Securities or Notes
Purchase Price and deferred and unpaid distributions or interest, if any, on the
Preferred Securities or Notes, as the case may be (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 not exceeding 25 basis
points (0.25%) of the sum of the Treasury Portfolio Purchase Price, the Separate
Preferred Securities or Notes Purchase Price and deferred and unpaid
distributions or interest, if any, on the Preferred Securities or Notes, as the
case may be, from any amount of such proceeds in excess of the sum of the
Treasury Portfolio Purchase Price, the Separate Preferred Securities or Notes
Purchase Price and deferred and unpaid distributions or interest, if any, on the
Preferred Securities or Notes, as the case may be. With respect to Separate
Preferred Securities or Notes, any proceeds of the Initial Remarketing in excess
of the Remarketing Fee attributable to the Separate Preferred Securities or
Notes will be remitted to the Custodial Agent for payment to the holders of
Separate Preferred Securities or Notes. With respect to Preferred Securities or
Notes that are part of Corporate Units, any proceeds of the Initial Remarketing
in excess of the sum of the Treasury Portfolio Purchase Price and the
36
Remarketing Fee with respect to such Preferred Securities or Notes will be
remitted to the Purchase Contract Agent for payment to the Holders of the
related Corporate Units. Neither the Company nor any Corporate Unit Holders
whose Preferred Securities or 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 Preferred Securities or Notes of
Holders of Corporate Units 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 Corporate Unit 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 Corporate Units 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 Corporate
Units and the Collateral Agent had in respect of the Preferred Securities or
Notes, subject to the Pledge thereof as provided in the Pledge Agreement, and
any reference herein or in the Certificates to the Preferred Securities or 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
distributions or interest on the Preferred Securities or Notes, respectively,
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 Corporate Units 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 Preferred Securities or Notes as Collateral.
If, in spite of using its reasonable efforts, the Remarketing Agent cannot
remarket the related Preferred Securities or 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, the Separate Preferred Securities or Notes
Purchase Price and deferred and unpaid distributions or interest, if any, on the
Preferred Securities or Notes, as the case may be, 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 Business Day
immediately following the Initial Remarketing Date in a newspaper published each
business day 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 Preferred Security or a Note that is no longer
part of a Corporate Unit may elect to have such Preferred Security or Note
remarketed in the Initial Remarketing. A holder making such an election
must notify the Custodial Agent on or prior to 5:00 p.m. on the second
Business Day immediately preceding the Initial Remarketing Date (but in no
event earlier than the Payment Date next preceding the Initial Remarketing
Date) of the aggregate liquidation amount or aggregate principal amount of
Preferred Securities or Notes that are not part of Corporate Units to be
remarketed and deliver such Preferred Securities or Notes to the Custodial
Agent at that time. Any such notice will be irrevocable (provided that,
holders of such Preferred Securities or Notes may withdraw any such notice
on or prior to the second Business Day preceding the Initial Remarketing
Date) 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
37
time) on the Business Day immediately preceding the Initial Remarketing
Date, the Custodial Agent shall cause such Preferred Securities or 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 Preferred Securities or 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 Date, 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
Property Trustee or the Indenture Trustee, as the case may be, of the receipt of
such notices from Holders intending to make a Cash Settlement.
(ii) A Holder of a Corporate Unit 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 at or prior
to 11:00 a.m. (New York City time) on the Business Day immediately
preceding the Purchase Contract Settlement Date, in lawful money of the
United States by certified or cashiers' check, or wire transfer of
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 a Corporate Unit 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
38
Preferred Securities or 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 Property Trustee or the Indenture Trustee, as applicable, of the
aggregate liquidation amount of Preferred Securities or 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 Preferred Securities or Notes to be remarketed in the 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 Preferred Securities or Notes of Corporate Unit 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),
and 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 liquidation amount of Preferred Securities or aggregate principal
amount of Notes, as the case may be, that are part of Corporate Units and of the
aggregate liquidation amount of Preferred Securities or aggregate principal
amount of Notes, as the case may be, that are no longer part of Corporate Units
that are to be remarketed pursuant to clause (ii) below. Concurrently, the
Collateral Agent in its capacity as such or as Custodial Agent, pursuant to the
terms of the Pledge Agreement, shall cause such Preferred Securities or Notes to
be presented to the Remarketing Agent for Remarketing.
(ii) A holder of a Preferred Security or a Note that is no longer
part of a Corporate Unit may elect to have such Preferred Security or Note
remarketed. A holder making such an election must notify the Custodial
Agent and deliver such Preferred Securities or Notes to the Custodial
Agent on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date (but in no event earlier than the
Payment Date next preceding the Secondary Remarketing Date), of the
aggregate number of Preferred Securities or Notes that are not part of
Corporate Units to
39
be remarketed. Any such notice will be irrevocable (provided that, holders
of such Preferred Securities or Notes may withdraw any such notice on or
prior to the fifth Business Day immediately preceding the Purchase
Contract Settlement Date) and may not be conditioned upon the level at
which the Reset Rate is established 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 Preferred
Securities or Notes to be presented to the Remarketing Agent for
Remarketing.
(iii) Upon receipt of such notice from the Purchase Contract Agent
and the Custodial Agent and such Preferred Securities or Notes from the
Collateral Agent and the 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 Preferred Securities or
Notes on such date at a price equal to 100.25% (but not less than 100%) of
the aggregate liquidation amount of Preferred Securities or aggregate
principal amount of such Notes, as the case may be, plus deferred and
unpaid distributions or interest, if any, thereon, as provided in the
Remarketing Agreement. If the Remarketing Agent is able to remarket the
Preferred Securities or Notes at a price equal to or greater than 100% of
the aggregate liquidation amount of Preferred Securities or aggregate
principal amount of Notes plus deferred and unpaid distributions or
interest, if any, thereon (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 not exceeding 25 basis points
(0.25%) of the aggregate liquidation amount of the remarketed Preferred
Securities or aggregate principal amount of the remarketed Notes, as the
case may be, from any amount of the proceeds of a Successful Secondary
Remarketing in excess of the aggregate liquidation amount of remarketed
Preferred Securities or aggregate principal amount of the remarketed
Notes, plus deferred and unpaid distributions or interest, if any,
thereon. 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 Corporate Unit 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 Corporate Units. Corporate Unit Holders whose Preferred Securities
or Notes are so remarketed will not otherwise be responsible for the
payment of any Remarketing Fee in connection therewith. With respect to
Separate Preferred Securities or Notes, any proceeds of the Secondary
Remarketing in excess of the Remarketing Fee attributable to the Separate
Preferred Securities or Notes will be remitted to the Custodial Agent for
payment to the holders of Separate Preferred Securities or Notes.
(iv) If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Preferred Securities or Notes of such
Holders of Corporate Units at a price not less than 100.0% of their
aggregate liquidation amount or aggregate principal amount, as the case
may be, plus the amount of any deferred and unpaid distributions or
interest or a condition precedent set forth in the Remarketing Agreement
is not fulfilled,
40
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
Preferred Securities or Notes, including, without limitation, those
actions specified in paragraph 5.02(d) below; provided, that if upon a
Failed Secondary Remarketing the Collateral Agent exercises such rights
for the benefit of the Company with respect to such Preferred Securities
or Notes, any accrued and unpaid distributions on such Preferred
Securities or interest on such Notes shall become payable by the Company
to the Purchase Contract Agent for payment to the Beneficial Owner of the
Corporate Units to which such Notes relate. The Company shall cause a
notice of such Failed Secondary Remarketing to be published on the second
Business Day immediately preceding the Purchase Contract Settlement Date
in a newspaper published each business day 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 Preferred Securities or Notes, as the case may
be, wishes to exercise its rights to put the Preferred Securities or Notes
to the Trust or the Company, as the case may be, following a Failed
Secondary Remarketing, as set forth in the Declaration and Indenture.
(d) With respect to any (i) Preferred Securities or Notes which are
subject to a Failed Secondary Remarketing or (ii) any Preferred Securities or
Notes which are components of Corporate Units 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 Preferred Securities or Notes, (ii) sell the Preferred Securities or
Notes in one or more public or private sales or (iii) take, or choose not to
take, any other action with respect to the Preferred Securities or 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 Corporate Unit (if a Tax Event Redemption
Date or a Successful Initial Remarketing has occurred) or a Treasury Unit
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 5.07, each Holder of a Corporate Unit (if a Tax Event Redemption Date or
a Successful Initial Remarketing has occurred) or a Treasury Unit 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
41
of the receipt of such notices from such Holders intending to make a Cash
Settlement. Treasury Unit Holders may make Cash Settlements only in integral
multiples of 20 Treasury Units.
(ii) A Holder of a Corporate Unit (if a Tax Event Redemption Date or
a Successful Initial Remarketing has occurred) or a Treasury Unit 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 Corporate Unit (if a Tax Event Redemption
Date or a Successful Initial Remarketing has occurred) or a Treasury Unit
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 Treasury Units or Corporate Units 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
42
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 Preferred Securities, 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 Preferred Securities, 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 Preferred
Securities, 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
43
and payment date for such dividend or distribution has occurred after the
Purchase Contract Settlement Date and any cash in lieu of fractional shares
required by Section 5.09, 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 Business 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
44
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall, after the date hereof, issue rights,
warrants or options to all holders of its Common Stock (not being available on
an equivalent basis to Holders of the Securities upon settlement of the Purchase
Contracts underlying such Securities), other than pursuant to any dividend
reinvestment plans, 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 Business Day following the day upon which such subdivision,
split or combination becomes effective.
45
(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 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 each 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:
46
(i) the numerator shall be the Current Market Price of Common Stock
on the record date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock; and
(ii) the denominator shall be the Current Market Price of Common
Stock,
such increase to be effective immediately prior to the opening of business on
the day following the record date; provided, however, that in the event the
portion of cash so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price per share of Common Stock on the
record date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of a Security shall have the right to receive upon
settlement of the Securities the amount of cash such Holder would have received
had such Holder settled each Security on the record date. In the event that such
dividend or distribution is not so paid or made, the Settlement Rate shall again
be adjusted to be the Settlement Rate which would then be in effect if such
dividend or distribution had not been declared.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares (as
herein defined) of (I) an aggregate consideration having a fair market value (as
reasonably determined by the Board of Directors, whose determination shall be
conclusive and the basis for which shall be described in a Board Resolution)
that combined together with the aggregate of the cash plus the fair market value
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration payable
in respect of any other tender or exchange offer, by the Company or any
subsidiary of the Company for all or any portion of Common Stock expiring within
the 12 months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to this paragraph (6) has been made, and
(II) the aggregate amount of any distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (6) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be equal to (A) the product of (I)
the Current Market Price per share of Common Stock on the date of the
Expiration Time and (II) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (B) the amount
of cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to shareholders based on the
47
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 selected by the Company 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 by the
Company 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 any announcement of an issuance of rights, warrants or
options or the declaration of a date fixed for determination of shareholders
entitled to receive a dividend or distribution requiring adjustment pursuant to
this Section 5.04(a) shall subsequently be canceled by the
48
Company, or such dividend, distribution or issuance shall fail to receive
requisite approval or fail to occur, the Settlement Rate shall be readjusted to
the Settlement Rate which would then have been in effect had adjustment for such
event not been made. If an adjustment is made to the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.04(a), an
adjustment shall also be made to the Applicable Market Value solely to determine
which of clauses (i), (ii) or (iii) of the definition of Settlement Rate in
Section 5.01 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.04(a) and the denominator shall be the Settlement Rate
immediately prior to such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.04(a) during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
(10) The Company may, but shall not be required to, make such increases in
the Settlement Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any income tax to any
holders of shares of Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock or
from any event treated as such for income tax purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the shares of Common Stock outstanding
immediately prior to the merger or consolidation are not exchanged for
cash, securities or other property of the Company or another corporation);
(ii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an
entirety;
(iii) any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition); or
(iv) any liquidation, dissolution or termination of the Company
other than as a result of or after the occurrence of a Termination Event,
(any such event, a "Reorganization Event"),
each Purchase Contract will be automatically adjusted to provide that each
Holder of Securities will receive on the Purchase Contract Settlement Date or
any Early Settlement Date occurring after such Reorganization Event, as the case
may be, with respect to each Purchase Contract
49
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 Early Settlement Date or Purchase Contract
Settlement Date, as the case may be) by a Holder in respect of Common Stock
issuable on account of each Purchase Contract as if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event. The
amount of securities, cash and other property receivable upon settlement of each
Purchase Contract (other than in connection with an Early Settlement pursuant to
Section 5.04(b)(2)) shall equal the Adjusted Exchange Property. For purposes of
the foregoing, it is assumed that the Holder referred to in the second preceding
sentence is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be (any such Person, a "Constituent Person"),
or an Affiliate of a Constituent Person to the extent such Reorganization Event
provides for different treatment of Common Stock held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("non-electing share"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).
The "Adjusted Exchange Property" shall equal
(A) in the case of settlement of a Purchase Contract on the Purchase
Contract Settlement Date, an amount of Base Exchange Property multiplied
by the applicable Settlement Rate (which Settlement Rate, for purposes of
this Section 5.04(b)(1), shall be determined by reference to the
Applicable Exchange Property Market Value in lieu of the Applicable Market
Value and which shall be applied as if the Base Exchange Property were one
share of Common Stock); and
(B) in the case of an Early Settlement pursuant to Section 5.07, an
amount of Base Exchange Property multiplied by the Early Settlement Rate
(which shall be applied as if the Base Exchange Property were one share of
Common Stock).
"Base Exchange Property" means the hypothetical amount of securities, cash
and other property that would have been received upon consummation of the
Reorganization Event in exchange for one share of Common Stock.
"Applicable Exchange Property Market Value" shall mean (1) with respect to
any publicly traded securities receivable by holders of Common Stock pursuant to
a Reorganization Event, the Closing Price of such securities (substituting such
securities for Common Stock in the definition of the term Closing Price), (2) in
the case of any cash receivable by holders of Common Stock pursuant to a
Reorganization Event, the amount of such cash and (3) in the case
50
of any other property receivable by holders of Common Stock pursuant to a
Reorganization Event, the market value of such property, as determined by a
nationally recognized investment banking firm retained by the Company for this
purpose.
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 the Cash Merger, at the
Settlement Rate then in effect as if the date of such settlement were the
Purchase Contract Settlement Date. 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 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 of the Purchase Price 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. Treasury Unit Holders may only effect
Early Settlement pursuant to this Section 5.04(b)(2) in integral multiples of 20
Purchase Contracts. If a Tax Event Redemption Date or a Successful Initial
Remarketing has occurred, Corporate Unit Holders may effect Early Settlement
pursuant to this Section 5.04(b)(2) only in such multiples of Corporate Units as
will enable the U.S. Treasury securities comprising the Applicable Ownership
Interest of the Treasury Portfolio to be released in whole multiples. Other than
the provisions relating to timing of notice and settlement, which shall be as
set forth above, the provisions of Section 5.01(a) shall apply with respect to
an Early Settlement following a Cash Merger pursuant to this Section 5.04(b)(2).
Notwithstanding the foregoing, no Early Settlement will be permitted pursuant to
this Section 5.04(b)(2) unless, at the time such Early Settlement is effected,
there is an effective Registration Statement with respect to the shares of
Common Stock to be issued and delivered in connection with such Early
Settlement, if such a Registration Statement is required (in the view of
counsel, which need not be in the form of a written opinion, for either the
Company or the Purchase Contract Agent) under the Securities
51
Act. If such a Registration Statement is so required, the Company covenants and
agrees to use its commercially reasonable efforts to (A) have in effect a
Registration Statement covering the shares of Common Stock to be delivered in
respect of the Purchase Contracts being settled and (B) provide a Prospectus in
connection therewith, in each case in a form that the Purchase Contract Agent
may use in connection with such early settlement.
(c) All calculations and determinations pursuant to this Section 5.04
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
SECTION 5.05 Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in accordance
with Section 5.04 and prepare and transmit to the Purchase Contract Agent
an Officer's Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section
5.04 (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
52
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 Preferred Securities, 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 Early Settlement.
(a) Subject to and upon compliance with the provisions of this Section
5.07, at the option of the Holder thereof, Purchase Contracts underlying
Securities may effect Early Settlement on or prior to 5:00 p.m. (New York City
time) on the fifth Business Day (if they are components of Corporate Units) or
the second Business Day (if they are components of Treasury Units or components
of Corporate Units and the Applicable Ownership Interest in the Treasury
Portfolio has replaced the Preferred Securities as a component of the Corporate
Units) immediately preceding the Purchase Contract Settlement Date. Holders of
Treasury Units may only effect Early Settlement of the related Purchase
Contracts in integral multiples of 20 Purchase Contracts. If a Successful
Initial Remarketing or a Tax Event Redemption has occurred, Corporate Unit
Holders may effect Early Settlement on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date only in such
multiples of Corporate Units as will enable the U.S. Treasury securities
comprising the Applicable Ownership Interest of the Treasury Portfolio to be
released in whole multiples. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts, the Holder of the Certificate
evidencing Securities shall deliver to the Purchase Contract Agent at the
Corporate Trust Office an "Election to Settle Early" form (on the reverse side
of the Certificate) and any other documents requested by the Purchase Contract
Agent and accompanied by payment (payable to the Company in immediately
available funds) in an amount (the "Early Settlement Amount") equal to the
product of (i) (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase Contracts during the
period from the close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount equal to the
Purchase Contract Payments payable on such Payment Date with respect to such
Purchase Contracts.
Except as provided in the immediately preceding sentence and subject to
Section 5.11(c), no payment shall be made upon Early Settlement of any Purchase
Contract on account of any Purchase Contract Payments accrued on such Purchase
Contract or on account of dividends payable on the Common Stock issued upon such
Early Settlement, the record date for which payment occurs prior to the Early
Settlement Date. If the foregoing requirements are first satisfied with respect
to Purchase Contracts underlying any Securities prior to or at 5:00 p.m.
53
(New York City time) on a Business Day, such day shall be the Early Settlement
Date with respect to such Securities and if such requirements are first
satisfied after 5:00 p.m. (New York City time) on a Business Day or on a day
that is not a Business Day, the Early Settlement Date with respect to such
Securities shall be the next succeeding Business Day (so long as such next
succeeding Business Day is not later than the fifth Business Day immediately
preceding the Purchase Contract Settlement Date).
(b) No Early Settlement will be permitted under this Section 5.07 unless,
at the time of delivery of the Election to Settle Early form or the time the
Early Settlement is effected, there is an effective Registration Statement with
respect to the shares of Common Stock to be issued and delivered in connection
with such Early Settlement, if such a Registration Statement is required (in the
view of counsel, which need not be in the form of a written opinion, for either
the Company or the Purchase Contract Agent) under the Securities Act. If such a
Registration Statement is so required, the Company covenants and agrees to use
its commercially reasonable efforts to (A) have in effect a Registration
Statement covering the shares of Common Stock to be delivered in respect of the
Purchase Contracts being settled and (B) provide a Prospectus in connection
therewith, in each case in a form that the Purchase Contract Agent may use in
connection with such Early Settlement.
(c) Upon Early Settlement of Purchase Contracts by a Holder of the related
Securities, the Company shall issue, and the Holder shall be entitled to receive
1.2423 shares of Common Stock on account of each Purchase Contract as to which
Early Settlement is effected (the "Early Settlement Rate"). The Early Settlement
Rate shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted.
(d) Not later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(i) the shares of Common Stock issuable upon Early Settlement of
Purchase Contracts to be issued and delivered, together with payment in
lieu of any fraction of a share, as provided in Section 5.09; and
(ii) the related Preferred Securities, Notes or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, in the case of
Corporate Units, or the related Treasury Securities, in the case of
Treasury Units, to be released from the Pledge by the Collateral Agent and
transferred, in each case, to the Purchase Contract Agent for delivery to
the Holder thereof or its designee.
(e) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Preferred Securities,
Notes, the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) of the Treasury Portfolio, or Treasury
Securities, as the case may be, from the Securities Intermediary, as applicable,
the Purchase Contract Agent shall, in accordance with the instructions provided
by the Holder thereof on the Election to Settle Early form (on the reverse of
the Certificate evidencing the related Securities):
54
(i) transfer to the Holder the Preferred Securities, Notes, the
appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio or Treasury
Securities, as the case may be, forming a part of such Securities;
(ii) deliver to the Holder a certificate or certificates for the
full number of shares of Common Stock issuable upon such Early Settlement,
together with payment in lieu of any fraction of a share, as provided in
Section 5.09; and
(iii) if so required under the Securities Act, deliver a Prospectus
for the shares of Common Stock issuable upon such Early Settlement as
contemplated by Section 5.07(b).
(f) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and deliver to the
Holder thereof, at the expense of the Company, a Certificate evidencing the
Securities as to which Early Settlement was not effected.
SECTION 5.08 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
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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),
except that, if such Business Day is in the next succeeding calendar year, such
payment will be made on the immediately preceding Business Day. 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 Corporate Units) 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) In the case of any Security with respect to which Early Settlement of
the underlying Purchase Contract is effected pursuant to Section 5.07 on an
Early Settlement 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 on an
Early Settlement Date, 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 obligations of the Company with respect to Purchase Contract
Payments will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness. In the event of:
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(i) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to
creditors of the Company, as such, or to the Company's assets;
(ii) any voluntary or involuntary liquidation, dissolution or other
winding up of the Company, whether or not involving insolvency or
bankruptcy; or
(iii) any assignment for the benefit of creditors or any other
marshalling of the Company's assets and liabilities,
then and in any such event (A) the holders of Senior Indebtedness will be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Indebtedness, or provision will be made for such payment
in cash, before the Holders of Outstanding Securities are entitled to receive or
retain any payment of Purchase Contract Payments, and (B) in furtherance of the
foregoing, the holders of Senior Indebtedness will be entitled to receive, for
application to the payment thereof, any payment or distribution 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 Senior Indebtedness being subordinated to the payment of Purchase
Contract Payments on the Outstanding Securities, which may be payable or
deliverable in respect of the Outstanding Securities in any such case,
proceeding, dissolution, liquidation or other winding up event.
Subject to the payment in full of all Senior Indebtedness, the rights of
the Holders of the Outstanding Securities with respect to Purchase Contract
Payments will be subrogated to the rights of the holders of Senior Indebtedness
to receive payments or distributions of cash, property or securities of the
Company applicable to such Senior Indebtedness until the Purchase Contract
Payments with respect to the Outstanding Securities have been paid in full.
The Company shall not make any payment of Purchase Contract Payments with
respect to the Outstanding Securities if any Senior Indebtedness is not paid
when due and such default has not been cured or waived or ceased to exist, or if
the maturity of any Senior Indebtedness has been accelerated because of a
default.
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
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Purchase Contract Payments at a rate equal to 10.25% per annum compounding
quarterly, until such deferred installments are paid in full. Deferred Purchase
Contract Payments shall be due on the Payment Date except to the extent that
payment is deferred pursuant to this Section. Except as otherwise provided in
Section 5.11(d), in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, the Holder will have no right to receive any accrued or
deferred Purchase Contract Payments.
(b) In the event 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 a number of shares of Common Stock equal to the total amount of deferred
Purchase Contract Payments payable to such Holder divided by the Applicable
Market Value. Notwithstanding the foregoing, the Company shall be required to
pay cash representing deferred Purchase Contract Payments on the Purchase
Contract Settlement Date unless the Company gives the Holders and the Purchase
Contract Agent notice of its election not to pay cash in satisfaction of its
obligations in respect of the deferred Purchase Contract Payments no later than
the Trading Day next preceding the Trading Day commencing the period in which
the "Applicable Market Value" is determined for purposes of determining the
Settlement Rate. In the event that the Company shall satisfy its obligations in
respect of deferred Purchase Contract Payments in cash, 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) declare or pay any dividends or distributions on any of the
Company's capital stock, or (b) redeem, purchase, acquire or make a liquidation
payment with respect to, any of the Company's capital stock. Notwithstanding the
foregoing, the Company and any of its subsidiaries may (1) purchase or acquire
its capital stock in connection with the satisfaction by it of its obligations
under any employee or director compensation or benefit plans or under the
Company's direct stock purchase and dividend reinvestment 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; and (4) 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
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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 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 distributions on any Preferred Securities
or interest on any Notes or Purchase Contract Payments
59
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, willful misconduct or negligence on its
part, may, with respect to the Securities, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Purchase Contract Agent and conforming
to the requirements of this Agreement or the Pledge Agreement, as applicable,
but in the case of any certificates or opinions which by any provision hereof
are specifically required to be furnished to the Purchase Contract Agent, the
Purchase Contract Agent shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Agreement or the Pledge
Agreement, as applicable (but need not confirm or investigate the accuracy of
the mathematical calculations or other facts stated therein).
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its own
grossly negligent action, its own grossly negligent failure to act, or its own
willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
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(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Purchase Contract Agent was negligent in ascertaining the
pertinent facts;
(3) no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
indemnity satisfactory to the Purchase Contract Agent is not provided to
it; and
(4) the Purchase Contract Agent shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of the
Outstanding Securities.
(c) Whether or not therein expressly so provided, every provision of this
Agreement and the Pledge Agreement relating to the conduct or affecting the
liability of or affording protection to the Purchase Contract Agent shall be
subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Purchase Contract Agent.
SECTION 7.02 Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and addresses appear in
the Security Register, notice of such default hereunder, unless such default
shall have been cured or waived.
SECTION 7.03 Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note, 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 Officer's Certificate, Issuer Order or
Issuer Request, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting any
action hereunder, the Purchase Contract Agent (unless other
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evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, conclusively rely upon an Officer's Certificate of the
Company;
(4) the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Purchase Contract Agent,
in its discretion, and at the expense of the Company, may make reasonable
further inquiry or investigation into such facts or matters related to the
execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be given a reasonable
opportunity to examine the relevant books, records and premises of the
Company, personally or by agent or attorney and shall incur no liability
or additional liability of any kind by reason of such inquiry or
investigation;
(6) the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the Purchase Contract Agent shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney or an Affiliate appointed with due care by it hereunder;
(7) the Purchase Contract Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Holders pursuant to this Agreement,
unless such Holders shall have offered to the Purchase Contract Agent
security or indemnity satisfactory to the Purchase Contract Agent against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(8) the Purchase Contract Agent shall not be liable for any action
taken, suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Agreement;
(9) the Purchase Contract Agent shall not be deemed to have notice
of any default hereunder unless a Responsible Officer of the Purchase
Contract Agent has actual knowledge thereof or unless written notice of
any event which is in fact such a default is received by the Purchase
Contract Agent at the Corporate Trust Office of the Purchase Contract
Agent, and such notice references the Securities and this Agreement;
(10) the Purchase Contract Agent may request that the Company
deliver an Officer's 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 Officer's Certificate may be
signed by any person authorized to sign an Officer's Certificate,
including any person specified as so authorized in any such certificate
previously delivered and not superseded; and
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(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 and to each agent, custodian and other Person
employed to act hereunder.
SECTION 7.04 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or of
the Securities, or of the Pledge Agreement or the Pledge. The Purchase Contract
Agent shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
SECTION 7.05 May Hold Securities.
Any Security Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it would
have if it were not Security Registrar or such other agent, or the Purchase
Contract Agent. The Company may become the owner or pledgee of Securities.
SECTION 7.06 Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder or agreed to in writing with the Company.
SECTION 7.07 Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the
Company and the Purchase Contract Agent shall from time to time agree in
writing;
(2) except as otherwise expressly provided for herein, to reimburse
the Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent
in accordance with any provision of this Agreement and the Pledge
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence,
willful misconduct or bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense incurred
63
without gross negligence, willful misconduct or bad faith on its part,
arising out of or in connection with the acceptance or administration of
its duties hereunder, including the costs and expenses of defending itself
against any claim (whether asserted by the Company, a Holder or any other
person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder.
The provisions of this Section shall survive the resignation and removal
of the Purchase Contract Agent and the termination of this Agreement.
SECTION 7.08 Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which
shall be a corporation organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a corporation in the Borough of Manhattan, New York City,
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Purchase Contract Agent shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.09 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Purchase Contract
Agent required by Section 7.10 shall not have been delivered to the Purchase
Contract Agent within 30 days after the giving of such notice of resignation,
the resigning Purchase Contract Agent may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after the giving of such
notice of resignation, the resigning Purchase Contract Agent may
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petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Purchase Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section 310(b)
of the TIA, as if the Purchase Contract Agent were an indenture trustee
under an indenture qualified under the TIA, after written request therefor
by the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible under
Section 7.08 and shall fail to resign after written request therefor by
the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public officer
shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Purchase Contract Agent and the appointment of a successor Purchase
Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract Agent shall have
been so appointed by the Company and accepted appointment in the manner required
by Section 7.10, any Holder who has been a bona fide Holder of a Security for at
least six months, on behalf of itself and all others similarly situated, or the
Purchase Contract Agent may petition at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Register. Each notice shall include the name of the successor Purchase Contract
Agent and the address of its Corporate Trust Office.
SECTION 7.10 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase Contract
Agent, every such successor Purchase Contract Agent so appointed shall execute,
acknowledge and
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deliver to the Company and to the retiring Purchase Contract Agent an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Purchase Contract Agent shall become effective and such successor
Purchase Contract Agent, without any further act, deed or conveyance, shall
become vested with all the rights, powers, agencies and duties of the retiring
Purchase Contract Agent; but, on the request of the Company or the successor
Purchase Contract Agent, such retiring Purchase Contract Agent shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Purchase Contract Agent all the rights, powers and trusts of the
retiring Purchase Contract Agent and shall duly assign, transfer and deliver to
such successor Purchase Contract Agent all property and money held by such
retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph 7.10(a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Purchase Contract
Agent shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided that such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Purchase Contract Agent then in office, any successor by merger, conversion or
consolidation to such Purchase Contract Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and executed with the
same effect as if such successor Purchase Contract Agent had itself
authenticated and executed such Securities.
SECTION 7.12 Preservation of Information; Communications to Holders.
(a) The Purchase Contract Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "Applicants") apply in
writing to the Purchase Contract Agent, and furnish to the Purchase Contract
Agent reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Securities and is
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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
(including but not limited to the obligation to pay the Purchase Price for the
Common Stock on the Purchase Contract Settlement Date (which obligation is
solely an obligation of the Holders)), but the Purchase Contract Agent shall
have certain administrative duties as expressly stated in Article Five hereof.
Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Purchase Contract Agent or its officers, employees or agents be
liable under this Agreement to any third party for indirect, special, punitive,
or consequential loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known to the Purchase
Contract Agent, incurred without any act or deed that is found to be
attributable to gross negligence or willful misconduct on the part of the
Purchase Contract Agent.
SECTION 7.14 Tax Compliance.
(a) The Company and the Purchase Contract Agent will comply with all
applicable certification, information reporting and withholding (including
"backup" withholding) requirements imposed by applicable tax laws, regulations
or administrative practice with respect to (i) any payments made with respect to
the Securities or (ii) the issuance, delivery, holding, transfer, redemption or
exercise of rights under the Securities. Such compliance shall include, without
limitation, the preparation and timely filing of required returns and the timely
payment of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the terms
hereof with any written direction received from the Company with respect to the
execution or certification of any required documentation and the application of
such requirements to particular payments or Holders or in other particular
circumstances, and may for purposes of this Agreement conclusively rely on any
such direction in accordance with the provisions of Section 7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to
67
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) cure any ambiguity, correct or supplement any provisions herein
which may be inconsistent with any other provisions herein, or make any
other provisions with respect to such matters or questions arising under
this Agreement, provided that such action shall not adversely affect the
interests of the Holders.
SECTION 8.02 Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Securities voting together as one class, by Act of said Holders
delivered to the Company and the Purchase Contract Agent, the Company, when
authorized by a Board Resolution, and the Purchase Contract Agent may enter into
an agreement or agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; provided,
however, that, except as contemplated herein, no such supplemental agreement
shall, without the unanimous consent of the Holders of each outstanding Purchase
Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any
68
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 Payment or deferred Purchase
Contract Payment;
(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 the amount of any other
property upon settlement of any Purchase Contract or change the Purchase
Contract Settlement Date or the right to Early Settlement or otherwise
adversely affect the Holder's rights under the Purchase Contract;
(5) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
or
(6) reduce any Purchase Contract Payments or deferred Purchase
Contract Payments or change any place where, or the coin or currency in
which, any Purchase Contract Payment or deferred Purchase Contract Payment
is payable;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or the Treasury Units, 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 Officer's 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.
69
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 merge or consolidate with or into
any other entity or sell, assign, transfer, lease or convey 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, the
Notes, the Guarantee, 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 merger, consolidation, sale, assignment,
transfer, lease or conveyance be in default in the performance of any
covenant or condition under the Purchase Contracts, the Notes, the
Guarantee, this Agreement, the Pledge Agreement, the Indenture (including
any supplement thereto) and the Remarketing Agreement.
70
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 Public Service Enterprise Group Incorporated, 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 Officer's 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 Officer's 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.
71
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 Corporate Units 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 Officer's Certificate (one of the
signers of which shall be the principal executive officer, principal financial
officer or principal accounting officer of the Company), stating
72
whether or not to the knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
SECTION 10.06 ERISA.
Each Holder from time to time of the Securities that is a Plan hereby
represents that its acquisition of the Corporate Units 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]
73
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
By: _____________________________________
Name:
Title:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Purchase Contract Agent
By: _____________________________________
Name:
Title:
74
EXHIBIT A
FACE OF CORPORATE UNITS 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 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 Corporate Units:______________
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
PSEG FUNDING TRUST I
CORPORATE UNITS
This Corporate Units Certificate certifies that ___________________ is the
registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only - or such other number of Corporate Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto]. Each Corporate Unit consists of (i) either (a) the beneficial
ownership by the Holder of one Preferred Security (the "Preferred Security") of
PSEG Funding Trust I, a Delaware statutory trust (the "Trust"), having a
liquidation amount of $50, subject to the Pledge of such Preferred Security by
such Holder pursuant to the Pledge Agreement, or (b) upon the occurrence of a
Successful Initial Remarketing or a Tax Event Redemption Date prior to the
Initial Reset Date or, in the event of a failed Initial Remarketing, the
Purchase Contract Settlement Date, the appropriate Applicable Ownership Interest
(as
A-1
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 Public Service
Enterprise Group Incorporated, a New Jersey 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 Preferred 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,
constituting part of each Corporate Unit evidenced hereby has been pledged to
the Collateral Agent, for the benefit of the Company, to secure the obligations
of the Holder under the Purchase Contract comprising part of such Corporate
Unit.
The Pledge Agreement provides that all payments of the liquidation amount
with respect to any of the Pledged Preferred 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, or cash distributions
on any Pledged Preferred Securities (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 Corporate Units received by the Collateral Agent shall
be paid by wire transfer in same day funds (i) in the case of (A) cash
distributions with respect to Pledged Preferred Securities or the appropriate
Applicable Ownership Interest (as specified in clause (B) of the definition of
such term) of the Treasury Portfolio, as the case may be, and (B) any payments
of the liquidation amount with respect to any Preferred 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, 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 12:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 11:00 a.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 liquidation
amount with respect to any of the Pledged Preferred Securities or 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 Corporate Units of which such Pledged
Preferred Securities 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
Corporate Units. Distributions on any Preferred Security 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, forming part of a
Corporate Unit evidenced hereby, which are payable quarterly in arrears on
February 16, May 16, August 16, and November 16 of each year (each, a "Payment
Date"), commencing November 16, 2002, and, in the event that the Initial Reset
Date is not otherwise such a payment date, the Initial Reset Date shall, subject
to receipt thereof by the Purchase Contract Agent from the Collateral Agent, be
paid to the Person in whose name this Corporate
A-2
Units Certificate (or a Predecessor Corporate Units 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
Corporate Units Certificate to purchase, and the Company to sell, on November
16, 2005 (the "Purchase Contract Settlement Date"), at a price equal to $50 (the
"Stated Amount"), a number of newly issued shares of Common Stock, without par
value ("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 Corporate Units 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 liquidation amount with respect to any Pledged Preferred Securities
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 Corporate Unit 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 Corporate Unit evidenced hereby, an amount (the
"Purchase Contract Payments") equal to 4.00% per year of the Stated Amount. Such
Purchase Contract Payments shall be payable to the Person in whose name this
Corporate Units 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 as and to the extent set forth in the Purchase Contract
Agreement.
Distributions on the Preferred Securities and 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 Corporate Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
By: ___________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: WACHOVIA BANK, NATIONAL ASSOCIATION,
not individually but solely as
Attorney-in-Fact of such Holder
By: ___________________________________
Name:
Title:
DATED: September 10, 2002
A-4
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Corporate Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: WACHOVIA BANK, NATIONAL ASSOCIATION,
as Purchase Contract Agent
By: ______________________________________
Authorized Signatory
Dated: September 10, 2002
A-5
(REVERSE OF CORPORATE UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of September 10, 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement"), between the Company and Wachovia Bank,
National Association, 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 Corporate Units Certificates are, and
are to be, executed and delivered.
Unless an Early Settlement has occurred, each Purchase Contract evidenced
hereby obligates the Holder of this Corporate Units 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. The "Settlement Rate" is
equal to:
(1) if the Applicable Market Value (as defined below) is greater
than or equal to $40.2480 (the "Threshold Appreciation Price"), 1.2423
shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $33.54 (the "Reference Price"), the
number of shares of Common Stock per Purchase Contract having a value
equal to the Stated Amount divided by the Applicable Market Value; and
(3) if the Applicable Market Value is less than or equal to the
Reference Price, 1.4908 shares of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Corporate Unit to purchase at the Purchase Price, and the Company to sell, a
number of shares of Common Stock equal to the Early Settlement Rate or
Settlement Rate, as applicable.
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.
A-6
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 firms 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 Corporate Units 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 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 Preferred Securities. Unless a Tax Event Redemption Date or a
Successful Initial Remarketing has occurred, a Holder of Corporate Units who
does not (1) on or prior to 5:00 p.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, or (2) on
or prior to 5:00 p.m. (New York City time) on the fifth Business Day prior to
the Purchase Contract Settlement Date make an effective Early Settlement, 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
Preferred Securities 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 Date or a Successful Initial Remarketing has occurred, a Holder
of Corporate Units who does not notify the Purchase Contract Agent, on or prior
to 5:00 p.m. (New York City time) on the second
A-7
Business Day immediately preceding the Purchase Contract Settlement Date, of its
intention to effect a Cash Settlement or an Early Settlement, shall pay the
Purchase Price for the shares of Common Stock to be delivered under the related
Purchase Contract from the proceeds at maturity of the Applicable Ownership
Interests (as defined in clause (A) of the definition of such term) of the
Treasury Portfolio.
If, as provided in the Purchase Contract Agreement, (i) upon the
occurrence of a Failed Secondary Remarketing or (ii) upon the failure of a
Holder to deliver the Purchase Price in cash on or prior to 11:00 a.m. the
Business Day immediately preceding the Purchase Contract Settlement Date after
such Holder has notified the Purchase Contract Agent of its intention to effect
a Cash Settlement, the Collateral Agent, for the benefit of the Company,
exercises its rights as a secured creditor with respect to the Pledged Preferred
Securities related to this Corporate Units Certificate, any accrued and unpaid
distributions on such Pledged Preferred Securities will become payable by the
Company to the holder of this Corporate Units 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.
By acquiring a Corporate Unit, a Holder of Corporate Units agrees to treat
the Preferred Security or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, constituting part of the Corporate Units
as owned by such Holder for United States federal, state and local income and
franchise tax purposes. In addition, by acquiring a Corporate Unit, a Holder of
Corporate Units agrees to treat the Notes as indebtedness for all United States
federal income tax purposes.
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 Preferred
Security 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 Corporate Unit from the Pledge. A Corporate Unit shall thereafter
represent the right to receive the Preferred Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio forming a part of such
Corporate Unit 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 Preferred Securities. Upon receipt of notice of any meeting at which
holders of Preferred Securities are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Preferred Securities, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail to the Corporate
Unit Holders a notice:
A-8
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Corporate Unit 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
Preferred Securities entitled to vote) shall be entitled to instruct the
Purchase Contract Agent as to the exercise of the voting rights pertaining
to the Preferred Securities constituting a part of such Holder's Corporate
Units; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Corporate Unit 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 number of Preferred Securities as to which any particular
voting instructions are received. In the absence of specific instructions from
the Holder of a Corporate Unit, the Purchase Contract Agent shall abstain from
voting the Preferred Security evidenced by such Corporate Unit.
Upon the dissolution and liquidation of the Trust, an aggregate principal
amount of the Notes constituting the assets of the Trust and underlying the
Preferred Securities equal to the aggregate liquidation amount of the Pledged
Preferred Securities shall be delivered to the Collateral Agent in exchange for
the Pledged Preferred Securities. Thereafter, the Notes shall be held by the
Securities Intermediary to secure the obligations of each Holder of Corporate
Units to purchase shares of Common Stock under the Purchase Contracts
constituting a part of such Corporate Units and all references herein to Pledged
Preferred Securities shall, in order to effect the foregoing, refer to Pledged
Notes.
Following the dissolution and liquidation of the Trust, the Holders and
the Collateral Agent shall have such security interests, rights and obligations
with respect to the 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, as the Holders and the Collateral Agent had in respect of the
Pledged Preferred Securities, any reference herein to the Preferred Securities
shall be deemed to be a reference to the 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, and any reference herein to the
liquidation amount of the Preferred Securities shall be deemed to be a reference
to the principal amount of the 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.
Upon the occurrence of a Tax Event Redemption Date prior to the Purchase
Contract Settlement Date, an amount equal to the Redemption Amount plus any
accumulated and unpaid distributions payable on the Tax Event Redemption Date
with respect to the Applicable Principal Amount shall be deposited in the
Collateral Account in exchange for the Pledged Preferred Securities. 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 Corporate Units, the Treasury
Portfolio and promptly (a) transfer the Applicable Ownership Interest (as
specified in clause (A) of the
A-9
definition of such term) of the Treasury Portfolio to the Collateral Account to
secure the obligations of each Holder of Corporate Units to purchase shares of
Common Stock under the Purchase Contracts constituting a part of such Corporate
Units, (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 Corporate Units and (C)
remit the remaining portion of such funds to the Purchase Contract Agent for
payment to the Holders of such Corporate Units.
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 Corporate Units, 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 Corporate Units.
Following the Initial Reset Date (in the event of a Successful Initial
Remarketing) or the occurrence of a Tax Event Redemption Date prior to the
Initial Reset Date or, in the event of a Failed Initial Remarketing, the
Purchase Contract Settlement Date, the Holders of Corporate Units 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 Corporate
Units and the Collateral Agent had in respect of the Preferred Securities or
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement and any reference herein to the Preferred Securities shall be
deemed to be a reference to such Treasury Portfolio.
The Corporate Units Certificates are issuable only in registered form and
only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Units Certificate will be registered and
Corporate Units 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 Preferred Securities, thereby creating
Treasury Units, shall be responsible for any fees or expenses payable in
connection therewith. Except as provided in the Purchase Contract Agreement, for
so long as the Purchase Contract underlying a Corporate Unit remains in effect,
such Corporate Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Corporate Unit in respect of the
Preferred Securities and Purchase Contract constituting such Corporate Unit may
be transferred and exchanged only as a Corporate Unit.
A Holder of Corporate Units may substitute for the Pledged Preferred
Securities 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,
securing such Holder's obligations under the related Purchase Contracts Treasury
Securities in an aggregate principal amount equal to the aggregate
A-10
liquidation amount of the Pledged Preferred Securities or the Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio 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 "Treasury
Unit". A Holder may make such Collateral Substitution only in integral multiples
of 20 Corporate Units for 20 Treasury Units.
If the Treasury Portfolio has replaced the Preferred Securities as a
component of the Corporate Units as a result of a Tax Event Redemption or a
Successful Initial Remarketing, a Corporate Unit Holder may make such Collateral
Substitution only in such integral multiples of Corporate Units as will enable
the U.S. Treasury securities comprising the Applicable Ownership Interest of the
Treasury Portfolio to be released in whole multiples.
A Holder of Treasury Units may recreate Corporate Units by delivering to
the Securities Intermediary Preferred Securities with an aggregate liquidation
amount, Notes with an aggregate principal amount 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, 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 Corporate
Units only in integral multiples of 20 Treasury Units for 20 Corporate Units.
If the Treasury Portfolio has replaced the Preferred Securities as a
component of the Corporate Units as a result of a Tax Event Redemption or a
Successful Initial Remarketing, a Treasury Unit Holder may recreate Corporate
Units only in such integral multiples of Treasury Units as will enable the U.S.
Treasury securities comprising the Applicable Ownership Interest of the Treasury
Portfolio to be purchased in whole multiples.
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 Corporate Units 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
10.25% compounded 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 a number of shares
of Common Stock equal to the total amount of deferred Purchase Contract Payments
payable to such Holder divided by the Applicable Market Value, provided that the
Company shall be required to pay
A-11
cash representing deferred Purchase Contract Payments unless the Company gives
the Holders and the Purchase Contract Agent notice of its election not to pay
cash within the time period prescribed in the Purchase Contract Agreement.
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 Preferred 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, from the Pledge in accordance with the provisions
of the Pledge Agreement.
Upon the occurrence of a Cash Merger, a Holder of Corporate Units may
effect Early Settlement of the Purchase Contract underlying such Corporate Units
pursuant to the terms of Section 5.04(b)(2) of the Purchase Contract Agreement.
In addition, a Holder of Corporate Units may effect Early Settlement of the
Purchase Contract underlying such Corporate Units pursuant to the terms of
Section 5.07 of the Purchase Contract Agreement. Upon Early Settlement of
Purchase Contracts by a Holder of the related Corporate Units, the Pledged
Preferred Securities or Pledged Applicable Ownership Interests (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio underlying
such Corporate Units, as the case may be, shall be released from the Pledge as
provided in the Pledge Agreement.
Upon registration of transfer of this Corporate Units 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 Corporate Units 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 Corporate Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the Corporate Units 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 Preferred Securities or the appropriate Applicable
Ownership Interest (as
A-12
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, underlying this Corporate Units 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 liquidation amount of the Pledged Preferred 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, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in accordance
with, the laws of the State of New York, without regard to conflicts of laws
principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and any agent
of the Company or the Purchase Contract Agent may treat the Person in whose name
this Corporate Units Certificate is registered as the owner of the Corporate
Units evidenced hereby for the purpose of receiving payments of distributions
payable quarterly on the Preferred Securities, receiving payments of Purchase
Contract Payments, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Purchase Contract Agent.
A-13
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: _________________ Custodian ________________
(cust) (minor)
Under Uniform Gifts to Minors Act of __________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
_______________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
_______________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Corporate Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Corporate Units Certificates on the books of Public Service Enterprise
Group Incorporated, and PSEG Funding Trust I 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
Corporate Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: _____________________________________________
A-14
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 Corporate Units
evidenced by this Corporate Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: __________ Signature
Signature Guarantee: ________________
(if assigned to another person)
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such Please print name and address of
Person's name and address and (ii) Registered Holder:
provide a guarantee of your signature:
_____________________________________
_________________________________________ Name
Name
_____________________________________
_________________________________________ Address
Address
_____________________________________
_________________________________________ _____________________________________
_________________________________________ _____________________________________
_________________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-15
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate Units 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 Corporate Units
evidenced by this Corporate Units Certificate specified below. The undersigned
Holder directs that a certificate for shares of Common Stock deliverable upon
such Early Settlement be registered in the name of, and delivered, together with
a check in payment for any fractional share and any Corporate Units Certificate
representing any Corporate Units 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 Preferred Securities, 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: ___________________________________
A-16
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Corporate Units Certificates are to be registered
in the name of and delivered to and Pledged Preferred Securities, 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: Please print name and address of Registered Holder:
REGISTERED HOLDER
Please print name and address of Registered Holder:
___________________________________ ________________________________________
Name Name
___________________________________ ________________________________________
Address Address
___________________________________ ________________________________________
___________________________________ ________________________________________
___________________________________ ________________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________
A-17
Transfer Instructions for Pledged Preferred Securities or the Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, transferable
upon Early Settlement or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-18
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
=============================================================================================================
Number of Corporate
Amount of increase Amount of decrease Units evidenced by
in Number of in Number of this Global Signature of
Corporate Units Corporate Units Certificate authorized signatory
evidenced by the evidenced by the following such of Trustee or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
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_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
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_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
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_____________________________________________________________________________________________________________
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_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
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_____________________________________________________________________________________________________________
X-00
XXXXXXX X
FACE OF TREASURY UNITS 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 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 Treasury Units:___________
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
PSEG FUNDING TRUST I
TREASURY UNITS
This Treasury Units Certificate certifies that _________________ is the
registered Holder of the number of Treasury Units set forth above [For inclusion
in Global Certificates only - or such other number of Corporate Units reflected
in the Schedule of Increases or Decreases in Global Certificate attached
hereto]. Each Treasury Unit consists of (i) a 1/20 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 Public Service Enterprise Group
Incorporated, a New Jersey 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.
B-1
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Treasury Unit 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 Treasury Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Treasury Units
Certificate to purchase, and the Company, to sell, on November 16, 2005 (the
"Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of newly issued shares of Common Stock, without par value
("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 Treasury Unit 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 Treasury Unit 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 Treasury Unit evidenced hereby, an amount (the
"Purchase Contract Payments") equal to 4.00% per year of the Stated Amount. Such
Purchase Contract Payments shall be payable to the Person in whose name this
Treasury Units 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 as and to the extent set forth in the Purchase Contract
Agreement.
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 Treasury Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
B-2
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
By: _______________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the Purchase
Contracts)
By: WACHOVIA BANK, NATIONAL
ASSOCIATION,
not individually but solely as
Attorney-in-Fact of such Holder
By: _______________________________
Name:
Title:
Dated: September 10, 2002
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: WACHOVIA BANK, NATIONAL
ASSOCIATION,
as Purchase Contract Agent
By: ________________________________
Authorized Signatory
Dated: September 10, 2002
B-4
(REVERSE OF TREASURY UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of September 10, 2002 (as may be supplemented from time to
time, the "Purchase Contract Agreement") between the Company and Wachovia Bank,
National Association, as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), as 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 Treasury Units
Certificates are, and are to be, executed and delivered.
Unless an Early Settlement has occurred, each Purchase Contract evidenced
hereby obligates the Holder of this Treasury Units Certificate to purchase, and
the Company to sell, on the Purchase Contract Settlement Date at a price equal
to the Stated Amount (the "Purchase Price") a number of shares of Common Stock
equal to the Settlement Rate, unless prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event with respect to the Security
of which such Purchase Contract is a part. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is greater
than or equal to $40.2480 (the "Threshold Appreciation Price"), 1.2423
share of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $33.54 (the "Reference Price"), the
number of shares of Common Stock per Purchase Contract having a value
equal to the Stated Amount divided by the Applicable Market Value; and
(3) if the Applicable Market Value is less than or equal to the
Reference Price, then 1.4908 shares of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Treasury Unit to purchase at the Purchase Price for cash, and the Company to
sell, a number of shares of Common Stock equal to the Early Settlement Rate or
the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing 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.
B-5
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 Treasury Unit 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 Treasury Unit equal to the Stated Amount of
such Purchase Contract to the purchase of the Common Stock. A Holder of Treasury
Units 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 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the Purchase Contract Settlement Date, make an effective
Early Settlement or (3) deliver the Purchase Price in cash by 11:00 a.m. 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.
B-6
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.
By acquiring a Treasury Unit, a Holder of Treasury Units agrees to treat
the Treasury Securities constituting part of the Treasury Units as owned by such
Holder for United States federal, state and local income and franchise tax
purposes.
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 Treasury
Unit. A Treasury Unit shall thereafter represent the right to receive the
interest in the Treasury Security forming a part of such Treasury Unit, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
The Treasury Units Certificates are issuable only in registered form and
only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units 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 Preferred Securities or Notes, for Treasury Securities, thereby
recreating Corporate Units, 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 Treasury Unit remains in effect,
such Treasury Unit shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Treasury Unit in respect of the
Treasury Security and the Purchase Contract constituting such Treasury Unit may
be transferred and exchanged only as a Treasury Unit.
A Holder of Treasury Units may recreate Corporate Units by delivering to
the Securities Intermediary Preferred Securities with an aggregate liquidation
amount, Notes with an aggregate principal amount 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, 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 "Corporate Unit." Any such
creation of Corporate Units may be effected only in multiples of 20 Treasury
Units for 20 Corporate Units.
B-7
If the Treasury Portfolio has replaced the Preferred Securities or Notes
as a component of the Corporate Units as a result of a Tax Event Redemption or a
Successful Initial Remarketing, a Treasury Unit Holder may make such Collateral
Substitutions only in such integral multiples of Treasury Units as will enable
the U.S. Treasury securities comprising the Applicable Ownership Interest of the
Treasury Portfolio to be purchased in whole multiples.
A Holder of Corporate Units may recreate Treasury Units by delivering to
the Securities Intermediary Treasury Securities in an aggregate principal amount
equal to the aggregate liquidation amount of the Pledged Preferred Securities,
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 Treasury Units may be effected only in multiples of 20 Corporate
Units for 20 Treasury Units.
If the Treasury Portfolio has replaced the Preferred Securities or Notes
as a component of the Corporate Units as a result of a Tax Event Redemption, a
Successful Initial Remarketing or, with respect to the Preferred Securities, as
a result of a Liquidation Distribution, a Corporate Unit Holder may make such
Collateral Substitutions only in such integral multiples of Corporate Units as
will enable the U.S. Treasury securities comprising the Applicable Ownership
Interest of the Treasury Portfolio to be released in whole multiples.
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 Treasury Units 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
10.25% per annum, compounded 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 a number of shares of Common Stock equal to the total amount of deferred
Purchase Contract Payments payable to such Holder divided by the Applicable
Market Value, provided that the Company shall be required to pay cash
representing deferred Purchase Contract Payments unless the Company gives the
Holders and the Purchase Contract Agent notice of its election not to pay cash
within the time period prescribed in the Purchase Contract Agreement.
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
B-8
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 Treasury Unit shall thereafter
represent the right to receive the interest in the Treasury Security forming a
part of such Treasury Unit, in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
Upon the occurrence of a Cash Merger, a Holder of Treasury Units may
effect Early Settlement of the Purchase Contract underlying such Treasury Units
pursuant to the terms of Section 5.04(b)(2) of the Purchase Contract Agreement.
In addition, a Holder of reasury Units may effect Early Settlement of the
Purchase Contract underlying such Treasury Units pursuant to the terms of
Section 5.07 of the Purchase Contract Agreement. Upon Early Settlement of
Purchase Contracts by a Holder of the related Treasury Units, the Pledged
Treasury Securities underlying such Treasury Units shall be released from the
Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Treasury Units 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 Treasury Units 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 Treasury Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the Treasury Units 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 Treasury Units
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.
B-9
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflicts of laws principles thereof.
The Company, the Purchase Contract Agent and its Affiliates and any agent
of the Company or the Purchase Contract Agent may treat the Person in whose name
this Treasury Units Certificate is registered as the owner of the Treasury Units
evidenced hereby for the purpose of receiving payments of interest on the
Treasury Securities, receiving payments of Purchase Contract Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any payments in respect thereof be overdue and notwithstanding
any notice to the contrary, and neither the Company, the Purchase Contract Agent
nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Purchase Contract Agent.
B-10
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: _________________ Custodian ________________
(cust) (minor)
Under Uniform Gifts to Minors Act of __________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or
other Identifying Number of Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Treasury Units
Certificates on the books of Public Service Enterprise Group Incorporated, and
PSEG Funding Trust I 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
Corporate Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: _____________________________________________
B-11
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 Treasury Units evidenced
by this Treasury Units Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: __________ _____________________________________
Signature
Signature Guarantee: ________________
(if assigned to another person)
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such Please print name and address of
Person's name and address and (ii) Registered Holder:
provide a guarantee of your signature:
_________________________________________ _____________________________________
Name Name
_________________________________________ _____________________________________
Address Address
_________________________________________ _____________________________________
_________________________________________ _____________________________________
_________________________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
B-12
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Units 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 Treasury Units
evidenced by this Treasury Units Certificate specified below. The option to
effect Early Settlement may be exercised only with respect to Purchase Contracts
underlying Treasury Units with an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof. The undersigned Holder directs that a certificate for
shares of Common Stock deliverable upon such Early Settlement be registered in
the name of, and delivered, together with a check in payment for any fractional
share and any Treasury Units Certificate representing any Treasury Units
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: ___________________________________
B-13
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Treasury UnitsCertificates 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:
REGISTERED HOLDER
Please print name and address of Registered Holder:
___________________________________ ________________________________________
Name Name
___________________________________ ________________________________________
Address Address
___________________________________ ________________________________________
___________________________________ ________________________________________
___________________________________ ________________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________
B-14
Transfer Instructions for Pledged Treasury Securities Transferable Upon or Early
Settlement or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
B-15
[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 Corporate
Amount of increase Amount of decrease Units evidenced by
in Number of in Number of this Global Signature of
Corporate Units Corporate Units Certificate authorized signatory
evidenced by the evidenced by the following such of Trustee or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
B-16
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
Wachovia Bank, National Association
00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: [_______ Corporate Units] [_______ Treasury Units] of Public Service
Enterprise Group Incorporated, a New Jersey corporation (the "Company") and PSEG
Funding Trust I.
The undersigned Holder hereby notifies you that it has delivered to The
Bank of New York, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate [liquidation] [principal] amount of [Preferred
Securities] [Notes] [Treasury Securities] [Applicable Ownership Interests (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio] in exchange for the [Pledged Preferred Securities] [Pledged Notes]
[Pledged Treasury Securities] held in the Collateral Account, in accordance with
the Pledge Agreement, dated as of September 10, 2002 (the "Pledge Agreement";
unless otherwise defined herein, terms defined in the Pledge Agreement are used
herein as defined therein), between you, the Company, the Collateral Agent and
the Securities Intermediary. The undersigned Holder has paid all applicable fees
relating to such exchange. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the undersigned
Holder the [Pledged Preferred Securities] [Pledged Notes] [Pledged Treasury
Securities] [Pledged Applicable Ownership Interests] related to such [Corporate
Units] [Treasury Units].
Dated: _____________________________ Signature_____________________________
Signature Guarantee: _____________________________________________
C-1
Please print name and address of Registered Holder:
________________________________ _____________________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
________________________________________
________________________________________
________________________________________
________________________________________
C-2
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
________________________________
________________________________
Attention:
Telecopy: __________
Re: [__________ Corporate Units] [______ Treasury Units] of Public
Service Enterprise Group Incorporated, a New Jersey
corporation (the "Company") and PSEG Funding Trust I
Please refer to the Purchase Contract Agreement, dated as of September 10,
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 Corporate Units and Treasury Units from time
to time.
We hereby notify you that a Termination Event has occurred and that [the
Notes][the Treasury Securities] [Preferred Securities] [Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio] serving as Collateral underlying your ownership interest in
_____ [Corporate Units] [Treasury Units] have been released and are being held
by us for your account pending receipt of transfer instructions with respect to
such [Notes][Treasury Securities] [Preferred Securities] [Applicable Ownership
Interests (as specified in clause (A) of the definition of such term) of the
Treasury Portfolio] (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 [Corporate
Units][Treasury Units] effected through book-entry or by delivery to us of your
[Corporate Units Certificate][Treasury Units 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 [Corporate Units][Treasury Units] are transferred or your [Corporate Units
Certificate] [Treasury Units Certificate] is surrendered or satisfactory
evidence is provided that such [Corporate Units Certificate][Treasury Units
Certificate] has been destroyed, lost or stolen, together with any
indemnification that we or the Company may require.
Date: By: WACHOVIA BANK, NATIONAL ASSOCIATION
_________________________________________
Name:
Title: Authorized Signatory
D-1
EXHIBIT E
NOTICE TO SETTLE BY CASH
Wachovia Bank, National Association
00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Re: [_______ Corporate Units] [Treasury Units] of Public Service
Enterprise Group Incorporated, a New Jersey corporation (the
"Company") and PSEG Funding Trust I
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.02 of the Purchase Contract Agreement, dated as of September 10, 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
[Corporate Units] [Treasury Units].
Dated: _____________________________ Signature_________________________________
Signature Guarantee: _____________________
Please print name and address of Registered Holder:
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT AND PROPERTY TRUSTEE
(Settlement of Purchase Contract through Remarketing)
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Wachovia Bank, National Association
00 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
Telecopy: 000-000-0000
Re: __________ Corporate Units of Public Service Enterprise Group
Incorporated, a New Jersey corporation (the "Company") and
PSEG Funding Trust I
Please refer to the Purchase Contract Agreement, dated as of September 10,
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 Corporate Units from time to time.
In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on instructions and Cash Settlements received from Holders of Corporate
Units as of 11:00 a.m. (New York City time), the fourth Business Day preceding
the Purchase Contract Settlement Date, we hereby notify you that ______
[Preferred Securities] [Notes] are to be tendered for purchase in the Secondary
Remarketing.
Date: By: WACHOVIA BANK, NATIONAL
ASSOCIATION
____________________________________
Name:
Title: Authorized Signatory
F-1
