XXXXXXX 0(xx)
XXX GROUP, INC.
AND
THE BANK OF NEW YORK,
as Purchase Contract Agent
and Trustee
----------------
PURCHASE CONTRACT AGREEMENT
----------------
DATED AS OF ___________, 200__
TIE SHEET
---------
Section of Section of
Trust Indenture Act Purchase Contract
of 1939, as amended Agreement
------------------- --------------------
310(a)..................................................... 7.8
310(b)..................................................... 7.9(d) and (g), 11.8
310(c)..................................................... Inapplicable
311(a)..................................................... 11.2(b)
311(b)..................................................... 11.2(b)
311(c)..................................................... Inapplicable
312(a)..................................................... 11.2(a)
312(b)..................................................... 11.2(b)
313........................................................ 11.3
314(a)..................................................... 11.4
314(b)..................................................... Inapplicable
314(c)..................................................... 11.5
314(d)..................................................... Inapplicable
314(e)..................................................... 1.2
314(f)..................................................... 11.1
315(a)..................................................... 7.1(a)
315(b)..................................................... 7.2
315(c)..................................................... 7.1(e)
315(d)(1).................................................. 7.1(b)
315(d)(2).................................................. 7.1(b)
315(d)(3).................................................. 11.9
316(a)(1)(A)............................................... 11.9
316(a)(1)(B)............................................... 11.6
316(b)..................................................... 6.1
316(c)..................................................... 11.2
317(a)..................................................... Inapplicable
317(b)..................................................... Inapplicable
318(a)..................................................... 11.1(b)
-------------------
* This Cross-Reference Table does not constitute part of the Purchase
Contract Agreement and shall not affect the interpretation of any of its
terms or provisions.
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.1. Definitions................................................1
SECTION 1.2. Compliance Certificates and Opinions......................13
SECTION 1.3. Form of Documents Delivered to Agent......................14
SECTION 1.4. Acts of Holders; Record Dates.............................15
SECTION 1.5. Notices...................................................16
SECTION 1.6. Notice to Holders; Waiver.................................17
SECTION 1.7. Effect of Headings and Table of Contents..................17
SECTION 1.8. Successors and Assigns....................................17
SECTION 1.9. Separability Clause.......................................17
SECTION 1.10. Benefits of Agreement.....................................17
SECTION 1.11. Governing Law.............................................18
SECTION 1.12. Legal Holidays............................................18
SECTION 1.13. Counterparts..............................................18
SECTION 1.14. Inspection of Agreement...................................18
ARTICLE II
Certificate Forms
SECTION 2.1. Forms of Certificates Generally...........................19
SECTION 2.2. Form of Agent's Certificate of Authentication.............20
ARTICLE III
The Securities
SECTION 3.1. Title and Terms; Denominations............................20
SECTION 3.2. Rights and Obligations Evidenced by the Certificates......20
SECTION 3.3. Execution, Authentication, Delivery and Dating............21
SECTION 3.4. Temporary Certificates....................................22
SECTION 3.5. Registration; Registration of Transfer and Exchange.......22
SECTION 3.6. Book-Entry Interests......................................23
SECTION 3.7. Notices to Holders........................................24
SECTION 3.8. Appointment of Successor Clearing Agency..................24
SECTION 3.9. Definitive Certificates...................................24
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates........25
SECTION 3.11. Persons Deemed Owners.....................................26
SECTION 3.12. Cancellation..............................................26
SECTION 3.13. Establishment or Reestablishment of Treasury Units........27
SECTION 3.14. Establishment or Reestablishment of Corporate Units.......29
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination
Event.....................................................30
SECTION 3.16. No Consent to Assumption..................................31
ARTICLE IV
The Debentures
SECTION 4.1. Payment of Interest; Rights to Interest Preserved;
Interest Rate Reset; Notice...............................31
SECTION 4.2. Notice and Voting.........................................33
SECTION 4.3. Substitution of the Treasury Portfolio for Debentures.....33
SECTION 4.4. Consent to Treatment for Tax Purposes.....................34
ARTICLE V
The Purchase Contracts
SECTION 5.1. Purchase of Shares of Common Stock........................35
SECTION 5.2. Contract Adjustment Payments..............................36
SECTION 5.3. Deferral of Payment Dates For Contract Adjustment
Payments..................................................37
SECTION 5.4. Payment of Purchase Price.................................38
SECTION 5.5. Issuance of Shares of Common Stock........................42
SECTION 5.6. Adjustment of Settlement Rate.............................43
SECTION 5.7. Notice of Adjustments and Certain Other Events............47
SECTION 5.8. Termination Event; Notice.................................48
SECTION 5.9. Early Settlement..........................................48
SECTION 5.10. No Fractional Shares......................................50
SECTION 5.11. Charges and Taxes.........................................51
ARTICLE VI
Remedies
SECTION 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock..........51
SECTION 6.2. Restoration of Rights and Remedies........................51
SECTION 6.3. Rights and Remedies Cumulative............................52
SECTION 6.4. Delay or Omission Not Waiver..............................52
SECTION 6.5. Undertaking for Costs.....................................52
SECTION 6.6. Waiver of Stay or Extension Laws..........................52
ARTICLE VII
The Agent
SECTION 7.1. Certain Duties and Responsibilities.......................53
ii
SECTION 7.2. Notice of Default.........................................54
SECTION 7.3. Certain Rights of Agent...................................54
SECTION 7.4. Not Responsible for Recitals or Issuance of Securities....55
SECTION 7.5. May Hold Securities.......................................55
SECTION 7.6. Money Held in Custody.....................................56
SECTION 7.7. Compensation and Reimbursement............................56
SECTION 7.8. Corporate Agent Required; Eligibility.....................56
SECTION 7.9. Resignation and Removal; Appointment of Successor.........57
SECTION 7.10. Acceptance of Appointment by Successor....................58
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business..................................................58
SECTION 7.12. Preservation of Information; Communications to Holders....59
SECTION 7.13. No Obligations of Agent...................................59
SECTION 7.14. Tax Compliance............................................59
ARTICLE VIII
Supplemental Agreements
SECTION 8.1. Supplemental Agreements Without Consent of Holders........60
SECTION 8.2. Supplemental Agreements with Consent of Holders...........60
SECTION 8.3. Execution of Supplemental Agreements......................61
SECTION 8.4. Effect of Supplemental Agreements.........................61
SECTION 8.5. Reference to Supplemental Agreements......................61
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions..................62
SECTION 9.2. Rights and Duties of Successor Entity.....................62
SECTION 9.3. Opinion of Counsel Given to Agent.........................63
ARTICLE X
Covenants
SECTION 10.1. Performance Under Purchase Contracts......................63
SECTION 10.2. Maintenance of Office or Agency...........................63
SECTION 10.3. Company to Reserve Common Stock...........................64
SECTION 10.4. Covenants as to Common Stock..............................64
ARTICLE XI
Trust Indenture Act
SECTION 11.1. Trust Indenture Act; Application..........................64
SECTION 11.2. Lists of Holders of Securities............................64
iii
SECTION 11.3. Reports by the Agent......................................64
SECTION 11.4. Periodic Reports to Agent.................................65
SECTION 11.5. Evidence of Compliance with Conditions Precedent..........65
SECTION 11.6. Defaults; Waiver..........................................65
SECTION 11.7. Agent's Knowledge of Defaults.............................65
SECTION 11.8. Conflicting Interests.....................................65
SECTION 11.9. Direction of Agent........................................65
EXHIBIT A Form of Corporate Unit Certificate
EXHIBIT B Form of Treasury Unit Certificate
EXHIBIT C Notice to Settle by Separate Cash
iv
PURCHASE CONTRACT AGREEMENT, dated as of ___________, 200__, between FPL
Group, Inc., a Florida corporation (the "Company"), and The Bank of New York,
acting as purchase contract agent, attorney-in-fact and trustee for the Holders
of Securities from time to time (in any one or more of such capacities, the
"Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Agent, as provided in this Agreement, the valid obligations
of the Company and the Holders, and to constitute these presents a valid
agreement of the Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular; and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "HEREIN," "HEREOF" and "HEREUNDER" and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.1(d).
"ACT" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"AGENT" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"AGREEMENT" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE BENCHMARK TREASURY" on a particular determination date shall
mean direct obligations of the United States (which may be obligations traded on
a when-issued basis only) having a maturity comparable to the remaining term to
maturity of the Debentures, which may be two years or between two and one-half
and two and one-quarter years, as applicable, as agreed upon by FPL Group
Capital and the Reset Agent. The yield for the Applicable Benchmark Treasury
will be the bid side yield displayed at 10:00 a.m., New York City time, on the
third Business Day immediately preceding the applicable Reset Date in the
Telerate system (or if the Telerate system is (a) no longer available on the
third Business Day immediately preceding such Reset Date or (b) in the opinion
of the Reset Agent (after consultation with FPL Group Capital) no longer an
appropriate system from which to obtain such yield, such other nationally
recognized quotation system as, in the opinion of the Reset Agent (after
consultation with FPL Group Capital), is appropriate). If such yield is not so
displayed, the yield for the Applicable Benchmark Treasury shall be, as
calculated by the Reset Agent, the yield to maturity for the Applicable
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid yields, as of 10:30 a.m., New
York City time, on the third Business Day immediately preceding the applicable
Reset Date of three leading United States government securities dealers selected
by the Reset Agent (after consultation with FPL Group Capital) (which may
include the Reset Agent or an affiliate thereof).
"APPLICABLE MARKET VALUE" has the meaning specified in Section 5.1.
"APPLICABLE OWNERSHIP INTEREST" means, with respect to each Corporate Unit
and the U.S. Treasury securities in a Treasury Portfolio, (1) a [1/20], or [5%],
undivided beneficial ownership interest in a $1,000 face amount of a principal
or interest strip in a U.S. Treasury security included in such Treasury
Portfolio which matures on or prior to ___________, 200__, and (2) (a) for the
originally scheduled quarterly interest payment date on the Debentures that
would have occurred on _____________, 200__, if no successful remarketing had
occurred, a ___% undivided beneficial ownership interest in a $1,000 face amount
of a principal or interest strip in a U.S. Treasury security maturing on or
prior to that date, (b) for each scheduled interest payment date on the
Debentures that occurs after the Tax Event Redemption Date and on or prior to
______________, 200__, a ___% undivided beneficial ownership interest in a
$1,000 face amount of a principal or interest strip in a U.S. Treasury security
maturing on or prior to that date and (c) if the [Initial Reset Date] occurs
prior to ______________, 200__ for the originally scheduled quarterly interest
payment date on the Debentures that would have occurred on ________________,
200__ if no successful remarketing had occurred, an undivided beneficial
ownership interest to be determined by the Reset Agent, in a $1,000 face amount
of a principal or interest strip in a U.S. Treasury security maturing on or
prior to _____________, 200__.
2
"APPLICABLE PRINCIPAL AMOUNT" means (i) on any date prior to the Reset
Date, if any, the aggregate principal amount of Debentures that are components
of Corporate Units on such date or (ii) on or after the Reset Date, if any, the
aggregate principal amount of the Debentures outstanding on such date.
"AUTHORIZED NEWSPAPER" means a newspaper in the English language of general
circulation in The City of New York and generally published each Business Day.
As of the date of this Agreement, the Company anticipates that for purposes of
each Reset Announcement Date, the Authorized Newspaper will be The Wall Street
Journal.
"AUTHORIZED OFFICER" means the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, or any other officer or
agent of the Company duly authorized by the Board of Directors to act in respect
of matters relating to this Agreement.
"BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a Person
who is the beneficial owner of such Book-Entry Interest as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"BOARD OF DIRECTORS" means the board of directors of the Company or a duly
authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of Directors,
a copy of which has been certified by the Secretary or an Assistant Secretary of
the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivered to the
Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 3.6.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any other day
on which banking institutions and trust companies in Xxx Xxxx Xxxx (xx xxx Xxxxx
xx Xxx Xxxx) are permitted or required by any applicable law to close.
"CASH SETTLEMENT" has the meaning set forth in Section 5.4(a)(i).
"CERTIFICATE" means a Corporate Unit Certificate or a Treasury Unit
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 as a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
3
"CLEARING AGENCY PARTICIPANT" means a securities broker or dealer, bank,
trust company, clearing corporation, other financial institution or other Person
for whom from time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
"CLOSING PRICE" has the meaning specified in Section 5.1.
"COLLATERAL" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"COLLATERAL AGENT" means __________, 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" means the substitution of the pledged components
of one type of Security for pledged components of the other type of Security
(i.e., either Corporate Unit or Treasury Unit) in connection with the
establishment or reestablishment of Treasury Units or Corporate Units, as
described in Sections 3.13 and 3.14.
"COMMON STOCK" means the Common Stock, par value $0.01 per share, of the
Company, including, where applicable, the preferred share purchase rights
appurtenant thereto.
"COMPANY" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Company" shall mean
such successor.
"COMPANY CERTIFICATE" means a certificate signed by an Authorized Officer
and delivered to the Agent.
"CONTRACT ADJUSTMENT PAYMENTS" means the amounts payable by the Company in
respect of each Purchase Contract issued in connection with the Corporate Units
and the Treasury Units, which amounts shall be equal to ___% per annum of the
Stated Amount; computed on the basis of a 360-day year of twelve 30-day months,
plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.3.
"CORPORATE TRUST OFFICE" means the corporate trust office of the Agent at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 000 Xxxxxxx Xxxxxx,
Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000.
"CORPORATE UNIT" means a Security, initially issued in substantially the
form set forth as Exhibit A hereto in the Stated Amount of [$50], which
represents (i) beneficial ownership by the Holder of either (a) (1) one
Debenture in a principal amount of [$50], or (2) following a successful
remarketing of the Debentures on the [Initial Remarketing Date], on or after the
[Initial Reset Date] an Applicable Ownership Interest in the Treasury Portfolio,
subject to the pledge of such Debenture or Applicable Ownership Interest in the
4
Treasury Portfolio by the Holder pursuant to the Pledge Agreement or (b) upon
the occurrence of a Tax Event Redemption prior to the Purchase Contract
Settlement Date, an Applicable Ownership Interest in the Treasury Portfolio,
subject to the Pledge of such Applicable Ownership Interest in the Treasury
Portfolio by the Holder pursuant to the Pledge Agreement, and (ii) the rights
and obligations of the Holder under one Purchase Contract.
"CORPORATE UNIT CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Corporate Units specified on
such certificate.
"CORPORATE UNIT REGISTER" and "CORPORATE UNIT REGISTRAR" have the
respective meanings specified in Section 3.5.
"COUPON RATE" with respect to a Debenture means the percentage rate per
annum at which such Debenture will bear interest.
"CURRENT MARKET PRICE" has the meaning specified in Section 5.6(a)(8).
"DEBENTURES" means the series of debentures of FPL Group Capital designated
"Series __ Debentures due ___________, 200__" to be issued under the Indenture.
"DEFAULT" means a default by the Company in any of its obligations under
this Agreement. "DEFERRED CONTRACT ADJUSTMENT PAYMENTS" has the meaning
specified in Section 5.3.
"DEPOSITARY" means, initially, DTC until another Clearing Agency becomes
its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"EARLY SETTLEMENT" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT AMOUNT" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT DATE" has the meaning specified in Section 5.9(a).
"EARLY SETTLEMENT RATE" has the meaning specified in Section 5.9(b).
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning specified in Section 1.4.
"EXPIRATION TIME" has the meaning specified in Section 5.6(a)(6).
"FAILED REMARKETING" means a remarketing that does not occur because a
condition precedent to such remarketing is not fulfilled, or if in spite of
using its reasonable efforts, the Remarketing Agent cannot remarket the
Debentures of Holders of Corporate Units at a price not less than ____% of the
applicable Treasury Portfolio Purchase Price, in the case of the remarketing of
Debentures on the [Initial Remarketing Date], or ____% of the aggregate
5
principal amount of such Debentures, in the case of the remarketing of
Debentures on the [Secondary Remarketing Date], in each case, plus accrued and
unpaid interest.
"FPL GROUP CAPITAL" means FPL Group Capital Inc, a Florida corporation and
a wholly-owned subsidiary of the Company, or any successor under the Indenture.
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of the
Securities and is registered in the name of the Depositary or a nominee thereof.
"GUARANTEE AGREEMENT" means the Guarantee Agreement dated as of June 1,
1999, between the Company and The Bank of New York, as guarantee trustee, as
originally executed and delivered and as it may from time to time be
supplemented or amended.
"HOLDER," when used with respect to a Security, means the Person in whose
name a Corporate Unit Certificate and/or a Treasury Unit Certificate evidencing
the Security is registered on the related Corporate Unit Register and/or the
Treasury Unit Register, as the case may be.
"INDENTURE" means the Indenture (For Unsecured Debt Securities), dated as
of June 1, 1999, between FPL Group Capital and the Indenture Trustee pursuant to
which the Debentures are to be issued, as originally executed and delivered and
as it may from time to time be supplemented or amended by one or more indentures
supplemental thereto entered into pursuant to the applicable provisions thereof
and shall include the terms of a particular series of securities established as
contemplated by Section 301 thereof.
"INDENTURE TRUSTEE" means The Bank of New York, as trustee under the
Indenture, or any successor thereto.
"[INITIAL REMARKETING]" means the remarketing which occurs 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, as selected by FPL Group
Capital in its sole discretion, from ____________, 200__ to ____________, 200__.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request signed
in the name of the Company by an Authorized Officer and delivered to the Agent.
"NYSE" has the meaning specified in Section 5.1.
"OFFICER'S CERTIFICATE" means a certificate signed by an authorized
signatory of FPL Group Capital establishing the terms of the debt securities of
any series pursuant to the Indenture.
6
"OPINION OF COUNSEL" means an opinion in writing signed by legal counsel,
who may be an employee of or counsel to the Company or an Affiliate and who
shall be reasonably acceptable to the Agent.
"OUTSTANDING," with respect to any Corporate Units and Treasury Units
means, as of the date of determination, all Corporate Units or Treasury Units
evidenced by Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(i) if a Termination Event has occurred, (A) Treasury Units for which
Treasury Securities have been deposited with the Agent in trust for the
Holders of such Treasury Units and (B) Corporate Units for which the
principal amount of the related Debenture or the appropriate Applicable
Ownership Interest in the Treasury Portfolio (or as contemplated in
Section 3.15 hereto with respect to a Holder's interest in the Treasury
Portfolio, cash) has been theretofore deposited with the Agent in trust for
the Holders of such Corporate Units;
(ii) Corporate Units and Treasury Units evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Corporate Units and Treasury Units evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose hands the Corporate
Units or Treasury Units evidenced by such Certificate are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Corporate Units or Treasury Units have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Corporate Units
or Treasury Units owned by the Company or any Affiliate of the Company shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Corporate Units or
Treasury Units which a Responsible Officer of the Agent actually knows to be so
owned shall be so disregarded. Corporate Units or Treasury Units so owned which
have been pledged in good faith may be regarded as Outstanding Securities if the
pledgee establishes to the satisfaction of the Agent the pledgee's right so to
act with respect to such Corporate Units or Treasury Units and that the pledgee
is not the Company or any Affiliate of the Company.
"PAYMENT DATE" means (i) each of ___________, _________, _________ and
_________, commencing _________, 200__ and (ii) with respect to the Debentures,
the [Initial Reset Date] if the remarketing of the Debentures on the third
Business Day immediately preceding the [Initial Reset Date] is successful and
the [Initial Reset Date] is not ____________, 200__ or ____________, 200__.
"PERMITTED INVESTMENTS" has the meaning set forth in Article I of the
Pledge Agreement.
7
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any agency
or political subdivision thereof or any other entity of whatever nature.
"PLEDGE" means the pledge under the Pledge Agreement of the Debentures, the
Treasury Securities or the appropriate Applicable Ownership Interest in the
Treasury Portfolio, in each case constituting a part of the Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the date hereof,
by and among the Company, the Agent, as purchase contract agent and as
attorney-in-fact for the Holders from time to time of Securities, and the
Collateral Agent, as the collateral agent, the custodial agent and the
securities intermediary.
"PLEDGED APPLICABLE OWNERSHIP INTEREST IN THE TREASURY PORTFOLIO" has the
meaning specified in Section 2.1 of the Pledge Agreement.
"PLEDGED DEBENTURES" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"PLEDGED TREASURY SECURITIES" has the meaning specified in Section 2.1 of
the Pledge Agreement.
"PREDECESSOR CERTIFICATE" means a Predecessor Corporate Unit Certificate or
a Predecessor Treasury Unit Certificate.
"PREDECESSOR CORPORATE UNIT CERTIFICATE" of any particular Corporate Unit
Certificate means every previous Corporate Unit Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Corporate Unit evidenced thereby; and, for the purposes of this definition, any
Corporate Unit Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Corporate Unit
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
Unit Certificate.
"PREDECESSOR TREASURY UNIT CERTIFICATE" of any particular Treasury Unit
Certificate means every previous Treasury Unit 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 Unit Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Unit
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 Unit
Certificate.
"PRIMARY TREASURY DEALER" means a primary U.S. government securities dealer
in New York City.
"PROCEEDS" has the meaning set forth in Article I of the Pledge Agreement.
8
"PURCHASE CONTRACT," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company (A) to sell
to the Holder of such Security and the Holder of such Security to purchase not
later than the Purchase Contract Settlement Date, for [$50] in cash, a number of
newly issued shares of Common Stock equal to the applicable Settlement Rate and
(B) to pay the Holder Contract Adjustment Payments, if any, on the terms and
subject to the conditions set forth in Article V hereof.
"PURCHASE CONTRACT SETTLEMENT DATE" means __________, 200__.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning specified in
Section 5.5.
"PURCHASE PRICE" has the meaning specified in Section 5.1.
"PURCHASED SHARES" has the meaning specified in Section 5.6(a)(6).
"QUOTATION AGENT" means (i) __________. and its successors, provided,
however, that, if the foregoing shall cease to be a Primary Treasury Dealer, the
Company and FPL Group Capital shall substitute therefor another Primary Treasury
Dealer, and (ii) any other Primary Treasury Dealer selected by the Company and
FPL Group Capital.
"RECORD DATE" for the payment of interest, distributions and Contract
Adjustment Payments 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, a day selected by the Company which shall be at least one
Business Day but not more than 60 Business Days prior to such Payment Date (and
which shall correspond to the related record date for the Debentures).
"REDEMPTION AMOUNT" means for each Debenture, the product of (i) the
principal amount of such Debenture and (ii) a fraction whose numerator is the
applicable Treasury Portfolio Purchase Price and whose denominator is the
Applicable Principal Amount of Debentures.
"REDEMPTION PRICE" means an amount per Debenture equal to the Redemption
Amount plus accrued and unpaid interest, if any, to the date of redemption.
"REGISTER" means the Corporate Unit Register and the Treasury Unit
Register.
"REGISTRAR" means the Corporate Unit Registrar and the Treasury Unit
Registrar.
"REMARKETING AGENT" has the meaning specified in Section 5.4(b).
"REMARKETING AGREEMENT" means the Remarketing Agreement dated __________,
200__ by and among the Company, FPL Group Capital, __________, as the
remarketing agent and reset agent and The Bank of New York, as the purchase
contract agent, including any amendments and supplements thereto.
"REMARKETING FEE" means an amount not exceeding ____ basis points (.____%)
of (i) the applicable Treasury Portfolio Purchase Price from any amount of the
proceeds from the remarketing of the Debentures in excess of the Treasury
Portfolio Purchase Price, in the case of any successful remarketing of
9
Debentures on the [Initial Remarketing Date], or (ii) the aggregate principal
amount of the remarketed Debentures from any amount of the proceeds from the
remarketing of the Debentures in excess of the aggregate principal amount of
those remarketed Debentures, in the case of any successful remarketing of
Debentures on the [Secondary Remarketing Date], in each case plus accrued and
unpaid interest thereon.
"REORGANIZATION EVENT" has the meaning specified in Section 5.6(b).
"RESET AGENT" means __________, or such other Reset Agent as the Company
and FPL Group Capital shall select from time to time.
"RESET ANNOUNCEMENT DATE" means the seventh Business Day immediately
preceding the Reset Date, the date on which the Reset Spread, and the Applicable
Benchmark Treasury will be announced by FPL Group Capital.
"RESET DATE" means the [Initial Reset Date], or, if the remarketing of the
Debentures on the [Initial Remarketing Date] results in a Failed Remarketing,
___________, 200__, unless a remarketing of the Debentures on the [Secondary
Remarketing Date] results in a Failed Remarketing.
"RESET RATE" means the Coupon Rate to be in effect for the Debentures on
and after the Reset Date and determined as provided in Section 4.1.
"RESET SPREAD" means an amount determined by the Reset Agent which, when
added to the Applicable Benchmark Treasury in effect on the third Business Day
immediately preceding the Reset Date, will produce the rate the Debentures
should bear in order to have an approximate market value on the third Business
Day immediately preceding the Reset Date of ____% of (a) the Treasury Portfolio
Purchase Price, if the Reset Date is the [Initial Reset Date], or (b) their
aggregate principal amount if the Reset Date is ___________, 200__; provided
that the Reset Rate shall in no event exceed the maximum permitted by applicable
law.
"RESPONSIBLE OFFICER," when used with respect to the Agent, means any
officer within the corporate trust department of the Agent, including any vice
president, assistant vice president, assistant secretary, assistant treasurer
trust officer or any other officer of the Agent who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such persons' knowledge of any familiarity with the particular
subject.
"[SECONDARY REMARKETING]" means the remarketing which occurs on the
[Secondary Remarketing Date].
"[SECONDARY REMARKETING DATE]" means the third Business Day immediately
preceding ___________, 200__.
"SECURITY" means a Corporate Unit or a Treasury Unit.
"SENIOR INDEBTEDNESS" means indebtedness of any kind of the Company
(including the guarantee of the Debentures pursuant to the Guarantee Agreement)
10
unless the instrument under which such indebtedness is incurred expressly
provides that it is in parity or subordinate in right of payment to the Contract
Adjustment Payments.
"SETTLEMENT RATE" has the meaning specified in Section 5.1.
"STATED AMOUNT" means [$50], which is equal to the stated amount of a
Corporate Unit and the face amount of a Treasury Unit.
"TAX EVENT" means the receipt by FPL Group Capital of an opinion of a
nationally recognized independent tax counsel experienced in such matters to the
effect that, as a result of (a) any amendment to, change in, or announced
proposed change in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any amendment to or change in an interpretation or
application of any such laws or regulations by any legislative body, court,
governmental agency or regulatory authority or (c) any interpretation or
pronouncement by any such legislative body, court, governmental agency or
regulatory authority that provides for a position with respect to any such laws
or regulations that differs from the generally accepted position on _________,
200__, which amendment, change or proposed change is effective or which
interpretation or pronouncement is announced on or after _________, 200__, there
is more than an insubstantial risk that interest payable by FPL Group Capital on
the Debentures would not be deductible, in whole or in part, by FPL Group
Capital for Federal income tax purposes.
"TAX EVENT REDEMPTION" means, if a Tax Event shall occur and be continuing,
the redemption of Debentures, in whole but not in part, at the option of FPL
Group Capital on not less than 30 days nor more than 60 days prior written
notice.
"TAX EVENT REDEMPTION DATE" means the date on which a Tax Event Redemption
is to occur.
"TERMINATION DATE" means the date, if any, on which a Termination Event
occurs.
"TERMINATION EVENT" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days; or (iii) at any time on or
prior to the Purchase Contract Settlement Date the Company shall file a petition
for relief under the Bankruptcy Code, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any other
11
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"THRESHOLD APPRECIATION PRICE" has the meaning specified in Section 5.1.
"TIA" means, as of any time, the Trust Indenture Act of 1939, as amended,
or any successor statute, as in effect at such time.
"TRADING DAY" has the meaning specified in Section 5.1.
"TREASURY PORTFOLIO" means:
(1) in connection with the remarketing on the [Initial Reset Date], a
portfolio of zero-coupon U.S. Treasury securities (a) consisting of
interest or principal strips of U.S. Treasury securities that mature on or
prior to ___________, 200__ in an aggregate amount equal to the Applicable
Principal Amount of Debentures, (b) with respect to the originally
scheduled quarterly interest payment date on the Debentures that would have
occurred on ___________, 200__, consisting of interest or principal strips
of U.S. Treasury securities which mature on or prior to ___________, 200__
in an aggregate amount equal to the aggregate interest payment that would
be due on the Applicable Principal Amount of Debentures that would have
been included in Corporate Units assuming no remarketing of the Debentures
on the [Initial Remarketing Date] and that the interest rate on the
Debentures was not reset on the [Initial Reset Date] and (c) if the
[Initial Reset Date] occurs prior to ____________, 200__, consisting of
interest or principal strips of U.S. Treasury securities which mature on or
prior to ____________, 200__ with respect to the originally scheduled
quarterly interest payment date on the Debentures that would have occurred
on ____________, 200__ in an aggregate amount equal to the aggregate
interest payment that would be due on ____________, 200__ on the principal
amount of the Debentures that would have been included in Corporate Units
assuming no remarketing and assuming the Coupon Rate on the Debentures is
not reset and assuming that interest on the Debentures accrued from the
[Initial Reset Date] to, but excluding, ____________, 200__; and
(2) in connection with a Tax Event Redemption (a) if the Tax Event
Redemption Date occurs prior to the [Initial Reset Date], or, if the
[Initial Remarketing] is a Failed Remarketing, prior to the Purchase
Contract Settlement Date, a portfolio of zero-coupon U.S. Treasury
securities consisting of (i) interest or principal strips of U.S. Treasury
securities that mature on or prior to ___________, 200__ in an aggregate
amount equal to the Applicable Principal Amount of Debentures and (ii) with
respect to each scheduled interest payment date on the Debentures that
occurs after the Tax Event Redemption Date and on or before the Purchase
Contract Settlement Date, interest or principal strips of U.S. Treasury
securities that mature on or prior to such interest payment date in an
aggregate amount equal to the aggregate interest payment that would be due
on the Applicable Principal Amount of Debentures on such date, assuming the
Coupon Rate of the Debentures is not reset on the Reset Date, and (b) if
12
the Tax Event Redemption Date occurs on or after the [Initial Reset Date],
or, if the [Secondary Remarketing] is a Failed Remarketing, on or after
___________, 200__, a portfolio of zero-coupon U.S. Treasury securities
consisting of (i) principal or interest strips of U.S. Treasury securities
that mature on or prior to ___________, 200__ in an aggregate principal
amount equal to the Applicable Principal Amount of Debentures and (ii) with
respect to each scheduled interest payment date on the Debentures that
occurs after the Tax Event Redemption Date and on or before ___________,
200__, interest or principal strips of U.S. Treasury securities that mature
on the Business Day prior to such interest payment date in an aggregate
amount equal to the aggregate interest payment that would be due on the
Applicable Principal Amount of Debentures on such date, assuming the Coupon
Rate of the Debentures is not reset on the Reset Date.
"TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate price quoted
by a Primary Treasury Dealer to the Quotation Agent (a) in the case of the
remarketing on the [Initial Remarketing Date] for the purchase of the Treasury
Portfolio for settlement on the [Initial Reset Date] and (b) in the case of a
Tax Event Redemption, on the third Business Day immediately preceding the Tax
Event Redemption Date for the purchase of the Treasury Portfolio for settlement
on the Tax Event Redemption Date.
"TREASURY SECURITY" means a zero-coupon U.S. Treasury security having a
principal amount at maturity equal to $1,000 and maturing on ___________, 200__
(CUSIP No. __________).
"TREASURY UNITS" means a Security, initially issued in substantially the
form set forth as Exhibit B hereto in a Stated Amount of [$50], which represents
(i) a [1/20] undivided beneficial ownership in a Treasury Security having a
principal amount at maturity equal to $1,000, and (ii) the rights and
obligations of the Company and the Holder under one Purchase Contract.
"TREASURY UNIT CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Units specified on
such certificate.
"TREASURY UNIT REGISTER" and "TREASURY UNIT REGISTRAR" have the respective
meanings specified in Section 3.5.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated _________,
200__ among the Company, FPL Group Capital, __________ and __________.
"VICE PRESIDENT" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
SECTION 1.2. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent a Company
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and 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
13
application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such 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
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. FORM OF DOCUMENTS DELIVERED TO AGENT.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of 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 1.4. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
14
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Agent and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 7.1) conclusive in favor of the Agent and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Corporate Unit
Register or the Treasury Unit Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate shall bind every future Holder of
the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate Units and the Outstanding 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 on or prior to the applicable Expiration Date by Holders of the requisite
number of Outstanding Securities on such record date. Nothing in this paragraph
shall be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite number of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Agent in writing and to each Holder of Securities in the manner set forth in
Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Agent in writing, and to each Holder of Securities in the manner set forth
15
in Section 1.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
SECTION 1.5. NOTICES.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Agreement to be
made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Agent at The Bank of
New York, 000 Xxxxxxx Xxxxxx, Xxxxx 00X, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Vice President, Corporate Trust Administration, or at any other
address previously furnished in writing by the Agent to the Holders and the
Company;
(2) the Company by the Agent or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Company at FPL Group,
Inc., 000 Xxxxxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000, Attention:
Treasurer, or at any other address previously furnished in writing to the
Agent by the Company;
(3) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, addressed to
the Collateral Agent at __________, ________________, ____________,
Attention: ____________, or at any other address previously furnished in
writing by the Collateral Agent to the Agent, the Company and the Holders;
or
(4) the Indenture Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Indenture Trustee at
The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Vice President, Corporate Trust Administration, or at any other
address previously furnished in writing by the Indenture Trustee to the
Company.
SECTION 1.6. NOTICE TO HOLDERS; WAIVER.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
16
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Agent, but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Agent shall constitute a
sufficient notification for every purpose hereunder.
SECTION 1.7. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.8. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 1.9. SEPARABILITY CLAUSE.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10. BENEFITS OF AGREEMENT.
Nothing in this Agreement or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and, to the extent provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
terms and conditions hereof and of the Securities evidenced by their
Certificates by their acceptance of delivery of such Certificates.
17
SECTION 1.11. GOVERNING LAW.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER
JURISDICTION SHALL BE MANDATORILY APPLICABLE.
SECTION 1.12. LEGAL HOLIDAYS.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Corporate Unit
Certificates or the Treasury Unit Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, and no interest shall accrue or be payable by
the Company or any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in 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 the Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Corporate Unit Certificates or the Treasury Unit Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
SECTION 1.13. COUNTERPARTS.
This Agreement may be executed in any number of counterparts by the parties
hereto on separate counterparts, each of which, when so executed and delivered,
shall be deemed an original, but all such counterparts shall together constitute
one and the same instrument.
SECTION 1.14. INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
CERTIFICATE FORMS
SECTION 2.1. FORMS OF CERTIFICATES GENERALLY.
The Corporate Unit Certificates (including the form of Purchase Contract
forming part of the Corporate Units evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
18
Company executing such Corporate Unit Certificates, as evidenced by their
execution of the Corporate Unit Certificates.
The definitive Corporate Unit 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 Corporate Units
evidenced by such Corporate Unit Certificates, consistent with the provisions of
this Agreement, as evidenced by their execution thereof.
The Treasury Unit Certificates (including the form of Purchase Contract
forming part of the Treasury Units evidenced thereby) shall be in substantially
the form set forth in Exhibit B hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Treasury Units may be listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Treasury Unit Certificates, as evidenced by their
execution of the Treasury Unit Certificates.
The definitive Treasury Unit 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 Treasury Units
evidenced by such Treasury Unit Certificates, consistent with the provisions of
this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE
CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
SECTION 2.2. FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the Corporate
Units shall be in substantially the form set forth on the form of the Corporate
Unit Certificates set forth as Exhibit A hereto.
The form of the Agent's certificate of authentication of the Treasury Units
shall be in substantially the form set forth on the form of the Treasury Unit
Certificates set forth as Exhibit B hereto.
19
ARTICLE III
THE SECURITIES
SECTION 3.1. TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Corporate Units and Treasury Units evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to ___________ units [(or __________ if the overallotment
option provided for in the Underwriting Agreement is exercised in full)] except
for Certificates authenticated, executed and delivered upon registration of
transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Section 3.4, 3.5, 3.10, 3.12, 3.13, 5.9 or 8.5.
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 3.2. RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES.
Each Corporate Unit Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing the
ownership by the Holder thereof of a beneficial interest in a Debenture or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
subject to the Pledge of such Debenture or the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Agent as attorney-in-fact for, and on
behalf of, the Holder of each Corporate Unit shall pledge, pursuant to the
Pledge Agreement, each Debenture or the Applicable Ownership Interest in 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 Debenture or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, for
the benefit of the Company, to secure the obligation of the Holder under one
Purchase Contract to purchase the Common Stock of the Company.
Each Treasury Unit Certificate shall evidence the number of Treasury Units
specified therein, with each such Treasury Unit representing the ownership by
the Holder thereof of a [1/20], or [5%], undivided beneficial interest in a
Treasury Security, subject to the Pledge of such Treasury Security by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Agent as
attorney-in-fact for, and on behalf of, the Holder of each Treasury Unit shall
pledge, pursuant to the Pledge Agreement, each Treasury Security forming a part
of such Treasury 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
Treasury Security for the benefit of the Company, to secure the obligation of
the Holder under one Purchase Contract to purchase the Common Stock of the
Company.
SECTION 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
20
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its President, one of its Vice Presidents, its Treasurer, one of
its Assistant Treasurers, its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Certificates may be manual or
facsimile.
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Agent, as such Holder's attorney-in-fact. Such
signature by an authorized signatory of the Agent shall be conclusive evidence
that the Holder of such Certificate has entered into the Purchase Contracts
evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
SECTION 3.4. TEMPORARY CERTIFICATES.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the forms set forth in Exhibit
A and Exhibit B hereto, with such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Corporate Units or Treasury Units are listed,
or as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Agent, and the 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 Corporate Units or Treasury Units, as the case
21
may be, as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Corporate Units or
Treasury Units, as the case may be, evidenced thereby as definitive
Certificates.
SECTION 3.5. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register (the
"Corporate Unit Register") in which, subject to such reasonable regulations as
it may prescribe, the Agent shall provide for the registration of Corporate Unit
Certificates and of transfers of Corporate Unit Certificates (the Agent, in such
capacity, the "Corporate Unit Registrar") and a register (the "Treasury Unit
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Treasury Unit Certificates
and of transfers of Treasury Unit Certificates (the Agent, in such capacity, the
"Treasury Unit Registrar").
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized denominations, like
tenor, and evidencing a like number of 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 Agent, and the Agent shall authenticate, execute on behalf of the
Holder, and deliver the Certificates which the Holder making the exchange is
entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of 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.
Every Certificate presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent, duly executed by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.6 and
8.5 not involving any transfer.
Notwithstanding the foregoing, the Company will not be obligated to execute
and deliver to the Agent, and the Agent will not be obligated to authenticate,
execute on behalf of the Holder and deliver any Certificate presented or
surrendered for registration of transfer or for exchange on or after the
22
Business Day immediately preceding the Purchase Contract Settlement Date or on
or after the Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Agent shall (i) if the Purchase Contract Settlement Date has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase Contracts
forming a part of the Securities evidenced by such Certificate, (ii) in the case
of Corporate Units, if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the aggregate principal amount of
the Debentures or the aggregate Stated Amount of the Treasury Portfolio, as
applicable, evidenced thereby, or (iii) in the case of Treasury Units, if a
Termination Event shall have occurred prior to the Purchase Contract Settlement
Date, transfer the Treasury Securities evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article V hereof.
SECTION 3.6. BOOK-ENTRY INTERESTS.
The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
or a nominee or custodian thereof by, or on behalf of, the Company. 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 3.9. The Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section 3.9:
(i) the provisions of this Section 3.6 shall be in full force and effect;
(ii) the Company shall be entitled to deal with the Clearing Agency for
all purposes of this Agreement (including the payment of Contract Adjustment
Payments, if any, and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(iii) to the extent that the provisions of this Section 3.6 conflict with
any other provisions of this Agreement, the provisions of this Section 3.6 shall
control; and
(iv) the rights of the Beneficial Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. The Clearing Agency will make book entry transfers
among Clearing Agency Participants and receive and transmit payments of Contract
Adjustment Payments to such Clearing Agency Participants.
SECTION 3.7. NOTICES TO HOLDERS.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Certificates
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
23
SECTION 3.8. APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
SECTION 3.9. DEFINITIVE CERTIFICATES.
If (i) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant to Section 3.8, or
(ii) the Company elects to terminate the book-entry system through the Clearing
Agency with respect to the Securities, then upon surrender of the Global
Certificates representing the Book-Entry Interests with respect to the
Securities by the Clearing Agency, accompanied by registration instructions, the
Company shall cause definitive Certificates to be delivered to Beneficial Owners
in accordance with the instructions of the Clearing Agency. The Company shall
not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be protected in relying on, such instructions.
SECTION 3.10. MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES.
If any mutilated Certificate is surrendered to the Agent, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holder, and deliver in exchange therefor, a new Certificate at the
cost of the Holder, evidencing the same number of 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 Agent (i) evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same 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 will not be obligated to execute
and deliver to the Agent, and the Agent will not be obligated to authenticate,
execute on behalf of the Holder and deliver any Certificate on or after the
Business Day immediately preceding the Purchase Contract Settlement Date or on
or after the Termination Date. In addition, in lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent may (i) if the Purchase Contract Settlement Date has
occurred, deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Securities evidenced by such Certificate, or
(ii) if a Termination Event shall have occurred, transfer the Debentures, the
appropriate Applicable Ownership Interest in the Treasury Portfolio or the
Treasury Securities, as the case may be, forming a part of the Securities
represented by such Certificate to such Holder, in each case subject to the
24
applicable conditions and in accordance with the applicable provisions of
Article V hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Agent may require payment from the Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. PERSONS DEEMED OWNERS.
Prior to due presentment of a Certificate for registration of transfer, the
Company, FPL Group Capital and the Agent, and any agent of the Company, FPL
Group Capital or the Agent, may treat the Person in whose name such Certificate
is registered on the Corporate Units Register or the Treasury Units Register, as
applicable, as the owner of the Corporate Units or Treasury Units evidenced
thereby, for the purpose of receiving interest on the Debentures or
distributions on the maturing quarterly interest strips of the Treasury
Portfolio, as applicable, receiving payments of Contract Adjustment Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any interest on the Debentures or the Contract Adjustment
Payments payable in respect of the Purchase Contracts constituting a part of the
Corporate Units or Treasury Units evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the Company, FPL Group
Capital nor the Agent, nor any agent of the Company, FPL Group Capital or the
Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing herein shall prevent the Company, FPL Group Capital, the Agent or any
agent of the Company, FPL Group Capital or the Agent, from treating the Clearing
Agency as the sole Holder of such Global Certificate or from giving effect to
any written certification, proxy or other authorization furnished by any
Clearing Agency (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Clearing Agency and owners of beneficial
interests in such Global Certificate, the operation of customary practices
governing the exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.
SECTION 3.12. CANCELLATION.
All Certificates surrendered for delivery of shares of Common Stock on or
after the Purchase Contract Settlement Date, upon the transfer of the
25
Debentures, the appropriate Applicable Ownership Interest in the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Certificate, or a Collateral Substitution or the
reestablishment of a Corporate Unit shall, if surrendered to any Person other
than the Agent, be delivered to the Agent and, if not already cancelled, shall
be promptly cancelled by it. The Company may at any time deliver to the Agent
for cancellation any Certificates previously authenticated, executed and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Certificates so delivered shall, upon Issuer Order, be
promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
SECTION 3.13. ESTABLISHMENT OR REESTABLISHMENT OF TREASURY UNITS.
A Holder of a Corporate Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Treasury Unit and separate the Debenture or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as applicable, from the
related Purchase Contract in respect of such Corporate Unit by substituting
Treasury Securities for the Debentures, or appropriate Applicable Ownership
Interest in the Treasury Portfolio, that form a part of such Corporate Unit in
accordance with this Section 3.13; and if a successful remarketing of the
Debentures has occurred on the [Initial Remarketing Date] or a Tax Event
Redemption has occurred, Holders of such Corporate Units may make such
Collateral Substitutions at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date. Holders may make
Collateral Substitutions and establish Treasury Units (i) only in integral
multiples of [20] Corporate Units if only Debentures are being substituted for
Treasury Securities, or (ii) only in integral multiples of [1,600] Corporate
Units if the appropriate Applicable Ownership Interests in the Treasury
Portfolio are being substituted for Treasury Securities. To create [20] Treasury
Units (if a Tax Event Redemption has not occurred and Debentures remain a
component of Corporate Units), or [1,600] Treasury Units (if a Tax Event
Redemption has occurred or the Treasury Portfolio has replaced the Debentures as
a component of the Corporate Units as a result of a successful remarketing of
such Debentures), the Corporate Unit Holder shall:
(a) if the Treasury Portfolio has not replaced any Debentures as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption, deposit with the Collateral Agent a Treasury Security having a
principal amount at maturity of $1,000; or
(b) if the Treasury Portfolio has replaced the Debentures as a component
of Corporate Units as a result of a successful remarketing of the Debentures or
a Tax Event Redemption, on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, deposit with the Collateral
Agent Treasury Securities having an aggregate principal amount at maturity of
[$80,000]; and
26
(c) in each case, transfer and surrender the related [20] Corporate Units,
or, in the event the Treasury Portfolio is a component of Corporate Units,
[1,600] Corporate Units, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant types and amounts of Treasury Securities to
the Collateral Agent and requesting that the Agent instruct the Collateral Agent
to release the applicable Debentures or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, underlying such
Corporate Units, whereupon the Agent shall promptly give such instruction to the
Collateral Agent, substantially in the form of Exhibit A to the Pledge
Agreement.
Upon receipt of the Treasury Securities described in clause (a) or (b)
above and the instructions described in clause (c) above, in accordance with the
terms of the Pledge Agreement, the Collateral Agent will release from the
Pledge, to the Agent, on behalf of the Holder, Debentures or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
that had been components of such Corporate Unit, free and clear of the Company's
security interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Corporate Units surrendered and transferred;
(ii) transfer the applicable Debentures or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, that had been
components of such Corporate Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury Unit Certificate executed by the Company in accordance with Section 3.3
evidencing the same number of Purchase Contracts as were evidenced by the
cancelled Corporate Units.
Holders who elect to separate the Debentures or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, from the
related Purchase Contracts and to substitute Treasury Securities for such
Debentures or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, shall be responsible for any fees or expenses
payable to the Collateral Agent for its services as Collateral Agent in respect
of the substitution, and the Company shall not be responsible for any such fees
or expenses.
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 a Corporate Unit Certificate to the Agent after depositing the
appropriate Treasury Securities with the Collateral Agent, the Debentures or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, constituting a part of such Corporate Unit, and any interest on such
Debentures or distributions with respect to the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, shall be held in the name of the
Agent or its nominee in trust for the benefit of such Holder, until such
Corporate Unit is so transferred or the Corporate Unit Certificate is so
delivered, as the case may be, or, until such Holder provides evidence
satisfactory to the Company and the Agent that such Corporate Unit Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.
27
Except as described in this Section 3.13, 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 Debenture or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, and
Purchase Contract comprising such Corporate Unit may be acquired, and may be
transferred and exchanged, only as an entire Corporate Unit.
SECTION 3.14. ESTABLISHMENT OR REESTABLISHMENT OF CORPORATE UNITS.
A Holder of a Treasury Unit may, at any time on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate Corporate Units by depositing with the Collateral Agent Debentures
or the appropriate Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, having an aggregate principal amount equal to the aggregate
principal amount at maturity of, and in substitution for all, but not less than
all, of the Treasury Securities comprising part of the Treasury Unit in
accordance with this Section 3.14; provided, however, that if the Treasury
Portfolio has replaced the Debentures as a component of Corporate Units as a
result of a successful remarketing of the Debentures or a Tax Event Redemption,
such Collateral Substitutions may be made at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date.
Holders of Treasury Units may make such Collateral Substitutions and establish
Corporate Units (i) only in integral multiples of [20] Treasury Units if
Treasury Securities are being replaced by only Debentures, or (ii) only in
integral multiples of [1,600] Treasury Units if any Treasury Security is being
replaced by the Applicable Ownership Interest in the Treasury Portfolio. To
create [20] Corporate Units (if a Tax Event Redemption has not occurred and the
Debentures remain components of Corporate Units), or [1,600] Corporate Units (if
a Tax Event Redemption has occurred or the Treasury Portfolio has replaced the
Debentures as a result of a successful remarketing of the Debentures), the
Treasury Unit Holder shall:
(a) if the Treasury Portfolio has not replaced the Debentures as a
component of Corporate Units as a result of a successful remarketing or a Tax
Event Redemption, on or prior to the fifth Business Day preceding the Purchase
Contract Settlement Date, deposit with the Collateral Agent $1,000 in aggregate
principal amount of Debentures; or
(b) if the Treasury Portfolio has replaced the Debentures as a component
of Corporate Units as a result of a successful remarketing of the Debentures or
a Tax Event Redemption, on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, deposit with the Collateral
Agent the Applicable Ownership Interest in the Treasury Portfolio for each
[1,600] Corporate Units being created by the Holder, and having an aggregate
principal amount of [$80,000]; and
(c) in each case, transfer and surrender the related [20] Treasury Units,
or in the event the Treasury Portfolio is a component of Corporate Units,
[1,600] Treasury Units, to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit B to the Pledge Agreement, stating that the
Holder has transferred the relevant amount of Debentures or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be, to
the Collateral Agent and requesting that the Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Treasury Units, whereupon the
28
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit A to the Pledge Agreement.
Upon receipt of the Debentures or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, described in clause (a)
or (b) above and the instructions described in clause (c) above, in accordance
with the terms of the Pledge Agreement, the Collateral Agent will effect the
release of the Treasury Securities having a corresponding aggregate principal
amount from the Pledge to the Agent free and clear of the Company's security
interest therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Treasury Units surrendered and transferred;
(ii) transfer the Treasury Securities that had been components of such
Treasury Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Corporate Unit Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were evidenced
by the cancelled Treasury Units.
Holders who elect to separate Treasury Securities from the related Purchase
Contract and to substitute Debentures or the Applicable Ownership Interest in
the Treasury Portfolio, as the case may be, for such Treasury Securities 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.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.14 fails to effect a book-entry transfer of the Treasury Units or
fails to deliver a Treasury Unit Certificate to the Agent after depositing the
Debentures or Applicable Ownership Interest in the Treasury Portfolio with the
Collateral Agent, the Treasury Securities constituting a part of such Treasury
Unit Certificate, and any interest on such Treasury Securities, shall be held in
the name of the Agent or its nominee in trust for the benefit of such Holder,
until such Treasury Unit is so transferred or the Treasury Unit is so delivered,
or until such Holder provides evidence satisfactory to the Company and the Agent
that such Treasury Unit has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a 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
Purchase Contract comprising such Treasury Unit may be acquired, and may be
transferred and exchanged only as an entire 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 Agent of
the Debentures, the appropriate Applicable Ownership Interest in the Treasury
Portfolio or the Treasury Securities, as the case may be, underlying the
Corporate Units and the Treasury Units pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to the
Debentures, the appropriate Applicable Ownership Interest in the Treasury
29
Portfolio or Treasury Securities, as the case may be, from each Holder by
written request mailed to such Holder at its address as it appears in the
Corporate Unit Register or the Treasury Unit Register, as the case may be. Upon
book-entry transfer of the Corporate Units or Treasury Units or delivery of a
Corporate Unit Certificate or Treasury Unit Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Debentures, the appropriate
Applicable Ownership Interest in the Treasury Portfolio or 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
Debentures, the appropriate Applicable Ownership Interest in 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 interest thereon, shall be
held in the name of the Agent or its nominee in trust for the benefit of such
Holder, until such Corporate Units or Treasury Units are transferred or the
Corporate Unit Certificate or Treasury Unit Certificate is surrendered or such
Holder provides satisfactory evidence that such Corporate Unit Certificate or
Treasury Unit Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Agent and the Company. In the case of the
Treasury Portfolio or any Treasury Securities, the Agent may dispose of the
subject securities for cash and pay the applicable portion of such cash to the
Holders in lieu of such Holders' Applicable Ownership Interest in such Treasury
Portfolio, or any Treasury Securities, where such Holder would otherwise have
been entitled to receive less than $1,000 of any such security.
SECTION 3.16. NO CONSENT TO ASSUMPTION.
Each Holder of a Security, by acceptance thereof, will 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, its
trustee in bankruptcy, receiver, liquidator or a person or entity performing
similar functions, in the event that the Company becomes a debtor under the
Bankruptcy Code or subject to other similar State or Federal law providing for
reorganization or liquidation.
ARTICLE IV
THE DEBENTURES
SECTION 4.1. PAYMENT OF INTEREST; RIGHTS TO INTEREST PRESERVED; INTEREST RATE
RESET; NOTICE.
A payment of interest on the Debentures or distribution with respect to the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, which is paid on any Payment Date shall, subject to receipt thereof by
the Agent from the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Corporate Unit Certificate
(or one or more Predecessor Corporate Unit Certificates) of which such
Debentures or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, is a part is registered at the close of business
on the Record Date next preceding such Payment Date.
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Each Corporate Unit Certificate evidencing Debentures delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of any
other Corporate Unit Certificate shall carry the rights to payment of interest
accrued and unpaid, and to accrue interest, which is carried by the Debentures
underlying such other Corporate Unit Certificate.
In the case of any Corporate Unit with respect to which Cash Settlement of
the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, interest on the Debentures
or distributions with respect to the appropriate Applicable Ownership Interest
in 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 interest or distributions shall, subject to receipt
thereof by the Agent, be payable to the Person in whose name the Corporate Unit
Certificate (or one or more Predecessor Corporate Unit 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 effected on the Business Day immediately
preceding the Purchase Contract Settlement Date or an Early Settlement Date, as
the case may be, or with respect to which a Collateral Substitution has been
effected, payment of interest on the related Debentures or distributions with
respect to the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, that would otherwise be payable after the
Purchase Contract Settlement Date or Early Settlement Date shall not be payable
hereunder to the Holder of such Corporate Units; provided, however, that to the
extent that such Holder continues to hold the separated Debentures that formerly
comprised a part of such Holder's Corporate Units, such Holder shall be entitled
to receive the payment of interest on such separated Debentures.
The Coupon Rate on the Debentures to be in effect on and after the Reset
Date will be determined on the third Business Day immediately preceding the
Reset Date to the Reset Rate (such Reset Rate to be effective from and after the
Reset Date). If the [Initial Remarketing] and the [Secondary Remarketing] result
in Failed Remarketings, the Coupon Rate on the Debentures will not be reset but
will continue at the initial Coupon Rate. On the Reset Announcement Date, the
Reset Spread and the Applicable Benchmark Treasury to be used to determine the
Reset Rate will be announced by the Company or FPL Group Capital. In addition,
on any Reset Announcement Date with respect to an [Initial Reset Date] occurring
prior to ____________, 200__, the percentage undivided beneficial ownership
interest determined by the Reset Agent for purposes of clause (2)(c) of the
definition of "Applicable Ownership Interest" will be announced by the Company
or FPL Group Capital. On the Business Day immediately following the Reset
Announcement Date, the Company will cause a notice of the Reset Spread and
Applicable Benchmark Treasury and, if applicable, the percentage undivided
beneficial ownership interest determined by the Reset Agent to be published in
an Authorized Newspaper.
Not later than 7 calendar days nor more than 15 calendar days prior to the
Reset Announcement Date and the Purchase Contract Settlement Date, if such
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Purchase Contract Settlement Date is not also a Reset Date, the Company or FPL
Group Capital will request that the Depositary (or any successor Clearing Agency
or its nominee) notify by first-class mail, postage prepaid, the Beneficial
Owners or Clearing Agency Participants holding Corporate Units or Treasury
Units, of the Reset Announcement Date and any procedures to be followed by such
Holders of Corporate Units who intend to settle their obligation under the
Purchase Contract with separate cash on the Purchase Contract Settlement Date.
SECTION 4.2. NOTICE AND VOTING.
Under and subject to the terms of the Pledge Agreement and this Agreement,
the Agent will be entitled to exercise the voting and any other consensual
rights pertaining to the Pledged Debentures but only to the extent instructed by
the Holders as described below. Upon receipt of notice of any meeting at which
holders of Debentures are entitled to vote or upon any solicitation of consents,
waivers or proxies of holders of Debentures, the Agent shall, as soon as
practicable thereafter, mail to the Holders of Corporate Units a notice
(a) containing such information as is contained in the notice or solicitation,
(b) stating that each Corporate Unit Holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Debentures entitled to vote) shall be
entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Debentures constituting a part of such Holder's Corporate
Units and (c) stating the manner in which such instructions may be given. Upon
the written request of the Holders of Corporate Units on such record date, the
Agent shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Debentures as to which any particular voting instructions are received. In
the absence of specific instructions from the Holder of Corporate Units, the
Agent shall abstain from voting the Debentures constituting a part of such
Holder's Corporate Units. The Company hereby agrees, if applicable, to solicit
Holders of Corporate Units to timely instruct the Agent in order to enable the
Agent to vote such Debentures.
SECTION 4.3. SUBSTITUTION OF THE TREASURY PORTFOLIO FOR DEBENTURES.
(a) Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged
Debentures. Pursuant to the terms of the Pledge Agreement, the Collateral Agent
will apply an amount equal to the Redemption Amount of such Redemption Price to
purchase on behalf of the Holders of Corporate Units the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price, if any, to the
Agent for payment to the Holders of such Corporate Units. The Treasury Portfolio
will be substituted for the outstanding Pledged Debentures, and will be held by
the Collateral Agent in accordance with the terms of the Pledge Agreement to
secure the obligation of each Holder of a Corporate Unit to purchase the Common
Stock of the Company on the Purchase Contract Settlement Date under the Purchase
Contract constituting a part of such Corporate Unit. Following the occurrence of
a Tax Event Redemption prior to the Purchase Contract Settlement Date, the
Holders of Corporate Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in respect of the
Debentures subject to the Pledge thereof as provided in Articles II, III, IV, V
or VI of the Pledge Agreement, and any reference herein to the Pledged
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Debentures shall be deemed to be reference to such Treasury Portfolio. The
Company may cause to be made in any Corporate Unit Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of the Treasury Portfolio for Debentures
as collateral.
(b) Upon the successful remarketing of the Pledged Debentures on the
[Initial Remarketing Date], the proceeds of such remarketing (after deducting
any Remarketing Fee) shall be delivered to the Collateral Agent in exchange for
the Pledged Debentures. Pursuant to the terms of the Pledge Agreement, the
Collateral 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 promptly remit the remaining portion of such proceeds to the Agent
for payment to the Holders of such Corporate Units. The Treasury Portfolio will
be substituted for the outstanding Pledged Debentures, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of a Corporate Unit to purchase the Common Stock
of the Company on the Purchase Contract Settlement Date under the Purchase
Contract constituting a part of such Corporate Unit. Following the successful
remarketing of the Debentures on the [Initial Remarketing Date], the Holders of
Corporate Units and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as the Holders of
Corporate Units and the Collateral Agent had in respect of the Debentures
subject to the Pledge thereof as provided in Articles II, III, IV, V or VI of
the Pledge Agreement, and any reference herein to the Pledged Debentures shall
be deemed to be reference to such Treasury Portfolio. The Company may cause to
be made in any Corporate Unit Certificates thereafter to be issued such change
in phraseology and form (but not in substance) as may be appropriate to reflect
the substitution of the Treasury Portfolio for Debentures as collateral.
SECTION 4.4. CONSENT TO TREATMENT FOR TAX PURPOSES.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, covenants and agrees to treat itself as the owner, for Federal, State
and local income and franchise tax purposes, of (i) the related Debentures or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, in the
case of the Corporate Units, or (ii) the Treasury Securities, in the case of the
Treasury Units. Each Holder of a Corporate Unit, by its acceptance thereof,
further covenants and agrees to treat the Debentures as indebtedness of FPL
Group Capital for Federal, State and local income and franchise tax purposes.
ARTICLE V
THE PURCHASE CONTRACTS
SECTION 5.1. PURCHASE OF SHARES OF COMMON STOCK.
Each Purchase Contract shall, unless a Termination Event or an Early
Settlement in accordance with Section 5.9 hereof has occurred, obligate the
Holder of the related Security to purchase, and the Company to sell, on the
Purchase Contract Settlement Date, for [$50] in cash (the "Purchase Price"), a
number of newly issued shares of Common Stock equal to the applicable Settlement
Rate. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $____ (the "Threshold Appreciation
33
Price"), ____ shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price, but is
greater than $____, the number of shares of Common Stock equal to [$50.00]
divided by the Applicable Market Value and (c) if the Applicable Market Value is
less than or equal to $____, ____ shares of Common Stock per Purchase Contract,
in each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest [1/10,000th] of a share). As provided
in Section 5.10, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the [20] consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date.
The "Closing Price" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
national or regional securities exchange on which the Common Stock is so listed,
or if the Common Stock is not so listed on a United States national or regional
securities exchange, the last sale price of the Common Stock as reported by the
NASDAQ Stock Market, or if the Common Stock is not so reported, the last quoted
bid price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained by the
Company for this purpose. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock at the close of business.
Each Holder of a Corporate Unit or a Treasury Unit, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, consents to the provisions hereof, irrevocably authorizes
the Agent to enter into and perform the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to and agrees to be bound by the Pledge of the
Debentures, the Treasury Portfolio or the Treasury Securities, as the case may
be, pursuant to the Pledge Agreement. 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 5.4 and the Pledge Agreement,
but subject to the terms thereof, payments in respect of the principal and
interest on the Debentures or the Proceeds of the Treasury Securities or the
Applicable Ownership Interest in the Treasury Portfolio on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant hereto), under the terms of this
34
Agreement, the Purchase Contracts underlying such Certificate and the Pledge
Agreement and the transferor shall be released from the obligations under this
Agreement, the Purchase Contracts underlying the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each Holder of a
Certificate, by its acceptance thereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
SECTION 5.2. CONTRACT ADJUSTMENT PAYMENTS.
Subject to Section 5.3 herein, the Company shall pay, on each Payment Date,
except the [Initial Reset Date], if the [Initial Reset Date] is not also a
regular quarterly Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name a Certificate (or
one or more Predecessor Certificates) is registered on the Register at the close
of business on the Record Date next preceding such Payment Date. The Contract
Adjustment Payments will be payable at the Corporate Trust Office or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Corporate Unit Register or
Treasury Unit Register or by wire transfer to an account appropriately
designated in writing by the Person entitled to payment.
Upon the occurrence of a Termination Event, the Company's obligation to pay
Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of any other Certificate (including as
a result of a Collateral Substitution or the reestablishment of a Corporate
Unit) shall carry the rights to Contract Adjustment Payments accrued and unpaid,
and to accrue Contract Adjustment Payments, which were carried by the Purchase
Contracts which were represented by such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to which
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date that is after any Record Date and on or prior to the next
succeeding Payment Date, Contract Adjustment Payments, if any, otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall, subject to
receipt thereof by the Agent, be payable to the Person in whose name the
Certificate evidencing such Security (or one or more Predecessor Certificates)
was 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, Contract Adjustment Payments
that would otherwise be payable after the Early Settlement Date with respect to
such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments
(including any accrued or Deferred Contract Adjustment Payments), will be
subordinate and junior in right of payment to the Company's obligations under
any Senior Indebtedness.
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SECTION 5.3. DEFERRAL OF PAYMENT DATES FOR CONTRACT ADJUSTMENT PAYMENTS.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the
date the Company is required to give notice of the Record Date or Payment Date
with respect to payment of such Contract Adjustment Payments 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. In
connection with any Contract Adjustment Payments so deferred, additional
Contract Adjustment Payments on the amounts so deferred will accrue at the rate
of ___% per annum (computed on the basis of a 360-day year of twelve 30-day
months), compounding on each succeeding Payment Date, until paid in full (such
deferred installments of Contract Adjustment Payments, if any, together with the
accrued additional Contract Adjustment Payments accrued thereon, being referred
to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section 5.3. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date. If the Purchase Contracts are terminated upon
the occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments and Deferred Contract Adjustment Payments will terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, each Holder will receive on the Purchase Contract Settlement
Date, in lieu of a cash payment, a number of shares of Common Stock (in addition
to a number of shares of Common Stock equal to the Settlement Rate) equal to (x)
the aggregate amount of Deferred Contract Adjustment Payments payable to such
Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase, redeem or acquire its capital stock,
(ii) as a result of a reclassification of the Company's capital stock or the
36
exchange or conversion of all or a portion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, or in connection
with the settlement of stock purchase contracts, (iv) dividends or distributions
in capital stock of the Company (or rights to acquire capital stock), or
repurchases, redemptions or acquisitions of capital stock in connection with the
issuance or exchange of capital stock (or securities convertible into or
exchangeable for shares of the Company's capital stock and distributions in
connection with the settlement of stock purchase contracts) or (v) redemptions,
exchanges or repurchases of any rights outstanding under a shareholder rights
plan or the declaration or payment thereunder of a dividend or distribution of
or with respect to rights in the future.
SECTION 5.4. PAYMENT OF PURCHASE PRICE.
(a) (i) Unless the Treasury Portfolio has replaced the Debentures as a
component of the Corporate Units or a Holder settles the underlying
Purchase Contract through the early delivery of cash to the Agent in the
manner described in Section 5.9, each Holder of a Corporate Unit must
notify the Agent of its intention to pay in cash ("Cash Settlement") the
Purchase Price for the shares of Common Stock to be purchased pursuant to
the Purchase Contract on the Purchase Contract Settlement Date by
presenting and surrendering to the Agent the Corporate Unit Certificate
with a notice in substantially the form of Exhibit C hereto on the reverse
side of such Certificate completed and executed. Such presentation,
surrender and notice must be made at or prior to 5:00 p.m., New York City
time, on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date. The Agent shall promptly notify the Collateral Agent of
the receipt of such a notice from a Holder intending to make a Cash
Settlement.
(ii) A Holder of a Corporate Unit who has so notified the Agent of
its intention to make a Cash Settlement is required to pay the Purchase
Price to the Collateral Agent prior to 11:00 a.m., New York City time, on
the Business Day immediately preceding the Purchase Contract Settlement
Date in lawful money of the United States by certified or cashiers' check
or wire transfer, in each case in immediately available funds payable to or
upon the order of the Company. Any cash received by the Collateral Agent
will be invested promptly by the Collateral Agent in Permitted Investments
and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Collateral
Agent in respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of a Corporate Unit fails to notify the Agent of
its intention to effect a Cash Settlement in accordance with paragraph
(a)(i) above, such failure shall constitute a default under the Purchase
Contract and the Holder shall be deemed to have consented to the
disposition of the Pledged Debentures pursuant to the remarketing as
described in paragraph (b) below. If a Holder of a Corporate Unit does
37
notify the Agent as provided in paragraph (a)(i) above of its intention to
pay the Purchase Price in cash, but fails to make such payment as required
by paragraph (a)(ii) above, such failure shall also constitute a default;
however, the Debentures of such a Holder will not be remarketed but instead
the Collateral Agent, for the benefit of the Company, will exercise its
rights as a secured party with respect to such Debentures, including those
rights specified in paragraph (c) below.
(b) In order to dispose of the Debentures of Corporate Unit Holders who
have not notified the Agent of their intention to effect a Cash Settlement with
respect to the Purchase Contract Settlement Date as provided in paragraph (a)(i)
above, the Company shall engage a nationally recognized investment banking firm
(the "Remarketing Agent") pursuant to the Remarketing Agreement to sell the
Debentures. In order to facilitate the remarketing, the Agent shall notify the
Remarketing Agent, by 10:00 a.m., New York City time, on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date, of the aggregate
number of Debentures to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, will present for remarketing the
Debentures to the Remarketing Agent. Upon receipt of such notice from the Agent
and the Debentures from the Collateral Agent, the Remarketing Agent will, on the
third Business Day immediately preceding the Purchase Contract Settlement Date,
use its reasonable efforts to remarket the Debentures on such date at a price of
approximately ____% (but not less than ____%) of the aggregate principal amount
of the Debentures, plus accrued and unpaid interest, if any, thereon. After
deducting any Remarketing Fee then the Remarketing Agent will remit the
remaining portion of the proceeds from such remarketing to the Collateral Agent.
Such portion of the proceeds, equal to the aggregate principal amount of such
Debentures, will automatically be applied by the Collateral Agent, in accordance
with the Pledge Agreement to satisfy in full such Corporate Unit Holders'
obligations to pay the Purchase Price for the 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 Agent for payment to the Holders of the related Corporate
Units. Corporate Unit Holders whose Debentures are so remarketed will not
otherwise be responsible for the payment of any Remarketing Fee in connection
therewith. If such a remarketing results in a Failed Remarketing in accordance
with the terms of the Pledge Agreement, the Collateral Agent, for the benefit of
the Company, will exercise its rights as a secured party with respect to such
Debentures, including those actions specified in paragraph (c) below; provided,
that if upon a Failed Remarketing the Collateral Agent exercises such rights for
the benefit of the Company with respect to such Debentures, any accrued and
unpaid interest on such Debentures will become payable by FPL Group Capital to
the Agent for payment to the Holder of the Corporate Units to which such
Debentures relate. Such payment will be made by FPL Group Capital on or prior to
11:00 a.m., New York City time, on the Purchase Contract Settlement Date in
lawful money of the United States by certified or cashiers' check or wire
transfer, in each case in immediately available funds payable to or upon the
order of the Agent. The Company will cause a notice of such Failed Remarketing
to be published on the Business Day immediately preceding the Purchase Contract
Settlement Date in an Authorized Newspaper.
(c) With respect to any Debentures beneficially owned by Holders who have
elected Cash Settlement but failed to deliver cash as required in (a)(ii) above,
38
or with respect to Debentures which are subject to a Failed Remarketing, the
Collateral Agent for the benefit of the Company reserves all of its rights as a
secured party with respect thereto and, subject to applicable law and paragraph
(h) below, may, among other things, (i) retain the Debentures in full
satisfaction of the Holders' obligations under the Purchase Contracts or (ii)
sell the Debentures in one or more public or private sales and apply the
proceeds of such sale in full satisfaction of the Holders' obligations under the
Purchase Contract.
(d) (i) Unless a Holder of Treasury Units or Corporate Units (if the
Treasury Portfolio has replaced the Debentures as a component of the
Corporate Units) settles the underlying Purchase Contract through the early
delivery of cash to the Agent in the manner described in Section 5.9, each
Holder of a Treasury Unit or a Corporate Unit (if the Treasury Portfolio
has replaced the Debentures as a component of the Corporate Units) must
notify the Agent of its intention to pay in cash the Purchase Price for the
shares of Common Stock to be purchased pursuant to the Purchase Contract on
the Purchase Contract Settlement Date by presenting and surrendering to the
Agent the Treasury Unit Certificate or Corporate Unit Certificate, as the
case may be, with a notice in substantially the form of Exhibit C hereto on
the reverse side of such Certificate completed and executed. Such
presentation, surrender and notice must be made at or prior to 5:00 p.m.,
New York City time, on the second Business Day immediately preceding the
Purchase Contract Settlement Date. The Agent shall promptly notify the
Collateral Agent of the receipt of such a notice from a Holder intending to
make a Cash Settlement.
(ii) A Holder of a Treasury Unit or Corporate Unit (if the Treasury
Portfolio has replaced the Debentures, as a component of the Corporate
Units) who has so notified the Agent of its intention to make a Cash
Settlement in accordance with paragraph (d)(i) above is required to pay the
Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City
time, on the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in immediately available
funds payable to or upon the order of the Company. Any cash received by the
Collateral Agent will be invested promptly by the Collateral Agent in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance with
the terms of this Agreement and the Pledge Agreement. Any funds received by
the Collateral Agent in respect of the investment earnings from the
investment in such Permitted Investments will be distributed to the Agent
when received for payment to the Holder.
(iii) If a Holder of a Treasury Unit or a Corporate Unit (if the
Treasury Portfolio has replaced the Debentures as a component of Corporate
Units,) fails to notify the Agent of its intention to effect a Cash
Settlement in accordance with paragraph (d)(i) above, or if such Holder
does notify the Agent as provided in paragraph (d)(i) above of its
intention to pay the Purchase Price in cash, but fails to make such payment
as required by paragraph (d)(ii) above, then such failure shall constitute
a default under the Purchase Contract and upon the maturity of the Pledged
39
Treasury Securities or the appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, held by the Collateral Agent on the
Business Day immediately prior to the Purchase Contract Settlement Date,
the principal amount of the Treasury Securities or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, received by the Collateral Agent will be invested promptly in overnight
Permitted Investments. On the Purchase Contract Settlement Date an amount
equal to the Purchase Price will be remitted to the Company as payment
thereof without receiving any instructions from the Holder. In the event
the sum of the proceeds from the related Pledged Treasury Securities or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, and the investment earnings earned from such investments is in
excess of the aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent will distribute such excess to the
Agent for the benefit of the Holder of the related Treasury Unit or
Corporate Unit when received.
(e) Any distribution to Holders of excess funds and interest described
above, shall be payable at the Corporate Trust Office maintained for that
purpose or, at the option of the Holder, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Register.
(f) The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificate therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner herein set
forth.
(g) Upon Cash Settlement with respect to a Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge Agreement cause
the Pledged Debentures or the appropriate Pledged Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, or the Pledged Treasury
Securities underlying the relevant Security to be released from the Pledge by
the Collateral Agent free and clear of any security interest of the Company and
transferred to the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from the Collateral
Agent, the Agent shall, by book-entry transfer, or other appropriate procedures,
in accordance with instructions provided by the Holder thereof, transfer the
Debentures or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, or such Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent shall hold the
Debentures or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, or such Treasury Securities, and any distribution
thereon, in the name of the Agent or its nominee in trust for the benefit of
such Holder).
(h) The obligations of the Holders to pay the Purchase Price on the
Purchase Contract Settlement Date are non-recourse obligations and are payable
solely out of any Cash Settlement or the proceeds of any Collateral pledged to
secure the obligations of the Holders with respect to such Purchase Price and in
no event will Holders be liable for any deficiency between the proceeds of
Collateral disposition and the Purchase Price.
40
SECTION 5.5. ISSUANCE OF SHARES OF COMMON STOCK.
Unless a Termination Event shall have occurred, and except with respect to
Purchase Contracts with respect to which there has been an Early Settlement, on
the Purchase Contract Settlement Date, upon the Company's receipt of payment in
full of the Purchase Price for the shares of Common Stock purchased by the
Holders pursuant to the foregoing provisions of this Article and subject to
Section 5.6(b), the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more certificates
representing the newly issued shares of Common Stock registered in the name of
the Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions for which
both a record date and payment date for such dividend or distribution has
occurred after the Purchase Contract Settlement Date, being hereinafter referred
to as the "Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article V (after taking
into account all Securities then held by such Holder) together with cash in lieu
of fractional shares as provided in Section 5.10 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and any Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
SECTION 5.6. ADJUSTMENT OF SETTLEMENT RATE.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, 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 the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
41
(2) In case the Company shall issue rights, warrants or options to
all holders of its Common Stock (that are not available on an equivalent basis
to Holders of the Securities upon settlement of the Purchase Contracts
underlying such Securities) entitling such holders of the Common Stock, for a
period expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, options or warrants, to subscribe
for or purchase shares of Common Stock at a price per share less than the
Current Market Price per share of the Common Stock on the date fixed for the
determination of shareholders entitled to receive such rights, options or
warrants (other than pursuant to any dividend reinvestment or share purchase
plan, including such a plan that provides for purchases of Common Stock by
non-shareholders), the Settlement Rate, in effect at the opening of business on
the day following the date fixed for such determination, shall be increased by
dividing such Settlement Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
which the aggregate 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 the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Settlement Rate,
in effect at the opening of business on the day following the day upon which
such subdivision or split becomes effective, shall be proportionately increased,
and, conversely, in case outstanding shares of Common Stock shall each be
combined into a smaller number of shares of Common Stock, the Settlement Rate,
in effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness or assets
(including securities, but excluding any rights or warrants referred to in
paragraph (2) of this Section, any dividend or distribution paid exclusively in
cash and any dividend or distribution referred to in paragraph (1) of this
Section), the Settlement Rate, in effect at the opening of business on the day
following the day on which such dividend or distribution was effected, 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 the numerator shall be the Current Market
Price per share of the Common Stock on the date fixed for such determination
less the then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) of the
portion of the assets or evidences of indebtedness so distributed applicable to
42
one share of Common Stock and the denominator shall be such Current Market Price
per share of the Common Stock, such adjustment to become effective immediately
prior to the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such distribution. In any case
in which this paragraph (4) is applicable, paragraph (2) of this Section shall
not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash that is
distributed in a Reorganization Event to which Section 5.6(b) applies or as part
of a distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate of any cash plus the fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration payable in
respect of any tender or exchange offer (other than consideration payable in
respect of any odd-lot tender offer) by the Company or any of its subsidiaries
for all or any portion of the Common Stock concluded within the 12 months
preceding the date of payment of the distribution described in clause (I) above
and in respect of which no adjustment pursuant to this paragraph (5) or
paragraph (6) of this Section has been made, exceeds [15%] of the product of the
Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such
date, then, and in each such case, immediately after the close of business on
such date for determination, the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for determination
of the shareholders entitled to receive such distribution by a fraction (i) the
numerator of which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an amount equal to
the quotient of (x) the combined amount distributed or payable in the
transactions described in clauses (I), (II) and (III) above and (y) the number
of shares of Common Stock outstanding on such date for determination and
(ii) the denominator of which shall be equal to the Current Market Price per
share of the Common Stock on such date for determination.
(6) In case (I) a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to shareholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) that combined together with
(II) the aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and described in a
Board Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer), by the
Company or any subsidiary of the Company for all or any portion of the Common
Stock expiring within the 12 months preceding the expiration of such tender or
43
exchange offer and in respect of which no adjustment pursuant to paragraph (5)
of this Section or this paragraph (6) has been made and (III) the aggregate
amount of any distributions to all holders of the Company's Common Stock made
exclusively in cash (other than regular quarterly cash dividends) within the 12
months preceding the expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to paragraph (5) of this Section or this
paragraph (6) has been made, exceeds [15%] of the product of the Current Market
Price per share of the Common Stock as of the last time (the "Expiration Time")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in each such
case, immediately prior to the opening of business on the day after the date of
the Expiration Time, the Settlement Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Settlement Rate immediately
prior to the close of business 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 the Common Stock on the date of the Expiration Time
and (II) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of cash plus the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer, of Purchased
Shares), and (ii) the denominator of which shall be equal to the product of (A)
the Current Market Price per share of the Common Stock as of the Expiration Time
and (B) the number of shares of Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares validly tendered
and not withdrawn as of the Expiration Time (the shares deemed so accepted, up
to any such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve
(a) a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of shareholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive Trading
Days selected by the Company commencing not more than 30 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date," when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on the applicable exchange or in the applicable
market without the right to receive such issuance or distribution.
44
(9) All adjustments to the Settlement Rate shall be calculated to
the nearest [1/10,000th] of a share of Common Stock (or if there is not a
nearest [1/10,000th] of a share to the next lower [1/10,000th] of a share). No
adjustment in the Settlement Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this subparagraph are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant
to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (a), (b) or (c) of the definition of Settlement Rate
in Section 5.1 will apply on the Purchase Contract Settlement Date. Such
adjustment shall be made by multiplying the Applicable Market Value by a
fraction of which the numerator shall be the Settlement Rate immediately after
such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of this Section 5.6(a) and the denominator shall be the Settlement Rate
immediately before such adjustment; provided, however, that if such adjustment
to the Settlement Rate is required to be made pursuant to the occurrence of any
of the events contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10) of
this Section 5.6(a) during the period taken into consideration for determining
the Applicable Market Value, appropriate and customary adjustments shall be made
to the Settlement Rate.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish the effect of any income tax to any holders of shares
of Common Stock resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event. In
the event of (i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"), the Settlement Rate will be adjusted
to provide that each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part thereof,
the kind and amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right to
dividends or distribution thereon which have a record date that is prior to the
Purchase Contract Settlement Date) by a Holder of the number of shares of Common
Stock issuable on account of each Purchase Contract if the Purchase Contract
Settlement Date had occurred immediately prior to such Reorganization Event
assuming such Holder of Common Stock is not a Person with which the Company
consolidated or into which the Company merged or which merged into the Company
or with which such statutory exchange of securities was effected or to which
such sale, transfer, lease or conveyance 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
45
Stock held by Affiliates of the Company and non-affiliates and such Holder
failed to exercise its rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such Reorganization Event
(provided that if the kind or amount of securities, cash and other property
receivable upon such Reorganization Event is not the same for each share of
Common Stock held immediately prior to such Reorganization Event by other than a
Constituent Person or an Affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each non-electing share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the non-electing shares). In the event of such a Reorganization Event, the
Person formed by such consolidation, merger or exchange or the Person which
acquires the assets of the Company or, in the event of a liquidation or
dissolution of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each Outstanding Security
shall have the rights provided by this Section 5.6. 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. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
SECTION 5.7. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with
Section 5.6 and prepare and transmit to the Agent a Company 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 5.6
(or if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Settlement Rate, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Agent shall not be accountable with respect to
the validity or value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or delivered with
respect to any Purchase Contract, and the Agent makes no representation with
respect thereto. The Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
46
SECTION 5.8. TERMINATION EVENT; NOTICE.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, and the rights and
obligations of the Holders to purchase Common Stock, will immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice thereof to the Agent, the
Collateral Agent and to the Holders at their addresses as they appear in the
applicable Register. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Debentures or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, forming a part of such Securities in the case of Corporate Units, or
Treasury Securities in the case of Treasury Units, in accordance with the
provisions of Section 4.3 of the Pledge Agreement.
SECTION 5.9. EARLY SETTLEMENT.
(a) A holder of Corporate Units may settle the related Purchase Contracts
in their entirety at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date in the manner described herein,
but only in integral multiples of [20] Corporate Units; provided, however, if
the Treasury Portfolio has become a component of the Corporate Units, Holders of
Corporate Units may settle early only in integral multiples of [1,600] Corporate
Units. A holder of Treasury Units may settle the related Purchase Contracts in
their entirety at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date in the manner described herein
(in either case, an "Early Settlement") but only in integral multiples of [20]
Treasury Units. The right to Early Settlement is subject to there being in
effect, if so required under Federal securities laws, a registration statement
covering the shares of Common Stock to be delivered in respect of the Purchase
Contracts being settled. Upon Early Settlement, (i) the holder's rights to
receive Deferred Contract Adjustment Payments, if any, on the Purchase Contracts
being settled will be forfeited, (ii) the holder's right to receive additional
Contract Adjustment Payments in respect of such Purchase Contracts will
terminate and (iii) no adjustment will be made to or for the holder on account
of Deferred Contract Adjustment Payments, or any amount accrued in respect of
Contract Adjustment Payments. In order to exercise the right to effect any Early
Settlement with respect to any Purchase Contracts, the Holder of the Certificate
evidencing Securities shall deliver such Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early on the reverse thereof duly completed
and executed and accompanied by payment (payable to the Company in immediately
available funds in an amount (the "Early Settlement Amount")) equal to the sum
of (i) [$50] times the number of Purchase Contracts being settled, plus, (ii) if
such delivery is made with respect to any Purchase Contracts during the period
from the close of business on any Record Date next preceding any Payment Date to
the opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable, if any, on such Payment Date with respect to such
Purchase Contracts; provided that no payment is required if the Company has
elected to defer the Contract Adjustment Payments which would otherwise be
payable on the Payment Date. Except as provided in the immediately preceding
sentence and subject to the second to last paragraph of Section 5.2, no payment
47
or adjustment shall be made upon Early Settlement of any Purchase Contract on
account of any Contract Adjustment Payments accrued on such Purchase Contract or
on account of any dividends on the Common Stock issued upon such Early
Settlement. In order for any of the foregoing requirements to be considered
satisfied or effective with respect to a Purchase Contract underlying any
Security on or by a particular Business Day, such requirement must be met at or
prior to 5:00 p.m., New York City time, on such Business Day; the first Business
Day on which all of the foregoing requirements have been satisfied by 5:00 p.m.,
New York City time shall be the "Early Settlement Date" with respect to such
Security.
(b) 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, ____ newly issued shares of Common Stock per Corporate Unit or Treasury
Unit (the "Early Settlement Rate") (regardless of the market price of the Common
Stock on the date of Early Settlement); provided, however, that upon the Early
Settlement of the Purchase Contracts, the Holder of such related Securities will
forfeit the right to receive any Deferred Contract Adjustment Payments. The
Early Settlement Rate shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted, in accordance with Section 5.6. As promptly
as practicable after Early Settlement of Purchase Contracts in accordance with
the provisions of this Section 5.9, the Company shall issue and shall deliver to
the Agent at the Corporate Trust Office a certificate or certificates for the
full number of shares of Common Stock issuable upon such Early Settlement
together with payment in lieu of any fraction of a share, as provided in
Section 5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and
(ii) the related Debentures or the appropriate Applicable Ownership Interest in
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 Agent for delivery to the
Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Debentures, the
appropriate Applicable Ownership Interest in the Treasury Portfolio or Treasury
Securities, as the case may be, from the Collateral Agent, as applicable, the
Agent shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities, (i) transfer to the Holder the
Debentures, Treasury Portfolio or Treasury Securities, as the case may be,
forming a part of such Securities, and (ii) deliver to the Holder a certificate
or certificates for the full number of shares of Common Stock issuable upon such
Early Settlement together with payment in lieu of any fraction of a share, as
provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
48
SECTION 5.10. NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to such fractional share times the (i) the Threshold
Appreciation Price, in the case of an Early Settlement or (ii) the Applicable
Market Value, in all other circumstances. The Company shall provide the Agent
from time to time with sufficient funds to permit the Agent to make all cash
payments required by this Section 5.10 in a timely manner.
SECTION 5.11. CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Common Stock pursuant to the
Purchase Contracts and in payment of any Deferred Contract Adjustment Payments;
provided, however, that the Company shall not be required to pay any such tax or
taxes which may be payable in respect of any exchange of or substitution for a
Certificate evidencing a Security or any issuance of a share of Common Stock in
a name other than that of the registered Holder of a Certificate surrendered in
respect of the Securities evidenced thereby, other than in the name of the
Agent, as custodian for such Holder, and the Company shall not be required to
issue or deliver such share certificates or Certificates unless or until the
Person or Persons requesting the transfer or issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid or that no such tax is due.
ARTICLE VI
REMEDIES
SECTION 6.1. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT ADJUSTMENT
PAYMENTS AND TO PURCHASE COMMON STOCK.
The Holder of any Corporate Unit or Treasury Unit shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, the prepayment of Contract
Adjustment Payments pursuant to Section 5.9(a) and the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to
Section 5.9(b) or upon the occurrence of a Termination Event), to receive
payment of each installment of the Contract Adjustment Payments with respect to
the Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock (subject to
Section 5.6) pursuant to such Purchase Contract and, in each such case, to
institute suit for the enforcement of any such payment and right to purchase
Common Stock (subject to Section 5.6), and such rights shall not be impaired
without the consent of such Holder.
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SECTION 6.2. RESTORATION OF RIGHTS AND REMEDIES.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
SECTION 6.3. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.4. DELAY OR OMISSION NOT WAIVER.
No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right. Every right and remedy given by this Article or by law to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by such
Holders.
SECTION 6.5. UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of Corporate Units or
Treasury Units, by its acceptance of such Corporate Units or Treasury Units
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or omitted by it as
Agent, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided that the provisions of
this Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than [10%] of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of payment of
interest on any Debentures or Contract Adjustment Payments, if any, on any
Purchase Contract on or after the respective Payment Date therefor (subject to
Section 5.3) in respect of any Security held by such Holder, or for enforcement
of the right to purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
SECTION 6.6. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
50
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE VII
THE AGENT
SECTION 7.1. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Prior to a Default and after the curing or waiving of all such
Defaults that may have occurred,
(1) the Agent undertakes to perform, with respect to the Securities,
such duties and only such duties as are specifically set forth in this
Agreement and no implied covenants or obligations shall be read into this
Agreement against the Agent; and
(2) the Agent may, with respect to the Securities, conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, in the absence of bad faith on the part of the Agent,
upon certificates or opinions furnished to the Agent and conforming to the
requirements of this Agreement; but in the case of any certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Agreement.
(b) No provision of this Agreement shall be construed to relieve the Agent
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Agent was negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers.
(c) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Agent shall be subject to the provisions of this Section.
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(d) The Agent is authorized to execute, deliver and perform the Pledge
Agreement in its capacity as Agent and to grant the Pledge. The Agent shall be
entitled to all of the rights, privileges, immunities and indemnities contained
in this Agreement with respect to any duties of the Agent under, or actions
taken by the Agent pursuant to, such Pledge Agreement and any Remarketing
Agreement entered into by the Agent to effectuate Section 5.4 hereof or
Section 6.3 of the Pledge Agreement.
(e) In case a Default has occurred (that has not been cured or waived),
and is actually known by a Responsible Officer of the Agent, the Agent shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(f) At the request of the Company, the Agent is authorized to execute and
deliver one or more Remarketing Agreements to, among other things, effectuate
Section 5.4.
SECTION 7.2. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default hereunder of which a
Responsible Officer of the Agent has actual knowledge, the Agent shall transmit
by mail to the Company and the Holders of Securities, as their names and
addresses appear in the Register, notice of such Default hereunder, unless such
Default shall have been cured or waived; provided that, except for a Default in
any payment obligation hereunder, the Agent shall be protected in withholding
such notice if and so long as a Responsible Officer of the Agent in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
SECTION 7.3. CERTAIN RIGHTS OF AGENT.
Subject to the provisions of Section 7.1:
(a) the Agent may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Certificate, Issuer Order or Issuer Request,
and any resolution of the Board of Directors of the Company may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
a Company Certificate;
(d) the Agent may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
52
(e) the Agent shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company personally
or by agent or attorney;
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder;
(g) the rights, privileges, protections, immunities and benefits given to
the Agent, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Agent in each of its capacities
hereunder;
(h) the 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 Agent security or indemnity satisfactory to the Agent against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction; and
(i) the 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.
SECTION 7.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Certificates shall be taken as the
statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.5. MAY HOLD SECURITIES.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
SECTION 7.6. MONEY HELD IN CUSTODY.
Money held by the Agent in custody hereunder need not be segregated from
the other funds except to the extent required by law or provided herein. The
Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
53
SECTION 7.7. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Agent from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to
time in writing (which compensation shall not be limited by any provisions
of law in regards to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Agent upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Agent and any predecessor Agent for, and to hold
it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration or the performance of its duties
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
"Agent" for purposes of this Section 7.7 shall include any predecessor
Agent; provided, however, that the negligence or bad faith of any Agent
hereunder shall not affect the rights of any other Agent hereunder.
When the Agent incurs expenses or renders services in an action or
proceeding commenced pursuant to Section 4.3 of the Pledge Agreement upon the
occurrence of a Termination Event, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for the services are
intended to constitute expenses of administration under any applicable Federal
or State bankruptcy, insolvency or other similar law.
The provisions of this Section 7.7 shall survive the termination of
this Agreement and the Pledge Agreement.
SECTION 7.8. CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be (i) not an
Affiliate of the Company and (ii) 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 and subject to supervision or
examination by Federal or State authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Agent shall cease to be eligible in accordance
54
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 7.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof to
the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, after
written request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section 7.8 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Agent shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Agent or of its property shall be
appointed or any public officer shall take charge or control of the Agent or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the Corporate Trust Office of Agent for any
cause, the Company, by a Board Resolution, shall promptly appoint a successor
Agent and shall comply with the applicable requirements of Section 7.10. If no
successor Agent shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, the Agent or any Holder who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent to give,
notice of each resignation and each removal of the Agent and each appointment of
55
a successor Agent by mailing written notice of such event by first-class mail,
postage prepaid, to all Holders as their names and addresses appear in the
applicable Register. Each notice shall include the name of the successor Agent
and the address of its Corporate Trust Office.
(g) If the Agent has or shall acquire any "conflicting interest" within
the meaning of Section 310(b) of the TIA, the Agent and the Company shall in all
respects comply with the provisions of Section 310(b) of the TIA.
SECTION 7.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Agent, every such
successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become vested with all the rights, powers, agencies and duties of the
retiring Agent; but, on the request of the Company or the successor Agent, such
retiring Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and deliver to such
successor Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time of
such acceptance such successor Agent shall be qualified and eligible under this
Article.
SECTION 7.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Agent may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Agent, shall be the
successor of the Agent hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Agent then in office, any successor by
merger, conversion or consolidation to such Agent may adopt such authentication
and execution and deliver the Certificates so authenticated and executed with
the same effect as if such successor Agent had itself authenticated and executed
such Securities.
SECTION 7.12. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Agent, and furnish to the Agent reasonable proof that each such
applicant has owned a Security for a period of at least six months preceding the
56
date of such application, and such application states that the applicants desire
to communicate with other Holders with respect to their rights under this
Agreement or under the Securities and is accompanied by a copy of the form of
proxy or other communication which such applicants propose to transmit, then the
Agent shall mail to all the Holders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
SECTION 7.13. NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement or the Pledge
Agreement, the Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Purchase Contract in
respect of the obligations of the Holder of any Security thereunder. The Company
agrees, and each Holder of a Certificate, by his acceptance thereof, shall be
deemed to have agreed, that the Agent's execution of the Certificates on behalf
of the Holders shall be solely as agent and attorney-in-fact for the Holders,
and that the Agent shall have no obligation to perform such Purchase Contracts
on behalf of the Holders, except to the extent expressly provided in Article V
hereof.
SECTION 7.14. TAX COMPLIANCE.
(a) The Agent, on its own behalf and on behalf of the Company, will comply
with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement conclusively rely on any such direction in accordance with the
provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
SUPPLEMENTAL AGREEMENTS
SECTION 8.1. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at any time
and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(i) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company herein and in
the Certificates;
57
(ii) to add to the covenants of the Company for the benefit of the Holder
or to surrender any right or power herein conferred upon the Company;
(iii) to evidence and provide for the acceptance of appointment hereunder
by a successor Agent;
(iv) to make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.6(b); or
(v) to cure any ambiguity, to correct or supplement any provisions herein
which may be inconsistent with any other provisions herein, or to make any other
provisions with respect to such matters or questions arising under this
Agreement, provided such action shall not adversely affect the interests of the
Holders.
SECTION 8.2. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts, or the provisions of this Agreement or the rights of the
Holders in respect of the Securities; provided, however, that, except as
contemplated herein, no such supplemental agreement shall, without the consent
of the Holder of each Outstanding Security affected thereby,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be Pledged to
secure a Holder's Obligations under the Purchase Contract, impair the right of
the Holder of any Purchase Contract to receive distributions on the related
Collateral (except for the rights of Holders of Corporate Units to substitute
the Treasury Securities for the Pledged Debentures or the Applicable Ownership
Interest in the Treasury Portfolio or the rights of holders of Treasury Units to
substitute Debentures or the Applicable Ownership Interest in the Treasury
Portfolio for the Pledged Treasury Securities) or otherwise adversely affect the
Holder's rights in or to such Collateral or adversely alter the rights in or to
such Collateral;
(c) reduce any Contract Adjustment Payments or any Deferred Contract
Adjustment Payment, or change any place where, or the coin or currency in which,
any Contract Adjustment Payment is payable;
(d) impair the right to institute suit for the enforcement of any Purchase
Contract;
(e) reduce the number of shares of Common Stock to be purchased pursuant
to any Purchase Contract, increase the price to purchase shares of Common Stock
upon settlement of any Purchase Contract, change the Purchase Contract
Settlement Date or the right to Early Settlement or otherwise adversely affect
the Holder's rights under any Purchase Contract; or
58
(f) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or the Treasury Units, then only the Holders of
the affected class of Security as of the record date for the Holders entitled to
vote thereon will be entitled to vote on or consent to such amendment or
proposal, and such amendment or proposal shall not be effective except with the
consent of Holders of not less than a majority of such class; provided further,
however, that no such agreement, whether with or without the consent of Holders,
shall affect Section 3.16 hereof.
It shall not be necessary for any Act of the Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.3. EXECUTION OF SUPPLEMENTAL AGREEMENTS.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
SECTION 8.4. 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 8.5. REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Certificates authenticated, executed on behalf of the Holders and delivered
after the execution of any supplemental agreement pursuant to this Article may,
and shall if required by the Agent, bear a notation in form approved by the
Agent as to any matter provided for in such supplemental agreement. If the
Company shall so determine, new Certificates so modified as to conform, in the
opinion of the Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Agent in exchange for Outstanding Certificates.
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ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT
UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with or into
any other Person or sell, assign, transfer, lease or convey all or substantially
all of its properties and assets to any Person or group of affiliated Persons in
one transaction or a series of related transactions, unless (i) either the
Company shall be the continuing entity or the successor (if other than the
Company) shall be a Person, other than an individual, organized and existing
under the laws of the United States of America or a State thereof or the
District of Columbia and such entity shall expressly assume all the obligations
of the Company under the Purchase Contracts, this Agreement and the Pledge
Agreement by one or more supplemental agreements in form reasonably satisfactory
to the Agent and the Collateral Agent, executed and delivered to the Agent and
the Collateral Agent by such Person, and (ii) the Company or such successor
entity, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, assignment, transfer, lease or conveyance, be in
default in its payment obligations or in any material default in the performance
of any of its other obligations hereunder, or under any of the Securities or the
Pledge Agreement.
SECTION 9.2. RIGHTS AND DUTIES OF SUCCESSOR ENTITY.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor entity in
accordance with Section 9.1, such successor entity 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 entity thereupon may cause to be signed, and may
issue either in its own name or in the name of FPL Group, Inc. any or all of the
Certificates evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent; and, upon the
order of such successor corporation, instead of the Company, and subject to all
the terms, conditions and limitations in this Agreement prescribed, the Agent
shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Certificate evidencing Securities which such successor entity thereafter shall
cause to be signed and delivered to the Agent for that purpose. All the
Certificates so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Certificates theretofore or thereafter
issued in accordance with the terms of this Agreement as though all of such
Certificates had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
SECTION 9.3. OPINION OF COUNSEL GIVEN TO AGENT.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
60
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 consolidation, merger, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE X
COVENANTS
SECTION 10.1. PERFORMANCE UNDER PURCHASE CONTRACTS.
The Company covenants and agrees for the benefit of the Holders from time
to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the Borough of Manhattan, The City of New York
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 establishment of a Corporate Unit and where notices and demands
to or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Agent as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Agent of any such designation or rescission and of any
change in the location of any such other office or agency. The Company hereby
designates as the place of payment for the Securities the Corporate Trust Office
and appoints the Agent at its Corporate Trust Office as paying agent in such
city.
SECTION 10.3. COMPANY TO RESERVE COMMON STOCK.
The Company shall at all times prior to the Purchase Contract Settlement
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock the full number of shares of Common Stock
issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
61
SECTION 10.4. COVENANTS AS TO COMMON STOCK.
The Company covenants that all shares of Common Stock which may be issued
against tender of payment in respect of any Purchase Contract constituting a
part of the Outstanding Securities will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable.
ARTICLE XI
TRUST INDENTURE ACT
SECTION 11.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Agreement is subject to the provisions of the TIA that are
required or deemed to be part of this Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Agreement limits,
qualifies or conflicts with the duties imposed by Section 310 to 317, inclusive,
of the TIA, such imposed duties shall control.
SECTION 11.2. LISTS OF HOLDERS OF SECURITIES.
(a) The Company shall furnish or cause to be furnished to the Agent
(a) semiannually, not later than _________ and _________ in each year,
commencing _________, 200__, a list, in such form as the Agent may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of a
date not more than 15 days prior to the delivery thereof, and (b) at such other
times as the Agent may request in writing, within 30 days after the receipt by
the Company of any such request, a List of Holders as of a date not more than 15
days prior to the time such list is furnished; provided that, the Company shall
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Agent by the
Company. The Agent may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Agent shall comply with its obligations under Section 311(a) of
the TIA, subject to the provisions of Section 311(b) and Section 312(b) of the
TIA.
SECTION 11.3. REPORTS BY THE AGENT.
Not later than __________ of each year, commencing __________, 200__, the
Agent shall provide to the Holders such reports, if any, as are required by
Section 313(a) of the TIA in the form and in the manner provided by
Section 313(a) of the TIA. Such reports shall be as of the preceding
___________. The Agent shall also comply with the requirements of
Sections 313(b), (c) and (d) of the TIA.
SECTION 11.4. PERIODIC REPORTS TO AGENT.
The Company shall provide to the Agent such documents, reports and
information as required by Section 314(a) (if any) and the compliance
certificate required by Section 314(a) of the TIA in the form, in the manner and
at the times required by Section 314(a) of the TIA.
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SECTION 11.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Company shall provide to the Agent such evidence of compliance with any
conditions precedent provided for in this Agreement as and to the extent
required by Section 314(c) of the TIA. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) of the TIA may be given in the
form of a Company's Certificate. Any opinion required to be given pursuant to
Section 314(c)(2) of the TIA may be given in the form of an Opinion of Counsel.
SECTION 11.6. DEFAULTS; WAIVER.
The Holders of a majority of the Outstanding Purchase Contracts voting
together as one class may, by vote or consent, on behalf of all of the Holders,
waive any past Default and its consequences, except a Default
(a) in the payment on any Security, or
(b) in respect of a provision hereof which under Section 8.2 cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.
Upon such waiver, any such Default shall cease to exist, and any Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Agreement, but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
SECTION 11.7. AGENT'S KNOWLEDGE OF DEFAULTS.
The Agent shall not be deemed to have knowledge of any Default unless a
Responsible Officer shall have obtained written notice of such Default.
SECTION 11.8. CONFLICTING INTERESTS.
The Indenture, the Guarantee Agreement, the Purchase Contract Agreement,
dated as of February 1, 2002 between the Company and The Bank of New York, as
purchase contract agent, attorney-in-fact and trustee and the Purchase Contract
Agreement, dated as of June 1, 2002 between the Company and The Bank of New
York, as purchase contract agent, attorney-in-fact and trustee shall be deemed
to be specifically described in this Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the TIA.
SECTION 11.9. DIRECTION OF AGENT.
Sections 315(d)(3) and 316(a)(1)(A) of the TIA are hereby expressly
excluded from this Agreement, as permitted by the TIA.
63
IN WITNESS WHEREOF, the parties hereto have caused this Purchase Contract
Agreement to be duly executed as of the day and year first above written.
FPL GROUP, INC.
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Purchase
Contract Agent and Trustee
By:
------------------------------------
Name:
Title:
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EXHIBIT A
FORM OF CORPORATE UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE
CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
No. _____
CUSIP No. __________
Number of Corporate Units _______
FPL GROUP, INC.
Form of Face of Corporate Unit Certificate
___% Corporate Units
([$50] Stated Amount)
This Corporate Unit Certificate certifies that ___________ is the
registered Holder of the number of Corporate Units set forth above. Each
Corporate Unit represents (a) a stock purchase contract (as modified and
supplemented and in effect from time to time, a "Purchase Contract") of FPL
Group, Inc., a Florida corporation (the "Company"), and (b) either (A)
beneficial ownership of a Series __ Debenture due ___________, 200__ of FPL
Group Capital Inc, a Florida corporation ("FPL Group Capital"), ("Debenture")
having a principal amount of [$50], or (B) upon the occurrence of a successful
[Initial Remarketing] or a Tax Event Redemption prior to the Purchase Contract
Settlement Date, the Applicable Ownership Interest in the Treasury Portfolio,
subject to the Pledge of such Debenture or such Applicable Ownership Interest in
A-1
the Treasury Portfolio by such Holder pursuant to the Pledge Agreement. All
capitalized terms used herein without definition herein shall have the meaning
set forth in the Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Debenture and/or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
constituting part of each Corporate 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 a portion of such Corporate
Units.
The Pledge Agreement provides that all payments of the principal amount of
Debentures or the Stated Amount of the appropriate Applicable Ownership Interest
(as specified in clause (1) of the definition of such term) in the Treasury
Portfolio, as the case may be, or payments of interest on any Pledged Debentures
or the appropriate Pledged Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, constituting part of the Corporate Units received
by the Collateral Agent shall be paid by the Collateral Agent by wire transfer
in same day funds (i) in the case of (A) payments of interest with respect to
Pledged Debentures or cash distributions on the appropriate Pledged Applicable
Ownership Interest (as specified in clause (2) of the definition of such term)
in the Treasury Portfolio, as the case may be, and (B) any payments of the
principal amount of Debentures or the Stated Amount of the appropriate
Applicable Ownership Interest (as specified in clause (1) of the definition of
such term) in the Treasury Portfolio, as the case may be, with respect to any
Debentures or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, that have been released from the Pledge pursuant
to the Pledge Agreement, to the Agent to the account designated by the Agent, no
later than 2:00 p.m., New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the event such payment is
received by the Collateral Agent on a day that is not a Business Day or after
12:30 p.m., New York City time, on a Business Day, then such payment shall be
made no later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the principal amount of
Debentures or the Stated Amount of the appropriate Applicable Ownership Interest
(as specified in clause (1) of the definition of such term) in the Treasury
Portfolio, as the case may be, of any Debentures or the appropriate Applicable
Ownership Interest (as specified in clause (1) of the definition of such term)
in the Treasury Portfolio, as the case may be, to the Company on the Purchase
Contract Settlement Date (as defined herein) in accordance with the terms of the
Pledge Agreement, in full satisfaction of the respective obligations of the
Holders of the Corporate Units of which such Pledged Debentures or the Treasury
Portfolio, as the case may be, are a part under the Purchase Contracts forming a
part of such Corporate Units. Payment of interest on any Pledged Debenture or
cash distribution on the appropriate Pledged Applicable Ownership Interest (as
specified in clause (2) of the definition of such term) in the Treasury
Portfolio, as the case may be, forming part of a Corporate Unit evidenced hereby
which are payable quarterly in arrears on ___________, _________, _________ and
_________ each year, commencing _________, 200__ and on the [Initial Reset Date]
if the remarketing of the Pledged Debentures on the third Business Day
immediately preceding the [Initial Reset Date] is successful and the [Initial
Reset Date] is not ____________, 200__ or ____________, 200__ (each, a "Payment
Date"), shall, subject to receipt thereof by the Agent from the Collateral
Agent, be paid to the Person in whose name this Corporate Unit Certificate (or a
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Predecessor Corporate Unit 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 Unit Certificate to purchase, and the Company to sell, not later than
___________, 200__ (the "Purchase Contract Settlement Date"), at a price of
[$50] in cash (the "Purchase Price"), a number of newly-issued shares of Common
Stock, $0.01 par value ("Common Stock"), of the Company equal to the applicable
Settlement Rate (as defined below), 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 "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $____ (the "Threshold Appreciation
Price"), ____ shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $____, the number of shares of Common Stock per Purchase Contract
equal to [$50] divided by the Applicable Market Value, and (c) if the Applicable
Market Value is less than or equal to $____, ____ shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The Company shall pay, on each Payment Date other than the [Initial Reset
Date], if the [Initial Reset Date] is not also a regular quarterly Payment Date,
in respect of each Purchase Contract forming part of a Corporate Unit evidenced
hereby, an amount (the "Contract Adjustment Payments") equal to ___% per annum
of the Stated Amount; computed on the basis of a 360-day year of twelve 30-day
months, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
Corporate Unit Certificate (or a Predecessor Corporate Unit Certificate or a
Predecessor Treasury Unit Certificate) is registered on the Register at the
close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the Corporate Trust Office
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Corporate Unit
Register or by wire transfer to an account appropriately designated in writing
by the Person entitled to payment.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Corporate Unit 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.
FPL GROUP, INC.
By:
------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK,
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
Dated:
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AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Corporate Unit Certificates referred to in the within
mentioned Purchase Contract Agreement.
Dated: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
------------------------------------
Authorized Signatory
A-5
(FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of ___________, 200__ (as may be supplemented from time to time, the
"Purchase Contract Agreement"), between the Company and The Bank of New York, as
purchase contract agent and trustee (including any successor thereunder, herein
called the "Agent"), to which the Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company, and the Holders and of the terms upon which the
Corporate Unit Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement, shall obligate the Holder of the related Corporate Units to purchase
at the applicable Purchase Price, and the Company to sell, a number of newly
issued shares of Common Stock equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing 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" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
national or regional securities exchange on which the Common Stock is so listed,
or if the Common Stock is not so listed on a United States national or regional
securities exchange, the last sale price of the Common Stock as reported by the
NASDAQ Stock Market, or if the Common Stock is not so reported, the last quoted
bid price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter-market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter-market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of the Corporate Units evidenced hereby shall pay, on the Purchase Contract
Settlement Date, the applicable Purchase Price for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby by effecting a
Cash Settlement. A Holder of Corporate Units who does not make such payment in
accordance with the Purchase Contract Agreement or who does not notify the Agent
of such Holder's intention, at or prior to 5:00 p.m., New York City time, on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
to make an effective Cash Settlement or an Early Settlement, shall have
defaulted in its obligations under the related Purchase Contract. A Holder of
Corporate Units who fails to notify the Agent of such Holder's intention to
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effect a Cash Settlement in accordance with the Purchase Contract Agreement
shall be deemed to have consented to the disposition of the applicable Pledged
Debentures pursuant to the remarketing described in the Purchase Contract
Agreement. If a Holder of Corporate Units does notify the Agent of its intention
to pay the applicable Purchase Price but fails to do so, the Collateral Agent
shall exercise its rights as a secured creditor for the benefit of the Company
under the Purchase Contract Agreement and the Pledge Agreement and shall apply
the Proceeds of the sale of the related applicable Pledged Debentures held by
the Collateral Agent to satisfy the Holder's obligations under such Purchase
Contract to purchase Common Stock at the Purchase Price.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
Under and subject to the terms of the Pledge Agreement and the Purchase
Contract Agreement, the Agent will be entitled to exercise the voting and any
other consensual rights pertaining to the Pledged Debentures but only to the
extent instructed by the Holders as described below in this paragraph. Upon
receipt of notice of any meeting at which holders of Debentures are entitled to
vote or upon the solicitation of consents, waivers or proxies of holders of
Debentures, the Agent shall, as soon as practicable thereafter, mail to the
Holders of Corporate Units a notice (a) containing such information as is
contained in the notice or solicitation (b) stating that each Corporate Unit
Holder on the record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the holders
of Debentures entitled to vote) shall be entitled to instruct the Agent as to
the exercise of the voting rights pertaining to the Debentures constituting a
part of such Holder's Corporate Units and (c) stating the manner in which such
instructions may be given. Upon the written request of the Corporate Unit
Holders on such record date, the Agent shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Debentures as to which any particular voting
instructions are received. In the absence of specific instructions from the
Holder of Corporate Units, the Agent shall abstain from voting the Debenture
evidenced by such Corporate Units.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged
Debentures. Pursuant to the terms of the Pledge Agreement, the Collateral Agent
will apply an amount equal to the Redemption Amount of such Redemption Price to
purchase, on behalf of the Holders of Corporate Units the Treasury Portfolio and
promptly remit the remaining portion of such Redemption Price, if any, to the
Agent for payment to the Holders of such Corporate Units. The Treasury Portfolio
will be substituted for the Pledged Debentures, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of a Corporate Unit to purchase the Common Stock
of the Company on the Purchase Contract Settlement Date under the Purchase
Contract constituting a part of such Corporate Unit. Following the occurrence of
a Tax Event Redemption prior to the Purchase Contract Settlement Date or
following a successful [Initial Remarketing], the Holders of Corporate Units and
the Collateral Agent shall have such security interests, rights and obligations
A-7
with respect to the Treasury Portfolio as the Holder of Corporate Units and the
Collateral Agent had in respect of the Debentures, as the case may be, subject
to the Pledge thereof as provided in Articles II, III, IV, V, and VI, of the
Pledge Agreement and any reference herein to the Pledged Debentures shall be
deemed to be reference to such Treasury Portfolio. The Company may cause to be
made in any Corporate Unit Certificate therewith to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Treasury Portfolio for Debentures as Collateral.
The Corporate Unit 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 Unit Certificate will be registered and
Corporate Unit Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Corporate Unit 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 made
for any such registration of transfer or exchange, but the Company and the Agent
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. A Holder who elects to substitute
Treasury Securities for Debentures or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, 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 Debentures or the
appropriate Applicable Ownership Interest in the Treasury Portfolio, as the case
may be, and the Purchase Contract constituting such Corporate Unit may be
acquired, and may be transferred and exchanged only as an entire Corporate Unit.
The holder of any Corporate Units may substitute for the Pledged Debentures or
the appropriate Pledged Applicable Ownership Interest (as specified in
clause (1) of the definition of such term) in the Treasury Portfolio securing
its obligation under the related Purchase Contract, Treasury Securities in an
aggregate principal amount equal to the aggregate principal amount of the
Pledged Debentures or Stated Amount of the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, the Security for which such Pledged Treasury Securities
secures the Holder's obligation under the Purchase Contract shall be referred to
as a "Treasury Unit." A Holder may make such Collateral Substitution only in
integral multiples of [20] Corporate Units for [20] Treasury Units; provided,
however, that if a Tax Event Redemption or a successful [Initial Remarketing]
has occurred and the Treasury Portfolio has become a component of the Corporate
Units, a Holder may make such Collateral Substitutions only in integral
multiples of [1,600] Corporate Units for [1,600] Treasury Units. All such
adjustments to the equivalent aggregate principal amount of this Corporate Unit
Certificate shall be duly recorded by placing an appropriate notation on the
Schedule attached hereto.
A Holder of Treasury Units may create or recreate Corporate Units by
depositing with the Collateral Agent Debentures or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, with a Stated
Amount, in the case of such Debentures, or with the appropriate Applicable
Ownership Interest (as specified in clause (1) of the definition of such term)
in the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest in the Treasury Portfolio, equal to the aggregate principal amount of
A-8
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.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, except the [Initial Reset Date], if the [Initial Reset Date] is
not also a quarterly Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Corporate Unit
Certificate evidencing such Purchase Contract is registered on the Register at
the close of business on the Record Date next preceding such Payment Date. The
Contract Adjustment Payments will be payable at the Corporate Trust Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Corporate Unit Register or
by wire transfer to an account appropriately designated in writing by such
person.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of ___% per
annum (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Corporate Unit Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to the number of shares equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Corporate Unit Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase, redeem or acquire its capital stock,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of all or a portion of one class or series of the
Company's capital stock for another class or series of the Company's capital
A-9
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, or in connection
with the settlement of stock purchase contracts, (iv) dividends or distributions
in capital stock of the Company (or rights to acquire capital stock) or
repurchases, redemptions or acquisitions of capital stock in connection with the
issuance or exchange of the Company's capital stock (or securities convertible
into or exchangeable for shares of capital stock and distributions in connection
with the settlement of stock purchase contracts) or (v) redemptions, exchanges
or repurchases of any rights outstanding under a shareholder rights plan or the
declaration or payment thereunder of a dividend or distribution of or with
respect to rights in the future.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, and the rights and
obligations of the Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders at their addresses as they appear in the Corporate Unit
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Debentures or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, forming a part of the
Corporate Units evidenced hereby from the Pledge in accordance with the
provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, a Holder of Corporate Units may settle the related Purchase Contracts
in their entirety at any time on or prior to the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, but only in integral multiples
of [20] Corporate Units; provided, however, that if the Treasury Portfolio has
become a component of the Corporate Units, Holders of Corporate Units may settle
early only in integral multiples of [1,600] Corporate Units at any time on or
prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date. In order to exercise the right to effect any such early
settlement ("Early Settlement") with respect to any Purchase Contracts evidenced
by this Corporate Unit Certificate, the Holder of this Corporate Unit
Certificate shall deliver this Corporate Unit Certificate to the Agent at the
Corporate Trust Office duly endorsed for transfer to the Company or in blank
with the form of Election to Settle Early set forth below duly completed and
executed and accompanied by payment payable to the Company in immediately
available funds in an amount (the "Early Settlement Amount") equal to the sum of
(i) [$50] times the number of Purchase Contracts being settled, plus (ii) if
such delivery is made with respect to any Purchase Contracts during the period
from the close of business on any Record Date next preceding any Payment Date to
the opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments payable, if any, on such Payment Date with respect to such
Purchase Contracts. Upon Early Settlement of Purchase Contracts by a Holder of
the related Securities, the Pledged Debentures or the appropriate Pledged
Applicable Ownership Interest in the Treasury Portfolio underlying such
Securities shall be released from the Pledge as provided in the Pledge Agreement
and the Holder shall be entitled to receive a number of shares of Common Stock
A-10
on account of each Purchase Contract forming part of a Corporate Unit as to
which Early Settlement is effected equal to the Early Settlement Rate which
shall be equal to ____ newly issued shares of Common Stock per Purchase Contract
(the "Early Settlement Rate"); provided however, that upon the Early Settlement
of the Purchase Contracts, (i) the Holder thereof will forfeit the right to
receive any Deferred Contract Adjustment Payments, if any, on such Purchase
Contracts, (ii) the Holder's right to receive additional Contract Adjustment
Payments in respect of such Purchase Contracts will terminate, and (iii) no
adjustment will be made to or for the Holder on account of Deferred Contract
Adjustment Payments, or any amount accrued in respect of Contract Adjustment
Payments. The Early Settlement Rate shall be adjusted in the same manner and at
the same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Corporate Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Corporate
Unit 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 Unit Certificate, by its acceptance hereof,
irrevocably authorizes the 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 of the
Purchase Contracts by the Company, its trustee in bankruptcy, receiver,
liquidator or a person or entity performing similar functions, in the event that
the Company becomes the subject of a case under the Bankruptcy Code or subject
to other similar Federal or State law providing for reorganization or
liquidation, agrees to be bound by the terms and provisions thereof, covenants
and agrees to perform its obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to and agrees to be bound by the Pledge of the Debentures or the
appropriate Pledged Applicable Ownership Interest in the Treasury Portfolio, as
the case may be, underlying this Corporate Unit Certificate pursuant to the
Pledge Agreement. The Holder, by its acceptance hereof, 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 of the principal and interest of the Pledged Debentures, or the
Stated Amount of the appropriate Applicable Ownership Interest (as specified in
clause (1) of the definition of such term) in the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
The Holder of this Corporate Unit Certificate, by its acceptance hereof,
covenants and agrees to treat itself as the owner, for Federal, State and local
income and franchise tax purposes, of the Debentures or the appropriate
Applicable Ownership Interest in the Treasury Portfolio forming part of the
Corporate Units evidenced hereby. The Holder of this Corporate Unit Certificate,
by its acceptance hereof, further covenants and agrees to treat the Debentures
A-11
forming part of the Corporate Units evidenced hereby as indebtedness of FPL
Group Capital for Federal, State and local income and franchise tax purposes.
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. In addition, certain amendments to the Purchase Contract
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
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 THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER
JURISDICTION SHALL BE MANDATORILY APPLICABLE.
The Company, FPL Group Capital and the Agent and any agent of the Company,
FPL Group Capital or the Agent may treat the Person in whose name this Corporate
Unit Certificate is registered on the Corporate Unit Register as the owner of
the Corporate Units evidenced hereby for the purpose of receiving payments of
interest payable quarterly and on the [Initial Reset Date], if the remarketing
of the Debentures on the third Business Day immediately preceding the [Initial
Reset Date] is successful and the [Initial Reset Date] is not ____________,
200__ or ____________, 200__, on the Debentures, receiving payments of Contract
Adjustment Payments and any Deferred Contract Adjustment 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, FPL Group Capital, the Agent nor any such
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, in
accordance with the Purchase Contract Agreement, entitle the Holder to any of
the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
A-12
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 (Minor)
------------------------ ------------------
under Uniform Gifts to Minors Act (State)
-----------------
TEN ENT-- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
-------------------------
ASSIGNMENT
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 Unit Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
--------------------------------------------------------------------------------
attorney to transfer said Corporate Unit Certificates on the books of FPL Group,
Inc. with full power of substitution in the premises.
Dated:
------------------------------- ----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Corporate Unit Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
----------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-13
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 Unit Certificate (after taking into account all
Securities then held by such Holder) 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:
------------------------
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such
Person's name and address and (ii)
provide a guarantee of your signature:
Please print name and address of Registered Holder:
------------------------------------- --------------------------------------
Name Name
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
Address Address
------------------------------------- --------------------------------------
Social Security or other Taxpayer Identification Number, if any
A-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this Corporate Unit Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Corporate Units evidenced by this Corporate
Unit Certificate specified below. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement
(after taking into account all Securities of such Holder submitted by such
Holder for Early Settlement) be registered in the name of, and delivered,
together with a check in payment for any fractional share and any Corporate Unit
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 Debentures or the appropriate Pledged Applicable
Ownership Interest in 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:
-----------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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
Unit Certificates are to be registered
in the name of and delivered to and
Pledged Debentures, or the Treasury
Portfolio, as the case may be, are to be
transferred to a Person other than the REGISTERED HOLDER
Holder, please print such Person's name
and address:
Please print name and address of Registered Holder:
------------------------------------- --------------------------------------
Name Name
------------------------------------- --------------------------------------
Address Address
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
--------------------------------------------------------------------------------
Social Security or other Taxpayer Identification Number, if any
Transfer Instructions for Pledged Debentures, or the Treasury Portfolio, as the
case may be, Transferable Upon Early Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
A-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:
-------------------- ------------------ ------------------ ----------------- ------------------
PRINCIPAL
AMOUNT OF THIS SIGNATURE OF
AMOUNT OF AMOUNT OF GLOBAL AUTHORIZED
DECREASE IN INCREASE IN CERTIFICATE OFFICER OF
PRINCIPAL AMOUNT PRINCIPAL AMOUNT FOLLOWING SUCH TRUSTEE OR
OF THE GLOBAL OF THE GLOBAL DECREASE OR SECURITIES
DATE CERTIFICATE CERTIFICATE INCREASE CUSTODIAN
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
A-16
EXHIBIT B
FORM OF TREASURY UNIT CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE
CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF THE
CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON
OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
No. _____
CUSIP No. __________
Number of Treasury Units _______
FPL GROUP, INC.
Form of Face of Treasury Unit Certificate
([$50] Stated Amount)
This Treasury Unit Certificate certifies that ___________ is the registered
Holder of the number of Treasury Units set forth above. Each Treasury Unit
represents (a) a stock purchase contract (as modified and supplemented and in
effect from time to time, a "Purchase Contract") of FPL Group, Inc., a Florida
corporation (the "Company"), and (b) a [1/20], or [5%] undivided beneficial
ownership interest in a Treasury Security, subject to the Pledge of such
Treasury Security by such Holder pursuant to the Pledge Agreement. All
capitalized terms used herein without definition herein shall have the meaning
set forth in the Purchase Contract Agreement referred to below.
Pursuant to the Pledge Agreement, the Treasury Securities constituting part
of each Treasury Unit evidenced hereby have been pledged to the Collateral
B-1
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Treasury Unit.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer in same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Treasury Units to the accounts designated by them in writing for such
purpose no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day) and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Treasury Units
of which such Pledged Treasury Securities are a part under the Purchaser
Contracts forming a part of such Treasury Units.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Unit Certificate to purchase, and the Company to sell, not later than
___________, 200__ (the "Purchase Contract Settlement Date"), at a price of
[$50] in cash (the "Purchase Price"), a number of newly issued shares of Common
Stock, $0.01 par value ("Common Stock"), of the Company, equal to the applicable
Settlement Rate (as defined below), 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 Treasury 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 "Settlement Rate" is equal to (a) if the Applicable Market Value (as
defined below) is equal to or greater than $____ (the "Threshold Appreciation
Price"), ____ shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $____, the number of shares of Common Stock per Purchase Contract
equal to [$50] divided by the Applicable Market Value, and (c) if the Applicable
Market Value is less than or equal to $____, ____ shares of Common Stock per
Purchase Contract, in each case subject to adjustment as provided in the
Purchase Contract Agreement. No fractional shares of Common Stock will be issued
upon settlement of Purchase Contracts, as provided in the Purchase Contract
Agreement.
The Company shall pay, on each Payment Date other than the [Initial Reset
Date], if the [Initial Reset Date] is not also a regular quarterly Payment Date,
in respect of each Purchase Contract forming part of a Treasury Unit evidenced
hereby, an amount (the "Contract Adjustment Payments") equal to ___% per annum
of the Stated Amount; computed on the basis of a 360-day year of twelve 30-day
months, subject to deferral at the option of the Company as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. Such
Contract Adjustment Payments shall be payable to the Person in whose name this
Treasury Unit Certificate (or a Predecessor Treasury Unit Certificate or a
Predecessor Corporate Unit Certificate) is registered on the Register at the
close of business on the Record Date for such Payment Date.
B-2
Contract Adjustment Payments will be payable at the Corporate Trust Office
or, at the option of the Company, by check mailed to the address of the Person
entitled thereto at such Person's address as it appears on the Treasury Unit
Register or by wire transfer to an account appropriately designated in writing
by the Person entitled to payment.
Reference is hereby made to the further provisions set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as
if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Treasury Unit Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
FPL GROUP, INC.
By:
------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: The Bank of New York,
not individually but solely as
Attorney-in-Fact of such Holder
By:
------------------------------------
Name:
Title:
Dated:
B-4
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Treasury Unit Certificates referred to in the within
mentioned Purchase Contract Agreement.
Dated: THE BANK OF NEW YORK,
as Purchase Contract Agent
By:
------------------------------------
Authorized Signatory
B-5
(FORM OF REVERSE OF TREASURY UNIT CERTIFICATE)
Unless the context otherwise requires, each provision of this Security
shall be part of the Purchase Contracts evidenced hereby. This Security and each
Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement,
dated as of ___________, 200__ (as may be supplemented from time to time, the
"Purchase Contract Agreement"), between the Company and The Bank of New York, as
purchase contract agent and trustee (including any successor thereunder, herein
called the "Agent"), to which the Purchase Contract Agreement and supplemental
agreements thereto reference is hereby made for a description of the respective
rights, limitations of rights, obligations, duties and immunities thereunder of
the Agent, the Company, and the Holders and of the terms upon which the Treasury
Unit Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement, shall obligate the Holder of the related Treasury Units to purchase
at the applicable Purchase Price, and the Company to sell, a number of newly
issued shares of Common Stock equal to the Early Settlement Rate.
In accordance with the terms of the Purchase Contract Agreement, the Holder
of the Treasury Units evidenced hereby shall pay, on the Purchase Contract
Settlement Date, the applicable Purchase Price for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby by effecting a
Cash Settlement. A Holder of Treasury Units who does not make such payment in
accordance with the Purchase Contract Agreement or who does not notify the Agent
of such Holder's intention, at or prior to 5:00 p.m., New York City time, on the
second Business Day immediately preceding the Purchase Contract Settlement Date,
to make an effective Cash Settlement or an Early Settlement, shall have
defaulted in its obligations under the related Purchase Contract and the
Collateral Agent shall exercise its rights as a secured creditor for the benefit
of the Company under the Purchase Contract Agreement and the Pledge Agreement
and shall apply the Proceeds of the sale of the related applicable Pledged
Treasury Securities held by the Collateral Agent to satisfy the Holder's
obligations under such Purchase Contract to purchase Common Stock at the
Purchase Price.
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" of the Common Stock on any date of determination means the
closing sale price (or, if no closing price is reported, the last reported sale
price) of the Common Stock on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
national or regional securities exchange on which the Common Stock is so listed,
or if the Common Stock is not so listed on a United States national or regional
securities exchange, the last sale price of the Common Stock as reported by the
NASDAQ Stock Market, or if the Common Stock is not so reported, the last quoted
bid price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
B-6
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Treasury Unit 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 Unit Certificate will be registered and
Treasury Unit Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Treasury Unit 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 made for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Debentures or
the appropriate Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, for Treasury Securities, thereby recreating Corporate 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 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 acquired, and may be
transferred and exchanged, only as an entire Treasury Unit. The holder of any
Treasury Units may substitute for the Treasury Securities securing its
obligation under the related Purchase Contract, Pledged Debentures or the
appropriate Pledged Applicable Ownership Interest (as specified in clause (1) of
the definition of such term) in the Treasury Portfolio in an aggregate principal
amount equal to the aggregate principal amount of the Pledged Treasury
Securities in accordance with the terms of the Purchase Contract Agreement and
the Pledge Agreement. From and after such Collateral Substitution, the Security
for which such Pledged Debentures or the appropriate Pledged Applicable
Ownership Interest (as specified in clause (1) of the definition of such term)
in the Treasury Portfolio secures the Holder's obligation under the Purchase
Contract shall be referred to as a "Corporate Unit." A Holder may make such
Collateral Substitution only in integral multiples of [20] Treasury Units for
[20] Corporate Units; provided, however, that if a Tax Event Redemption or a
successful [Initial Remarketing] has occurred and the Treasury Portfolio has
become a component of the Corporate Units, a Holder may make such Collateral
Substitutions only in integral multiples of [1,600] Treasury Units for [1,600]
Corporate Units. All such adjustments to the equivalent aggregate principal
amount of this Treasury Unit Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of a Corporate Unit may, at any time, on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date, create
or recreate a Treasury Unit by depositing with the Collateral Agent Treasury
Securities in an aggregate principal amount of the Pledged Treasury Securities
equal to the aggregate principal amount in the case of Debentures, or an
B-7
aggregate Stated Amount of the appropriate Applicable Ownership Interest (as
specified in clause (1) of the definition of such term) in 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 a Treasury
Unit may be effected only in integral multiples of [20] Corporate Units for [20]
Treasury Units; provided, however, that if a Tax Event Redemption or a
successful [Initial Remarketing] has occurred and the Treasury Portfolio has
become a component of the Corporate Units, a Holder may make such Collateral
Substitutions only in integral multiples of [1,600] Corporate Units for [1,600]
Treasury Units at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date. From and after such
substitution, the Holder's Security shall be referred to as a "Treasury Unit."
All such adjustments to the equivalent aggregate principal amount of this
Treasury Unit Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, except the [Initial Reset Date], if the [Initial Reset Date] is
not also a quarterly Payment Date, the Contract Adjustment Payments payable in
respect of each Purchase Contract to the Person in whose name the Treasury Unit
Certificate evidencing such Purchase Contract is registered on the Register at
the close of business on the Record Date next preceding such Payment Date. The
Contract Adjustment Payments will be payable at the Corporate Trust Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Treasury Unit Register or
by wire transfer to an account appropriately designated in writing by such
person.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election to
defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall
bear additional Contract Adjustment Payments thereon at the rate of ___% per
annum (computed on the basis of a 360-day year of twelve 30-day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, are referred to herein
as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment
Payments, if any, shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase Contract Agreement. No
Contract Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments on the Purchase Contracts until the Purchase Contract
Settlement Date, the Holder of this Treasury Unit Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to the number of shares equal to the
Settlement Rate) equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of this Treasury Unit Certificate
divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
B-8
Payments have been paid, the Company shall not declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make guarantee
payments with respect to the foregoing (other than (i) purchases, redemptions or
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan or other similar arrangement with or for the
benefit of employees, officers, directors or agents or a stock purchase or
dividend reinvestment plan, or the satisfaction by the Company of its
obligations pursuant to any contract or security outstanding on the date of such
event requiring the Company to purchase, redeem or acquire its capital stock,
(ii) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of all or a portion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, or in connection
with the settlement of stock purchase contracts, (iv) dividends or distributions
in capital stock of the Company (or rights to acquire capital stock), or
repurchases, redemptions or acquisitions of capital stock in connection with the
issuance or exchange of capital stock (or securities convertible into or
exchangeable for shares of the Company's capital stock and distributions in
connection with the settlement of stock purchase contracts) or (v) redemptions,
exchanges or repurchases of any rights outstanding under a shareholder rights
plan or the declaration or payment thereunder of a dividend or distribution of
or with respect to rights in the future.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, and the rights and
obligations of the Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Treasury Unit
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement, a Holder of Treasury Units may settle the related Purchase Contracts
in their entirety on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date, but only in integral multiples of [20]
Treasury Units. In order to exercise the right to effect any such early
settlement ("Early Settlement") with respect to any Purchase Contracts evidenced
by this Treasury Unit Certificate, the Holder of this Treasury Unit Certificate
shall deliver this Treasury Unit Certificate to the Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and executed and
accompanied by payment payable to the Company in immediately available funds in
an amount (the "Early Settlement Amount") equal to the sum of (i) [$50] times
the number of Purchase Contracts being settled, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to the opening of
business on such Payment Date, an amount equal to the Contract Adjustment
B-9
Payments payable, if any, on such Payment Date with respect to such Purchase
Contracts. Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Treasury Securities underlying such Securities
shall be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of shares of Common Stock on
account of each Purchase Contract forming part of a Treasury Unit as to which
Early Settlement is effected equal to the Early Settlement Rate which shall be
equal to ____ newly issued shares of Common Stock per Purchase Contract (the
"Early Settlement Rate"); provided however, that upon the Early Settlement of
the Purchase Contracts, (i) the Holder thereof will forfeit the right to receive
any Deferred Contract Adjustment Payments, if any, on such Purchase Contracts,
(ii) the Holder's right to receive additional Contract Adjustment Payments in
respect of such Purchase Contracts will terminate, and (iii) no adjustment will
be made to or for the Holder on account of Deferred Contract Adjustment
Payments, or any amount accrued in respect of Contract Adjustment Payments. The
Early Settlement Rate shall be adjusted in the same manner and at the same time
as the Settlement Rate is adjusted as provided in the Purchase Contract
Agreement.
Upon registration of transfer of this Treasury Unit Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase Contract Agreement
and the Purchase Contracts evidenced hereby and the transferor shall be released
from the obligations under the Purchase Contracts evidenced by this Treasury
Unit 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 Unit Certificate, by its acceptance hereof,
irrevocably authorizes the 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 of the
Purchase Contracts by the Company, its trustee in bankruptcy, receiver,
liquidator or a person or entity performing similar functions, in the event that
the Company becomes the subject of a case under the Bankruptcy Code or subject
to other similar Federal or State law providing for reorganization or
liquidation, agrees to be bound by the terms and provisions thereof, covenants
and agrees to perform its obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to enter
into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying this Treasury Unit
Certificate pursuant to the Pledge Agreement. The Holder, by its acceptance
hereof, further covenants and agrees, that, to the extent and in the manner
provided in the Purchase Contract Agreement and the Pledge Agreement, but
subject to the terms thereof, payments in respect to the Stated Amount of the
Pledged Treasury Securities on the Purchase Contract Settlement Date shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts. In addition, certain amendments to the Purchase Contract
Agreement may be made without any consent of the Holders as provided in the
Purchase Contract Agreement.
B-10
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 THEREUNDER, EXCEPT TO THE EXTENT THAT THE LAWS OF ANY OTHER
JURISDICTION SHALL BE MANDATORILY APPLICABLE.
The Company, FPL Group Capital and the Agent and any agent of the Company,
FPL Group Capital or the Agent may treat the Person in whose name this Treasury
Unit Certificate is registered on the Treasury Unit Register as the owner of the
Treasury Units evidenced hereby for the purpose of receiving payments on the
Treasury Securities, receiving payments of Contract Adjustment Payments and any
Deferred Contract Adjustment 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, FPL Group Capital, the Agent nor any such agent shall be affected
by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, in
accordance with the Purchase Contract Agreement, entitle the Holder to any of
the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
B-11
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 (Minor)
------------------------ ------------------
under Uniform Gifts to Minors Act (State)
-----------------
TEN ENT-- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
-------------------------
ASSIGNMENT
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 Unit Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
--------------------------------------------------------------------------------
attorney to transfer said Corporate Unit Certificates on the books of FPL Group,
Inc. with full power of substitution in the premises.
Dated:
------------------------------- ----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Corporate Unit Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
----------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-12
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 Unit Certificate (after taking into account all Securities then
held by such Holder) 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:
---------------------
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such
Person's name and address and (ii)
provide a guarantee of your signature:
Please print name and address of Registered Holder:
------------------------------------- --------------------------------------
Name Name
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
Address Address
------------------------------------- --------------------------------------
Social Security or other Taxpayer Identification Number, if any
B-13
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury Unit Certificate hereby irrevocably
exercises the option to effect Early Settlement in accordance with the terms of
the Purchase Contract Agreement with respect to the Purchase Contracts
underlying the number of Treasury Units evidenced by this Treasury Unit
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 (after taking into account all Securities
then held by such Holder) be registered in the name of, and delivered, together
with a check in payment for any fractional share and any Treasury Unit
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:
---------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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
Unit Certificates are to be registered
in the name of and delivered to and
Pledged Treasury Securities are to be
transferred to a Person other than the
Holder, please print such Person's name REGISTERED HOLDER
and address:
Please print name and address of Registered Holder:
------------------------------------- --------------------------------------
Name Name
------------------------------------- --------------------------------------
Address Address
------------------------------------- --------------------------------------
------------------------------------- --------------------------------------
--------------------------------------------------------------------------------
Social Security or other Taxpayer Identification Number, if any
Transfer Instructions for Pledged Debentures, or the Treasury Portfolio, as the
case may be, Transferable Upon Early Settlement or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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B-14
[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:
-------------------- ------------------ ------------------ ----------------- ------------------
PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF THIS SIGNATURE OF
DECREASE IN INCREASE IN GLOBAL AUTHORIZED
PRINCIPAL AMOUNT PRINCIPAL AMOUNT CERTIFICATE OFFICER OF
OF THE GLOBAL OF THE GLOBAL FOLLOWING SUCH TRUSTEE OR
DATE CERTIFICATE CERTIFICATE DECREASE OR SECURITIES
INCREASE CUSTODIAN
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
-------------------- ------------------ ------------------ ----------------- ------------------
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B-15
EXHIBIT C
NOTICE TO SETTLE BY SEPARATE CASH
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Telecopy: (212) _______
Re: Securities of FPL Group, Inc. (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.4 of the Purchase Contract Agreement, dated as of ___________, 200__
among the Company, yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date, (in lawful money of the United States by [certified or cashiers check or]
wire transfer, in each case in immediately available funds), $_________ as the
Purchase Price for the shares of Common Stock issuable to such Holder by the
Company under the related Purchase Contracts on the Purchase Contract Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holder's election to make such cash
settlement with respect to the Purchase Contracts related to such Holder's
[Corporate Units] [Treasury Units].
Date: By:
----------------------------- ---------------------------------
Name:
Title:
Signature Guarantee:
----------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
Name Social Security or other Taxpayer
------------------------------------- Identification Number, if any
Address
----------------------------------
----------------------------------------- ------------------------------------
-----------------------------------------
C-1
