Exhibit 4.6
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PRIME GROUP REALTY TRUST
AND
,
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as Purchase Contract Agent
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PURCHASE CONTRACT AGREEMENT
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Dated as of ,
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TABLE OF CONTENTS
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PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Applicable Market Value . . . . . . . . . . . . . . . . . . . . 2
Board of Trustees . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution. . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Closing Price . . . . . . . . . . . . . . . . . . . . . . . . . 2
Collateral Agent. . . . . . . . . . . . . . . . . . . . . . . . 2
Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Contract Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office. . . . . . . . . . . . . . . . . . . . . 3
Current Market Price. . . . . . . . . . . . . . . . . . . . . . 3
Depositary. . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Early Settlement. . . . . . . . . . . . . . . . . . . . . . . . 3
Early Settlement Amount . . . . . . . . . . . . . . . . . . . . 3
Early Settlement Date . . . . . . . . . . . . . . . . . . . . . 3
Early Settlement Rate . . . . . . . . . . . . . . . . . . . . . 3
Exchange Act. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Excess Underlying Securities. . . . . . . . . . . . . . . . . . 3
Expiration Date . . . . . . . . . . . . . . . . . . . . . . . . 3
Expiration Time . . . . . . . . . . . . . . . . . . . . . . . . 3
Final Settlement Date . . . . . . . . . . . . . . . . . . . . . 3
Final Settlement Fund . . . . . . . . . . . . . . . . . . . . . 3
Global Security Certificate . . . . . . . . . . . . . . . . . . 3
Holder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Issuer Order. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Issuer Request. . . . . . . . . . . . . . . . . . . . . . . . . 4
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NYSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 4
Outstanding Securities. . . . . . . . . . . . . . . . . . . . . 4
Outstanding Security Certificates . . . . . . . . . . . . . . . 4
Payment Date. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Pledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Pledge Agreement. . . . . . . . . . . . . . . . . . . . . . . . 5
Predecessor Security Certificate. . . . . . . . . . . . . . . . 5
Purchase Contract . . . . . . . . . . . . . . . . . . . . . . . 5
Purchased Shares. . . . . . . . . . . . . . . . . . . . . . . . 5
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Reorganization Event. . . . . . . . . . . . . . . . . . . . . . 5
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . 5
Security. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security Certificate. . . . . . . . . . . . . . . . . . . . . . 6
Security Register . . . . . . . . . . . . . . . . . . . . . . . 6
Security Registrar. . . . . . . . . . . . . . . . . . . . . . . 6
Settlement Rate . . . . . . . . . . . . . . . . . . . . . . . . 6
Stated Amount . . . . . . . . . . . . . . . . . . . . . . . . . 6
Termination Date. . . . . . . . . . . . . . . . . . . . . . . . 6
Termination Event . . . . . . . . . . . . . . . . . . . . . . . 6
Threshold Appreciation Price. . . . . . . . . . . . . . . . . . 6
TIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trading Day . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Underlying Securities . . . . . . . . . . . . . . . . . . . . . 7
Underwriting Agreement. . . . . . . . . . . . . . . . . . . . . 7
Vice President. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 102. Compliance Certificates and Opinions. . . . . . . . . . . 7
Section 103. Form of Documents Delivered to Agent. . . . . . . . . . . 8
Section 104. Acts of Holders; Record Dates . . . . . . . . . . . . . . 8
Section 105. Notices, etc., to Agent and the Company . . . . . . . . .10
Section 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . .10
Section 107. Effect of Headings and Table of Contents. . . . . . . . .11
Section 108. Successors and Assigns. . . . . . . . . . . . . . . . . .11
Section 109. Separability Clause . . . . . . . . . . . . . . . . . . .11
Section 110. Benefits of Agreement . . . . . . . . . . . . . . . . . .11
Section 111. Governing Law . . . . . . . . . . . . . . . . . . . . . .11
Section 112. Legal Holidays. . . . . . . . . . . . . . . . . . . . . .11
Section 113. Counterparts. . . . . . . . . . . . . . . . . . . . . . .12
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Section 114. Inspection of Agreement . . . . . . . . . . . . . . . . .12
ARTICLE TWO
Security Certificate Forms
Section 201. Forms of Security Certificates Generally. . . . . . . . .12
Section 202. Form of Agent's Certificate of Authentication . . . . . .13
ARTICLE THREE
The Securities
Section 301. Title and Terms; Denominations. . . . . . . . . . . . . .13
Section 302. Rights and Obligations Evidenced by the Security
Certificates. . . . . . . . . . . . . . . . . . . . . . .13
Section 303. Execution, Authentication, Delivery and Dating. . . . . .14
Section 304. Temporary Security Certificates . . . . . . . . . . . . .14
Section 305. Registration; Registration of Transfer and Exchange . . .15
Section 306. Mutilated, Destroyed, Lost and Stolen Security
Certificates. . . . . . . . . . . . . . . . . . . . . . .17
Section 307. Persons Deemed Owners . . . . . . . . . . . . . . . . . .18
Section 308. Cancellation. . . . . . . . . . . . . . . . . . . . . . .18
Section 309. Securities Not Separable. . . . . . . . . . . . . . . . .19
ARTICLE FOUR
The Underlying Securities
Section 401. Payment of Interest; Interest Rights Preserved. . . . . .19
Section 402. Transfer of Underlying Securities Upon Occurrence
of Termination Event. . . . . . . . . . . . . . . . . . .20
ARTICLE FIVE
The Purchase Contracts
Section 501. Purchase of Common Shares . . . . . . . . . . . . . . . .21
Section 502. Contract Fees . . . . . . . . . . . . . . . . . . . . . .22
Section 503. Deferral of Payment Dates For Contract Fee. . . . . . . .23
Section 504. Payment of Purchase Price . . . . . . . . . . . . . . . .23
Section 505. Issuance of Common Shares . . . . . . . . . . . . . . . .24
Section 506. Adjustment of Settlement Rate . . . . . . . . . . . . . .24
Section 507. Notice of Adjustments and Certain Other Events. . . . . .29
Section 508. Termination Event; Notice . . . . . . . . . . . . . . . .30
Section 509. Early Settlement. . . . . . . . . . . . . . . . . . . . .30
Section 510. No Fractional Shares. . . . . . . . . . . . . . . . . . .32
Section 511. Charges and Taxes . . . . . . . . . . . . . . . . . . . .32
ARTICLE SIX
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Remedies
Section 601. Unconditional Right of Holders to Receive Contract Fees
and to Purchase Common Shares . . . . . . . . . . . . . .32
Section 602. Restoration of Rights and Remedies. . . . . . . . . . . .33
Section 603. Rights and Remedies Cumulative. . . . . . . . . . . . . .33
Section 604. Delay or Omission Not Waiver. . . . . . . . . . . . . . .33
Section 605. Undertaking for Costs . . . . . . . . . . . . . . . . . .33
Section 606. Waiver of Stay or Extension Laws. . . . . . . . . . . . .34
ARTICLE SEVEN
The Agent
Section 701. Certain Duties and Responsibilities . . . . . . . . . . .34
Section 702. Notice of Default . . . . . . . . . . . . . . . . . . . .35
Section 703. Certain Rights of Agent . . . . . . . . . . . . . . . . .35
Section 704. Not Responsible for Recitals or Issuance of Securities. .36
Section 705. May Hold Securities . . . . . . . . . . . . . . . . . . .36
Section 706. Money Held in Trust . . . . . . . . . . . . . . . . . . .36
Section 707. Compensation and Reimbursement. . . . . . . . . . . . . .37
Section 708. Corporate Agent Required; Eligibility . . . . . . . . . .37
Section 709. Resignation and Removal; Appointment of Successor . . . .37
Section 710. Acceptance of Appointment by Successor. . . . . . . . . .39
Section 711. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . .39
Section 712. Preservation of Information; Communications to Holders. .39
Section 713. No Obligations of Agent . . . . . . . . . . . . . . . . .40
Section 714. Tax Compliance. . . . . . . . . . . . . . . . . . . . . .40
ARTICLE EIGHT
Supplemental Agreements
Section 801. Supplemental Agreements Without Consent of Holders. . . .41
Section 802. Supplemental Agreements with Consent of Holders . . . . .41
Section 803. Execution of Supplemental Agreements. . . . . . . . . . .42
Section 804. Effect of Supplemental Agreements . . . . . . . . . . . .42
Section 805. Reference to Supplemental Agreements. . . . . . . . . . .42
ARTICLE NINE
Consolidation, Merger, Sale or Conveyance
Section 901. Covenant Not to Merge, Consolidate, Sell or
Convey Property Except Under Certain Conditions . . . . .43
Section 902. Rights and Duties of Successor Entity . . . . . . . . . .43
Section 903. Opinion of Counsel to Agent . . . . . . . . . . . . . . .44
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ARTICLE TEN
Covenants
Section 1001. Performance Under Purchase Contracts . . . . . . . . . .44
Section 1002. Maintenance of Office or Agency. . . . . . . . . . . . .44
Section 1003. Company to Reserve Common Shares . . . . . . . . . . . .45
Section 1004. Covenants as to Common Shares. . . . . . . . . . . . . .45
Section 1005. Statements of Officers of the Company as to Default. . .45
TESTIMONIUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
EXHIBIT A Form of Security Certificate
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This PURCHASE CONTRACT AGREEMENT, dated as of __________, ____,
is between PRIME GROUP REALTY TRUST, a Maryland real estate investment trust
(the "COMPANY"), and __________________________, acting as purchase contract
agent for the Holders of Securities from time to time (the "AGENT").
RECITALS
The Company has duly authorized the execution and delivery of
this Agreement and the Security Certificates evidencing the Securities.
All things necessary to make the Company's obligations under the
Securities, when the Security Certificates are executed by the Company and
authenticated, executed on behalf of the Holders and delivered by the Agent, as
in this Agreement provided, the valid obligations of the Company, and to
constitute these presents a valid agreement of the Company, in accordance with
its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. DEFINITIONS.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) 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; and
(2) 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.
1
"ACT" when used with respect to any Holder, has the meaning
specified in SECTION 104.
"AFFILIATE" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"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 the Person who is then the Agent hereunder.
"AGREEMENT" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE MARKET VALUE" has the meaning specified in
SECTION 501.
"BOARD OF TRUSTEES" means the board of trustees of the Company or
a duly authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of
Trustees, 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 Trustees and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or a
day on which the NYSE or banking institutions or trust companies in The City of
New York are authorized or obligated by law or executive order to be closed.
"CLOSING PRICE" has the meaning specified in SECTION 501.
"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.
"COMMON SHARES" means the common shares of beneficial interest,
par value $.01 per share, of the Company.
2
"COMPANY" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such, and
thereafter "Company" shall mean such successor.
"CONTRACT FEE" means the fee payable by the Company in respect of
each Purchase Contract, equal to ___% per annum of the Stated Amount, accruing
from __________, , computed on the basis of the actual number of days
elapsed in a year of 365 or 366 days, as the case may be, plus any additional
fees accrued pursuant to SECTION 503.
"CORPORATE TRUST OFFICE" means the principal office of the Agent
in the [Borough of Manhattan, The City of New York], at which at any particular
time its corporate trust business shall be administered, which office at the
date hereof is located at [__________________, New York, New York _____].
"CURRENT MARKET PRICE" has the meaning specified in
SECTION 506(a)(8).
"DEPOSITARY" means a clearing agency registered under the
Exchange Act that is designated to act as Depositary for the Securities as
contemplated by SECTION 305.
"EARLY SETTLEMENT" has the meaning specified in SECTION 509(a).
"EARLY SETTLEMENT AMOUNT" has the meaning specified in
SECTION 509(a).
"EARLY SETTLEMENT DATE" has the meaning specified in
SECTION 509(a).
"EARLY SETTLEMENT RATE" has the meaning specified in SECTION
509(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.
"EXCESS UNDERLYING SECURITIES" has the meaning specified in
SECTION 402.
"EXPIRATION DATE" has the meaning specified in SECTION 104.
"EXPIRATION TIME" has the meaning specified in SECTION 506(a)(6).
"FINAL SETTLEMENT DATE" means __________, .
"FINAL SETTLEMENT FUND" has the meaning specified in SECTION 505.
"GLOBAL SECURITY CERTIFICATE" means a Security Certificate that
evidences all or part of the Securities and is registered in the name of a
Depositary or a nominee thereof.
3
"HOLDER," when used with respect to a Security Certificate (or a
Security), means a Person in whose name the Security evidenced by such Security
Certificate (or the Security Certificate evidencing such Security) is registered
in the Security Register.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or
request signed in the name of the Company by its [Chairman of the Board, its
President or a Vice President and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary,] and delivered to the Agent.
"NYSE" has the meaning specified in SECTION 501.
"OFFICERS' CERTIFICATE" means a certificate signed by the
Chairman of the Board, any Vice Chairman of the Board, any Vice Chairman, the
President or any Vice President and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Company and delivered to the
Agent.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company.
"OUTSTANDING SECURITIES" means, as of the date of determination,
all Securities evidenced by then Outstanding Security Certificates, except:
(i) If a Termination Event has occurred, Securities for which the
Underlying Securities have been theretofore deposited with the Agent in
trust for the Holders of such Securities; and
(ii) On and after the applicable Early Settlement Date, Securities
as to which the Holder has elected to effect Early Termination of the
related Purchase Contracts;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
number of Securities have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Securities owned by the Company or any
Affiliate of the Company shall be disregarded and deemed not to be outstanding,
except that, in determining whether the Agent shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which the Agent knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
outstanding if the pledgee establishes to the satisfaction of the Agent the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any Affiliate of the Company.
"OUTSTANDING SECURITY CERTIFICATES" means, as of the date of
determination, all Security Certificates theretofore authenticated, executed and
delivered under this Agreement, except:
4
(i) Security Certificates theretofore canceled by the Agent or
delivered to the Agent for cancellation; and
(ii) Security Certificates in exchange for or in lieu of which
other Security Certificates have been authenticated,
executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Security Certificate
in respect of which there shall have been presented to the
Agent proof satisfactory to it that such Security
Certificate is held by a bona fide purchaser in whose
hands the Securities evidenced by such Security
Certificate are valid obligations of the Company.
"PAYMENT DATE" means each __________ and __________, commencing
__________, _____.
"PERSON" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLEDGE" means the pledge under the Pledge Agreement of the
Underlying Securities constituting a part of the Securities.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of the
date hereof, among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"PREDECESSOR SECURITY CERTIFICATE" of any particular Security
Certificate means every previous Security Certificate evidencing all or a
portion of the rights and obligations of the Holder under the Securities
evidenced thereby; and, for the purposes of this definition, any Security
Certificate authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security Certificate shall be
deemed to evidence the same rights and obligations of the Holder as the
mutilated, destroyed, lost or stolen Security Certificate.
"PURCHASE CONTRACT," when used with respect to any Security,
means the contract obligating the Company to sell and the Holder of such
Security to purchase Common Shares on the terms and subject to the conditions
set forth in Article Five hereof.
"PURCHASED SHARES" has the meaning specified in
SECTION 506(a)(6).
"RECORD DATE" for the interest and Contract Fees payable on any
Payment Date means the ______ or _______ (whether or not a Business Day), as the
case may be, next preceding such Payment Date.
"REORGANIZATION EVENT" has the meaning specified in SECTION
506(b).
5
"RESPONSIBLE OFFICER," when used with respect to the Agent, means
any officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"SECURITY" means the collective rights and obligations of a
Holder of a Security Certificate in respect of Underlying Securities with a
principal amount equal to the Stated Amount, subject to the Pledge thereof, and
a Purchase Contract.
"SECURITY CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Securities specified on
such certificate.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings specified in SECTION 305.
"SETTLEMENT RATE" has the meaning specified in SECTION 501.
"STATED AMOUNT" means $____________.
"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 Final Settlement Date, a decree or
order by a court having jurisdiction in the premises shall have been entered
adjudging the Company a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization of the Company under the United States
Bankruptcy Code or any other similar applicable Federal or State law, and,
unless such decree or order shall have been entered within 60 days prior to the
Final Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) a decree or order of a court
having jurisdiction in the premises 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 decree or order shall have been entered within
60 days prior to the Final Settlement Date, such 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 Final Settlement Date the Company shall institute
proceedings to be adjudicated a bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization under the United States Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"THRESHOLD APPRECIATION PRICE" has the meaning specified in
SECTION 501.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
6
"TRADING DAY" has the meaning specified in SECTION 501.
"UNDERLYING SECURITIES" means the [type and description of
underlying securities] pledged to the Collateral Agent pursuant to the Pledge.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement dated
__________, between the Company and
____________________________________________________, as representatives of the
several Underwriters named therein.
"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 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Agreement, upon
any application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Company shall furnish to the Agent an
Officers' 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 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
has made such examination or investigation as is necessary to enable him
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.
7
Section 103. 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 of, or
representations by, counsel or an Opinion of 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 of, or
representations by, counsel 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 104. ACTS OF HOLDERS; RECORD DATES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the 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 701) 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 by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate
8
or affidavit shall also constitute sufficient proof of his authority. The fact
and date of the execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any other manner which the
Agent deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security Certificate
evidencing such Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Agent or the Company in reliance thereon, whether or
not notation of such action is made upon such Security 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 Outstanding Securities on such record date, and no other Holders,
shall be entitled to take the relevant action, 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 106.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; PROVIDED, that no
such change shall be effective unless notice of the proposed new Expiration Date
is given to the Agent in writing, and to each Holder of Securities in the manner
set forth in SECTION 106, 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.
9
Section 105. NOTICES, ETC., TO AGENT AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Agreement to be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
to the Agent at [Address], Attention: _________________________,
or at any other address previously furnished in writing by the
Agent to the Holders and the Company, or
(2) The Company by the Agent or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing
and personally delivered or mailed, first-class postage prepaid,
to the Company at Prime Group Realty Trust, 00 Xxxx Xxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 Attention: _________, or at
any other address previously furnished in writing to the Agent by
the Company.
Section 106. 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 his address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Agreement provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the 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 107. 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.
10
Section 108. 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 109. 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 110. 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 Security Certificates by their acceptance of delivery
thereof.
Section 111. 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 the conflict of laws provisions thereof.
Section 112. LEGAL HOLIDAYS.
In any case where any Payment Date, any Early Settlement Date or
the Final Settlement Date shall not be a Business Day, then (notwithstanding any
other provision of this Agreement or of the Securities) payment in respect of
interest on Underlying Securities or Contract Fees shall not be made, Purchase
Contracts shall not be performed and Early Settlement shall not be effected on
such date, but such payments shall be made, or the Purchase Contracts shall be
performed or Early Settlement shall be effected, as applicable, on the next
succeeding Business Day with the same force and effect as if made on such
Payment Date, Early Settlement Date or Final Settlement Date, as the case may
be; PROVIDED, that no interest shall accrue or be payable by the Company or any
Holder for the period from and after any such Payment Date, Early Settlement
Date or Final Settlement Date, as the case may be, 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, Early Settlement Date or Final
Settlement Date, as the case may be.
11
Section 113. COUNTERPARTS.
This Agreement may be executed in any number of counterparts,
each of which, when so executed, shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
Section 114. INSPECTION OF AGREEMENT.
A copy of this Agreement shall be available at all reasonable
times at the Corporate Trust Office for inspection by any Holder.
ARTICLE TWO
Security Certificate Forms
Section 201. FORMS OF SECURITY CERTIFICATES GENERALLY.
The Security Certificates (including the form of Purchase
Contracts forming part of the Securities 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 Securities are listed or any Depositary
therefor, or as may, consistently herewith, be determined by the officers of the
Company executing such Security Certificates, as evidenced by their execution of
the Security Certificates.
The definitive Security 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
Security Certificates, consistent with the provisions of this Agreement, as
evidenced by their execution thereof.
Every Global Security Certificate authenticated, executed on
behalf of the Holders and delivered hereunder shall bear a legend in
substantially the following form:
THIS SECURITY CERTIFICATE IS A GLOBAL SECURITY CERTIFICATE WITHIN THE
MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS SECURITY
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
12
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Section 202. FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION.
The form of the Agent's certificate of authentication of the
Securities shall be in substantially the form set forth on the form of the
Security Certificates.
ARTICLE THREE
The Securities
Section 301. TITLE AND TERMS; DENOMINATIONS.
The aggregate number of Securities evidenced by Security
Certificates authenticated, executed on behalf of the Holders and delivered
hereunder is limited to __________ [(subject to increase up to a maximum of
_________ to the extent the over-allotment option of the underwriters under the
Underwriting Agreement is exercised)], except for Security Certificates
authenticated, executed and delivered upon registration of transfer of, in
exchange for, or in lieu of, other Security Certificates pursuant to
SECTION 304, 305, 306, 509 or 805.
The Security Certificates shall be issuable only in registered
form and only in denominations of a single Security and any integral multiple
thereof.
Section 302. RIGHTS AND OBLIGATIONS EVIDENCED BY THE SECURITY CERTIFICATES.
Each Security Certificate shall evidence the number of Securities
specified therein, with each such Security representing the ownership by the
Holder thereof of Underlying Securities with a principal amount equal to the
Stated Amount, subject to the Pledge of such Underlying Securities by such
Holder pursuant to the Pledge Agreement, and the rights and obligations of the
Holder under one Purchase Contract. Prior to the purchase, if any, of Common
Shares under the Purchase Contracts, the Securities shall not entitle the
Holders to any of the rights of a holder of Common Shares, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as shareholders in respect of the meetings of
shareholders or for the election of trustees of the Company or for any other
matter, or any other rights whatsoever as shareholders, of the Company, except
to the extent otherwise expressly provided in this Agreement.
13
Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Upon the execution and delivery of this Agreement, and at any
time and from time to time thereafter, the Company may deliver Security
Certificates executed by the Company to the Agent for authentication, execution
on behalf of the Holders and delivery, together with its Issuer Order for
authentication of such Security Certificates, and the Agent in accordance with
such Issuer Order shall authenticate, execute on behalf of the Holder and
deliver such Security Certificates.
The Security Certificates shall be executed on behalf of the
Company by its [Chairman of the Board, its President or one of its Vice
Presidents]. The signature of any of these officers on the Security
Certificates may be manual or facsimile.
Security 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
Security Certificates or did not hold such offices at the date of such Security
Certificates.
No Purchase Contract underlying a Security evidenced by a
Security Certificate shall be valid until such Security 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 Security Certificate has entered into the Purchase Contracts underlying
the Securities evidenced by such Security Certificate.
Each Security Certificate shall be dated the date of its
authentication.
No Security Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless there appears on
such Security 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 Security Certificate shall be
conclusive evidence, and the only evidence, that such Security Certificate has
been duly authenticated and delivered hereunder.
Section 304. TEMPORARY SECURITY CERTIFICATES.
Pending the preparation of definitive Security 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 Security Certificates, temporary Security Certificates which are 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 Securities are listed,
14
or as may, consistently herewith, be determined by the officers of the Company
executing such Security Certificates, as evidenced by their execution of the
Security Certificates.
If temporary Security Certificates are issued, the Company will
cause definitive Security Certificates to be prepared without unreasonable
delay. After the preparation of definitive Security Certificates, the temporary
Security Certificates shall be exchangeable for definitive Security Certificates
upon surrender of the temporary Security 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 Security 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 Security Certificates of authorized denominations and
evidencing a like number of Securities as the temporary Security Certificate or
Security Certificates so surrendered. Until so exchanged, the temporary
Security Certificates shall in all respects evidence the same benefits and the
same obligations with respect to the Securities evidenced thereby as definitive
Security Certificates.
Section 305. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
The Agent shall keep at the Corporate Trust Office a register
(the register maintained in such office being herein referred to as the
"SECURITY REGISTER") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of Security Certificates
and of transfers of Security Certificates (the Agent, in such capacity, the
"SECURITY REGISTRAR").
Upon surrender for registration of transfer of any Security
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 Security Certificates of any
authorized denominations and evidencing a like number of Securities.
At the option of the Holder, Security Certificates may be
exchanged for other Security Certificates, of any authorized denominations and
evidencing a like number of Securities, upon surrender of the Security
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Security 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 Security Certificates which the Holder making the
exchange is entitled to receive.
All Security Certificates issued upon any registration of
transfer or exchange of a Security Certificate shall evidence the ownership of
the same number of Securities and be entitled to the same benefits and subject
to the same obligations, under this Agreement as the Securities evidenced by the
Security Certificate surrendered upon such registration of transfer or exchange.
15
Every Security Certificate presented or surrendered for
registration of transfer or for exchange shall (if so required by the Agent) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Agent duly executed, by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of a Security 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 Security Certificates, other than any exchanges pursuant
to SECTIONS 306 and 805 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder and deliver any Security
Certificate presented or surrendered for registration of transfer or for
exchange on or after the Final Settlement Date or the Termination Date. In lieu
of delivery of a new Security 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 Final Settlement Date has occurred, deliver the Common Shares issuable in
respect of the Purchase Contracts forming a part of the Securities evidenced by
such Security Certificate, or (ii) if a Termination Event shall have occurred
prior to the Final Settlement Date, transfer the principal amount of the
Underlying Securities evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of ARTICLE FIVE.
The provisions of Clauses (1), (2), (3) and (4) below shall apply
only to Global Security Certificates:
(1) Each Global Security Certificate authenticated and executed
on behalf of the Holders under this Agreement shall be registered in the
name of the Depositary designated for such Global Security Certificate
or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security Certificate
shall constitute a single Security Certificate for all purposes of this
Agreement.
(2) Notwithstanding any other provision in this Agreement, no
Global Security Certificate may be exchanged in whole or in part for
Security Certificates registered, and no transfer of a Global Security
Certificate in whole or in part may be registered, in the name of any
Person other than the Depositary for such Global Security Certificate or
a nominee thereof unless (A) such Depositary (i) has notified the
Company that it is unwilling or unable to continue as Depositary for
such Global Security Certificate or (ii) has ceased to be a clearing
agency registered under the Exchange Act or (b) there shall have
occurred and be continuing a default by the Company in respect to its
obligations under one or more Purchase Contracts.
16
(3) Subject to Clause (2) above, any exchange of a Global
Security Certificate for other Security Certificates may be made in
whole or in part, and all Security Certificates issued in exchange for a
Global Security Certificate or any portion thereof shall be registered
in such names as the Depositary for such Global Security Certificate
shall direct.
(4) Every Security Certificate authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global
Security Certificate or any portion thereof, whether pursuant to this
Section, SECTION 304, 306, 509 or 805 or otherwise, shall be
authenticated, executed on behalf of the Holders and delivered in the
form of, and shall be, a Global Security Certificate, unless such
Security Certificate is registered in the name of a Person other than
the Depositary for such Global Security Certificate or a nominee
thereof.
Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITY CERTIFICATES.
If any mutilated Security 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 Security Certificate, evidencing the same number of Securities and bearing
a 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
Security Certificate, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Security 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
Security Certificate, a new Security Certificate, evidencing the same number of
Securities and bearing a number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated
to execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Security Certificate on or after the Final Settlement Date or the Termination
Date. In lieu of delivery of a new Security 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 Final Settlement Date has occurred, deliver the Common Shares
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Security Certificate, or (ii) if a Termination Event shall
have occurred prior to the Final Settlement Date, transfer the principal amount
of the Underlying Securities evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
ARTICLE FIVE.
Upon the issuance of any new Security Certificate under this
Section, the Company and the Agent may require the payment of a sum sufficient
to cover any tax or other governmental
17
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Agent) connected therewith.
Every new Security Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security 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 Security Certificate 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 Security
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 settlement of mutilated, destroyed, lost or stolen Security
Certificates.
Section 307. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security Certificate for
registration of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such Security
Certificate is registered as the owner of the Securities evidenced thereby, for
the purpose of receiving payments of interest on the Underlying Securities,
receiving payments of Contract Fees, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not the payment of interest on the
Underlying Securities or any Contract Fee payable in respect of the Purchase
Contracts constituting a part of the Securities evidenced thereby shall be
overdue and notwithstanding any notice to the contrary, and neither the Company
nor the Agent, nor any agent of the Company or the Agent, shall be affected by
notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Security Certificate, nothing herein shall prevent the Company, the Agent or any
agent of the Company or the Agent, from giving effect to any written
certification, proxy or other authorization furnished by any Depositary (or its
nominee), as a Holder, with respect to such Global Security Certificate or
impair, as between such Depositary and owners of beneficial interests in such
Global Security Certificate, the operation of customary practices governing the
exercise of rights of such Depositary (or its nominee) as Holder of such Global
Security Certificate.
Section 308. CANCELLATION.
All Security Certificates surrendered for delivery of Common
Shares on or after the Final Settlement Date, transfer of Underlying Securities
after the occurrence of a Termination Event or pursuant to an Early Settlement
or registration of transfer or exchange shall, if surrendered to any Person
other than the Agent, be delivered to the Agent and, if not already canceled,
shall be promptly canceled by it. The Company may at any time deliver to the
Agent for cancellation any Security Certificates previously authenticated,
executed and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Security Certificates so delivered shall, upon Issuer
18
Order, be promptly canceled by the Agent. No Security Certificates shall be
authenticated, executed on behalf of the Holder and delivered in lieu of or in
exchange for any Security Certificates canceled as provided in this Section,
except as expressly permitted by this Agreement. All canceled Security
Certificates held by the Agent shall be disposed of as directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Security Certificate, such acquisition shall not operate as a cancellation of
such Security Certificate unless and until such Security Certificate is
delivered to the Agent canceled or for cancellation.
Section 309. SECURITIES NOT SEPARABLE.
Notwithstanding anything contained herein or in the Security
Certificates to the contrary, for so long as the Purchase Contract underlying a
Security remains in effect such Security shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Security
in respect of the Underlying Securities and Purchase Contracts constituting such
Security may be acquired, and may be transferred and exchanged, only as a
Security. Other than a Security Certificate evidencing a Security, no Holder of
a Security, or any transferee thereof, shall be entitled to receive a
certificate evidencing the ownership of Underlying Securities or the rights and
obligations of the Holder and the Company under a Purchase Contract for so long
as the Purchase Contract underlying the Security remains in effect.
ARTICLE FOUR
The Underlying Securities
Section 401. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Underlying Security 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 Security Certificate (or one or more Predecessor Security Certificates)
of which such Underlying Security is a part is registered at the close of
business on the Record Date next preceding such Payment Date.
Each Security Certificate evidencing Underlying Securities
delivered under this Agreement upon registration of transfer of or in exchange
for or in lieu of any other Security Certificate shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by the Underlying
Securities underlying such other Security Certificate.
In the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date after any Record Date and on or prior to the next succeeding
Payment Date, interest on the Underlying Securities underlying such Security
otherwise payable on such Payment Date shall be payable on such Payment Date
notwithstanding
19
such Early Settlement, and such interest shall, subject to receipt thereof by
the Agent, be paid to the Person in whose name the Security Certificate (or one
or more Predecessor Security Certificates) is 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 Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, interest on the related Underlying Securities that would
otherwise be payable after the Early Settlement Date shall not be payable
hereunder to the Holder of such Security.
Section 402. Transfer of Underlying Securities Upon OCCURRENCE OF TERMINATION
EVENT.
Upon the occurrence of a Termination Event and the transfer to
the Agent of the Underlying Securities underlying such Securities pursuant to
the terms of the Pledge Agreement, the Agent shall request transfer instructions
with respect to such Underlying Securities from each Holder of Securities by
written request mailed to such Holder at his address as it appears in the
Security Register, in respect of the Underlying Securities underlying the
Security Certificate held by such Holder. Upon surrender to the Agent of a
Security Certificate with such transfer instructions in proper form for transfer
of the Underlying Securities by Federal Reserve Bank-Wire or other appropriate
procedure, the Agent shall transfer the Underlying Securities evidenced by such
Security Certificate to such Holder in accordance with such instructions. If a
Security Certificate is not duly surrendered to the Agent with appropriate
transfer instructions, the Agent shall hold the Underlying Securities evidenced
by such Security Certificate as custodian for the Holder of such Security
Certificate.
Underlying Securities shall be transferred only in denominations
of $1,000 and integral multiples thereof. As promptly as practicable following
the occurrence of a Termination Event, the Agent shall determine the excess of
(i) the aggregate principal amount of Underlying Securities underlying the
Outstanding Securities over (ii) the aggregate principal amount of Underlying
Securities in denominations of $1,000 and integral multiples thereof
transferrable to Holders of record on the date of such Termination Event (such
excess being herein referred to as the "EXCESS UNDERLYING SECURITIES"). As soon
as practicable after transfer to the Agent of the Underlying Securities
underlying the Outstanding Securities as provided in the Pledge Agreement, the
Agent shall sell the Excess Underlying Securities to or through one or more U.S.
Government securities dealers at then prevailing prices. The Agent shall deduct
from the proceeds of such sales all commissions and other out-of-pocket
transaction costs incurred in connection with such sales of Excess Underlying
Securities and, until the net proceeds of such sale or sales have been
distributed to Holders of the Securities, the Agent shall hold such proceeds in
trust for the Holders of Securities. Each Holder shall be entitled to receive a
portion, if any, of such net proceeds in lieu of Underlying Securities with a
principal amount of less than $1,000 determined by multiplying the aggregate
amount of such net proceeds by a fraction, the numerator of which is the
fraction of $1,000 in principal amount of Underlying Securities to which such
Holder would otherwise be entitled (after taking into account all Securities
then held by such Holder) and the denominator of which is the aggregate
principal amount of Excess Underlying Securities.
20
ARTICLE FIVE
The Purchase Contracts
Section 501. PURCHASE OF COMMON SHARES.
Each Purchase Contract shall obligate the Holder of the related
Security to purchase, and the Company to sell, on the Final Settlement Date at a
price equal to the Stated Amount, a number of Common Shares to the Settlement
Rate, unless, on or prior to the Final Settlement Date, there shall have
occurred a Termination Event or an Early Settlement with respect to the Security
of which such Purchase Contract is a part. The "SETTLEMENT RATE" is equal to
(a) if the Applicable Market Value (as defined below) is greater than $_____
(the "THRESHOLD APPRECIATION PRICE"), _____ of a Common Share per Purchase
Contract, (b) if the Applicable Market Value is less than or equal to the
Threshold Appreciation Price but is greater than the Stated Amount, a fractional
Common Share per Purchase Contract equal to the Stated Amount divided by the
Applicable Market Value (rounded upward or downward to the nearest 1/10,000th of
a share) and (c) if the Applicable Market Value is less than or equal to the
Stated Amount, one Common Share per Purchase Contract, in each case subject to
adjustment as provided in SECTION 506. As provided in SECTION 510, no
fractional Common Shares will be issued upon settlement of Purchase Contracts.
The "APPLICABLE MARKET VALUE" means the average of the Closing
Price per Common Share on each of the twenty consecutive Trading Days ending on
the last Trading Day immediately preceding the Final Settlement Date. The
"CLOSING PRICE" of the Common Shares 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 Shares on the New York Stock Exchange (the "NYSE") on such
date or, if the Common Shares are not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal United States
securities exchange on which the Common Shares are so listed, or if the Common
Shares are not so listed on a United States national or regional securities
exchange, as reported by Nasdaq, or, if the Common Shares are not so reported,
the last quoted bid price for the Common Shares 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 Shares 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 Shares (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 Shares.
Each Holder of a Security Certificate evidencing Securities, by
his acceptance thereof, irrevocably authorizes the Agent to enter into and
perform the related Purchase Contracts on his behalf as his attorney-in-fact,
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform his obligations under such Purchase Contracts, consents to the
provisions hereof,
21
irrevocably authorizes the Agent as his attorney-in-fact to enter into and
perform the Pledge Agreement on his behalf as his attorney-in-fact, and consents
to and agrees to be bound by the Pledge of the Underlying Securities underlying
such Security Certificate pursuant to the Pledge Agreement; PROVIDED, that upon
a Termination Event, the rights of the Holder of such Security under the
Purchase Contract may be enforced without regard to any other rights or
obligations. Each Holder of a Security, by his acceptance thereof, further
irrevocably covenants and agrees, that, to the extent and in the manner provided
in SECTION 504 and the Pledge Agreement, but subject to the terms thereof,
payments in respect of principal of the Underlying Securities on the Final
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 Security Certificate
evidencing Purchase Contracts, the transferee shall be bound (without the
necessity of any other action on the part of such transferee), under the terms
of this Agreement, the Purchase Contracts evidenced thereby and the Pledge
Agreement and the transferor shall be released from the obligations under the
Purchase Contracts evidenced by the Security Certificates so transferred. The
Company covenants and agrees, and each Holder of a Security Certificate, by his
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
Section 502. CONTRACT FEES.
Subject to SECTION 503, the Company shall pay, on each Payment
Date, the Contract Fees payable in respect of each Purchase Contract to the
Person in whose name the Security Certificate (or one or more Predecessor
Security Certificates) evidencing such Purchase Contract is registered at the
close of business on the Record Date next preceding such Payment Date. The
Contract Fees will be payable at the office of the Agent in The City of New York
maintained for that purpose 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
Security Register.
Upon the occurrence of a Termination Event, the Company's
obligation to pay Contract Fees (including any accrued or deferred Contract
Fees) shall cease.
Each Security Certificate delivered under this Agreement upon
registration of transfer of, or in exchange for, or in lieu of, any other
Security Certificate shall carry the rights to Contract Fees accrued and unpaid,
and to accrue, which were carried by the Purchase Contracts evidenced by such
other Security Certificate.
Subject to SECTION 509, in the case of any Security with respect
to which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date after any Record Date and on or prior to the next
succeeding Payment Date, Contract Fees, if any, otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Contract Fees shall be paid to the Person in whose name the
Security
22
Certificate evidencing such Security (or one or more Predecessor Security
Certificates) is registered at the close of business on such Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date, Contract
Fees that would otherwise be payable after the Early Settlement Date with
respect to the Purchase Contract underlying such Security shall not be payable.
Section 503. DEFERRAL OF PAYMENT DATES FOR CONTRACT FEE.
The Company shall have the right, at any time prior to the Final
Settlement Date, to defer the payment of any or all of the Contract Fees
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 or Payment Date with respect to payment of
such Contract Fees to the New York Stock Exchange or other applicable
self-regulatory organization or to Holders of the Securities, but in any event
not less than one Business Day prior to such Record Date. Any Contract Fees so
deferred shall bear additional Contract Fees thereon at the rate of _____% annum
(computed on the basis of the actual number of days elapsed in a year of 365 or
366 days, as the case may be), compounding on each succeeding Payment Date,
until paid in full. Deferred Contract Fees (and additional Contract Fees
accrued thereon) shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to this Section. No Contract Fees may
be deferred to a date that is after the Final Settlement Date or, with respect
to any particular Purchase Contract, Early Settlement thereof. If the Purchase
Contracts are terminated upon the occurrence of a Termination Event, the
Holder's right to receive Contract Fees or deferred Contract Fees (and
additional Contract Fees accrued thereon) will terminate.
Section 504. PAYMENT OF PURCHASE PRICE.
The purchase price for the Common Shares purchased pursuant to a
Purchase Contract shall be paid by application of payments received by the
Company on the Final Settlement Date from the Collateral Agent pursuant to the
Pledge Agreement in respect of the principal of the Underlying Securities
pledged to secure the obligations of the relevant Holder under such Purchase
Contract. Such application shall satisfy in full the obligations under such
Purchase Contract of the Holder of the Security of which such Purchase Contract
is a part. The Company shall not be obligated to issue any Common Shares in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate purchase
price for the Common Shares to be purchased thereunder in the manner herein set
forth.
23
Section 505. ISSUANCE OF COMMON SHARES.
Unless a Termination Event shall have occurred on or prior to the
Final Settlement Date or an Early Settlement shall have occurred, on the Final
Settlement Date, upon its receipt of payment in full of the purchase price for
the Common Shares purchased by the Holders pursuant to the foregoing provisions
of this Article, and subject to SECTION 506(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 Common Shares registered
in the name of the Agent (or its nominee) as custodian for the Holders (such
certificates for Common Shares, together with any dividends or distributions for
which a record date and payment date for such dividend or distribution has
occurred after the Final Settlement Date, being hereinafter referred to as the
"FINAL SETTLEMENT FUND") to which the Holders are entitled hereunder. Subject
to the foregoing, upon surrender of a Security Certificate to the Agent on or
after the Final Settlement Date, together with settlement instructions thereon
duly completed and executed, the Holder of such Security Certificate shall be
entitled to receive in exchange therefor a certificate representing that number
of whole Common Shares which such Holder is entitled to receive pursuant to the
provisions of this ARTICLE FIVE (after taking into account all Securities then
held by such Holder) together with cash in lieu of fractional shares as provided
in SECTION 510 and any dividends or distributions with respect to such shares
constituting part of the Final Settlement Fund, but without any interest
thereon, and the Security 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 on the Security
Certificate.
If any Common Shares issued in respect of a Purchase Contract are
to be registered to a Person other than the Person in whose name the Security
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 Security 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 506. ADJUSTMENT OF SETTLEMENT RATE.
(a) ADJUSTMENTS FOR DIVIDENDS, DISTRIBUTIONS, SHARE SPLITS, ETC.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Common Shares of the Company in Common Shares, 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 Common Shares
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
24
Common Shares at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of Common Shares. The Company will not
pay any dividend or make any distribution on Common Shares held in the treasury
of the Company.
(2) In case the Company shall issue rights, options or warrants
to all holders of its Common Shares (not being available on an equivalent basis
to Holders of the Securities upon settlement of the Purchase Contracts
underlying such Securities) entitling them, for a period expiring within 45 days
after the record date for the determination of shareholderholders entitled to
receive such rights, options or warrants, to subscribe for or purchase Common
Shares at a price per share less than the Current Market Price per Common Share
on the date fixed for the determination of shareholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend reinvestment
plan), the Settlement Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by dividing
such Settlement Rate by a fraction of which the numerator shall be the number of
Common Shares outstanding at the close of business on the date fixed for such
determination plus the number of Common Shares which the aggregate of the
offering price of the total number of Common Shares so offered for subscription
or purchase would purchase at such Current Market Price and the denominator
shall be the number of Common Shares outstanding at the close of business on the
date fixed for such determination plus the number of Common Shares 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 Common
Shares at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of Common Shares. The Company shall not issue any
such rights, options or warrants in respect of Common Shares held in the
treasury of the Company.
(3) In case outstanding Common Shares shall be subdivided or
split into a greater number of Common Shares, 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 Common Shares shall each be combined into a smaller number
of Common Shares, 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 Shares 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 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 numera-
25
tor shall be the Current Market Price per Common Share on the date fixed for
such determination less the then fair market value (as determined by the Board
of Trustees, whose determination shall be conclusive and described in a Board
Resolution filed with the Agent) of the portion of the assets or evidences of
indebtedness so distributed applicable to one Common Share and the denominator
shall be such Current Market Price per Common Share, 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, by dividend or otherwise,
distribute to all holders of its Common Shares cash (excluding any cash that is
distributed in a Reorganization Event to which SECTION 506(b) applies or as part
of a distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (I) the aggregate amount of any other
distributions to all holders of its Common Shares 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 (II) the aggregate of any cash plus the fair
market value (as determined by the Board of Trustees, whose determination shall
be conclusive and described in a Board Resolution) of any non-cash consideration
payable in respect of any tender or exchange offer by the Company or any of its
subsidiaries for all or any portion of the Common Shares concluded 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, exceeds 15% of the product of the Current Market Price
per Common Share on the date for the determination of holders of Common Shares
entitled to receive such distribution times the number of Common Shares
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 Common Share on the date fixed for such determination
less an amount equal to the quotient of (x) the excess of such combined amount
over such 15% and (y) the number of Common Shares outstanding on such date for
determination and (ii) the denominator of which shall be equal to the Current
Market Price per Common Share on such date for determination.
(6) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common Shares shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to shareholders of an aggregate consideration
having a fair market value (as determined by the Board of Trustees, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with (I) the aggregate of the cash plus the fair market value
(as determined by the Board of Trustees, whose determination shall be conclusive
and described in a Board Resolution), as of the expiration of the applicable
tender or exchange offer, of any non-cash consideration payable in respect of
any other tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Shares expiring within the
12 months preceding the expiration of such tender
26
or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been made and (II) the
aggregate amount of any distributions to all holders of the Company's Common
Shares made exclusively in cash within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) of this Section or this paragraph (6) has been made, exceeds 15%
of the product of the Current Market Price per Common Share 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 Common Shares
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 Common Share on the date of the Expiration Time
and (II) the number of Common Shares 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 [non-cash] consideration payable to
shareholders pursuant to such tender or exchange offer, and (ii) the denominator
of which shall be equal to the product of (A) the Current Market Price per
Common Share as of the Expiration Time and (B) the number of Common Shares
outstanding (including any tendered shares) as of the Expiration Time less the
number of all shares accepted for payment pursuant to such tender or exchange
offer (the shares deemed so accepted, up to any such maximum, being referred to
as the "PURCHASED SHARES").
(7) The reclassification of Common Shares into securities
including securities other than Common Shares (other than any reclassification
upon a Reorganization Event to which Section 506(b) applies) shall be deemed to
involve (a) a distribution of such securities other than Common Shares to all
holders of Common Shares (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 Common Shares outstanding
immediately prior to such reclassification into the number of Common Shares
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 Common Shares on any day
means the average of the daily Closing Prices for the 5 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 Shares trade regular way on such exchange or in such market without the
right to receive such issuance or distribution.
27
(9) All adjustments to the Settlement Rate shall be calculated
to the nearest 1/10,000th of a Common Shares (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 paragraphs (1), (2),
(3), (4), (5), (6), (7) or (10) of this SECTION 506(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 501 will apply on the
Final 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 506(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 paragraphs (1),
(2), (3), (4), (5), (7) or (10) of this SECTION 506(a) during the period taken
into consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it considers to be
advisable in order to avoid or diminish any income tax to any holders of Common
Shares 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 entity and in which the Common Shares outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another entity), (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 Final 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 distributions thereon which have a record date that is prior to the
Final Settlement Date) by a Holder of the number of Common Shares issuable on
account of each Purchase Contract if the Final Settlement Date had occurred
immediately prior to such Reorganization Event, assuming such Holder of Common
Shares is not a Person with which the Company consolidated or into which the
Company merged or which merged into the Company or to which such sale or
transfer was made, as the case may be ("CONSTITUENT PERSON"), or an Affiliate of
a constituent Person (to the extent such Reorganization Event provides
28
for different treatment of Common Shares held by Affiliates of the Company and
non-Affiliates), and such Holder failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or amount of
securities, cash and other property receivable upon such Reorganization Event is
not the same for each Common Shares 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 506. 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 507. NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the adjusted Settlement Rate in
accordance with SECTION 506 and prepare and transmit to the Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) within 10 Business Days following the occurrence of an
event that permits or requires an adjustment to the Settlement Rate
pursuant to SECTION 506 (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
Common Shares, 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 Common Shares pursuant
to a Purchase
29
Contract or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article.
Section 508. TERMINATION EVENT; NOTICE.
The Purchase Contracts and the 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
Fees or deferred Contract Fees, 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 Final Settlement Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event, the Company shall
give written notice to the Agent, the Collateral Agent and to the Holders, at
their addresses as they appear in the Security Register. Upon and after the
occurrence of a Termination Event, the Securities shall thereafter represent the
right to receive the Underlying Securities forming a part of such Securities in
accordance with the provisions of SECTION 402 and the Pledge Agreement.
Section 509. EARLY SETTLEMENT.
(a) Subject to and upon compliance with the provisions of this
SECTION 509 at the option of the Holder thereof, any Purchase Contracts
underlying Securities having an aggregate Stated Amount equal to $[1,000] or an
integral multiple thereof may be settled early ("EARLY SETTLEMENT") as provided
herein. In order to exercise the right to effect Early Settlement with respect
to any Purchase Contracts, the Holder of the Security Certificate evidencing
such Purchase Contracts shall deliver such Security 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 accompanied by payment in the form of a certified or cashier's check payable
to the Company in immediately available funds in an amount (the "EARLY
SETTLEMENT AMOUNT") equal to (i) the product of (A) the Stated Amount TIMES
(B) the number of Purchase Contracts with respect to which the Holder has
elected to effect Early Settlement MINUS (ii) the aggregate amount of Contract
Fees, if any, otherwise payable on or prior to the immediately preceding Payment
Date deferred at the option of the Company pursuant to SECTION 503 and remaining
unpaid as of such immediately preceding Payment Date PLUS (iii) 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 sum of (x) the Contract
Fees payable on such Payment Date with respect to such Purchase Contracts PLUS
(y) the interest on the related Underlying Securities payable on such Payment
Date. Except as provided in the immediately preceding sentence and subject to
the [last] paragraph of SECTION 502, no payment or adjustment shall be made upon
Early Settlement of any Purchase Contract on account of any Contract Fees
accrued on such Purchase Contract or on account of any dividends on the Common
Shares issued upon such Early Settlement. If the foregoing requirements are
first satisfied with respect to Purchase Contracts underlying any Securities at
or prior to 5:00 p.m., New York City time, on a Business Day, such day shall be
the "EARLY SETTLEMENT DATE" with respect to such Securities and if such
requirements are first satisfied after 5:00 p.m., New York City time, on a
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Business Day or on a day that is not a Business Day, the "Early Settlement Date"
with respect to such Securities shall be the next succeeding Business Day.
(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, a number of Common Shares on account of each Purchase
Contract as to which Early Settlement is effected equal to the Early Settlement
Rate; PROVIDED, HOWEVER, that upon the Early Settlement of the Purchase
Contracts, the Holder of such related Securities will forfeit the right to
receive any deferred Contract Fees. The Early Settlement Rate shall initially
be equal to __________ and shall be adjusted in the same manner and at the same
time as the Settlement Rate is adjusted. As promptly as practicable after Early
Settlement of Purchase Contracts in accordance with the provisions of this
SECTION 509, the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full number of
Common Shares issuable upon such Early Settlement together with payment in lieu
of any fraction of a share, as provided in SECTION 510.
(c) The Company shall cause the Common Shares issuable, and
Underlying Securities deliverable, upon Early Settlement of Purchase Contracts
to be issued and delivered, in the case of such Common Shares, and released from
the Pledge by the Collateral Agent and transferred, in the case of such
Underlying Securities, to the Purchase Contract Agent, for delivery to the
Holder thereof or its designee, no later than the third Business Day after the
applicable Early Settlement Date.
(d) Upon Early Settlement of any Purchase Contracts, and subject
to receipt thereof from the Company or 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
Security Certificate evidencing the related Securities, (i) transfer the
Underlying Securities forming a part of such Securities and (ii) deliver to the
Holder a certificate or certificates for the full number of Common Shares
issuable upon such Early Settlement together with payment in lieu of any
fraction of a share, as provided in SECTION 510.
(e) In the event that Early Settlement is effected with respect
to Purchase Contracts underlying less than all the Securities evidenced by a
Security 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 Security Certificate evidencing the Securities as
to which Early Settlement was not effected.
Section 510. NO FRACTIONAL SHARES.
No fractional shares or scrip representing fractional Common
Shares shall be issued or delivered upon settlement on the Final Settlement Date
or upon Early Settlement of any Purchase Contracts. If Security Certificates
evidencing more than one Purchase Contract shall be surrendered for settlement
at one time by the same Holder, the number of full Common Shares which shall be
delivered upon settlement shall be computed on the basis of the aggregate number
of Purchase
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Contracts evidenced by the Security Certificates so surrendered. Instead of any
fractional Common Shares which would otherwise be deliverable upon settlement of
any Purchase Contracts on the Final Settlement Date or upon Early Settlement,
the Company, through the Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the value of such fractional shares at
the Closing Price per share on the Trading Day immediately preceding the Final
Settlement Date or the related Early Settlement Date, respectively. 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 510 in a timely manner.
Section 511. CHARGES AND TAXES.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the Common Shares pursuant
to the Purchase Contracts and in payment of any deferred Contract Fees;
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
Security Certificate evidencing a Purchase Contract or any issuance of a Common
Shares in a name other than that of the registered Holder of a Security
Certificate surrendered in respect of the Purchase Contracts 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
Security 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.
ARTICLE SIX
Remedies
Section 601. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE CONTRACT FEES AND TO
PURCHASE COMMON SHARES.
Notwithstanding any other provision in this Agreement, the Holder
of any Security shall have the right, which is absolute and unconditional
(subject to the right of the Company to defer payment thereof pursuant to
SECTION 503), to receive payment of each installment of the Contract Fees with
respect to the Purchase Contract constituting a part of such Security on the
respective Payment Date for such Security and to purchase Common Shares 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 Shares, and such
rights shall not be impaired without the consent of such Holder.
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Section 602. RESTORATION OF RIGHTS AND REMEDIES.
If any Holder of Securities 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 603. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement of
mutilated, destroyed, lost or stolen Security Certificates in the last paragraph
of SECTION 306, no right or remedy herein conferred upon or reserved to the
Holders of Securities 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 604. 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 605. UNDERTAKING FOR COSTS.
All parties to this Agreement agree, and each Holder of any
Security by his acceptance of the Security Certificate evidencing such Security
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Agreement, or in
any suit against the 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 the payment of
the interest on any Underlying Security or the Contract Fees, if any, on any
Purchase Contract on or after the respective Payment Date therefor constituting
a part of the Securities held by such Holder, or for enforcement of the right to
purchase Common Shares under the Purchase Contracts constituting a part of the
Securities held by such Holder.
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Section 606. WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE SEVEN
The Agent
Section 701. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) (1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations shall
be read into this Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its
part, the Agent may, with respect to the Securities, conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions
furnished to the Agent and conforming to the requirements of this
Agreement, but in the case of any certificates or opinions which
by any provision hereof are specifically required to be furnished
to the Agent, the Agent shall be under a duty to examine the same
to determine whether or not they conform to the requirements of
this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Agent from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, 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
34
its duties hereunder, or in the exercise of any of its rights or powers,
if adequate indemnity is not provided to it.
(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.
Section 702. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any default by the Company
hereunder, of which a Responsible Officer of the Agent has actual knowledge, the
Agent shall transmit by mail to all Holders of Securities, as their names and
addresses appear in the Security Register, notice of such default hereunder,
unless such default shall have been cured or waived.
Section 703. CERTAIN RIGHTS OF AGENT.
Subject to the provisions of SECTION 701:
(a) the Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by an Officers' Certificate, Issuer
Order or Issuer Request, and any resolution of the Board of Trustees of
the Company may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the Agent
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Agent (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate of the
Company;
(d) the Agent may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(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
35
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 issuance of the Securities and 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 entitled to examine the books, records and
promises of the Company, personally or by agent or attorney; and
(f) the Agent may execute any of its powers hereunder or perform
any duties hereunder either directly or by or through agents or
attorneys and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder.
Section 704. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Security Certificates
shall be taken as the statements of the Company and the Agent assumes no
responsibility for their correctness. The Agent makes no representations as to
the validity or sufficiency of this Agreement or of the Securities. The Agent
shall not be accountable for the use or application by the Company of the
proceeds in respect of the Purchase Contracts.
Section 705. MAY HOLD SECURITIES.
Any Security Registrar or any other agent of the Company, or the
Agent, in its individual or any other capacity, may become the owner or pledgee
of Securities and may otherwise deal with the Company with the same rights it
would have if it were not Security Registrar or such other agent, or the Agent.
Section 706. MONEY HELD IN TRUST.
Money held by the Agent in trust hereunder need not be segregated
from the other funds except to the extent required by law. The Agent shall be
under no obligation to invest or pay interest on any money received by it
hereunder except as otherwise agreed with the Company.
Section 707. COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to reimburse
the Agent upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Agent in accordance with any
provision of this Agreement (including
36
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
(3) to indemnify the Agent and any predecessor Agent for, and to
hold each of them 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 of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
Section 708. CORPORATE AGENT REQUIRED; ELIGIBILITY.
There shall at all times be an Agent hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having (or being a member of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State authority and having a
Corporate Trust Office in the [Borough of Manhattan, The City of New York], if
there be such a corporation in the [Borough of Manhattan, The City of New York]
qualified and eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with the provisions
of this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 709. 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 710.
(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 710
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.
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(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, as
if the Agent were an indenture trustee under an indenture qualified
under the TIA, after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Agent shall cease to be eligible under SECTION 708 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 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 710. If no successor
Agent shall have been so appointed by the Company and accepted appointment in
the manner required by SECTION 710, any Holder who has been a bona fide Holder
of a Security for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor Agent
to give, notice of each resignation and each removal of the Agent and each
appointment of a successor Agent by mailing written notice of such event by
first-class mail, postage prepaid, to all Holders of Securities as their names
and addresses appear in the Security Register. Each notice shall include the
name of the successor Agent and the address of its Corporate Trust Office.
Section 710. 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
38
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 711. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Agent, shall be the successor of the Agent hereunder; PROVIDED, such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Security 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 Security
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 712. 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 Security Registrar.
(b) If three or more Holders (herein referred to as
"APPLICANTS") apply in writing to the Agent, and furnish to the Agent reasonable
proof that each such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such application states that
the applicants desire to communicate with other Holders with respect to their
rights under this Agreement or under the Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Agent shall, within five Business Days after the receipt of
such application, afford such applicants access to the information preserved at
the time by the Agent in accordance with SECTION 712(a).
(c) Every Holder of Securities, by receiving and holding the
Security Certificates evidencing the same, agrees with the Company and the Agent
that none of the Company, the Agent nor any agent of any of them shall be held
accountable by reason of the disclosure of any such information as to the names
and addresses of the Holders in accordance with SECTION 712(b), regardless of
the source from which such information was derived.
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Section 713. NO OBLIGATIONS OF AGENT.
Except to the extent otherwise provided in this Agreement, the
Agent assumes no obligations and shall not be subject to any liability under
this Agreement or any Purchase Contract in respect of the obligations of the
Holder of any Security thereunder. The Company agrees, and each Holder of a
Security Certificate, by his acceptance thereof, shall be deemed to have agreed,
that the Agent's execution of the Security 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 FIVE.
Section 714. 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 direction received from
the Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of SECTION 701(a)(2).
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available on request to the Company or to its authorized representative.
ARTICLE EIGHT
Supplemental Agreements
Section 801. SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company and the Agent, at
any time and from time to time, may enter into one or more agreements
supplemental hereto, in form satisfactory to the Company and the Agent, for any
of the following purposes:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the
covenants of the Company herein and in the Security Certificates;
or
40
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Agent; or
(4) to make provision with respect to the rights of Holders
pursuant to the requirements of SECTION 506(b); or
(5) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provisions
herein, or to make any other provisions with respect to such matters or
questions arising under this Agreement; PROVIDED, such action shall not
adversely affect the interests of the Holders.
Section 802. SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority of
the Outstanding Securities, 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 Securities, or the provisions of this
Agreement or the rights of the Holders in respect of the Securities; PROVIDED,
HOWEVER, that no such supplemental agreement shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or type of Underlying Securities
underlying a Security, impair the right of the Holder of any Security to
receive interest payments on the Underlying Securities or otherwise
adversely affect the Holder's rights in or to such Underlying
Securities;
(3) reduce any Contract Fees or change any place where, or the
coin or currency in which, any Contract Fees are payable;
(4) impair the right to institute suit for the enforcement of
any Purchase Contract;
(5) reduce the number of Common Shares to be purchased pursuant
to any Purchase Contract, increase the price to purchase Common Shares
upon settlement of any Purchase Contract, change the Final Settlement
Date or otherwise adversely affect the Holder's rights under any
Purchase Contract; or
41
(6) reduce the percentage of the Outstanding Securities the
consent of whose Holders is required for any such supplemental
agreement.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 803. 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 701) 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 804. 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 Security Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered hereunder shall be bound
thereby.
Section 805. REFERENCE TO SUPPLEMENTAL AGREEMENTS.
Security 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 Security 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 Security Certificates.
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ARTICLE NINE
Consolidation, Merger, Sale or Conveyance
Section 901. COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY
EXCEPT UNDER CERTAIN CONDITIONS.
The Company covenants that it will not merge or consolidate with
any other Person or sell or convey all or substantially all of its assets to any
Person, except that the Company may merge or consolidate with, or sell or convey
all or substantially all of its assets to, any other Person, provided that
(i) the Company shall be the continuing entity, or the successor (if other than
the Company) shall be a entity organized and existing under the laws of the
United States of America or a State thereof and such entity shall assume the
obligations of the Company under the Purchase Contracts, this Agreement and the
Pledge Agreement by one or more supplemental agreements in form satisfactory to
the Agent and the Collateral Agent, executed and delivered to the Agent and the
Collateral Agent by such entity, and (ii) the Company or such successor entity,
as the case may be, shall not, immediately after such merger of consolidation,
or such sale or conveyance, be in default in the performance of any covenant or
condition hereunder, under any of the Securities or under the Pledge Agreement.
Section 902. RIGHTS AND DUTIES OF SUCCESSOR ENTITY.
In case of any such consolidation, merger, sale or conveyance and
upon any such assumption by the successor entity in accordance with SECTION 901,
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 Prime Group Realty Trust, any or all of the Security 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 entity, 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 Security
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and execution, and any
Security Certificate evidencing Securities which such successor entity
thereafter shall cause to be signed and delivered to the Agent for that purpose.
All the Security Certificates so issued shall in all respects have the same
legal rank and benefit under this Agreement as the Security Certificates
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Security Certificates had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale or conveyance
such change in phraseology and form (but not in substance) may be made in the
Security Certificates evidencing Securities thereafter to be issued as may be
appropriate.
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Section 903. OPINION OF COUNSEL TO AGENT.
The Agent, subject to SECTIONS 701 and 703, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale 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 TEN
Covenants
Section 1001. 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 1002. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain in the [Borough of Manhattan, The City
of New York] an office or agency where Security Certificates may be presented or
surrendered for acquisition of Common Shares upon settlement or Early Settlement
and for transfer of Underlying Securities upon occurrence of a Termination
Event, where Security Certificates may be surrendered for registration of
transfer or exchange 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 Security 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.
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Section 1003. COMPANY TO RESERVE COMMON SHARES.
The Company shall at all times prior to the Final Settlement Date
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Shares the full number of Common Shares issuable against
tender of payment in respect of all Purchase Contracts constituting a part of
the Securities evidenced by Outstanding Security Certificates.
Section 1004. COVENANTS AS TO COMMON SHARES.
The Company covenants that all Common Shares which may be issued
against tender of payment in respect of any Purchase Contract constituting a
part of the Outstanding Securities will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable.
Section 1005. STATEMENTS OF OFFICERS OF THE COMPANY AS TO DEFAULT.
The Company will deliver to the Agent, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions hereof, and if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.
PRIME GROUP REALTY TRUST
By:
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as Agent
By:
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