1
Exhibit 4.15
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
XXXXXXX AND BROAD HOME CORPORATION
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS PURCHASE CONTRACT AGENT
-----------------
PURCHASE CONTRACT AGREEMENT
-----------------
DATED AS OF JULY 7, 1998
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
RECITALS.................................................................... 1
ARTICLE I
Definitions and Other Provisions
of General Applications..................................................... 1
Section 1.1. Definitions.................................................. 1
Section 1.2. Compliance Certificates and Opinions......................... 12
Section 1.3. Form of Documents Delivered to Agent......................... 13
Section 1.4. Acts of Holders; Record Dates................................ 13
Section 1.5. Notices...................................................... 15
Section 1.6. Notice to Holders; Waiver.................................... 16
Section 1.7. Effect of Headings and Table of Contents..................... 17
Section 1.8. Successors and Assigns....................................... 17
Section 1.9. Separability Clause.......................................... 17
Section 1.10. Benefits of Agreement........................................ 17
Section 1.11. Governing Law................................................ 17
Section 1.12. Legal Holidays............................................... 18
Section 1.13. Counterparts................................................. 18
Section 1.14. Inspection of Agreement...................................... 18
ARTICLE II
Certificate Forms........................................................... 19
Section 2.1. Forms of Certificates Generally.............................. 19
Section 2.2. Form of Agent's Certificate of Authentication................ 20
ARTICLE III
The Securities.............................................................. 20
Section 3.1. Title and Terms; Denominations............................... 20
Section 3.2. Rights and Obligations Evidenced by the Certificates......... 21
Section 3.3. Execution, Authentication, Delivery and Dating............... 21
i
3
Page
----
Section 3.4. Temporary Certificates....................................... 22
Section 3.5. Registration; Registration of Transfer and Exchange.......... 23
Section 3.6. Book-Entry Interests......................................... 25
Section 3.7. Notices to Holders........................................... 25
Section 3.8. Appointment of Successor Clearing Agency..................... 26
Section 3.9. Definitive Certificates...................................... 26
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates........... 26
Section 3.11. Persons Deemed Owners........................................ 28
Section 3.12. Cancellation................................................. 28
Section 3.14. Establishment or Reestablishment of Income PRIDES............ 31
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.. 32
Section 3.16. No Consent to Assumption..................................... 33
ARTICLE IV
The Capital Securities...................................................... 34
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.............................. 34
Section 4.2. Notice and Voting............................................ 35
Section 4.3. Distribution of Debentures; Tax Event Redemption............. 36
ARTICLE V
The Purchase Contracts...................................................... 37
Section 5.1. Purchase of Shares of Common Stock........................... 37
Section 5.2. Contract Adjustment Payments................................. 39
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments... 40
Section 5.4. Payment of Purchase Price.................................... 42
Section 5.5. Issuance of Shares of Common Stock........................... 47
Section 5.6. Adjustment of Settlement Rate................................ 48
Section 5.7. Notice of Adjustments and Certain Other Events............... 54
Section 5.8. Termination Event; Notice.................................... 55
Section 5.9. Early Settlement............................................. 55
ii
4
Page
----
Section 5.10. No Fractional Shares......................................... 58
Section 5.11. Charges and Taxes............................................ 58
ARTICLE VI
Remedies.................................................................... 59
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock............. 59
Section 6.2. Restoration of Rights and Remedies........................... 59
Section 6.3. Rights and Remedies Cumulative............................... 59
Section 6.4. Delay or Omission Not Waiver................................. 60
Section 6.5. Undertaking for Costs........................................ 60
Section 6.6. Waiver of Stay or Extension Laws............................. 60
ARTICLE VII
The Agent................................................................... 61
Section 7.1. Certain Duties and Responsibilities.......................... 61
Section 7.2. Notice of Default............................................ 62
Section 7.3. Certain Rights of Agent...................................... 62
Section 7.4. Not Responsible for Recitals or Issuance of Securities....... 63
Section 7.5. May Hold Securities.......................................... 63
Section 7.6. Money Held in Custody........................................ 63
Section 7.7. Compensation and Reimbursement............................... 64
Section 7.8. Corporate Agent Required; Eligibility........................ 64
Section 7.9. Resignation and Removal; Appointment of Successor............ 65
Section 7.10. Acceptance of Appointment by Successor....................... 66
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business..................................................... 67
Section 7.12. Preservation of Information; Communications to Holders....... 67
Section 7.13. No Obligations of Agent...................................... 68
Section 7.14. Tax Compliance............................................... 68
ARTICLE VIII
Supplemental Agreements..................................................... 69
iii
5
Page
----
Section 8.1. Supplemental Agreements Without Consent of Holders........... 69
Section 8.2. Supplemental Agreements with Consent of Holders.............. 69
Section 8.3. Execution of Supplemental Agreements......................... 71
Section 8.4. Effect of Supplemental Agreements............................ 71
Section 8.5. Reference to Supplemental Agreements......................... 71
ARTICLE IX
Consolidation, Merger, Sale or Conveyance................................... 72
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions..................... 72
Section 9.2. Rights and Duties of Successor Corporation................... 72
Section 9.3. Opinion of Counsel Given to Agent............................ 73
ARTICLE X
Covenants................................................................... 73
Section 10.1. Performance Under Purchase Contracts......................... 73
Section 10.2. Maintenance of Office or Agency.............................. 73
Section 10.3. Company to Reserve Common Stock.............................. 74
Section 10.4. Covenants as to Common Stock................................. 74
EXHIBIT A Form of Income PRIDES Certificate
EXHIBIT B Form of Growth PRIDES Certificate
EXHIBIT C Instruction to Collateral Agent
EXHIBIT D Instruction to Purchase Contract Agent
EXHIBIT E Notice to Settle with Separate Cash
iv
6
PURCHASE CONTRACT AGREEMENT, dated as of July 7, 1998 between Xxxxxxx and
Broad Home Corporation, a Delaware corporation (the "Company"), and The First
National Bank of Chicago, a national banking association, 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 Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the Certificates
are executed by the Company and authenticated, executed on behalf of the Holders
and delivered by the Agent, as provided in this Agreement, the valid obligations
of the Company, and to constitute these presents a valid agreement of the
Company, in accordance with its terms, have been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular; and nouns and
pronouns of the masculine gender include the feminine and neuter genders;
7
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Applicable Ownership Interest; (ii) Applicable Principal
Amount; (iii) Authorized Newspaper; (iv) Indenture, (v) Investment Company
Event; (vi) Liquidation Distribution; (vii) Guarantee; (viii) Primary Treasury
Dealer; (ix) Quotation Agent; (x) Redemption Amount; (xi) Redemption Price;
(xii) Reset Agent; (xiii) Reset Announcement Date; (xiv) Reset Rate; (xv) Reset
Spread; (xvi) Tax Event; (xvii) Tax Event Redemption; (xviii) Tax Event
Redemption Date; (xix) Two-Year Benchmark Treasury; (xx) Treasury Portfolio;
(xxi) Treasury Portfolio Purchase Price; (xxii) Debentures; and (xxiii)
Remarketing Underwriting Agreement.
(e) the following terms have the meanings given to them in this Section
1.1(e).
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1993, as amended, as is in effect on the date hereof.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to the
applicable provisions of this Agreement, and thereafter "Agent" shall mean such
Person.
"Agreement" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more agreements supplemental
hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning specified in Section 5.1.
2
8
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a Person
who is the owner of such Book-Entry Interest as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency).
"Board of Directors" means the board of directors of the Company or a duly
authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global Certificate,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day other than a Saturday, Sunday or any other
day on which banking institutions in Xxx Xxxx Xxxx (xx xxx Xxxxx xx Xxx Xxxx)
are permitted or required by any applicable law to close.
"Capital Securities" means the 8% Capital Securities of the Trust, each
having a stated liquidation amount of $10, representing undivided beneficial
interests in the assets of the Trust.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Securities and in whose name, or in the name of a nominee of that
organization, shall
3
9
be registered a Global Certificate and which shall undertake to effect book
entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Bank of New York, as Collateral Agent under
the Pledge Agreement until a successor Collateral Agent shall have become such
pursuant to the applicable provisions of the Pledge Agreement, and thereafter
"Collateral Agent" shall mean the Person who is then the Collateral Agent
thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, $1.00 par value, of the Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"Contract Adjustment Payments" means (i) in the case of Income PRIDES, the
amount payable by the Company in respect of each Purchase Contract initially
constituting a part of an Income PRIDES, equal to .25% per annum of the Stated
Amount and (ii) in the case of Growth PRIDES, the amount payable by the Company
in respect of each Purchase Contract initially constituting a part of a Growth
PRIDES, equal to .75% per annum of the Stated Amount, in each case computed on
the basis of a 360 day year of twelve 30 day months, plus any Deferred Contract
Adjustment Payments accrued pursuant to Section 5.2 or 5.3.
"Corporate Trust Office" means the principal corporate trust office of the
Agent at which, at any particular time, its corporate trust business shall be
adminis-
4
10
tered, which office at the date hereof is located at Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000-0000, Attention: Corporate Trust Services
Division.
"Coupon Rate" means the percentage rate per annum at which each Debenture
will bear interest initially.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated the
8% Debentures due August 16, 2003, to be issued under the Indenture as of the
date hereof.
"Declaration" means the Amended and Restated Declaration of Trust of KBHC
Financing I, dated as of July 7, 1998, among the Company, as the sponsor, the
trustees named therein and the holders from time to time of the securities
representing undivided beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency becomes
its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
5
11
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Failed Remarketing" has the meaning specified in Section 5.4(b).
"Global Capital Security Certificate" means a certificate evidencing the
respective rights and obligations of Holders in respect of the number of Capital
Securities specified on such certificate and which is registered in the name of
a Clearing Agency or a nominee thereof.
"Global Certificate" means a Certificate that evidences all or part of the
Securities and is registered in the name of a Depositary or a nominee thereof.
"Growth PRIDES" means the collective rights and obligations of a Holder of
a Growth PRIDES Certificate in respect of the Treasury Securities, subject to
the Pledge thereof, and the related Purchase Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Growth PRIDES specified on
such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the respective
meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in whose
name the Security evidenced by an Income PRIDES Certificate and/or a Growth
PRIDES Certificate is registered in the related Income PRIDES Register and/or
the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder of
an Income PRIDES Certificate in respect of a Capital Security or an appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Income PRIDES specified on
such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the respective
meanings specified in Section 3.5.
6
12
"Indenture Trustee" means The First National Bank of Chicago, a national
banking association, as trustee under the Indenture, or any successor thereto.
"Institutional Trustee" means The First National Bank of Chicago, as
institutional trustee under the Declaration, or any successor thereto that is a
financial institution unaffiliated with the Company.
"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 5.1.
"New York Office" shall have the meaning set forth in Section 10.2
"Officer's Certificate" means a certificate of the Company signed on its
behalf by the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any 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 or an Affiliate and who
shall be reasonably acceptable to the Agent.
"Outstanding Securities," with respect to the Income PRIDES or Growth
PRIDES, means, as of the date of determination, all Income PRIDES or Growth
PRIDES, as the case may be, evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) If a Termination Event has occurred, (A) Growth PRIDES for which
the Stated Amount of Treasury Securities has been theretofore deposited
with the Agent in trust for the Holders of such Growth PRIDES and (B)
Income PRIDES for which the Stated Amount of the related Capital Security
or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, or a Liquidation Distribution in respect of such Capital
Security, as the case may be, has been theretofore deposited with the
Agent in trust for the Holders of such Income PRIDES;
7
13
(ii) Income PRIDES and Growth PRIDES evidenced by Certificates
theretofore cancelled by the Agent or delivered to the Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Agent proof satisfactory to it that such
Certificate is held by a bona fide purchaser in whose hands the Income
PRIDES or Growth PRIDES evidenced by such Certificate are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES or
Growth PRIDES 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 Income PRIDES or
Growth PRIDES which a Responsible Officer of the Agent knows to be so owned
shall be so disregarded. Income PRIDES or Growth PRIDES so owned which have been
pledged in good faith may be regarded as Outstanding Securities if the pledgee
establishes to the satisfaction of the Agent the pledgee's right so to act with
respect to such Income PRIDES or Growth PRIDES and that the pledgee is not the
Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and November 16,
commencing August 16, 1998.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated association or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
8
14
"Pledge" means the pledge under the Pledge Agreement of the Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and of the Treasury Securities, in each case
constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its own
behalf and as attorney-in-fact for the Holders from time to time of the
Securities, as the same may hereafter be amended in accordance with the terms
thereof.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate or
a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Growth PRIDES evidenced thereby; and, for the purposes of this definition, any
Growth PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Growth PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Growth PRIDES
Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Income PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income PRIDES
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Income PRIDES
Certificate.
"Proceeds" has the meaning set forth in Section 1 of the Pledge Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract forming a part of such Security and obligating the Company to (i) sell
and the Holder of such Security to purchase Common Stock and (ii) pay the Holder
9
15
Contract Adjustment Payments, if any, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means August 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in Section
5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution payable in respect of the Capital
Securities and Contract Adjustment Payments, if any, payable on any Payment Date
means the Business Day next preceding such Payment Date.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Remarketing Agent" has the meaning specified in Section 5.4.
"Remarketing Agreement" means the Remarketing Agreement dated as of July
7, 1998 by and among the Company, the Trust, the Remarketing Agent and the
Purchase Contract Agent.
"Remarketing Fee" has the meaning specified in Section 5.4.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"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 an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" means indebtedness of any kind of the Company unless
the instrument under which such indebtedness is incurred expressly provides
10
16
that it is on a parity in right of payment with or subordinate in right of
payment to the Contract Adjustment Payments.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $10.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the Company
or any other similar applicable Federal or State law, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days; or (ii) at any time on or prior to the
Purchase Contract Settlement Date, a judgment, decree or court order for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the winding up or
liquidation of its affairs, shall have been entered, and, unless such judgment,
decree or order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have continued
undischarged and unstayed for a period of 60 days, or (iii) at any time on or
prior to the Purchase Contract Settlement Date the Company shall file a petition
for relief under the Bankruptcy Code, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any other
similar applicable Federal or State law, or shall consent to the filing of any
such petition, or shall consent to the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of its property, or
shall make an assignment for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning specified in Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any successor
statute.
11
17
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means zero-coupon U.S. Treasury Securities (CUSIP
Number 912820 BB 2) which are the principal strip of the U.S. Treasury
Securities which mature on August 15, 2001.
"Trust" means KBHC Financing I, a statutory business trust formed under
the laws of the State of Delaware, or any successor thereto by merger or
consolidation.
"Underwriting Agreement" means the Underwriting Agreement dated June 30,
1998 among the Company, the Trust, and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation.
"Vice President" means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under any
provision of this Agreement, the Company shall furnish to the Agent an Officer's
Certificate stating that all conditions precedent, if any, provided for in this
Agreement relating to the proposed action have been complied with and, if
reasonably requested by the Agent, an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement shall include:
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
12
18
(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 Person, he or she
or it has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless the Company knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless the Person giving such certificate or
Opinion of 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.
13
19
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Agent and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Agreement
and (subject to Section 7.1) conclusive in favor of the Agent and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Certificate shall bind every future Holder of
the same Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Agent or the
Company in reliance thereon, whether or not notation of such action is made upon
such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Securities. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Income PRIDES and the Outstanding Growth PRIDES, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Income PRIDES or the Growth PRIDES,
as the case may be, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken on
or prior to the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on
14
20
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 pro posed action by Holders and the applicable
Expiration Date to be given to the Agent in writing and to each Holder of
Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the Company
may designate any date as the "Expiration Date" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Agent in writing, and to each Holder of Securities in the manner set forth
in Section 1.6, on or prior to the existing Expiration Date. If an Expiration
Date is not designated with respect to any record date set pursuant to this
Section, the Company shall be deemed to have initially designated the 180th day
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Agreement to be
made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Agent at The First National
Bank of Chicago, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX
00000-0000, Attention: Corporate Trust Services Division, 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
15
21
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, to the Company at Xxxxxxx and Broad
Home Corporation, 00000 Xxxxxxxx Xxxx., Xxx Xxxxxxx, XX 90024,Attention:
Chief Financial Officer, or at any other address previously furnished in
writing to the Agent by the Company; or
(3) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if made, given, furnished or filed in writing and
person ally delivered or mailed, first-class postage prepaid, addressed to
the Collateral Agent at The Bank of New York, Xxx Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Corporate Trust Administration, or at any other
address previously furnished in writing by the Collateral Agent to the
Agent, the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Institutional
Trustee at The First National Bank of Chicago, Xxx Xxxxx Xxxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, XX 00000-0000, Attention: Corporate Trust Services
Division, or at any other address previously furnished in writing by the
Institutional Trustee to the Company; or
(5) the Indenture Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and personally delivered or
mailed, first-class postage prepaid, addressed to the Indenture Trustee at
The First National Bank of Chicago, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, XX 00000-0000, Attention: Corporate Trust Services Division, or
at any other address previously furnished in writing by the Indenture
Trustee to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the applicable Register, not
later than the latest
16
22
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Agent, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, then, to the extent permitted by law, the
validity, legality and enforceability of the remaining provisions hereof and
thereof shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and, to the extent provided hereby, the Holders, any benefits or any legal or
equitable right, remedy or claim under this Agreement. The Holders from time to
time shall be beneficiaries of this Agreement and shall be bound by all of the
applicable terms and
17
23
conditions hereof and of the Securities evidenced by their Certificates by their
acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
THIS AGREEMENT AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such payments
shall be made on the next succeeding Business Day with the same force and effect
as if made on such Payment Date, 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 unless there shall be a default in the payment due on such next
succeeding Business Day, except that, if such next succeeding Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made on such Payment
Date.
In any case where any Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement, the
Income PRIDES Certificates or the Growth PRIDES Certificates), the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the immediately following Business Day with the same force and
effect as if performed on the Purchase Contract Settlement Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
18
24
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times during
normal business hours at the Corporate Trust Office for inspection by any
Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES 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 Income PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of
the Company executing such Income PRIDES Certificates, as evidenced by their
execution of the Income PRIDES Certificates.
The definitive Income PRIDES 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 such Income PRIDES
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
The Growth PRIDES Certificates (including the form of Purchase Contract
forming part of the Growth PRIDES evidenced thereby) shall be in substantially
the form set forth in Exhibit B hereto, with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Growth PRIDES are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of
the Company executing such Growth PRIDES Certificates, as evidenced by their
execution of the Growth PRIDES Certificates.
19
25
The definitive Growth PRIDES 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 such Growth PRIDES
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN
THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND
NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income PRIDES
shall be in substantially the form set forth on the form of the Income PRIDES
Certificates.
The form of the Agent's certificate of authentication of the Growth PRIDES
shall be in substantially the form set forth on the form of the Growth PRIDES
Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES and Growth PRIDES evidenced by
Certificates authenticated, executed on behalf of the Holders and delivered
20
26
hereunder is limited to 18,975,000 except for Certificates authenticated,
executed and delivered upon registration of transfer of, in exchange for, or in
lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.9, 3.10, 3.13, 3.14,
5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the Certificates.
Each Income PRIDES Certificate shall evidence the number of Income PRIDES
specified therein, with each such Income PRIDES representing the owner ship by
the Holder thereof of a beneficial interest in a Capital Security or the
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
subject to the Pledge of such Capital Security or the Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, by such Holder pursuant
to the Pledge Agreement, and the rights and obligations of the Holder thereof
and the Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, the Holder of each Income PRIDES shall pledge, pursuant to the
Pledge Agreement, the Capital Security or the Applicable Ownership Interest of
the Treasury Portfolio, as the case may be, forming a part of such Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Capital
Security or the Applicable Ownership Interest of the Treasury Portfolio, as the
case may be, for the benefit of the Company, to secure the obligation of the
Holder under each Purchase Contract to purchase the Common Stock of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth PRIDES
specified therein, with each such Growth PRIDES representing the owner ship by
the Holder thereof of a 1/100 undivided beneficial interest in a Treasury
Security with a principal amount at maturity equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the Company
under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf
of, the Holder of each Growth PRIDES shall pledge, pursuant to the Pledge
Agreement, the Treasury Security to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such Treasury Security, for the benefit of the Company, to secure the
obligation of the Holder under each Purchase Contract to purchase the Common
Stock of the Company.
21
27
Section 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Agent for authentication, execution on behalf of the Holders and delivery,
together with its Issuer Order for authentication of such Certificates, and the
Agent in accordance with such Issuer Order shall authenticate, execute on behalf
of the Holders and deliver such Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or one of its Vice Presidents and its
Treasurer or one of its Assistant Treasurers or its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized signatory of the Agent, as such Holder's attorney-in-fact. Such
signature by an authorized signatory of the Agent shall be conclusive evidence
that the Holder of such Certificate has entered into the Purchase Contracts
evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized signatory of the Agent by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder.
Section 3.4. Temporary Certificates.
22
28
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Agent, and the Agent shall authenticate, execute on
behalf of the Holders, and deliver, in lieu of such definitive Certificates,
temporary Certificates which are in substantially the form set forth in Exhibit
A or Exhibit B hereto, as the case may be, with such letters, numbers or other
marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES are listed, or
as may, consistently herewith, be deter mined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office or the New York office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Certificates, the Company shall execute and deliver to the Agent, and
the Agent shall authenticate, execute on behalf of the Holder, and deliver in
exchange therefor, one or more definitive Certificates of like tenor and
denominations and evidencing a like number of Income PRIDES or Growth PRIDES, as
the case may be, as the temporary Certificate or Certificates so surrendered.
Until so exchanged, the temporary Certificates shall in all respects evidence
the same benefits and the same obligations with respect to the Income PRIDES or
Growth PRIDES, as the case may be, evidenced thereby as definitive
Certificates.
Section 3.5. Registration; Registration of Transfer and Exchange.
The Agent shall keep at the Corporate Trust Office a Register (the "Income
PRIDES Register") in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of Income PRIDES
Certificates and of transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the "Growth PRIDES
Register") in which, subject to such reasonable regulations as it may prescribe,
the Agent shall provide for the registration of the Growth PRIDES Certificates
and transfers of Growth PRIDES Certificates (the Agent, in such capacity, the
"Growth PRIDES Registrar").
23
29
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office or the New York Office, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute on behalf of the
designated transferee or transferees, and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Income
PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Income PRIDES or Growth PRIDES, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office or the New York
Office. Whenever any Certificates are so surrendered for exchange, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver the Certificates which the Holder
making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of Income PRIDES or
Growth PRIDES, as the case may be, and be entitled to the same benefits and
subject to the same obligations, under this Agreement as the Income PRIDES or
Growth PRIDES, as the case may be, evidenced by the Certificate surrendered upon
such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer or
for exchange shall (if so required by the Agent) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent duly executed, by the Holder thereof or its attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Agent may require payment
from the Holder of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Certificates, other than any exchanges pursuant to Sections 3.4,
3.6, 3.9 and 8.5 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 Certificate
presented or
24
30
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earlier of the Purchase Contract
Settlement Date or the Termination Date. In lieu of delivery of a new
Certificate, upon satisfaction of the applicable conditions specified above in
this Section and receipt of appropriate registration or transfer instructions
from such Holder, the Agent shall (i) if the Purchase Contract Settlement Date
has occurred, deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate (together with any cash or other property to which the Holder is
entitled), or (ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Capital Securities, the
appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions
of Article Five hereof.
Section 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
by, or on behalf of, the Company. Such Global Certificate shall initially be
registered on the books and records of the Company in the name of Cede & Co.,
the nominee of the Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.9. The Agent shall enter into an
agreement with the Depositary if so requested by the Company. Unless and until
definitive, fully registered Certificates have been issued to Beneficial Owners
pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in full force and
effect;
(b) the Company shall be entitled to deal with the Clearing Agency
for all purposes of this Agreement (including the payment of Contract Adjustment
Payments, if any, and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this Section 3.6
shall control; and
25
31
(d) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants. The Clearing Agency will make book entry transfers
among Clearing Agency Participants and receive and transmit payments of Contract
Adjustment Payments, if any, to such Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Securities and a successor Clearing Agency is not
appointed within 90 days after such discontinuance pursuant to Section 3.8, (ii)
the Company elects to terminate the book-entry system through the Clearing
Agency with respect to the Securities, or (iii) there shall have occurred and be
continuing a default by the Company in respect of its obligations under one or
more Purchase Contracts, or one or more Capital Securities or Debentures, then
upon surrender of the Global Certificates representing the Book-Entry Interests
with respect to the Securities by the Clearing Agency, accompanied by
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Clearing Agency. The Company shall not be liable for any delay in delivery of
such instructions and may conclusively rely on and shall be protected in relying
on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
26
32
If any mutilated Certificate is surrendered to the Agent, the Company
shall execute and deliver to the Agent, and the Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, a new
Certificate at the cost of the Holder, evidencing the same number of Income
PRIDES or Growth PRIDES, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i) evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) such security or indemnity at the cost of the Holder as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company or the Agent that such Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Agent, and the Agent shall authenticate, execute on behalf of the Holder, and
deliver to the Holder, in lieu of any such destroyed, lost or stolen
Certificate, a new Certificate, evidencing the same number of Income PRIDES or
Growth PRIDES, as the case may be, and bearing a Certificate number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Agent, and the Agent shall not be obligated to
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earlier of
the Purchase Contract Settlement Date or the Termination Date. In lieu of
delivery of a new Certificate, upon satisfaction of the applicable conditions
specified above in this Section and receipt of appropriate registration or
transfer instructions from such Holder, the Agent shall (i) if the Purchase
Contract Settlement Date has occurred, deliver the shares of Common Stock
issuable in respect of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate (together with any cash or other property to which
the Holder is entitled), or (ii) if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Capital Securities,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or the
Treasury Securities, as the case may be, evidenced thereby, in each case subject
to the applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section, the Company
and the Agent may require the payment by the Holder of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the reasonable fees and expenses of the Agent)
connected therewith.
27
33
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Agent, and any agent of the Company or the Agent, may treat
the Person in whose name such Certificate is registered as the owner of the
Income PRIDES or Growth PRIDES evidenced thereby, for the purpose of receiving
distributions on the Capital Securities or on the maturing quarterly interest
strips of the Treasury Portfolio, as applicable, receiving payments of Contract
Adjustment Payments, if any, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any distributions on the Capital
Securities or the Contract Adjustment Payments, if any, payable in respect of
the Purchase Contracts constituting a part of the Income PRIDES or Growth PRIDES
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 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 Clearing Agency (or its nominee), as a Holder,
with respect to such Global Certificate or impair, as between such Clearing
Agency and owners of beneficial interests in such Global Certificate, the
operation of customary practices governing the exercise of rights of such
Clearing Agency (or its nominee) as Holder of such Global Certificate.
28
34
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on or
after the Purchase Contract Settlement Date, upon the transfer of Capital
Securities, the appropriate Applicable Ownership Interest of the Treasury
Portfolio or Treasury Securities, as the case may be, after the occurrence of a
Termination Event or pursuant to an Early Settlement, or upon the registration
of a transfer or exchange of a Security, or a Collateral Substitution or the
re-establishment of an Income PRIDES or a Growth PRIDES shall, if surrendered to
any Person other than the Agent, be delivered to the Agent and, if not already
cancelled, shall be promptly cancelled by it. The Company may at any time
deliver to the Agent for cancellation any Certificates previously authenticated,
executed and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Certificates so delivered shall, upon Issuer Order,
be promptly cancelled by the Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for any
Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Agent shall
upon written request be returned to the Company.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Agent
cancelled or for cancellation.
Section 3.13. Establishment or Reestablishment of Growth PRIDES.
A Holder may separate the Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as applicable, from the related
Purchase Contracts in respect of an Income PRIDES by substituting for such
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, Treasury Securities in an aggregate
principal amount equal to the aggregate Stated Amount of such Capital Securities
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as applicable (a
"Collateral Substitution"), at any time from and after the date of this
Agreement and on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date in the case of the Capital Securities and on
or prior to the second Business Day immediately preceding the Purchase Contract
Settlement Date in the case of the appropriate Applicable Ownership Interest of
the Treasury Portfolio, in each case by (a) depositing with the Collateral Agent
Treasury Securities having an aggregate principal amount equal to
29
35
the aggregate Stated Amount of the Capital Securities comprising part of such
Income PRIDES or for the appropriate Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) of the Treasury Portfolio
comprising part of such Income PRIDES, as the case may be, and (b) (i)
delivering cash in an amount equal to the excess of the Contract Adjustment
Payments that would have accrued since the last date that Contract Adjustment
Payments were made to the date of substitution on the Growth PRIDES being
created by the holder, over the Contract Adjustment Payments that have accrued
over the same time period on the related Income PRIDES, which amount the Agent
shall promptly remit to the Company, and (ii) transferring the related Income
PRIDES to the Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred the relevant
amount of Treasury Securities to the Collateral Agent and requesting that the
Agent instruct the Collateral Agent to release the Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, underlying such Income PRIDES, whereupon the Agent shall promptly give
such instruction to the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Treasury Securities described in clause (a) above
and the instruction described in clause (b) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, having the appropriate
aggregate Stated Amount in the case of such Capital Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, from the
Pledge, free and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer the Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, to the
Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
Growth PRIDES Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Income PRIDES.
30
36
Holders who elect to separate the Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the related Purchase Contract and to substitute Treasury Securities for
such Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, shall be responsible for any fees or
expenses payable to the Collateral Agent for its services as Collateral Agent in
respect of the substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders may make Collateral Substitutions (i) only in integral multiples
of 100 Income PRIDES if Capital Securities are being substituted by Treasury
Securities, or (ii) only in integral multiples of 40,000 Income PRIDES if the
appropriate Applicable Ownership Interests of the Treasury Portfolio are being
substituted by Treasury Securities.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Income PRIDES or fails
to deliver an Income PRIDES Certificate(s) to the Agent after depositing
Treasury Securities with the Collateral Agent, the Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting a part of such Income PRIDES, and any distributions on such
Capital Security or the Applicable Ownership Interest of the Treasury Portfolio,
as the case may be, shall be held in the name of the Agent or its nominee in
trust for the benefit of such Holder, until such Income PRIDES is so transferred
or the Income PRIDES Certificate is so delivered, as the case may be, or, with
respect to an Income PRIDES Certificate, such Holder provides evidence
satisfactory to the Company and the Agent that such Income PRIDES Certificate
has been destroyed, lost or stolen, together with any indemnity that may be
required by the Agent and the Company.
Except as described in this Section 3.13, for so long as the Purchase
Contract underlying an Income PRIDES remains in effect, such Income PRIDES shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, and Purchase
Contract comprising such Income PRIDES may be acquired, and may be transferred
and exchanged, only as an Income PRIDES.
31
37
Section 3.14. Establishment or Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may create or recreate Income PRIDES at any
time (i) on or prior to the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has not occurred,
and (ii) on or prior to the second Business Day immediately preceding the
Purchase Contract Settlement Date, if a Tax Event Redemption has occurred and an
Applicable Ownership Interest in the Treasury Portfolio has become a component
of the Income PRIDES, in each case by (a) depositing with the Collateral Agent
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, having an aggregate Stated Amount in the
case of the Capital Securities, or an appropriate Applicable Ownership Interest
(as defined in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, equal to the aggregate principal amount of the
Treasury Securities comprising part of the Growth PRIDES and (b) transferring
the related Growth PRIDES to the Agent accompanied by a notice to the Agent,
substantially in the form of Exhibit D hereto, stating that the Holder has
transferred the relevant amount of Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, to
the Collateral Agent and requesting that the Agent instruct the Collateral Agent
to release the Treasury Securities underlying such Growth PRIDES, whereupon the
Agent shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C hereto. Upon receipt of the Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, described in clause (a) above and the instruction
described in clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will release to the Agent, on behalf of the
Holder, of the Treasury Securities having a corresponding aggregate principal
amount from the Pledge, free and clear of the Company's security interest
therein, and upon receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver an
Income PRIDES Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled Growth PRIDES.
32
38
Holders of Growth PRIDES may establish or reestablish Income PRIDES in
integral multiples of 100 Growth PRIDES for 100 Income PRIDES if a Tax Event
Redemption has not occurred, and in integral multiples of 40,000 Growth PRIDES
for 40,000 Income PRIDES if a Tax Event Redemption has occurred.
In the event a Holder establishing or re-establishing Income PRIDES
pursuant to this Section 3.14 fails to effect a book-entry transfer of the
Growth PRIDES or fails to deliver a Growth PRIDES Certificate(s) to the Agent
after depositing Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, with the Collateral
Agent, the Treasury Securities constituting a part of such Growth PRIDES shall
be held in the name of the Agent or its nominee in trust for the benefit of such
Holder, until such Growth PRIDES is so transferred or the Growth PRIDES
Certificate is so delivered, as the case may be, or, with respect to a Growth
PRIDES Certificate, such Holder provides evidence satisfactory to the Company
and the Agent that such Growth PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the Agent and the
Company.
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be separable into its constituent parts and the rights and obligations of
the Holder of such Growth PRIDES in respect of the Treasury Security and
Purchase Contract comprising such Growth PRIDES may be acquired, and may be
transferred and exchanged, only as a Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the Agent
of the Capital Securities, the appropriate Applicable Ownership Interest of the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Income PRIDES and the Growth PRIDES pursuant to the terms of the Pledge
Agreement, the Agent shall request transfer instructions with respect to such
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it appears in the
Income PRIDES Register or the Growth PRIDES Register, as the case may be. Upon
book-entry transfer of the Income PRIDES or Growth PRIDES or delivery of an
Income PRIDES Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Capital Securities, the
Applicable Ownership Interest of the Treasury
33
39
Portfolio or Treasury Securities, as the case may be, underlying such Income
PRIDES or Growth PRIDES, as the case may be, to such Holder by book-entry
transfer, or other appropriate procedures, in accordance with such instructions;
provided, however, that, to the extent that a Holder of Income PRIDES or Growth
PRIDES would otherwise be entitled to receive less than $1,000 principal amount
at maturity of the Treasury Portfolio or the Treasury Securities, the Agent
shall dispose of such securities for cash, and transfer the appropriate amount
of such cash to such Holder in accordance with such Holder's instructions. In
the event a Holder of Income PRIDES or Growth PRIDES fails to effect such
transfer or delivery, the Capital Securities, the appropriate Applicable
Ownership Interest of the Treasury Portfolio or Treasury Securities, as the case
may be, underlying such Income PRIDES or Growth PRIDES, as the case may be, and
any distributions thereon, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES or Growth
PRIDES are transferred or the Income PRIDES Certificate or Growth PRIDES
Certificate is surrendered or such Holder provides satisfactory evidence that
such Income PRIDES Certificate or Growth PRIDES Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the Agent
and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company,
receiver, liquidator or a person or entity performing similar functions, its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation.
ARTICLE IV
The Capital Securities
Section 4.1. Payment of Distribution; Rights to Distributions Preserved;
Distribution Rate Reset; Notice.
A distribution on any Capital Security or on the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, which is paid
on any Payment Date shall, subject to receipt thereof by the Agent from the
Collateral
34
40
Agent as provided by the terms of the Pledge Agreement, be paid to the Person in
whose name the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) of which such Capital Security or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, is
a part is registered at the close of business on the Record Date for such
Payment Date.
Each Income PRIDES Certificate evidencing Capital Securities delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Income PRIDES Certificate shall carry the rights to
distributions accrued and unpaid, and distributions to accrue, which were or
will be carried by the Capital Securities underlying such other Income PRIDES
Certificate.
In the case of any Income PRIDES with respect to which Cash Settlement of
the underlying Purchase Contract is effected on the Business Day immediately
preceding the Purchase Contract Settlement Date pursuant to prior notice, or
with respect to which Early Settlement of the underlying Purchase Contract is
effected on an Early Settlement Date, or with respect to which a Collateral
Substitution is effected, in each case on a date that is after any Record Date
and on or prior to the next succeeding Payment Date, distributions on the
Capital Securities or on the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, underlying such Income PRIDES otherwise
payable on such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or Collateral
Substitution, and such distributions shall, subject to receipt thereof by the
Agent, be payable to the Person in whose name the Income PRIDES Certificate (or
one or more Predecessor Certificates) was registered at the close of business on
the Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Income PRIDES with respect to which Cash
Settlement or Early Settlement of the underlying Purchase Contract is effected
on the Business Day immediately preceding the Purchase Contract Settlement Date
or an Early Settlement Date, as the case may be, or with respect to which a
Collateral Substitution has been effected, distributions on the related Capital
Securities or on the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, that would otherwise be payable after the
Purchase Contract Settlement Date or Early Settlement Date shall not be payable
hereunder to the Holder of such Income PRIDES; provided, however, that to the
extent that such Holder continues to hold the separated Capital Securities that
formerly comprised a part of such Holder's Income PRIDES, such Holder shall be
entitled to receive the distributions on such separated Capital Securities.
35
41
The applicable Coupon Rate on the Capital Securities on and after the
Purchase Contract Settlement Date will be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the Purchase Contract Settlement
Date). On the Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Company. On the Business Day immediately following the Reset Announcement
Date, the Capital Securities Holders will be notified of such Reset Spread and
Two-Year Benchmark Treasury by the Company. Such notice shall be sufficiently
given to Holders of Capital Securities if published in an Authorized Newspaper
in The City of New York.
Not later than 7 calendar days nor more than 15 calendar days prior to the
Reset Announcement Date, the Company will notify the DTC or its nominee (or any
successor Clearing Agency or its nominee) by first-class mail, postage prepaid,
to notify the Beneficial Owners or Clearing Agency Participants holding Income
PRIDES or Growth PRIDES, of such Reset Announcement Date and the procedures to
be followed by such Holders of Income PRIDES who intend to settle their
obligation under the Purchase Contract with separate cash on the Purchase
Contract Settlement Date.
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Capital
Securities pledged with the Collateral Agent but only to the extent instructed
by the Holders as described below. Upon receipt of notice of any meeting at
which holders of Capital Securities are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Capital Securities,
the Agent shall, as soon as practicable thereafter, mail to the Holders of
Income PRIDES a notice (a) containing such information as is contained in the
notice or solicitation, (b) stating that each Holder on the record date set by
the Agent therefor (which, to the extent possible, shall be the same date as the
record date for determining the holders of Capital Securities entitled to vote)
shall be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Capital Securities underlying their Income PRIDES and (c)
stating the manner in which such instructions may be given. Upon the written
request of the Holders of Income PRIDES on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of Capital
Securities as
36
42
to which any particular voting instructions are received. In the absence of
specific instructions from the Holder of an Income PRIDES, the Agent shall
abstain from voting the Capital Security underlying such Income PRIDES. The
Company hereby agrees, if applicable, to solicit Holders of Income PRIDES to
timely instruct the Agent in order to enable the Agent to vote such Capital
Securities and the Trust shall covenant to such effect in the Declaration.
Section 4.3. Distribution of Debentures; Tax Event Redemption.
Upon the occurrence of an Investment Company Event or a liquidation of the
Trust in accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and underlying the Capital Securities equal
to the aggregate Stated Amount of the Pledged Capital Securities shall be
delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. Thereafter, the Debentures will be substituted for the Pledged
Capital Securities, and will be held by the Collateral Agent in accordance with
the terms of the Pledge Agreement to secure the obligations of each Holder of an
Income PRIDES to purchase the Common Stock under the Purchase Contracts
constituting a part of such Income PRIDES. Following the occurrence of an
Investment Company Event or a liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and obligations with
respect to the Debentures as the Holders and the Collateral Agent had in respect
of the Capital Securities subject to the Pledge thereof as provided in Sections
2, 3, 4, 5 and 6 of the Pledge Agreement, and any reference herein or in the
Certificates to the Capital Securities shall be deemed to be a reference to such
Debentures and any references to distributions on the Capital Securities shall
be deemed to be a reference to interest on such Debentures. The Company may
cause to be made in any Income PRIDES Certificates thereafter to be issued such
change in phraseology and form (but not in substance) as may be appropriate to
reflect the liquidation of the Trust and the substitution of Debentures for
Capital Securities as Collateral.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for
37
43
payment to the Holders of such Income PRIDES. The Treasury Portfolio will be
substituted for the Pledged Capital Securities, and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to secure
the obligation of each Holder of an Income PRIDES to purchase the Common Stock
of the Company under the Purchase Contract constituting a part of such Income
PRIDES. Following the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Income PRIDES and the Collateral Agent
shall have such security interests, rights and obligations with respect to the
Treasury Portfolio as the Holder of Income PRIDES and the Collateral Agent had
in respect of the Capital Security or Debentures, as the case may be, subject to
the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge
Agreement, and any reference herein or in the Certificates to the Capital
Security or the Debenture shall be deemed to be reference to such Treasury
Portfolio and any reference herein or in the Certificates to distributions on
the Capital Securities or interest on the Debentures shall be deemed to be a
reference to corresponding distributions on the Treasury Portfolio. The Company
may cause to be made in any Income PRIDES Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be appropriate
to reflect the liquidation of the Trust and the substitution of the Treasury
Portfolio for Capital Securities or Debentures as collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall, unless an Early Settlement has occurred in
accordance with Section 5.9 hereof, obligate the Holder of the related Security
to purchase, and the Company to sell, on the Purchase Contract Settlement Date
at a price equal to the Stated Amount (the "Purchase Price"), a number of newly
issued shares of Common Stock equal to the Settlement Rate unless, on or prior
to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event with respect to the Security of which such Purchase Contract
is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value
(as defined below) is equal to or greater than $38.10 (the "Threshold
Appreciation Price"), .2625 shares of Common Stock per Purchase Contract, (b) if
the Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $31.75, the number of shares of Common Stock per Purchase Contract
equal to the Stated Amount divided
38
44
by the Applicable Market Value and (c) if the Applicable Market Value is less
than or equal to $31.75, .3150 shares of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in Section 5.6 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share). As provided in
Section 5.10, no fractional shares of Common Stock will be issued upon
settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date
or, for purposes of determining cash payable in lieu of fractional shares in
connection with an Early Settlement, the third Trading Day immediately preceding
the relevant Early Settlement Date. The "Closing Price" of the Common Stock on
any date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange, Inc. (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, as reported by the Nasdaq
National Market or, if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
Each Holder of an Income PRIDES or a Growth PRIDES, by its acceptance
thereof, irrevocably authorizes the Agent to enter into and perform the related
Purchase Contract on its behalf as its attorney-in-fact (including the execution
of Certificates on behalf of such Holder), agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its obligations under such
Purchase Contracts, and consents to the provisions hereof, irrevocably
authorizes the Agent as its attorney-in-fact to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to and
agrees to be bound by the Pledge of the
39
45
Capital Securities, the Treasury Portfolio or the Treasury Securities pursuant
to the Pledge Agreement; provided that upon a Termination Event, the rights of
the Holder of such Security under the Purchase Contract may be enforced without
regard to any other rights or obligations. Each Holder of an Income PRIDES or a
Growth PRIDES, by its acceptance thereof, further covenants and agrees, that, to
the extent and in the manner provided in Section 5.4 and the Pledge Agreement,
but subject to the terms thereof, payments in respect of the Stated Amount of
the Capital Securities or the Proceeds of the Treasury Securities or the
Treasury Portfolio on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall be
bound (without the necessity of any other action on the part of such
transferee), under the terms of this Agreement, the Purchase Contracts
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The Company
covenants and agrees, and each Holder of a Certificate, by its acceptance
thereof, likewise covenants and agrees, to be bound by the provisions of this
paragraph.
Section 5.2. Contract Adjustment Payments.
Subject to Section 5.3 herein, the Company shall pay, on each Payment
Date, the Contract Adjustment Payments, if any, payable in respect of each
Purchase Contract to the Person in whose name a Certificate (or one or more
Predecessor Certificates) is registered at the close of business on the Record
Date next preceding such Payment Date. The Contract Adjustment Payments, if any,
will be payable at the New York Office maintained for that purpose or, at the
option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Income PRIDES Register or
the Growth PRIDES Register.
Upon the occurrence of a Termination Event, the Company's obligation to
pay Contract Adjustment Payments (including any accrued or Deferred Contract
Adjustment Payments), if any, shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the re-establishment of an Income PRIDES) any other
Certificate shall carry the
40
46
rights to Contract Adjustment Payments, if any, accrued and unpaid, and to
accrue Contract Adjustment Payments, if any, which were carried by the Purchase
Contracts underlying such other Certificates.
Subject to Section 5.9, in the case of any Security with respect to which
Early Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, or in respect of which Cash Settlement of the underlying
Purchase Contract is effected on the Business Day immediately preceding the
Purchase Contract Settlement Date, or with respect to which a Collateral
Substitution or an establishment or re-establishment or Income PRIDES pursuant
to Section 3.14 is effected, in each case on a date that is after any Record
Date and on or prior to the next succeeding Payment Date, Contract Adjustment
Payments on the Purchase Contracts underlying such Securities otherwise payable
on such Payment Date shall be payable on such Payment Date notwithstanding such
Cash Settlement, Early Settlement, Collateral Substitution or establishment or
re-establishment of Income PRIDES, and such Contract Adjustment Payments shall
be paid to the Person in whose name the Certificate evidencing such Security (or
one or more Predecessor 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 Cash
Settlement or Early Settlement of the underlying Purchase Contract is effected
on the Business Day immediately preceding the Purchase Contract Settlement Date
or an Early Settlement Date, as the case may be, or with respect to which a
Collateral Substitution or an establishment or re-establishment of Income PRIDES
has been effected, Contract Adjustment Payments, if any, that would otherwise be
payable after the Purchase Contract Settlement Date or Early Settlement Date
with respect to such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract Adjustment Payments, if
any, will be subordinated and junior in right of payment to the Company's
obligations under any Senior Indebtedness.
Section 5.3. Deferral of Payment Dates For Contract Adjustment Payments.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, 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
41
47
required to give notice of the Record Date or Payment Date with respect to
payment of such Contract Adjustment Payments, if any, to the NYSE or other
applicable self-regulatory organization or to Holders of the Securities, but in
any event not less than one Business Day prior to such Record Date. Any Contract
Adjustment Payments, if any, so deferred shall, to the extent permitted by law,
bear additional Contract Adjustment Payments thereon at the rate of 8.75% per
annum (computed on the basis of 360 day year of twelve 30 day months),
compounding on each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments, if any, together with the
additional Contract Adjustment Payments accrued thereon, being referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to this Section. No
Contract Adjustment Payments, if any, may be deferred to a date that is after
the Purchase Contract Settlement Date and no such deferral period may end other
than on a Payment Date. If the Purchase Contracts are terminated upon the
occurrence of a Termination Event, the Holder's right to receive Contract
Adjustment Payments, if any, and Deferred Contract Adjustment Payments will
terminate.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date in lieu of a cash payment a number of shares of Common Stock (in
addition to a number of shares of Common Stock equal to the Settlement Rate)
equal to (x) the aggregate amount of Deferred Contract Adjustment Payments
payable to such Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the Company with
respect to the payment of Deferred Contract Adjustment Payments on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable with
respect to such payment of Deferred Contract Adjustment Payments, the Holder
will be entitled to receive an amount in cash as provided in Section 5.10.
42
48
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then, until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of capital stock of the Company in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans or the satisfaction by the Company of its obligations
pursuant to any contract or security outstanding on the date of such event
requiring the Company to purchase capital stock of the Company, (ii) as a result
of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company (or
rights to acquire capital stock) or repurchases or redemptions of capital stock
solely from the issuance or exchange of capital stock or (v) redemptions or
repurchases of any rights outstanding under a shareholder rights plan or the
declaration thereunder of a dividend of rights in the future).
Section 5.4. Payment of Purchase Price.
(a) (i) Unless a Tax Event Redemption has occurred or a Holder
settles the underlying Purchase Contract through the early delivery of
cash to the Purchase Contract Agent in the manner described in Section
5.9, each Holder of an Income PRIDES must notify the Agent by use of a
notice in substantially the form of Exhibit E hereto of its intention to
pay in cash ("Cash Settlement") the Purchase Price for the shares of
Common Stock to be purchased pursuant to a Purchase Contract. Such notice
shall be made on or prior to 5:00 p.m., New York City time, on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date.
The Agent shall promptly notify the Collateral Agent of the receipt of
such a notice from a Holder intending to make a Cash Settlement.
(ii) A Holder of an Income PRIDES who has so notified the Agent of
its intention to make a Cash Settlement is required to pay the Purchase
Price to the Collateral Agent prior to 11:00 a.m., New York City time, on
the Business Day immediately preceding the Purchase Contract Settlement
Date
43
49
in lawful money of the United States by certified or cashiers' check or
wire transfer, in each case in immediately available funds payable to or
upon the order of the Company. Any cash received by the Collateral Agent
will be invested promptly by the Collateral Agent in Permitted Investments
and paid to the Company on the Purchase Contract Settlement Date in
settlement of the Purchase Contract in accordance with the terms of this
Agreement and the Pledge Agreement. Any funds received by the Collateral
Agent in respect of the investment earnings from the investment in such
Permitted Investments, will be distributed to the Agent when received for
payment to the Holder.
(iii) If a Holder of an Income PRIDES fails to notify the Agent of
its intention to make a Cash Settlement in accordance with paragraph
(a)(i) above, such failure shall constitute an event of default and the
Holder shall be deemed to have consented to the disposition of the pledged
Capital Securities pursuant to the remarketing as described in paragraph
(b) below. If a Holder of an Income PRIDES does notify the Agent as
provided in paragraph (a)(i) above of its intention to pay the Purchase
Price in cash, but fails to make such payment as required by paragraph
(a)(ii) above, such failure shall also constitute a default; however, the
Capital Securities of such a Holder will not be remarketed but instead the
Collateral Agent, for the benefit of the Company, will exercise its rights
as a secured party with respect to such Capital Securities, including but
not limited to those rights specified in paragraph (c) below.
(b) In order to dispose of the Capital Securities (or Debentures
exchanged for Capital Securities following an Investment Company Event or
other dissolution of the Trust) of Income PRIDES Holders who have not
notified the Agent of their intention to effect a Cash Settlement as
provided in paragraph (a)(i) above, the Company shall engage a nationally
recognized investment bank (the "Remarketing Agent") pursuant to the
Remarketing Agreement to sell such Capital Securities (or Debentures). In
order to facilitate the remarketing, the Agent shall notify, by 10:00
a.m., New York City time, on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, the Remarketing Agent of the
aggregate number of Capital Securities (or Debentures) to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for remarketing such Capital Securities (or
Debentures) to the Remarketing Agent. Upon receipt of such notice from the
Agent and such Capital Securities (or Debentures) from the Collateral
Agent, the Remarketing Agent will,
44
50
on the third Business Day immediately preceding the Purchase Contract
Settlement Date, use its reasonable efforts to remarket such Capital
Securities (or Debentures) on such date at a price of approximately
100.75% (but not less than 100%) of the aggregate stated liquidation
amount of such Capital Securities (or the aggregate principal amount of
Debentures), plus accrued and unpaid distributions (or, in the case of
Debentures, accrued and unpaid interest)(including in each case deferred
distributions or deferred interest, as the case may be), if any, thereon;
provided that the Company may limit the Reset Rate to be no higher than
the rate on the Two-Year Benchmark Treasury plus 300 basis points (3.00%)
and provided further that the Reset Rate shall in no event exceed (and the
Company shall limit the Reset Rate so that it does not exceed) the maximum
rate permitted by law. After deducting as the remarketing fee
("Remarketing Fee") an amount not exceeding 50 basis points (.50%) of the
aggregate stated liquidation amount of the remarketed Capital Securities
(or the aggregate principal amount of the remarketed Debentures) from any
amount of such proceeds in excess of the aggregate stated liquidation
amount of the remarketed Capital Securities (or the aggregate principal
amount of the remarketed Debentures) plus accrued and unpaid distributions
(or, in the case of Debentures, accrued and unpaid interest) (including in
each case deferred distributions or deferred interest, as the case may
be), if any, then the Remarketing Agent will remit the entire amount of
the proceeds from such remarketing to the Collateral Agent. Such portion
of the proceeds, equal to the aggregate stated liquidation amount of such
Capital Securities (or the aggregate principal amount of Debentures) will
automatically be applied by the Collateral Agent, in accordance with the
Pledge Agreement to satisfy in full such Income PRIDES holders'
obligations to pay the Purchase Price for the Common Stock under the
related Purchase Contracts on the Purchase Contract Settlement Date. Any
proceeds in excess of those required to pay the Purchase Price and the
Remarketing Fee will be remitted to the Agent for payment to the Holders
of the related Income PRIDES. Income PRIDES Holders whose Capital
Securities (or Debentures) are so remarketed will not otherwise be
responsible for the payment of any Remarketing Fee in connection
therewith. If, in spite of using its reasonable efforts, the Remarketing
Agent cannot remarket the related Capital Securities (or Debentures)
(other than to the Company) of such Holders of Income PRIDES at a price
not less than 100% of the aggregate stated liquidation amount of such
Capital Securities (or the aggregate principal amount of Debentures) plus
accrued and unpaid distributions (or, in the case of Debentures, accrued
and unpaid interest) (including in each case deferred distribu-
45
51
tions or deferred interest, as the case may be), if any, the remarketing
will be deemed to have failed (a "Failed Remarketing") and in accordance
with the terms of the Pledge Agreement the Collateral Agent for the
benefit of the Company will exercise its rights as a secured party with
respect to such Capital Securities (or Debentures), including those
actions specified in paragraph (c) below; provided, that if upon a Failed
Remarketing the Collateral Agent exercises such rights for the benefit of
the Company with respect to such Capital Securities (or Debentures), any
accrued and unpaid distributions (or, in the case of Debentures, accrued
and unpaid interest) (including in each case deferred distributions or
deferred interest, as the case may be) on such Capital Securities (or
Debentures) will become payable and be paid in cash by the Company to the
Agent for payment to the Holder of the Income PRIDES to which such Capital
Securities (or Debentures) relates. Such payment will be made by the
Company on or prior to 11 a.m. New York City time on the Purchase Contract
Settlement Date in lawful money of the United States by certified or
cashiers' check or wire transfer in immediately available funds payable to
or upon the order of the Agent. The Company will cause a notice of such
Failed Remarketing to be published on the second Business Day immediately
preceding the Purchase Contract Settlement Date in a daily newspaper in
the English language of general circulation in The City of New York, which
is expected to be The Wall Street Journal.
(c) With respect to any Capital Securities beneficially owned by
Holders who have elected Cash Settlement but failed to deliver cash as
required in (a)(ii) above, or with respect to Capital Securities which are
subject to a Failed Remarketing, the Collateral Agent for the benefit of
the Company reserves all of its rights as a secured party with respect
thereto and, subject to applicable law and paragraph (h) below, may, among
other things, (i) retain the Capital Securities in full satisfaction of
the Holders obligations under the Purchase Contracts or (ii) sell the
Capital Securities in one or more public or private sales.
(d) (i) Unless a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) settles the underlying Purchase Contract
through the early delivery of cash to the Purchase Contract Agent in
the manner described in Section 5.9, each Holder of an Income PRIDES
(if a Tax Event Redemption has occurred) must notify the Agent by
use of a notice in substantially the form of Exhibit E hereto of its
intention to pay in cash the Purchase Price for the shares of
46
52
Common Stock to be purchased pursuant to a Purchase Contract on or
prior to 5:00 p.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date. The
Agent shall promptly notify the Collateral Agent of the receipt of
such a notice from a Holder intending to make such a Cash
Settlement.
(ii) A Holder of an Income PRIDES (if a Tax Event Redemption
has occurred) who has so notified the Agent of its intention to make
a Cash Settlement in accordance with paragraph (d)(i) above is
required to pay the Purchase Price to the Collateral Agent prior to
11:00 a.m., New York City time, on the Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of
the United States by certified or cashiers' check or wire transfer,
in each case in immediately available funds payable to or upon the
order of the Company. Any cash received by the Collateral Agent will
be invested promptly by the Collateral Agent in Permitted
Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance
with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Collateral Agent in respect of the investment
earnings from the investment in such Permitted Investments will be
distributed to the Agent when received for payment to the Holder.
(iii) If a Holder of an Income PRIDES (if a Tax Event
Redemption has occurred) fails to notify the Agent of its intention
to make a Cash Settlement in accordance with paragraph (d)(i) above,
or if a Holder of an Income PRIDES (if a Tax Event Redemption has
occurred) does notify the Agent as provided in paragraph (d)(i)
above its intention to pay the Purchase Price in cash, but fails to
make such payment as required by paragraph (d)(ii) above, then upon
the maturity of the appropriate Applicable Ownership Interest of the
Treasury Portfolio held by the Collateral Agent on the Business Day
immediately prior to the Purchase Contract Settlement Date, the
appropriate Applicable Ownership Interest of the Treasury Portfolio
received by the Collateral Agent will be invested promptly in
overnight Permitted Investments. On the Purchase Contract Settlement
Date an amount equal to the Purchase Price will be remitted to the
Company as payment thereof without receiving any instructions from
the Holder. In the event the sum of the proceeds from the related
appropriate Appli-
47
53
cable Ownership Interest of the Treasury Portfolio and the
investment earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being settled
thereby, the Collateral Agent will distribute such excess to the
Agent for the benefit of the Holder of the related Income PRIDES
when received.
(e) Any distribution to Holders of excess funds and interest
described above, shall be payable at the New York Office maintained for
that purpose or, at the option of the Holder, by check mailed to the
address of the Person entitled thereto at such address as it appears on
the Register.
(f) Unless a Holder settles the underlying Purchase Contract through
the early delivery of cash to the Collateral Agent in the manner described
herein, the Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificate
therefor to the Holder unless it shall have received payment in full of
the Purchase Price for the shares of Common Stock to be purchased
thereunder in the manner herein set forth.
(g) Upon Cash Settlement of any Purchase Contract, (i) the
Collateral Agent will in accordance with the terms of the Pledge Agreement
cause the Pledged Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, or the
Pledged Treasury Securities underlying the relevant Security to be
released from the Pledge by the Collateral Agent free and clear of any
security interest of the Company and transferred to the Agent for delivery
to the Holder thereof or its designee as soon as practicable and (ii)
subject to the receipt thereof from the Collateral Agent, the Agent shall,
by book-entry transfer, or other appropriate procedures, in accordance
with instructions provided by the Holder thereof, transfer such Capital
Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, or such Treasury Securities (or,
if no such instructions are given to the Agent by the Holder, the Agent
shall hold such Capital Securities or the Treasury Portfolio, as the case
may be, or such Treasury Securities, and any distributions thereon, in the
name of the Agent or its nominee in trust for the benefit of such Holder).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and are payable solely out of any Cash Settlement
or the proceeds of any Collateral pledged to secure the obligations of the
48
54
Holders and in no event will Holders be liable for any deficiency between
the proceeds of Collateral disposition and the Purchase Price.
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event or an Early Settlement shall have occurred, on
the Purchase Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by the Holders
pursuant to the foregoing provisions of this Article and subject to Section
5.6(b), the Company shall issue and deposit with the Agent, for the benefit of
the Holders of the Outstanding Securities, one or more certificates representing
newly issued shares of Common Stock registered in the name of the Agent (or its
nominee) as custodian for the Holders (such certificates for shares of Common
Stock, together with any dividends or distributions for which both a record date
and payment date for such dividend or distribution has occurred on or after the
Purchase Contract Settlement Date, being hereinafter referred to as the
"Purchase Contract Settlement Fund") to which the Holders are entitled
hereunder. Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together with
settlement instructions thereon duly completed and executed, the Holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Common Stock which such Holder is
entitled to receive pursuant to the provisions of this Article Five (after
taking into account all Securities then held by such Holder) together with cash
in lieu of fractional shares as provided in Section 5.10 and any dividends or
distributions with respect to such shares constituting part of the Purchase
Contract Settlement Fund, but without any interest thereon, and the Certificate
so surrendered shall forthwith be cancelled. Such shares shall be registered in
the name of the Holder or the Holder's designee as specified in the settlement
instructions provided by the Holder to the Agent. If any shares of Common Stock
issued in respect of a Purchase Contract are to be registered to a Person other
than the Person in whose name the Certificate evidencing such Purchase Contract
is registered, no such registration shall be made unless the Person requesting
such registration has paid any transfer and other taxes required by reason of
such registration in a name other than that of the registered Holder of the
Certificate evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or is not
payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
49
55
(1) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Settlement Rate, as in
effect at the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which the numerator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number of
shares constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the day following the
date fixed for such determination. For the purposes of this paragraph (1), the
number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any distribution on
shares of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to
all holders of its Common Stock (not being available on an equivalent basis to
Holders of the Securities upon settlement of the Purchase Contracts underlying
such Securities) entitling them, for a period expiring within 45 days after the
record date for the determination of stockholders entitled to receive such
rights, options or warrants, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per share of the Common
Stock on the date fixed for the determination of stockholders entitled to
receive such rights, options or warrants (other than pursuant to a dividend
reinvestment plan or share purchase 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 shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock which the aggregate offering price of the total number of shares
of Common Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but
50
56
shall include any shares issuable in respect of any scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company shall not issue any
such rights, options or warrants in respect of shares of Common Stock held in
the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
or split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock evidences of its indebtedness, shares of
capital stock, securities, cash or other property (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 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 the
determination of stockholders entitled to receive such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution filed with the Agent) on such
date of the portion of the evidences of indebtedness, shares of capital stock,
securities, cash or other property so distributed applicable to one share of
Common Stock and the denominator shall be such Current Market Price per share of
the Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution. In any case in which this
paragraph (4) is applicable, paragraph (2) of this Section shall not be
applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (i) regular
quarterly
51
57
cash distributions, (ii) any cash that is distributed in a Reorganization Event
to which Section 5.6(b) applies or (iii) cash that is distributed as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock (other than regular quarterly
cash distributions) made exclusively in cash within the 12 months preceding the
date of payment of such distribution and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section has been made
and (III) the aggregate of any cash plus the fair market value, as of the
expiration of the applicable tender or exchange offer referred to below (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution), of consideration payable in respect of any
tender or exchange offer (other than consideration payable in respect of any
odd-lot tender offer) by the Company or any of its subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the date of
payment of the distribution described in clause (I) above and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made, exceeds 15% of the product of the Current Market Price
per share of the Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution times the number of
shares of Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date for determination, the
Settlement Rate shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on the date fixed for determination of the stockholders
entitled to receive such distribution by a fraction (i) the numerator of which
shall be equal to the Current Market Price per share of the Common Stock on the
date fixed for such determination less an amount equal to the quotient of (x)
the combined amount distributed or payable in the transactions described in
clauses (I), (II) and (III) above and (y) the number of shares of Common Stock
outstanding on such date for determination and (ii) the denominator of which
shall be equal to the Current Market Price per share of the Common Stock on such
date for determination.
(6) In case (I) a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to stockholders (based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of
Purchased Shares) of an aggregate consideration having a fair market value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a
52
58
Board Resolution) that combined together with (II) the aggregate of the cash
plus the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution), as of
the expiration of such tender or exchange offer, of consideration payable in
respect of any other tender or exchange offer (other than consideration payable
in respect of any odd-lot tender offer) by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or this paragraph
(6) has been made and (III) the aggregate amount of any distributions (other
than regular quarterly cash distributions) to all holders of the Company's
Common Stock made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (5) of this Section or this paragraph (6) has
been made, exceeds 15% of the product of the Current Market Price per share of
the Common Stock as of the last time (the "Expiration Time") tenders could have
been made pursuant to such tender or exchange offer (as it may be amended) times
the number of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close of
business as of the Expiration Time by a fraction (i) the numerator of which
shall be equal to (A) the product of (I) the Current Market Price per share of
the Common Stock as of the Expiration Time and (II) the number of shares of
Common Stock outstanding (including any tendered shares) as of the Expiration
Time less (B) the amount of cash plus the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
transactions described in clauses (I), (II) and (III) above (assuming in the
case of clause (I) the acceptance, up to any maximum specified in the terms of
the tender or exchange offer, of Purchased Shares), and (ii) the denominator of
which shall be equal to the product of (A) the Current Market Price per share of
the Common Stock as of the Expiration Time and (B) the number of shares of
Common Stock outstanding (including any tendered shares) as of the Expiration
Time less the number of all shares validly tendered and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve
(a)
53
59
a distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be deemed to
be "the date fixed for the determination of stockholders entitled to receive
such distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section), and (b) a subdivision, split or
combination, as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number of shares
of Common Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such subdivision
or split becomes effective" or "the day upon which such combination becomes
effective", as the case may be, and "the day upon which such subdivision, split
or combination becomes effective" within the meaning of paragraph (3) of this
Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive Trading
Days selected by the Company commencing not more than 30 Trading Days before,
and ending not later than, the earlier of the day in question and the day before
the "ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date", when used with
respect to any issuance or distribution, shall mean the first date on which the
Common Stock trades regular way on such exchange or in such market without the
right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate, shall be calculated to
the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment in
the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also
be made to the Applicable Market Value solely to determine which of clauses (a),
(b) or (c) of the definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made by multiplying
the Applicable Market Value by a fraction of which the numerator shall be the
Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator
shall be the Settlement Rate immediately before such adjustment; provided,
however, that if such adjustment to the Settlement Rate is
54
60
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during
the period taken into consideration for determining the Applicable Market Value,
appropriate and customary adjustments shall be made to the Settlement Rate.
(10) The Company may make such increases in the Settlement Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock resulting from any dividend or distribution of stock or issuance of rights
or warrants to purchase or subscribe for stock or from any event treated as such
for income tax purposes or for any other reasons.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event. In
the event of (i) any consolidation or merger of the Company with or into another
Person (other than a merger or consolidation in which the Company is the
continuing corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash, securities or
other property of the Company or another corporation), (ii) any sale, transfer,
lease or conveyance to another Person of the property of the Company as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of the Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"), the Settlement Rate will be adjusted
to provide that each Holder of Securities will receive on the Purchase Contract
Settlement Date with respect to each Purchase Contract forming a part thereof
(or upon any Early Settlement), the kind and amount of securities, cash and
other property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement Date) by a Holder
of the number of shares of Common Stock issuable on account of each Purchase
Contract if the Purchase Contract Settlement Date had occurred immediately prior
to such Reorganization Event assuming such Holder of Common Stock is not a
Person with which the Company consolidated or into which the Company merged or
which merged into the Company or to which such sale or transfer was made, as the
case may be (any such Person, a "Constituent Person"), or an Affiliate of a
Constituent Person to the extent such Reorganization Event provides for
different treatment of Common Stock held by Affiliates of the Company and
non-affiliates and such Holder failed to exercise its rights of election, if
any, as to the kind or amount of securities, cash and other property receivable
upon such Reorgani-
55
61
zation Event (provided that if the kind or amount of securities, cash and other
property receivable upon such Reorganization Event is not the same for each
share of Common Stock held immediately prior to such Reorganization Event by
other than a Constituent Person or an Affiliate thereof and in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purpose of this Section the kind and amount of securities, cash and
other property receivable upon such Reorganization Event by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). In the event of such a Reorganization
Event, the Person formed by such consolidation, merger or exchange or the Person
which acquires or leases the assets of the Company or, in the event of a
liquidation or dissolution of the Company, the Company or a liquidating trust
created in connection therewith, shall execute and deliver to the Agent an
agreement supplemental hereto providing that the Holders of each Outstanding
Security shall have the rights provided by this Section 5.6. Such supplemental
agreement shall provide for adjustments which, for events subsequent to the
effective date of such supplemental agreement, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section. The above
provisions of this Section shall similarly apply to successive Reorganization
Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall:
(i) forthwith compute the Settlement Rate in accordance with Section
5.6 and prepare and transmit to the Agent an Officer's Certificate setting
forth the Settlement Rate, the method of calculation thereof in reasonable
detail, and the facts requiring such adjustment and upon which such
adjustment is based; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section 5.6
(or if the Company is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the Holders of the
Securities of the occurrence of such event and a statement in reasonable
detail setting forth the method by which the adjustment to the Settlement
Rate was determined and setting forth the adjusted Settlement Rate.
56
62
(b) The Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Settlement Rate, or with respect to the nature or extent
or calculation of any such adjustment when made, or with respect to the method
employed in making the same. The Agent shall not be accountable with respect to
the validity or value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or delivered with
respect to any Purchase Contract; and the Agent makes no representation with
respect thereto. The Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or Deferred Contract Adjustment Payments, if the Company shall
have such obligation, and the rights and obligations of Holders to purchase
Common Stock, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon and after the occurrence of a Termination Event, the
Securities shall thereafter represent the right to receive the Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, forming a part of such Securities in the case of
Income PRIDES, or Treasury Securities in the case of Growth PRIDES, in
accordance with the provisions of Section 4.3 of the Pledge Agreement; provided,
however, that, to the extent that a Holder of Income PRIDES or Growth PRIDES
would otherwise be entitled to receive less than $1,000 principal amount at
maturity of the Treasury Portfolio or the Treasury Securities, the Agent shall
dispose of such securities for cash, and transfer the appropriate amount of such
cash to such Holder in accordance with such Holder's instructions. Upon the
occurrence of a Termination Event, the Company shall promptly but in no event
later than two Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they appear in the
Register.
Section 5.9. Early Settlement.
57
63
(a) Subject to and upon compliance with the provisions of this Section
5.9, at the option of the Holder thereof, Purchase Contracts underlying
Securities having an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof may be settled early ("Early Settlement") in the case of Income
PRIDES (unless a Tax Event Redemption has occurred) on or prior to the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and in
the case of Growth PRIDES on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, in each case, as provided
herein; provided however, that if a Tax Event Redemption has occurred and the
Treasury Portfolio has become a component of the Income PRIDES, Purchase
Contracts underlying Income PRIDES may be settled early on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date,
but only in an aggregate amount of 40,000 Income PRIDES or in an integral
multiple thereof. In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Securities shall deliver such Certificate to the Agent at the Corporate Trust
Office or the New York 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 (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 plus (ii) if
such delivery is made with respect to any Purchase Contracts during the period
from the close of business on any Record Date next preceding any Payment Date to
the opening of business on such Payment Date, an amount equal to the Contract
Adjustment Payments, if any, payable on such Payment Date with respect to such
Purchase Contracts; provided that no payment shall be required pursuant to
clause (ii) of this sentence if the Company shall have elected to defer the
Contract Adjustment Payments which would otherwise be payable on such Payment
Date. Except as provided in the immediately preceding sentence and subject to
the next to last paragraph of Section 5.2, no payment or adjustment shall be
made upon Early Settlement of any Purchase Contract on account of any Contract
Adjustment Payments accrued on such Purchase Contract or on account of any
dividends on the Common Stock issued upon such Early Settlement or on account of
any Deferred Contract Adjustment Payments. 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
Business Day or on a day that is not a Business Day,
58
64
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 and payment of any transfer or similar taxes payable by such Holder
in connection with the issuance of the related Common Stock to any person other
than such Holder, the Company shall issue, and the Holder shall be entitled to
receive, .2625 shares of newly issued Common Stock on account of each Purchase
Contract as to which Early Settlement is effected (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 Adjustment Payments and future Contract Adjustment Payments, if any,
except to the extent that the Early Settlement Date is after the close of
business on a Record Date and prior to the opening of business on the
corresponding Payment Date. The Early Settlement Rate 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 5.9, the Company shall issue and shall deliver to
the Agent at the Corporate Trust Office a certificate or certificates for the
full number of shares of Common Stock issuable upon such Early Settlement
together with payment in lieu of any fraction of a share, as provided in Section
5.10.
(c) No later than the third Business Day after the applicable Early
Settlement Date the Company shall cause (i) the shares of Common Stock issuable
upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii)
the related Capital Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, in the case of Income PRIDES, or the related Treasury
Securities, in the case of Growth PRIDES, to be released from the Pledge by the
Collateral Agent and transferred, in each case to the Agent for delivery to the
Holder thereof or its designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Capital Securities,
the appropriate Applicable Ownership Interest of the Treasury Portfolio or
Treasury Securities, as the case may be, from the Collateral Agent, as
applicable, the Agent shall, in accordance with the instructions provided by the
Holder thereof on the applicable form of Election to Settle Early on the reverse
of the Certificate evidencing the related Securities, (i) transfer to the Holder
the Capital Securities, Treasury Portfolio or Treasury Securities, as the case
may be, forming a part of such Securi-
59
65
ties, and (ii) deliver to the Holder a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early Settlement together
with payment in lieu of any fraction of a share, as provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the Agent
shall authenticate, countersign and deliver to the Holder thereof, at the
expense of the Company, a Certificate evidencing the Securities as to which
Early Settlement was not effected.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date or upon Early Settlement of any Purchase Contracts. If
Certificates evidencing more than one Purchase Contract shall be surrendered for
settlement at one time by the same Holder, the number of full shares of Common
Stock which shall be delivered upon settlement shall be computed on the basis of
the aggregate number of Purchase Contracts evidenced by the Certificates so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be deliverable upon settlement of any Purchase Contracts on the
Purchase Contract Settlement Date or upon Early Settlement, the Company, through
the Agent, shall make a cash payment in respect of such fractional interest in
an amount equal to the value of such fractional shares times the Applicable
Market Value. The Company shall provide the Agent from time to time with
sufficient funds to permit the Agent to make all cash payments required by this
Section 5.10 in a timely manner.
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Common Stock pursuant to the
Purchase Contracts and in payment of any Deferred Contract Adjustment Payments;
provided, however, that the Company shall not be required to pay any such tax or
taxes which may be payable in respect of any exchange of or substitution for a
Certificate evidencing a Security or any issuance of a share of Common Stock in
a name other than that of the registered Holder of a Certificate surrendered in
respect of the Securities evidenced thereby, other than in the name of the
Agent, as custodian for such Holder, and the Company shall not be required to
issue or deliver such share certificates or Certificates unless or until the
Person or Persons requesting the
60
66
transfer or issuance thereof shall have paid to the Company the amount of such
tax or shall have established to the satisfaction of the Company that such tax
has been paid or that no such tax is due.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract Adjustment
Payments and to Purchase Common Stock.
The Holder of any Income PRIDES or Growth PRIDES shall have the right,
which is absolute and unconditional (subject to the right of the Company to
defer payment thereof pursuant to Section 5.3, and to the forfeiture of any
Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive payment of
each installment of the Contract Adjustment Payments, if any, with respect to
the Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security and to purchase Common Stock pursuant to such
Purchase Contract and, in each such case, to institute suit for the enforcement
of any such payment and right to purchase Common Stock, and such rights shall
not be impaired without the consent of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be
61
67
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy upon a
default shall impair any such right or remedy or constitute a waiver of any such
right. Every right and remedy given by this Article or by law to the Holders may
be exercised from time to time, and as often as may be deemed expedient, by such
Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of Income PRIDES or
Growth PRIDES, by its acceptance of such Income PRIDES or Growth PRIDES 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 distributions on any Capital Securities or
Contract Adjustment Payments, if any, on any Purchase Contract on or after the
respective Payment Date therefor in respect of any Security held by such Holder,
or for enforcement of the right to purchase shares of Common Stock under the
Purchase Contracts constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the
62
68
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 VII
The Agent
Section 7.1. 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 the Pledge Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Agent; and
(2) The Agent may, with respect to the Securities, conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, 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 or bad faith, 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
63
69
(3) no provision of this Agreement shall require the Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers.
(c) Whether or not therein expressly so provided, every provision of this
Agreement relating to the conduct or affecting the liability of or affording
protection to the Agent shall be subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the Pledge Agreement in
its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 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 the Company and the Holders of Securities, as
their names and addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
(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 Officer's Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(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
specifi-
64
70
cally prescribed) may, in the absence of bad faith on its part, rely upon an
Officer's Certificate of the Company;
(d) the Agent may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Agent shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the Agent,
in its discretion, may make reasonable further inquiry or investigation into
such facts or matters related to the execution, delivery and performance of the
Purchase Contracts as it may see fit, and, if the Agent shall determine to make
such further inquiry or investigation, it shall be given a reasonable
opportunity to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(f) the Agent may execute any of the powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or an
Affiliate and the Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken as
the statements of the Company and the Agent assumes no responsibility for their
accuracy. The Agent makes no representations as to the validity or sufficiency
of either this Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Agent and its
Affiliates, in their individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with the Company, the Collateral
Agent or any other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
65
71
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be segregated from
the other funds except to the extent required by law or provided herein. The
Agent shall be under no obligation to invest or pay interest on any money
received by it hereunder except as otherwise expressly provided herein or as
otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time such compensation for all
services rendered by it hereunder as the parties shall agree from time to
time;
(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 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, willful
misconduct or bad faith; and
(3) to indemnify the Agent and any predecessor Agent for, and to
hold it harmless against, any loss, liability or expense incurred without
negligence, willful misconduct or bad faith on its part, arising out of or
in connection with the acceptance or administration of its duties
hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
Section 7.8. 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 subsidiary of a bank
holding company having) a combined capital and surplus of at least $50,000,000,
subject to supervi-
66
72
sion or examination by Federal or State authority and having an 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 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Agent and no appointment of a
successor Agent pursuant to this Article shall become effective until the
acceptance of appointment by the successor Agent in accordance with the
applicable requirements of Section 7.10.
(b) The Agent may resign at any time by giving written notice thereof to
the Company 60 days prior to the effective date of such resignation. If the
instrument of acceptance by a successor Agent required by Section 7.10 shall not
have been delivered to the Agent within 30 days after the giving of such notice
of resignation, the resigning Agent may petition any court of competent
jurisdiction for the appointment of a successor Agent.
(c) The Agent may be removed at any time by Act of the Holders of a
majority in number of the Outstanding Securities delivered to the Agent and the
Company.
(d) If at any time
(1) the Agent fails to comply with Section 310(b) of the TIA, 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
67
73
(2) the Agent shall cease to be eligible under Section 7.8 and shall
fail to resign after written request therefor by the Company or by any
such Holder, or
(3) the Agent shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Agent or of its property
shall be appointed or any public officer shall take charge or control of
the Agent or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Agent, or (ii) any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Agent and
the appointment of a successor Agent.
(e) If the Agent shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Agent for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Agent and shall comply
with the applicable requirements of Section 7.10. If no successor Agent shall
have been so appointed by the Company and accepted appointment in the manner
required by Section 7.10, 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 as their names and addresses appear in the
applicable Register. Each notice shall include the name of the successor Agent
and the address of its Corporate Trust Office and New York Office, if any.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Agent, every such
successor Agent so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed or conveyance,
shall become
68
74
vested with all the rights, powers, agencies and duties of the retiring Agent;
but, on the request of the Company or the successor Agent, such retiring Agent
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights, powers and trusts of the
retiring Agent and shall duly assign, transfer and deliver to such successor
Agent all property and money held by such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Agent all such rights, powers and agencies referred to in
paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless at the time of
such acceptance such successor Agent shall be qualified and eligible under this
Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any 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 Certificates shall have been
authenticated and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or consolidation to
such Agent may adopt such authentication and execution and deliver the
Certificates so authenticated and executed with the same effect as if such
successor Agent had itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to Holders.
(a) The Agent shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders received by the Agent in its
capacity as Registrar.
(b) If three or more Holders (herein referred to as "applicants") apply in
writing to the Agent, and furnish to the Agent reasonable proof that each such
69
75
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 mail to all the Holders copies of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement, the Agent
assumes no obligations and shall not be subject to any liability under this
Agreement, the Pledge Agreement or any Purchase Contract in respect of the
obligations of the Holder of any Security thereunder. The Company agrees, and
each Holder of a Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf of the Holders
shall be solely as agent and attorney-in-fact for the Holders, and that the
Agent shall have no obligation to perform such Purchase Contracts on behalf of
the Holders, except to the extent expressly provided in Article V hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the Company, will comply
with all applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any payments made
with respect to the Securities or (ii) the issuance, delivery, holding,
transfer, redemption or exercise of rights under the Securities. Such compliance
shall include, without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be withheld to the
appropriate taxing authority or its designated agent.
(b) The Agent shall comply with any written direction received from the
Company with respect to the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 7.1(a)(2) hereof.
70
76
(c) The Agent shall maintain all appropriate records documenting
compliance with such requirements, and shall make such records available, on
written request, to the Company or its authorized representative within a
reasonable period of time after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company and the Agent, at any time
and from time to time, may enter into one or more agreements supplemental
hereto, in form satisfactory to the Company and the Agent, for any of the
following purposes:
(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 Certificates; or
(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 5.6(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 8.2. Supplemental Agreements with Consent of Holders.
71
77
With the consent of the Holders of not less than a majority of the
Outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Agent, the Company, when authorized by
a Board Resolution, and the Agent may enter into an agreement or agreements
supplemental hereto for the purpose of modifying in any manner the terms of the
Purchase Contracts or the provisions of this Agreement or the rights of the
Holders in respect of the Securities (other than the Capital Securities and the
Debentures, which may be modified only in accordance with the applicable
provisions of the Declaration and the Indenture, respectively); provided,
however, that, except as contemplated herein, 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 the type of Collateral required to be
Pledged to secure a Holder's obligations under any Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of Holders
of Income PRIDES to substitute the Treasury Securities for the Pledged
Capital Securities or the rights of holders of Growth PRIDES to substitute
Capital Securities for the Pledged Treasury Securities) or otherwise
adversely affect the Holder's rights in or to such Collateral or adversely
alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments, if any, or any Deferred
Contract Adjustment Payment, or change any place where, or the coin or
currency in which, any Contract Adjustment Payment is payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract, any Contract Adjustment Payment, if any, or any
Deferred Contract Adjustment Payment, if any;
(5) reduce the number of shares of Common Stock (or the amount of
any other property) to be purchased pursuant to any Purchase Contract,
increase the price to purchase shares of Common Stock (or any other
property) upon settlement of any Purchase Contract, change the Purchase
Contract Settlement Date or otherwise adversely affect the Holder's rights
under any Purchase Contract; or
72
78
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided, that if any amendment or proposal referred to above would adversely
affect only the Income PRIDES or the Growth PRIDES, then only the affected class
of Holder as of the record date for the Holders entitled to vote thereon will be
entitled to vote on such amendment or proposal, and such amendment or proposal
shall not be effective except with the consent of Holders of not less than a
majority of such class.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Agent shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental agreement is
authorized or permitted by this Agreement. The Agent may, but shall not be
obligated to, enter into any such supplemental agreement which affects the
Agent's own rights, duties or immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article, this
Agreement and the Securities shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered hereunder shall be bound thereby.
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Agent, bear a notation in form
approved by the Agent as to any matter provided for in such supplemental
agreement. If the Company shall so
73
79
determine, new Certificates so modified as to conform, in the opinion of the
Agent and the Company, to any such supplemental agreement may be prepared and
executed by the Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property Except
Under Certain Conditions.
The Company covenants that it will not merge or consolidate with any other
Person or sell, assign, transfer, lease or convey all or substantially all of
its properties and assets to any Person or group of affiliated Persons in one
transaction or a series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other than the
Company) shall be a corporation organized and existing under the laws of the
United States of America or a State thereof or the District of Columbia and such
corporation shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement, the Indenture, the Declaration, the
Remarketing Agreement and the Pledge Agreement by one or more supplemental
agreements in form reasonably satisfactory to the Agent and the Collateral
Agent, executed and delivered to the Agent and the Collateral Agent by such
corporation, and (ii) the Company or such successor corporation, as the case may
be, shall not, immediately after such merger or consolidation, or such sale,
assignment, transfer, lease or conveyance, be in default of its payment
obligations under this Agreement or the Debentures, or in default of its
obligations to deliver Common Stock (or other property) on the Purchase Contract
Settlement Date or any Early Settlement Date, or in material default in the
performance of any other covenant hereunder or under the Debentures, the
Indenture, the Declaration, the Remarketing Agreement, the Purchase Contracts or
the Pledge Agreement.
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance and upon any such assumption by a successor corporation in
accordance with Section 9.1, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company,
74
80
and its predecessor shall, except in the case of a lease, be released from its
obligations under this Agreement. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of Xxxxxxx and
Broad Home Corporation any or all of the Certificates evidencing Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Agent; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Agent shall authenticate and execute on behalf
of the Holders and deliver any Certificates which previously shall have been
signed and delivered by the officers of the Company to the Agent for
authentication and execution, and any Certificate evidencing Securities which
such successor corporation thereafter shall cause to be signed and delivered to
the Agent for that purpose. All the Certificates so issued shall in all respects
have the same legal rank and benefit under this Agreement as the Certificates
theretofore or thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, assignment, transfer,
lease or conveyance, such change in phraseology and form (but not in substance)
may be made in the Certificates evidencing Securities thereafter to be issued as
may be appropriate.
Section 9.3. Opinion of Counsel Given to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale,
assignment, transfer, lease or conveyance, and any such assumption, complies
with the provisions of this Article and that all conditions precedent hereunder
to the consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
75
81
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from time
to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain or cause to be maintained in the Borough of
Manhattan, The City of New York an office or agency (a "New York Office") and in
Chicago, Illinois where Certificates may be presented or surrendered for payment
and for acquisition of shares of Common Stock (or other property) upon
settlement of the Purchase Contracts on the Purchase Contract Settlement Date or
Early Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or re-establishment of an Income PRIDES
and where notices and demands to or upon the Company in respect of the
Securities and this Agreement may be served. The Company will give prompt
written notice to the Agent of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Agent with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office, and the Company hereby appoints the
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies where Certificates may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Agent of any such designation or rescission and of any
change in the location of any such other office or agency.
76
82
The Company hereby designates the Borough of Manhattan, the City of New
York and Chicago, Illinois, as the places of payment for the Securities, and
hereby appoints the Agent, acting through its Corporate Trust Office in Chicago,
Illinois and through its office located at c/o First Chicago Trust Company of
New York, 00 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as the registrar,
paying agent and transfer agent for the Income PRIDES and the Growth PRIDES and
for the other purposes contemplated by this Section 10.2.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract Settlement
Date reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock the full number of shares of Common Stock
issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding Certificates.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be issued
against tender of payment in respect of any Purchase Contract constituting a
part of the Outstanding Securities will, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable. The Company shall comply with all
applicable securities laws regulating the offer, issuance and delivery of shares
of Common Stock upon settlement of Purchase Contracts and will endeavor to list
such shares on each national securities exchange or automated quotation system
on which the Common Stock is then listed.
77
83
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
XXXXXXX AND BROAD HOME
CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: Senior Vice President and
Chief Financial Officer
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By: /s/ Xxxx X. Xxxx
-------------------------------
Name: Xxxx X. Xxxx
Title: Asst. Vice President
84
EXHIBIT A
(Form of Face of Income PRIDES Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ CUSIP No.
Number of Income PRIDES _______
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ is the
registered Holder of the number of Income PRIDES set forth above. Each Income
PRIDES represents (i) either (a) beneficial ownership by the Holder of one 8%
Capital Security (the "Capital Security") of KBHC Financing I, a Delaware
statutory business trust (the "Trust"), having a stated liquidation amount of
$10, subject to the Pledge of such Capital Security by such Holder pursuant to
the Pledge Agreement or
85
(b) upon the occurrence of a Tax Event Redemption prior to the Purchase Contract
Settlement Date, the appropriate Applicable Ownership Interest of the Treasury
Portfolio, subject to the Pledge of such Applicable Ownership Interest of the
Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract with Xxxxxxx
and Broad Home Corporation, a Delaware corporation (the "Company," which term,
as used herein, includes its successors pursuant to the Purchase Contract
Agreement). All capitalized terms used herein which are defined in the Purchase
Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, constituting part of each Income PRIDES evidenced hereby have been
pledged to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising a portion of
such Income PRIDES.
The Pledge Agreement provides that all payments of the Stated Amount
or the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) of the Treasury Portfolio, as the case may be, or
cash distributions on any Pledged Capital Securities (as defined in the Pledge
Agreement) or the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, constituting part of the Income PRIDES received by the Collateral
Agent shall be paid by the Collateral Agent by wire transfer in same day funds
(i) in the case of (A) cash distributions with respect to Pledged Capital
Securities or the appropriate Applicable Ownership Interest (as specified in
clause (B) of the definition of such term) of the Treasury Portfolio, as the
case may be, and (B) any payments of the Stated Amount or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such terms) of the Treasury Portfolio, as the case may be, with respect to any
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be, that have been released from the Pledge
pursuant to the Pledge Agreement, to the Agent to the account designated by the
Agent, no later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day) and (ii) in the case of payments of the Stated Amount
of any Pledged Capital Securities or the appropriate Applicable Ownership
Interest (as specified in clause
A-2
86
(A) of the definition of such term) of the Treasury Portfolio that has not been
released from the Pledge pursuant to the Pledge Agreement, as the case may be,
to the Company on the Purchase Contract Settlement Date (as defined herein) in
accordance with the terms of the Pledge Agreement, in full satisfaction of the
respective obligations of the Holders of the Income PRIDES of which such Pledged
Capital Securities or the Treasury Portfolio, as the case may be, are a part
under the Purchase Contracts forming a part of such Income PRIDES. Distributions
on any Capital Security or the appropriate Applicable Ownership Interest (as
specified in clause (B) of the definition of such term) of the Treasury
Portfolio, as the case may be, forming part of an Income PRIDES evidenced hereby
which are payable quarterly in arrears on February 16, May 16, August 16 and
November 16 each year, commencing August 16, 1998 (a "Payment Date"), shall,
subject to receipt thereof by the Agent from the Collateral Agent, be paid to
the Person in whose name this Income PRIDES Certificate (or a Predecessor Income
PRIDES Certificate) is registered at the close of business on the Record Date
for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on August 16,
2001 (the "Purchase Contract Settlement Date"), at a price equal to $10 (the
"Stated Amount"), a number of shares of Common Stock, $1.00 par value per share
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Income PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of payment received in respect
of the Stated Amount or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) of the Treasury
Portfolio, as the case may be, of the Pledged Capital Securities or the
appropriate Applicable Ownership Interest of the Treasury Portfolio, as the case
may be, pledged to secure the obligations under such Purchase Contract of the
Holder of the Income PRIDES of which such Purchase Contract is a part.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of an Income PRIDES evidenced hereby an amount (the
"Contract Adjustment Payments") equal to .25% per annum of the Stated Amount,
computed on the basis of a 360-day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and
A-3
87
more fully described on the reverse hereof. Such Contract Adjustment Payments,
if any, shall be payable to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Distributions on the Capital Securities or the appropriate Applicable
Ownership Interest (as specified in clause (B) of the definition of such term)
of the Treasury Portfolio, as the case may be, and Contract Adjustment Payments,
if any, will be payable at the Corporate Trust Office of the Agent and at the
New York Office or, at the option of the Company, by check mailed to the address
of the Person entitled thereto as such address appears on the Income PRIDES
Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Income PRIDES Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
A-4
88
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
XXXXXXX AND BROAD HOME CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE FIRST NATIONAL BANK OF CHICAGO
not individually but solely as
attorney-in-fact of such Holder
By:
-------------------------------
Name:
Title:
Dated: , 1998
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
-------------------------------
Authorized Signatory
89
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of July 7, 1998 (as may be supplemented from time to time,
the "Purchase Contract Agreement"), between the Company and The First National
Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Agent, the Company and the Holders and of the terms upon which
the Income PRIDES Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Income PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Purchase Price, a number of
shares of Common Stock of the Company equal to the Settlement Rate, unless, on
or prior to the Purchase Contract Settlement Date, there shall have occurred a
Termination Event or an Early Settlement with respect to the 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 equal to or greater than $38.10
(the "Threshold Appreciation Price"), .2625 shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $21.75, the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than or equal to
$21.75, .3150 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled either through
Early Settlement or Cash Settlement, shall obligate the Holder of the related
Income PRIDES to purchase at the Purchase Price, and the Company to sell, a
number of newly issued shares of Common Stock equal to the Early Settlement Rate
or the Settlement Rate, as applicable.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date
or,
A-6
90
for purposes of determining cash payable in lieu of factional shares in
connection with an Early Settlement, the third Trading Day immediately preceding
the relevant Early Settlement Date. The "Closing Price" of the Common Stock on
any date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange, Inc. (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, as reported by the Nasdaq
National Market, or, if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Income PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or from the proceeds
of a remarketing of the related Pledged Capital Securities of such holders. A
Holder of Income PRIDES who does not elect, on or prior to 5:00 p.m. New York
City time on the fifth Business Day (or, if a Tax Event Redemption has occurred,
the second Business Day) immediately preceding the Purchase Contract Settlement
Date, to make an effective Cash Settlement or an Early Settlement, shall pay the
Purchase Price for the shares of Common Stock to be issued under the related
Purchase Contract from the Proceeds of the sale of the related Pledged Capital
Securities held by the Collateral Agent. Such sale will be made by the
Remarketing Agent pursuant to the terms of the Remarketing Agreement and the
Remarketing Underwriting Agreement on the third Business Day immediately
preceding the Purchase Contract Settlement Date. If, as provided in the Purchase
Contract Agreement, upon the occurrence of a Failed Remarketing the Collateral
Agent, for the benefit of the Company, exercises its rights as a secured
creditor with respect to the Pledged Capital Securities related to this Income
PRIDES certificate, any accrued and unpaid distribu-
A-7
91
ions (including deferred distributions) on such Pledged Capital Securities will
become payable by the Company to the holder of this Income PRIDES Certificate in
the manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
Under the terms of the Pledge Agreement, the Agent will be entitled to
exercise the voting and any other consensual rights pertaining to the Pledged
Capital Securities. Upon receipt of notice of any meeting at which holders of
Capital Securities are entitled to vote or upon the solicitation of consents,
waivers or proxies of holders of Capital Securities, the Agent shall, as soon as
practicable thereafter, mail to the Income PRIDES holders a notice (a)
containing such information as is contained in the notice or solicitation, (b)
stating that each Income PRIDES holder on the record date set by the Agent
therefor (which, to the extent possible, shall be the same date as the record
date for determining the holders of Capital Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Capital Securities constituting a part of such holder's Income
PRIDES and (c) stating the manner in which such instructions may be given. Upon
the written request of the Income PRIDES Holders on such record date, the Agent
shall endeavor insofar as practicable to vote or cause to be voted, in
accordance with the instructions set forth in such requests, the maximum number
of Capital Securities as to which any particular voting instructions are
received. In the absence of specific instructions from the Holder of an Income
PRIDES, the Agent shall abstain from voting the Capital Security evidenced by
such Income PRIDES.
Upon the occurrence of an Investment Company Event or liquidation of the
Trust, a principal amount of the Debentures constituting the assets of the Trust
and underlying the Capital Securities equal to the aggregate Stated Amount of
the Pledged Capital Securities shall be delivered to the Collateral Agent in
exchange for Pledged Capital Securities. Thereafter, the Debentures shall be
substituted for the Capital Securities and will be held by the Collateral Agent
to secure the obligations of each Holder of Income PRIDES to purchase shares of
Common Stock under the Purchase Contracts constituting a part of such Income
PRIDES. Following an Investment Company Event or the liquidation of the Trust,
the Holders and the Collateral Agent shall have such security interests, rights
and obligations with respect to the Debentures as the Holders and the Collateral
Agent had in respect of the Pledged Capital
A-8
92
Securities, and any reference in the Purchase Contract Agreement or Pledge
Agreement to the Capital Securities shall be deemed to be a reference to the
Debentures and any references to distributions on the Capital Securities shall
be deemed to be a reference to interest on such Debentures.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Debentures
shall be delivered to the Collateral Agent in exchange for the Pledged Capital
Securities. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent will apply an amount equal to the Redemption Amount of such
Redemption Price to purchase on behalf of the Holders of Income PRIDES, the
Treasury Portfolio and promptly remit the remaining portion of such Redemption
Price to the Agent for payment to the Holders of such Income PRIDES.
Following the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Holders of Income PRIDES and the Collateral Agent
shall have such security interests rights and obligations with respect to the
Treasury Portfolio as the Holder of Income PRIDES and the Collateral Agent had
in respect of the Capital Security or Debentures, as the case may be, subject to
the Pledge thereof as provided in Sections 2, 3, 4, 5 and 6 of the Pledge
Agreement and any reference herein to the Capital Security or the Debenture
shall be deemed to be a reference to such Treasury Portfolio and any reference
herein or in the Certificates to distributions on the Capital Securities shall
be deemed to be a reference to corresponding distributions on the Treasury
Portfolio.
The Income PRIDES Certificates are issuable only in registered form and
only in denominations of a single Income PRIDES and any integral multiple
thereof. The transfer of any Income PRIDES Certificate will be registered and
Income PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Income PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Treasury
Securities for Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, thereby creating or recreating Growth
PRIDES, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for
A-9
93
so long as the Purchase Contract underlying an Income PRIDES remains in effect,
such Income PRIDES shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Income PRIDES in respect of Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, and the Purchase Contract constituting such
Income PRIDES may be transferred and exchanged only as an Income PRIDES. A
Holder of an Income PRIDES may create or recreate a Growth PRIDES by delivering
to the Collateral Agent Treasury Securities in an aggregate principal amount
equal to the aggregate Stated Amount of the Pledged Capital Securities or the
appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such Collateral Substitution, the Security for which
such Pledged Treasury Securities secures the Holder's obligation under the
Purchase Contract shall be referred to as a "Growth PRIDES." A Holder may make
such Collateral Substitution only in integral multiples of 100 Income PRIDES for
100 Growth PRIDES; provided, however, that if a Tax Event Redemption has
occurred and the Treasury Portfolio has become a component of the Income PRIDES,
a Holder may make such Collateral Substitutions only in integral multiples of
40,000 Income PRIDES for 40,000 Growth PRIDES. Such Collateral Substitution may
cause the equivalent aggregate Stated Amount of this Certificate to be increased
or decreased; provided, however, the equivalent aggregate Stated Amount
outstanding under this Income PRIDES Certificate shall not exceed $179,750,000.
All such adjustments to the equivalent aggregate Stated Amount of this Income
PRIDES Certificate shall be duly recorded by placing an appropriate notation on
the Schedule attached hereto.
A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated Amount,
in the case of such Capital Securities, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. Any such creation or recreation of an Income
PRIDES may be effected only in multiples of 100 Growth PRIDES for 100 Income
PRIDES; provided, however, that if a Tax Event
A-10
94
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, a Holder may make such substitution only in integral multiples of
40,000 Growth PRIDES for 40,000 Income PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Purchase Contract to the Person in whose name the Income PRIDES Certificate
evidencing such Purchase Contract is registered at the close of business on the
Record Date for such Payment Date. Contract Adjustment Payments, if any, will be
payable at the Corporate Trust Office of the Agent and the New York Office or,
at the option of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Income PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of 8.75% per annum (computed on the
basis of a 360-day year of twelve 30 day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of Contract
Adjustment Payments, if any, together with the additional Contract Adjustment
Payments accrued thereon, are referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be
due on the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment
Payments, if any, may be deferred to a date that is after the Purchase Contract
Settlement Date and no such deferral period may end other than on a Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract
A-11
95
Settlement Date, the Holder of this Income PRIDES Certificate will receive on
the Purchase Contract Settlement Date, in lieu of a cash payment, a number of
shares of Common Stock (in addition to the number of shares of Common Stock
equal to the Settlement Rate) equal to (x) the aggregate amount of Deferred
Contract Adjustment Payments payable to the Holder of this Income PRIDES
Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
purchase capital stock of the Company, (ii) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of one class or series
of the Company's capital stock for another class or series of the Company's
capital stock, (iii) the purchase of fractional interests in shares of the
Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
or distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or a declaration thereunder of a
dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Income PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Capital Securities or the appropriate
A-12
96
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
from the Pledge in accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, 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
in the Purchase Contract Agreement; provided, however, that if a Tax Event
Redemption has occurred and the Treasury Portfolio has become a component of the
Income PRIDES, Holders may early settle Income PRIDES only in integral multiples
of 40,000 Income PRIDES. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES Certificate shall deliver
this Income PRIDES Certificate to the Agent at the Corporate Trust Office or the
New York Office duly endorsed for transfer to the Company or in blank with the
form of Election to Settle Early set forth below duly completed and accompanied
by payment in the form of immediately available funds payable to the Company 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, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts; provided
that no payment shall be required pursuant to clause (ii) of this sentence if
the Company shall have elected to defer the Contract Adjustment Payments which
would otherwise be payable on such Payment Date. Upon Early Settlement of
Purchase Contracts by a Holder of the related Securities, the Pledged Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio underlying such Securities shall be released from the Pledge as
provided in the Pledge Agreement and the Holder shall be entitled to receive a
number of shares of Common Stock on account of each Purchase Contract forming
part of a Income PRIDES 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 thereof will forfeit the right to receive any
Deferred Contract Adjustment Payments and any future Contract Adjustment
Payments, if any, on such Purchase Contracts, except to the extent that the
Early Settlement Date is after the close of business on a Record Date and prior
to the opening of business on the corresponding Payment Date. The Early
Settlement Rate shall initially be equal to .2625 shares of Common Stock and
A-13
97
shall be adjusted in the same manner and at the same time as the Settlement Rate
is adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Income PRIDES Certificate. The Company covenants and agrees, and the Holder, by
its acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be, underlying this Income
PRIDES Certificate pursuant to the Pledge Agreement. The Holder further
covenants and agrees, that, to the extent and in the manner provided in the
Purchase Contract Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect to the Stated Amount of the Pledged Capital
Securities, or the appropriate Applicable Ownership Interest (as specified in
clause (A) of the definition of such term) of the Treasury Portfolio, on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
A-14
98
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Income PRIDES Certificate is
registered as the owner of the Income PRIDES evidenced hereby for the purpose of
receiving payments of distributions payable quarterly on the Capital Securities
or on the maturing quarterly interest strips of the Treasury Portfolio, as
applicable, receiving payments of Contract Adjustment Payments, if any, and any
Deferred Contract Adjustment Payments, if any, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Agent nor any such agent shall be affected by notice to
the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
A-15
99
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Income PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books of Xxxxxxx and
Broad Home Corporation with full power of substitution in the premises.
Dated: _________________ ____________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Income PRIDES
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: ______________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined
A-16
100
by the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
X-00
000
XXXXXXXXXX INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Income PRIDES evidenced
by this Income PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: _________________ ____________________________________
Signature
Signature Guarantee:________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered
in the name of and delivered REGISTERED HOLDER
to a Person other than the
Holder, please (i) print such
Person's name and address and
(ii) provide a guarantee of
your signature:
Please print name and address
of Registered Holder:
_________________________________ ___________________________________
Name Name
_________________________________ ___________________________________
Address Address
_________________________________ ___________________________________
_________________________________ ___________________________________
_________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
A-18
102
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Income PRIDES evidenced by this Income PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Income PRIDES Certificate representing any Income PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,
deliverable upon such Early Settlement will be transferred in accordance with
the transfer instructions set forth below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ___________________ ____________________________________
Signature
Signature Guarantee
(if assigned to another person): __________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-19
103
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Income REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Capital Securities, or an
Applicable Ownership Interest in
the Treasury Portfolio, as the case may
be, are to be transferred to a Person
other than the Holder, please (i) print
such Person's name and address and
(ii) provide a guarantee of your
signature:
Please print name and address
of Registered Holder:
_________________________________ ___________________________________
Name Name
_________________________________ ___________________________________
Address Address
_________________________________ ___________________________________
_________________________________ ___________________________________
_________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
A-20
104
Transfer Instructions for Pledged Capital Securities, or the Applicable
Ownership Interest in the Treasury Portfolio, as the case may be, Transferable
Upon Early Settlement or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-21
105
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
===============================================================================================
Stated Amount Signature of
Amount of Amount of of this Global authorized
decrease in Stated increase in Stated Certificate officer of Purchase
Amount of the Amount of the following such Contract Agent or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
===============================================================================================
A-22
106
EXHIBIT B
(Form of Face of Growth PRIDES Certificate)
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF
THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. __________ CUSIP NO.
Number of Growth PRIDES _____
____% Growth PRIDES
This Growth PRIDES Certificate certifies that __________ is the registered
Holder of the number of Growth PRIDES set forth above. Each Growth PRIDES
represents (i) a 1/100 undivided beneficial ownership interest in a Treasury
Security having a principal amount at maturity equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with Xxxxxxx and Broad Home Corporation, a Delaware corporation (the
"Company," which term, as used herein, includes its successors pursuant to the
Purchase Contract Agreement). All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set forth therein.
107
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising a portion of such Growth PRIDES.
The Pledge Agreement provides that all payments of the principal of any
Treasury Securities received by the Collateral Agent shall be paid by the
Collateral Agent by wire transfer of same day funds (i) in the case of any
principal payments with respect to any Treasury Securities that have been
released from the Pledge pursuant to the Pledge Agreement, to the Holders of the
applicable Growth PRIDES to the accounts designated by them in writing for such
purpose no later than 2:00 p.m. New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a Business Day
or after 12:30 p.m., New York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City time, on the next
succeeding Business Day), and (ii) in the case of the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract Settlement Date (as
defined herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Growth PRIDES
of which such Pledged Treasury Securities are a part under the Purchase
Contracts forming a part of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on August 16,
2001 (the "Purchase Contract Settlement Date"), at a price equal to $10 (the
"Stated Amount"), a number of shares of Common stock, $1.00 par value per share
("Common Stock"), of the Company equal to the Settlement Rate, unless on or
prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Growth PRIDES of
which such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of the Proceeds from the
Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract forming part of a Growth PRIDES evidenced hereby an amount (the
"Contract Adjustment Payments") equal to .75% per annum of the Stated Amount,
computed on the basis of a 360-day year of twelve 30 day months, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name this
Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate) is
registered at the close of business on the Record Date for such Payment Date.
B-2
108
Contract Adjustment Payments, if any, will be payable at the Corporate
Trust Office of the Agent and at the New York Office or, at the option of the
Company, by check mailed to the address of the Person entitled thereto as such
address appears on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Growth PRIDES Certificate shall not be entitled
to any benefit under the Pledge Agreement or the Purchase Contract Agreement or
be valid or obligatory for any purpose.
B-3
109
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
XXXXXXX AND BROAD HOME CORPORATION
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: THE FIRST NATIONAL BANK OF CHICAGO,
not individually but solely as attorney-
in-fact of such Holder
By:
-------------------------------
Name:
Title:
Dated: , 1998
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE FIRST NATIONAL BANK OF CHICAGO,
as Purchase Contract Agent
By:
-------------------------------
Authorized Signatory
110
(Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of July 7, 1998 (as may be supplemented from time to time,
the "Purchase Contract Agreement"), between the Company and The First National
Bank of Chicago, as Purchase Contract Agent (including its successors
thereunder, herein called the "Agent"), to which the Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the terms
upon which the Growth PRIDES Certificates are, and are to be, executed and
delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at the Purchase Price, a number of shares of Common
Stock of the Company equal to the Settlement Rate, unless, on or prior to the
Purchase Contract Settlement Date, there shall have occurred a Termination Event
or an Early Settlement with respect to the 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 equal to or greater than $38.10 (the
"Threshold Appreciation Price"), .2625 shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $31.75, the number of shares of Common
Stock per Purchase Contract equal to the Stated Amount divided by the Applicable
Market Value and (c) if the Applicable Market Amount is less than or equal to
$31.75, .3150 shares of Common Stock per Purchase Contract, in each case subject
to adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts, as
provided in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement, shall obligate the Holder of the related Growth PRIDES to purchase
at the Purchase Price, and the Company to sell, a number of newly issued shares
of Common Stock equal to the Early Settlement Rate.
The "Applicable Market Value" means the average of the Closing Price per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date
or, for purposes of determining cash payable in lieu of fractional shares in
connection with an Early Settlement, the third Trading Day immediately preceding
the relevant Early Settlement Date. The "Closing Price" of the Common Stock on
any date of determination means the closing sale price (or, if no closing price
is reported, the last reported sale price) of the Common Stock on The New York
Stock Exchange, Inc. (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
111
transactions for the principal United States securities exchange on which the
Common Stock is so listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, as reported by the Nasdaq
National Market or, if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Company. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract or
by applying a principal amount of the Pledged Treasury Securities underlying
such Holder's Growth PRIDES equal to the Stated Amount of such Purchase Contract
to the purchase of the Common Stock. A Holder of Growth PRIDES who does not
elect, on or prior to 5:00 p.m. New York City time on the second Business Day
immediately preceding the Purchase Contract Settlement Date, to make an Early
Settlement, shall pay the Purchase Price for the shares of Common Stock to be
issued on the related Purchase Contract by applying a principal amount of the
Pledged Treasury Securities as aforesaid.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate Purchase
Price for the shares of Common Stock to be purchased thereunder in the manner
herein set forth.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered and
Growth PRIDES Certificates may be exchanged as provided in the Purchase Contract
Agreement. The Growth PRIDES Registrar may require a Holder, among other things,
to furnish appropriate endorsements and transfer documents permitted by the
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Agent may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. A Holder who elects to substitute Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be, for Treasury Securities, thereby creating or
recreating Income PRIDES, shall be responsible for any fees or expenses payable
in connection therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract underlying a Growth
B-6
112
PRIDES remains in effect, such Growth PRIDES shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Growth
PRIDES in respect of the Treasury Security and the Purchase Contract
constituting such Growth PRIDES may be transferred and exchanged only as a
Growth PRIDES. A Holder of Growth PRIDES may create or recreate Income PRIDES by
delivering to the Collateral Agent Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, with a Stated Amount,
in the case of such Capital Securities, or with the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
of the Treasury Portfolio, in the case of such appropriate Applicable Ownership
Interest of the Treasury Portfolio, equal to the aggregate principal amount of
the Pledged Treasury Securities in exchange for the release of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such substitution, the
Security for which such Pledged Capital Securities or appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be, secures the
Holder's obligation under the Purchase Contract shall be referred to as an
"Income PRIDES." A Holder may make such a substitution only in integral
multiples of 100 Growth PRIDES for 100 Income PRIDES; provided, however, that if
a Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, a Holder may make such substitution only in
integral multiples of 40,000 Growth PRIDES for 40,000 Income PRIDES. Such
substitution may cause the equivalent aggregate Stated Amount of this
Certificate to be increased or decreased; provided, however, the equivalent
aggregate Stated Amount outstanding under this Growth PRIDES Certificate shall
not exceed $10,000,000. All such adjustments to the equivalent aggregate Stated
Amount of this Growth PRIDES Certificate shall be duly recorded by placing an
appropriate notation on the Schedule attached hereto.
A Holder of an Income PRIDES may create or recreate a Growth PRIDES by
delivering to the Collateral Agent Treasury Securities in an aggregate principal
amount equal to the aggregate Stated Amount of the Pledged Capital Securities or
the appropriate Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) of the Treasury Portfolio, as the case may be, in
exchange for the release of such Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be, in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. Any such creation or recreation of a Growth PRIDES may be effected
only in multiples of 100 Income PRIDES for 100 Growth PRIDES; provided, however,
if a Tax Event Redemption has occurred and the Treasury Portfolio has become a
component of the Income PRIDES, a Holder may make such Collateral Substitution
only in integral multiples of 40,000 Income PRIDES for 40,000 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Purchase Contract to the Person in whose name the Growth PRIDES Certificate
evidencing such
X-0
000
Xxxxxxxx Contract is registered at the close of business on the Record Date for
such Payment Date. Contract Adjustment Payments, if any, will be payable at the
Corporate Trust Office of the Agent and the New York Office or, at the option of
the Company, by check mailed to the address of the Person entitled thereto at
such address as it appears on the Growth PRIDES Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments, if any, otherwise payable on any Payment Date, but only if
the Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in the
Purchase Contract Agreement. Any Contract Adjustment Payments, if any, so
deferred shall, to the extent permitted by law, bear additional Contract
Adjustment Payments thereon at the rate of 8.75% per annum (computed on the
basis of a 360-day year of twelve 30 day months), compounding on each succeeding
Payment Date, until paid in full (such deferred installments of Contract
Adjustment Payments, if any, together with the additional Contract Adjustment
Payments accrued thereon, are referred to herein as the "Deferred Contract
Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be
due on the next succeeding Payment Date except to the extent that payment is
deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment
Payments, if any, may be deferred to a date that is after the Purchase Contract
Settlement Date and no such deferral period may end other than on a Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until a Payment Date
prior to the Purchase Contract Settlement Date, then all Deferred Contract
Adjustment Payments, if any, shall be payable to the registered Holders as of
the close of business on the Record Date immediately preceding such Payment
Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date, in lieu of a cash payment, a
number of shares of Common Stock (in addition to the number of shares of Common
Stock equal to the Settlement Rate) equal to (x) the aggregate amount of
Deferred Contract Adjustment Payments payable to the Holder of this Growth
PRIDES Certificate divided by (y) the Applicable Market Value.
In the event the Company exercises its option to defer the payment of
Contract Adjustment Payments, if any, then until the Deferred Contract
Adjustment Payments have been paid, the Company shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
or make guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of capital stock of the Company in
connection with
B-8
114
the satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security outstanding on the date of such event requiring the Company
to purchase capital stock of the Company, (ii) as a result of a reclassification
of the Company's capital stock or the exchange or conversion of one class or
series of the Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional interests in shares of
the Company's capital stock pursuant to the conversion or exchange provisions of
such capital stock or the security being converted or exchanged, (iv) dividends
or distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan or a declaration thereunder of a
dividend of rights in the future).
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay Contract Adjustment
Payments, if any, or any Deferred Contract Adjustment Payments, and the rights
and obligations of Holders to purchase Common Stock shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Agent or the Company, if, on or prior to the Purchase Contract
Settlement Date, a Termination Event shall have occurred. Upon the occurrence of
a Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the Collateral Agent
and to the Holders, at their addresses as they appear in the Growth PRIDES
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holders thereof, 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
in the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this Growth
PRIDES Certificate, the Holder of this Growth PRIDES Certificate shall deliver
this Growth PRIDES Certificate to the Agent at the Corporate Trust Office or the
New York Office duly endorsed for transfer to the Company or in blank with the
form of Election to Settle Early set forth below duly completed and accompanied
by payment in the form of immediately available funds payable to the Company 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, plus (ii) if such delivery is
made with respect to any Purchase Contracts during the period from the close of
business on any Record Date for any Payment Date to the opening of business on
such Payment Date, an amount equal to the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase Contracts; provided
that no payment shall be required pursuant to clause (ii) of this sentence if
the
B-9
115
Company shall have elected to defer the Contract Adjustment Payments which would
otherwise be payable on such Payment Date. Upon Early Settlement of Purchase
Contracts by a Holder of the related Securities, the Pledged Treasury Securities
underlying such Securities shall be released from the Pledge as provided in the
Pledge Agreement and the Holder shall be entitled to receive a number of shares
of Common Stock on account of each Purchase Contract forming part of a Growth
PRIDES 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 thereof will forfeit the right to receive any Deferred
Contract Adjustment Payments and any future Contract Adjustment Payments on such
Purchase Contracts, except to the extent that the Early Settlement Date is after
the close of business on a Record Date and prior to the opening of business on
the corresponding Payment Date. The Early Settlement Rate shall initially be
equal to .2625 shares of Common Stock and shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Agent pursuant to the
Purchase Contract Agreement) under the terms of the Purchase Contract Agreement,
the Pledge Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contract
Agreement, the Pledge Agreement and the Purchase Contracts evidenced by this
Growth PRIDES Certificate. The Company covenants and agrees, and the Holder, by
his acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by its acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as its
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of the Purchase Contracts by the Company or its trustee in the event
that the Company becomes the subject of a case under the Bankruptcy Code, agrees
to be bound by the terms and provisions thereof, covenants and agrees to perform
its obligations under such Purchase Contracts, consents to the provisions of the
Purchase Contract Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on its behalf as its attorney-in-fact, and consents to the
Pledge of the Treasury Securities underlying this Growth PRIDES Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees, that,
to the extent and in the manner provided in the Purchase Contract Agreement and
the Pledge Agreement, but subject to the terms thereof, payments in respect to
the Stated Amount of the Pledged Treasury Securities on the Purchase Contract
Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
B-10
116
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Growth PRIDES Certificate is
registered as the owner of the Growth PRIDES evidenced hereby for the purpose of
receiving payments of interest on the Treasury Securities, receiving payments of
Contract Adjustment Payments, if any, and any Deferred Contract Adjustment
Payments, if any, performance of the Purchase Contracts and for all other
purposes whatsoever, whether or not any payments in respect thereof be overdue
and notwithstanding any notice to the contrary, and neither the Company, the
Agent nor any such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof, entitle
the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
B-11
117
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
---------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)_______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Growth PRIDES Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
attorney to transfer said Growth PRIDES Certificates on the books of Xxxxxxx and
Broad Home Corporation with full power of substitution in the premises.
Dated: _________________ ____________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Growth PRIDES
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: ______________________________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent
B-12
118
Medallion Program ("STAMP") or such other "signature guarantee program" as may
be determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
X-00
000
XXXXXXXXXX INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Growth PRIDES evidenced
by this Growth PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: _________________ ____________________________________
Signature
Signature Guarantee: _______________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the
Holder, please (i) print such
Person's name and address and
(ii) provide a guarantee of
your signature:
Please print name and address
of Registered Holder:
______________________________ ___________________________________
Name Name
______________________________ ___________________________________
Address Address
______________________________ ___________________________________
B-14
120
______________________________ ___________________________________
______________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
B-15
121
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Growth PRIDES evidenced by this Growth PRIDES
Certificate specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying Growth PRIDES with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock
deliverable upon such Early Settlement be registered in the name of, and
delivered, together with a check in payment for any fractional share and any
Growth PRIDES Certificate representing any Growth PRIDES evidenced hereby as to
which Early Settlement of the related Purchase Contracts is not effected, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. Pledged Treasury Securities deliverable upon such
Early Settlement will be transferred in accordance with the transfer
instructions set forth below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer or
similar tax payable incident thereto.
Dated: _________________ ____________________________________
Signature
Signature Guarantee: _______________________________
(if assigned to another person)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
B-16
122
Number of Securities evidenced hereby as to which Early Settlement of the
related Purchase Contracts is being elected:
If shares of Common Stock or Growth REGISTERED HOLDER
PRIDES Certificates are to be regis-
tered in the name of and delivered to
and Pledged Treasury Securities are to
be transferred to a Person other than
the Holder, please (i) print such Person's
name and address and (ii) provide a
guarantee of your signature:
Please print name and address
of Registered Holder:
______________________________ ___________________________________
Name Name
______________________________ ___________________________________
Address Address
______________________________ ___________________________________
______________________________ ___________________________________
______________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
______________________________
______________________________
______________________________
B-17
123
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
===============================================================================================
Stated Amount Signature of
Amount of Amount of of this Global authorized
decrease in Stated increase in Stated Certificate officer of Purchase
Amount of the Amount of the following such Contract Agent or
Date Global Certificate Global Certificate decrease or increase Securities Custodian
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
===============================================================================================
B-18
124
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
Attention:
Re: FELINE PRIDES of Xxxxxxx and Broad Home Corporation (the
"Company"), and KBHC Financing I
We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of , 1998, (the "Pledge Agreement") among the
Company, yourselves, as Collateral Agent, Custodial Agent and Securities
Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to time, that the
holder of the Securities listed below (the "Holder") has elected to substitute
[$_____ aggregate principal amount of Treasury Securities] [$_______stated
liquidation amount of Capital Securities or the appropriate Applicable Ownership
Interest of the Treasury Portfolio, as the case may be,] in exchange for an
equal Value of [Pledged Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] [Pledged
Treasury Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Capital Securities or the appropriate Applicable Ownership Interest
of the Treasury Portfolio, as the case may be,] to you, as Collateral Agent. We
hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Capital Securities or the appropriate Applicable Ownership Interest of the
Treasury Portfolio, as the case may be,], and upon the payment by such Holder of
any applicable fees, to release the [Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio, as the case may be,]
[Treasury Securities] related to such [Income PRIDES] [Growth PRIDES] to us in
accordance with the Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:_____________ ___________________________
By:______________________
Name:
Title:
Signature Guarantee:_____________
125
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Capital Securities or the appropriate Applicable
Ownership Interest of the Treasury Portfolio, as the case may be,] for the
[Pledged Capital Securities or the appropriate Applicable Ownership Interest of
the Treasury Portfolio, as the case may be,] [Pledged Treasury Securities]:
___________________________________ _____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
___________________________________
Address
___________________________________
___________________________________
C-2
126
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Xxxxxxx and Broad Home Corporation (the
"Company"), and KBHC Financing I
The undersigned Holder hereby notifies you that it has delivered to
The Bank of New York, as Collateral Agent, [$_______ aggregate principal amount
of Treasury Securities] [$ aggregate stated liquidation amount of Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, the case may be,] in exchange for an equal Value of [Pledged Capital
Securities or the appropriate Applicable Ownership Interest of the Treasury
Portfolio, as the case may be,] [Pledged Treasury Securities] held by the
Collateral Agent, in accordance with Section [4.1], [4.2] of the Pledge
Agreement, dated July 7, 1998 (the "Pledge Agreement"), between you, the Company
and the Collateral Agent. The undersigned Holder has paid the Collateral Agent
all applicable fees relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Capital Securities or the appropriate
Applicable Ownership Interest of the Treasury Portfolio] [Pledged Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES]. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.
Dated:_____________ _________________________
Signature
Signature Guarantee: _____________________
Please print name and address of Registered Holder:
___________________________________ _____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
___________________________________
Address
___________________________________
___________________________________
127
EXHIBIT E
NOTICE TO SETTLE BY SEPARATE CASH
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Trust Services Division
Re: FELINE PRIDES of Xxxxxxx and Broad Home Corporation (the
"Company"), and KBHC Financing I
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.4 of the Purchase Contract Agreement dated as of July 7, 1998
among the Company and yourselves, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder has
elected to pay to the Collateral Agent, on or prior to 11:00 a.m. New York City
time, on the Business Day immediately preceding the Purchase Contract Settlement
Date, (in lawful money of the United States by [certified or cashiers check or]
wire transfer, in each case in immediately available funds), $_________ as the
Purchase Price for the shares of Common Stock issuable to such Holder by the
Company under the related Purchase Contract on the Purchase Contract Settlement
Date. The undersigned Holder hereby instructs you to notify promptly the
Collateral Agent of the undersigned Holders election to make such cash
settlement with respect to the Purchase Contracts related to such Holder's
[Income PRIDES] [Growth PRIDES].
Dated:_____________ __________________________________________
Signature
Signature Guarantee: _____________________
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Please print name and address of Registered Holder:
___________________________________ _____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
___________________________________
___________________________________
E-1
