Exhibit 4.2
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THE HARTFORD FINANCIAL SERVICES GROUP, INC.
and
JPMORGAN CHASE BANK,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of May 23, 2003
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ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions........................................................................ 1
SECTION 1.02. Compliance Certificates and Opinions............................................... 15
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent............................. 16
SECTION 1.04. Acts of Holders; Record Dates...................................................... 16
SECTION 1.05. Notices............................................................................ 17
SECTION 1.06. Notice to Holders; Waiver.......................................................... 19
SECTION 1.07. Effect of Headings and Table of Contents........................................... 19
SECTION 1.08. Successors and Assigns............................................................. 19
SECTION 1.09. Separability Clause................................................................ 19
SECTION 1.10. Benefits of Agreement.............................................................. 19
SECTION 1.11. Governing Law...................................................................... 20
SECTION 1.12. Legal Holidays..................................................................... 20
SECTION 1.13. Counterparts....................................................................... 20
SECTION 1.14. Inspection of Agreement............................................................ 20
SECTION 1.15. Appointment of Financial Institution as Agent for the Company...................... 20
SECTION 1.16. No Waiver.......................................................................... 21
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.................................................... 21
SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication.................... 22
ARTICLE 3
THE UNITS
SECTION 3.01. Amount; Form and Denominations..................................................... 22
SECTION 3.02. Rights and Obligations Evidenced by the Certificates............................... 23
SECTION 3.03. Execution, Authentication, Delivery and Dating..................................... 23
SECTION 3.04. Temporary Certificates............................................................. 24
SECTION 3.05. Registration; Registration of Transfer and Exchange................................ 25
SECTION 3.06. Book-Entry Interests............................................................... 26
SECTION 3.07. Notices to Holders................................................................. 27
SECTION 3.08. Appointment of Successor Depositary................................................ 27
SECTION 3.09. Definitive Certificates............................................................ 27
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates................................. 28
SECTION 3.11. Persons Deemed Owners.............................................................. 29
SECTION 3.12. Cancellation....................................................................... 30
SECTION 3.13. Creation of Stripped Units by Substitution of Treasury Securities.................. 31
SECTION 3.14. Recreation of Normal Units......................................................... 33
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event........................ 34
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SECTION 3.16. No Consent to Assumption........................................................... 35
ARTICLE 4
THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved........................... 35
SECTION 4.02. Notice and Voting.................................................................. 37
SECTION 4.03. Special Event Redemption........................................................... 37
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock................................................. 38
SECTION 5.02. Remarketing; Payment of Purchase Price............................................. 41
SECTION 5.03. Issuance of Shares of Common Stock................................................. 51
SECTION 5.04. Adjustment of Settlement Rate...................................................... 52
SECTION 5.05. Notice of Adjustments and Certain Other Events..................................... 61
SECTION 5.06. Termination Event; Notice.......................................................... 62
SECTION 5.07. Early Settlement................................................................... 63
SECTION 5.08. Intentionally Omitted.............................................................. 65
SECTION 5.09. No Fractional Shares............................................................... 65
SECTION 5.10. Charges and Taxes.................................................................. 66
SECTION 5.11. Contract Adjustment Payments....................................................... 66
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract Adjustment Payments and to
Purchase Shares of Common Stock.............................................................. 72
SECTION 6.02. Restoration of Rights and Remedies................................................. 72
SECTION 6.03. Rights and Remedies Cumulative..................................................... 72
SECTION 6.04. Delay or Omission Not Waiver....................................................... 72
SECTION 6.05. Undertaking for Costs.............................................................. 72
SECTION 6.06. Waiver of Stay or Extension Laws................................................... 73
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities................................................ 73
SECTION 7.02. Notice of Default.................................................................. 74
SECTION 7.03. Certain Rights of Purchase Contract Agent.......................................... 75
SECTION 7.04. Not Responsible for Recitals or Issuance of Units.................................. 76
SECTION 7.05. May Hold Units..................................................................... 77
SECTION 7.06. Money Held in Custody.............................................................. 77
SECTION 7.07. Compensation and Reimbursement..................................................... 77
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility............................ 78
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SECTION 7.09. Resignation and Removal; Appointment of Successor.................................. 78
SECTION 7.10. Acceptance of Appointment by Successor............................................. 80
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business........................ 80
SECTION 7.12. Preservation of Information; Communications to Holders............................. 80
SECTION 7.13. No Obligations of Purchase Contract Agent.......................................... 81
SECTION 7.14. Tax Compliance..................................................................... 81
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders................................. 82
SECTION 8.02. Supplemental Agreements with Consent of Holders.................................... 83
SECTION 8.03. Execution of Supplemental Agreements............................................... 84
SECTION 8.04. Effect of Supplemental Agreements.................................................. 84
SECTION 8.05. Reference to Supplemental Agreements............................................... 84
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except
under Certain Conditions..................................................................... 85
SECTION 9.02. Rights and Duties of Successor Corporation......................................... 85
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent...... 86
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts.............................................. 86
SECTION 10.02. Maintenance of Office or Agency................................................... 86
SECTION 10.03. Company to Reserve Common Stock................................................... 87
SECTION 10.04. Covenants as to Common Stock...................................................... 87
SECTION 10.05. Statements of Officers of the Company as to Default............................... 87
SECTION 10.06. ERISA............................................................................. 87
SECTION 10.07. Tax Treatment..................................................................... 88
EXHIBITS
Exhibit A - Form of Normal Units Certificate
Exhibit B - Form of Stripped Units Certificate
Exhibit C - Instruction to Purchase Contract Agent
Exhibit D - Notice from Purchase Contract Agent to Holders
Exhibit E - Notice to Settle by Separate Cash
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PURCHASE CONTRACT AGREEMENT, dated as of May 23, 2003, between THE
HARTFORD FINANCIAL SERVICES GROUP, INC., a Delaware corporation (the "COMPANY"),
and JPMORGAN CHASE BANK, a New York banking corporation, acting as purchase
contract agent for the Holders of Units (as defined herein) from time to time
(the "PURCHASE CONTRACT AGENT").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.
All things necessary to make the Purchase Contracts (as defined
herein), when the Certificates (as defined herein) are executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent, as provided in this Agreement, the valid obligations of
the Company, and to constitute these presents a valid agreement of the Company,
in accordance with its terms, have been done. For and in consideration of the
premises and the purchase of the Units by the Holders thereof, it is mutually
agreed as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision; and
(d) the following terms have the meanings given to them in this
Section 1.01(d):
"ACCOUNTING EVENT" has the meaning set forth in Section 1.02(e) of the
Supplemental Indenture No. 3.
"ACT" has the meaning, with respect to any Holder, set forth in Section
1.04.
"ADJUSTED APPLICABLE MARKET VALUE" has the meaning set forth in Section
5.01.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.01.
"APPLICABLE OWNERSHIP INTEREST IN SENIOR NOTES" shall mean a 5%
undivided beneficial ownership interest in $1,000 principal amount of Senior
Notes that is a component of a Normal Unit.
"APPLICABLE OWNERSHIP INTEREST IN THE TREASURY PORTFOLIO" shall mean
with respect to the Treasury Portfolio contained in a Normal Unit, (i) a 5%
undivided beneficial ownership interest in $1,000 face amount of U.S. treasury
securities (or principal or interest strips thereof) included in such Treasury
Portfolio that mature on or prior to August 15, 2006, and (ii) (x) for the
scheduled Payment Date on the Senior Notes that occurs on the Purchase Contract
Settlement Date, in the case of a Successful Remarketing prior to the Final
Remarketing Date, or (y) for each scheduled Payment Date on the Senior Notes
that occurs after the Special Event Redemption Date to and including the
Purchase Contract Settlement Date, in the case of a Special Event Redemption, a
0.0320% undivided beneficial ownership interest in $1,000 face amount of U.S.
treasury securities (or principal or interest strips thereof) included in such
Treasury Portfolio that mature on or prior to the business day immediately
preceding such scheduled Payment Date.
"APPLICABLE PRINCIPAL AMOUNT" means the aggregate principal amount of
Senior Notes underlying the aggregate Applicable Ownership Interests in Senior
Notes.
"APPLICANTS" has the meaning set forth in Section 7.12(b).
"BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
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"BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"BOARD OF DIRECTORS" means the board of directors of the Company or a
duly authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Purchase Contract Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.06.
"BUSINESS DAY" or "BUSINESS DAY" means any day other than a Saturday or
Sunday or a day on which banking institutions or trust companies in New York
City, New York are authorized or required by applicable law to remain closed or
a day on which the Indenture Trustee or the Collateral Agent is closed for
business; provided that for purposes of the second paragraph of Section 1.12
only, the term "Business Day" shall also be deemed to exclude any day on which
trading on the New York Stock Exchange, Inc. is closed or suspended.
"CASH MERGER" has the meaning set forth in Section 5.04(b)(2).
"CASH MERGER EARLY SETTLEMENT" has the meaning set forth in Section
5.04(b)(2).
"CASH MERGER EARLY SETTLEMENT DATE" has the meaning set forth in
Section 5.04(b)(2).
"CASH SETTLEMENT" has the meaning set forth in Section 5.02(c)(i).
"CERTIFICATE" means a Normal Units Certificate or a Stripped Units
Certificate.
"CLOSING PRICE" has the meaning set forth in Section 5.01(a).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in Section 1.01(d) of the Pledge
Agreement.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 1.01(d) of
the Pledge Agreement.
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"COLLATERAL AGENT" means JPMorgan Chase Bank, a New York banking
corporation, as Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person
who is then the Collateral Agent thereunder.
"COLLATERAL SUBSTITUTION" means (i) with respect to a Normal Unit, (x)
the substitution for the Pledged Applicable Ownership Interest in Senior Notes
included in such Normal Unit by Treasury Securities in an aggregate principal
amount at maturity equal to the aggregate principal amount of Senior Notes
underlying such Pledged Applicable Ownership Interest in Senior Notes, or (y)
the substitution for the Pledged Applicable Ownership Interest in the Treasury
Portfolio included in such Normal Unit by Treasury Securities in an aggregate
principal amount at maturity equal to the aggregate principal amount at maturity
of such Pledged Applicable Ownership Interest in the Treasury Portfolio, or (ii)
with respect to a Stripped Unit, (x) the substitution for the Pledged Treasury
Securities included in such Stripped Unit (if the Applicable Ownership Interest
in the Treasury Portfolio has not replaced the Applicable Ownership Interest in
Senior Notes as a component of a Normal Unit) by Senior Notes having an
aggregate principal amount equal to the aggregate principal amount at stated
maturity of the Pledged Treasury Securities, or (y) the substitution for the
Pledged Treasury Securities included in such Stripped Unit (if the Applicable
Ownership Interest in the Treasury Portfolio has replaced the Applicable
Ownership Interest in Senior Notes as a component of a Normal Unit) by the
appropriate Applicable Ownership Interest in the Treasury Portfolio.
"COMMON STOCK" means the common stock, par value $0.01 per share, of
the Company.
"COMPANY" means the Person named as the "COMPANY" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "COMPANY" shall
mean such successor.
"CONSTITUENT PERSON" has the meaning set forth in Section 5.04(b).
"CONTRACT ADJUSTMENT PAYMENTS" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract, at a rate per
year of 4.44% of the Stated Amount per Purchase Contract.
"CORPORATE TRUST OFFICE" means the office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 0 Xxx
Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust
Services.
"COUPON RATE" means the percentage rate per annum at which each Senior
Note will bear interest initially.
"CURRENT MARKET PRICE" has the meaning set forth in Section 5.04(a)(8).
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"CUSTODIAL AGENT" means JPMorgan Chase Bank, a New York banking
corporation, as Custodial Agent under the Pledge Agreement until a successor
Custodial Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "CUSTODIAL AGENT" shall mean the Person who
is then the Custodial Agent thereunder.
"DEPOSITARY" means a clearing agency registered under Section 17A of
the Exchange Act that is designated to act as Depositary for the Units as
contemplated by Sections 3.06 and 3.08.
"DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"DTC" means The Depository Trust Company.
"EARLY SETTLEMENT" has the meaning set forth in Section 5.07.
"EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.07.
"EARLY SETTLEMENT DATE" has the meaning set forth in Section 5.07.
"EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.07.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"EXPIRATION DATE" has the meaning set forth in Section 1.04(e).
"EXPIRATION TIME" has the meaning set forth in Section 5.04(a)(6).
"FAILED FINAL REMARKETING" has the meaning set forth in Section
5.02(d).
"FAILED INITIAL REMARKETING" has the meaning set forth in Section
5.02(a).
"FAILED REMARKETING" shall mean any of (i) a Failed Initial
Remarketing, (ii) a Failed Second Remarketing, (iii) a Failed Third Remarketing
or (iv) a Failed Final Remarketing.
"FAILED SECOND REMARKETING" has the meaning set forth in Section
5.02(b).
"FAILED THIRD REMARKETING" has the meaning set forth in Section
5.02(b).
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"FINAL REMARKETING" has the meaning set forth in Section 5.02(d).
"FINAL REMARKETING DATE" means the third Business Day immediately
preceding the Purchase Contract Settlement Date.
"FINAL REMARKETING FEE" has the meaning set forth in Section 5.02(d).
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Units and is registered in the name of the Depositary or a nominee thereof.
"HOLDER" means, with respect to a Unit, the Person in whose name the
Unit evidenced by a Certificate is registered in the Security Register;
provided, however, that solely for the purpose of determining whether the
Holders of the requisite number of Units have voted on any matter (and not for
any other purpose hereunder), if the Unit remains in the form of one or more
Global Certificates and if the Depositary that is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Units are credited on the record
date, the term "HOLDER" shall mean such Depositary Participant acting at the
direction of the Beneficial Owners.
"INDENTURE" means the Senior Indenture, dated as of October 20, 1995,
between the Company and the Indenture Trustee (including any provisions of the
TIA that are deemed incorporated therein), as supplemented by Supplemental
Indenture No. 1 dated as of December 27, 2000, Supplemental Indenture No. 2
dated as of September 13, 2002 and Supplemental Indenture No. 3 dated as of the
date hereof, pursuant to which the Senior Notes will be issued.
"INDEMNITEES" has the meaning set forth in Section 7.07(3).
"INDENTURE TRUSTEE" means JPMorgan Chase Bank (formerly The Chase
Manhattan Bank (National Association)), as trustee under the Indenture, or any
successor thereto.
"INITIAL REMARKETING" has the meaning set forth in Section 5.02(a).
"INITIAL REMARKETING DATE" means the third Business Day immediately
preceding May 16, 2006.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request
signed in the name of the Company by (i) either its Chief Executive Officer, its
President or one of its Vice Presidents, and (ii) either its Corporate Secretary
or one of its Assistant Corporate Secretaries or its Treasurer or one of its
Assistant Treasurers, and delivered to the Purchase Contract Agent.
"NON-ELECTING SHARE" has the meaning set forth in Section 5.04(b).
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"NORMAL UNIT" means the collective rights and obligations of a Holder
of a Normal Units Certificate in respect of the Applicable Ownership Interest in
Senior Notes or an appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, subject in each case (except for the appropriate
Applicable Ownership Interest in the Treasury Portfolio specified in clause (ii)
of the definition of such term) to the Pledge thereof, and the related Purchase
Contract.
"NORMAL UNITS CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Normal Units specified
on such certificate.
"NYSE" has the meaning set forth in Section 5.01.
"OFFICERS' CERTIFICATE" means a certificate signed by (i) either the
Company's Chief Executive Officer, its President or one of its Vice Presidents,
and (ii) either the Company's Corporate Secretary or one of its Assistant
Corporate Secretaries or its Treasurer or one of its Assistant Treasurers, and
delivered to the Purchase Contract Agent. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Agreement (other than the Officers' Certificate provided for in Section 10.05)
shall include:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(iii) a statement that, in the opinion of each such officer,
each such officer has made such examination or investigation as is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent. An opinion of
counsel may rely on certificates as to matters of fact.
"OUTSTANDING UNITS" means, with respect to any Unit and as of the date
of determination, all Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) if a Termination Event has occurred, (x) Normal Units for
which the Senior Notes underlying the Applicable Ownership Interests in
Senior Notes or the Applicable
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Ownership Interests in the Treasury Portfolio have been theretofore
deposited with the Purchase Contract Agent in trust for the Holders of
such Normal Units and (y) Stripped Units;
(ii) Units evidenced by Certificates theretofore cancelled
by the Purchase Contract Agent or delivered to the Purchase Contract
Agent for cancellation or deemed cancelled pursuant to the provisions
of this Agreement; and
(iii) Units evidenced by Certificates in exchange for or in
lieu of which other Certificates have been authenticated, executed on
behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been
presented to the Purchase Contract Agent proof satisfactory to it that
such Certificate is held by a protected purchaser in whose hands the
Units evidenced by such Certificate are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
number of the Units have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Units owned by the Company or any Affiliate
of the Company shall be disregarded and deemed not to be Outstanding Units,
except that, in determining whether the Purchase Contract Agent shall be
authorized and protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Units so owned that have been pledged in good faith may
be regarded as Outstanding Units if the pledgee establishes to the satisfaction
of the Purchase Contract Agent the pledgee's right so to act with respect to
such Units 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 of each year, commencing August 16, 2003.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1.01(d) of
the Pledge Agreement.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"PLAN" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the Code or
any entity whose assets are considered assets of any such plan.
"PLEDGE" means the pledge under the Pledge Agreement of the Applicable
Ownership Interest in Senior Notes, a Treasury Security or the Applicable
Ownership Interest in the Treasury
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Portfolio (as specified in clause (i) of the definition of such term), as the
case may be, in each case constituting a part of the Units (it being understood
that the appropriate Applicable Ownership Interest in the Treasury Portfolio (as
specified in clause (ii) of the definition of such term) shall not be subject to
the Pledge).
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of May 23,
2003, among the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time of the Units, as amended
from time to time.
"PLEDGED APPLICABLE OWNERSHIP INTERESTS IN SENIOR NOTES" has the
meaning set forth in Section 1.01(d) of the Pledge Agreement.
"PLEDGED APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO" has
the meaning set forth in Section 1.01(d) of the Pledge Agreement.
"PLEDGED SENIOR NOTES" has the meaning set forth in Section 1.01(d) of
the Pledge Agreement.
"PLEDGED TREASURY SECURITIES" has the meaning set forth in Section
1.01(d) of the Pledge Agreement.
"PREDECESSOR CERTIFICATE" means a Predecessor Normal Units Certificate
or a Predecessor Stripped Units Certificate.
"PREDECESSOR NORMAL UNITS CERTIFICATE" of any particular Normal Units
Certificate means every previous Normal Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
Normal Units evidenced thereby; and, for the purposes of this definition, any
Normal Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Normal Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Normal Units
Certificate.
"PREDECESSOR STRIPPED UNITS CERTIFICATE" of any particular Stripped
Units Certificate means every previous Stripped Units Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Stripped Units evidenced thereby; and, for the purposes of this definition,
any Stripped Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Stripped
Units Certificate.
"PRIMARY TREASURY DEALER" shall mean a primary U.S. government
securities dealer.
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"PROCEEDS" has the meaning set forth in Section 1.01(d) of the Pledge
Agreement.
"PRO RATA" shall mean pro rata to each Holder according to the
aggregate Stated Amount of the Units held by such Holder in relation to the
aggregate Stated Amount of all Units outstanding.
"PROSPECTUS" means the prospectus relating to the delivery of shares of
any securities in connection with an Early Settlement pursuant to Section 5.07
or a Cash Merger Early Settlement of Purchase Contracts pursuant to Section
5.04(b)(2), in the form in which first filed, or transmitted for filing, with
the Securities and Exchange Commission after the effective date of the
Registration Statement pursuant to Rule 424(b) under the Securities Act,
including the documents incorporated by reference therein as of the date of such
Prospectus.
"PURCHASE CONTRACT" means, with respect to any Unit, the contract
forming a part of such Unit and obligating the Company to (i) sell, and the
Holder of such Unit to purchase, shares of Common Stock and (ii) pay the Holder
thereof Contract Adjustment Payments, in each case on the terms and subject to
the conditions set forth in Article 5 hereof.
"PURCHASE CONTRACT AGENT" means the Person named as the "PURCHASE
CONTRACT AGENT" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "PURCHASE CONTRACT AGENT" shall
mean such Person or any subsequent successor who is appointed pursuant to this
Agreement.
"PURCHASE CONTRACT SETTLEMENT DATE" means August 16, 2006.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in
Section 5.03.
"PURCHASE PRICE" has the meaning set forth in Section 5.01.
"PURCHASED SHARES" has the meaning set forth in Section 5.04(a)(6).
"QUOTATION AGENT" means any Primary Treasury Dealer selected by the
Company.
"RECORD DATE" for any distribution and Contract Adjustment Payment
payable on any Payment Date means, as to any Global Certificate or any other
Certificate, the first business day of the calendar month in which the relevant
Payment Date falls; provided that the Company may, at its option, select any
other day as the Record Date for any Payment Date so long as such Record Date
selected is more than one Business Day but fewer than 60 Business Days prior to
such Payment Date.
"REDEMPTION AMOUNT" has the meaning set forth in Section 1.02(e) of the
Supplemental Indenture No. 3.
10
"REDEMPTION PRICE" has the meaning set forth in Section 1.02(e) of the
Supplemental Indenture No. 3.
"REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.
"REFERENCE PRICE" has the meaning set forth in Section 5.01.
"REGISTRATION STATEMENT" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of any securities in connection with an Early Settlement on the Early
Settlement Date or a Cash Merger Early Settlement of Purchase Contracts on the
Cash Merger Early Settlement Date under Section 5.04(b)(2), including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in such registration statement, and any post-effective amendments
thereto.
"REMARKETING" means the remarketing of the Senior Notes by the
Remarketing Agent pursuant to the Remarketing Agreement.
"REMARKETING AGENT" has the meaning set forth in the Remarketing
Agreement.
"REMARKETING AGREEMENT" has the meaning set forth in Section 1.02(e) of
the Supplemental Indenture No. 3.
"REMARKETING DATE" means any of (i) the Initial Remarketing Date, (ii)
the Second Remarketing Date, (iii) the Third Remarketing Date and (iv) the Final
Remarketing Date.
"REMARKETING FEE" has the meaning set forth in Section 5.02(a).
"REORGANIZATION EVENT" has the meaning set forth in Section 5.04(b).
"RESET RATE" has the meaning set forth in Section 1.02(e) of the
Supplemental Indenture No. 3.
"RESPONSIBLE OFFICER" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer this Purchase Contract Agreement.
"RIGHTS" has the meaning set forth in Section 5.04(a)(11).
"SECOND REMARKETING" has the meaning set forth in Section 5.02(b).
"SECOND REMARKETING DATE" means the third Business Day immediately
preceding June 16, 2006.
11
"SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"SECURITIES INTERMEDIARY" means JPMorgan Chase Bank, a New York banking
corporation, as Securities Intermediary under the Pledge Agreement until a
successor Securities Intermediary shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "SECURITIES
INTERMEDIARY" shall mean such successor or any subsequent successor who is
appointed pursuant to the Pledge Agreement.
"SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings set forth in Section 3.05.
"SENIOR INDEBTEDNESS" means, indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on a parity in right of payment with or subordinate in right
of payment to the Contract Adjustment Payments.
"SENIOR NOTES" means the series of notes designated the senior notes
due August 16, 2008 to be issued by the Company under the Indenture.
"SEPARATE SENIOR NOTES" means Senior Notes that do not underlie
Applicable Ownership Interests in Senior Notes that are components of Normal
Units.
"SEPARATE SENIOR NOTES PURCHASE PRICE" has the meaning set forth in
Section 1.02(e) of Supplemental Indenture No. 3.
"SETTLEMENT RATE" has the meaning set forth in Section 5.01.
"SPECIAL EVENT" has the meaning set forth in Section 1.02(e) of the
Supplemental Indenture No. 3.
"SPECIAL EVENT REDEMPTION" means the redemption of the Senior Notes
pursuant to the Indenture following the occurrence of a Special Event.
"SPECIAL EVENT REDEMPTION DATE" means the date upon which a Special
Event Redemption is scheduled to occur pursuant to the Indenture.
"STATED AMOUNT" means $50.00.
"STRIPPED UNIT" means, following the substitution of a Treasury
Security for Pledged Applicable Ownership Interests in Senior Notes or the
Pledged Applicable Ownership Interest in the Treasury Portfolio as collateral to
secure a Holder's obligations under the Purchase Contract, the collective rights
and obligations of a Holder of a Stripped Units Certificate in respect of such
Treasury Securities, subject to the Pledge thereof, and the related Purchase
Contract.
12
"STRIPPED UNITS CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Stripped Units specified
on such certificate.
"SUCCESSFUL FINAL REMARKETING" has the meaning set forth in Section
5.02(d).
"SUCCESSFUL INITIAL REMARKETING" has the meaning set forth in Section
5.02(a).
"SUCCESSFUL REMARKETING" means any of (i) a Successful Initial
Remarketing, (ii) a Successful Second Remarketing, (iii) a Successful Third
Remarketing or (iv) a Successful Final Remarketing.
"SUCCESSFUL SECOND REMARKETING" has the meaning set forth in Section
5.02(b).
"SUCCESSFUL THIRD REMARKETING" has the meaning set forth in Section
5.02(b).
"SUPPLEMENTAL INDENTURE NO. 3" means the Supplemental Indenture No. 3
dated as of the date hereof between the Company and the Indenture Trustee.
"TAX EVENT" has the meaning set forth in Section 1.02(e) of the
Supplemental Indenture No. 3.
"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 if such judgment,
decree or order shall have been entered more than 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued undischarged
and unstayed for a period of 60 days;
(ii) at any time on or prior to the Purchase Contract Settlement Date,
a judgment, decree or court order for the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency of the Company or
of its property, or for the termination or liquidation of its affairs, shall
have been entered and if such judgment, decree or order shall have been entered
more than 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
13
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.
"THIRD REMARKETING" has the meaning set forth in Section 5.02(b).
"THIRD REMARKETING DATE" means the third Business Day immediately
preceding July 16, 2006.
"THRESHOLD APPRECIATION PRICE" has the meaning set forth in Section
5.01.
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"TRADING DAY" has the meaning set forth in Section 5.01.
"TRAILING 12 MONTH PERIOD" has the meaning set forth in Section 5.04.
"TREASURY PORTFOLIO" means a portfolio of (i) U.S. treasury securities
(or principal or interest strips thereof) that mature on or prior to August 15,
2006 in an aggregate amount equal to the Applicable Principal Amount, and (ii)
(x) in the case of a Successful Remarketing prior to the Final Remarketing Date,
for the scheduled Payment Date on the Senior Notes that occurs on the Purchase
Contract Settlement Date, U.S. treasury securities (or principal or interest
strips thereof) that mature on or prior to August 15, 2006 in an aggregate
amount equal to the aggregate interest payment (assuming no reset of the
interest rate) that would have been due on the Purchase Contract Settlement Date
on the Applicable Principal Amount, and (y) in the case of a Special Event
Redemption, for each scheduled Payment Date that occurs after the Special Event
Redemption Date to and including the Purchase Contract Settlement Date, U.S.
treasury securities (or principal or interest strips thereof) that mature on or
prior to the business day immediately preceding such scheduled Payment Date in
an aggregate amount equal to the aggregate interest payment (assuming no reset
of the interest rate) that would have been due on such scheduled Payment Date on
the Applicable Principal Amount.
"TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate ask-side
price quoted by a Primary Treasury Dealer to the Quotation Agent between 9:00
a.m. and 11:00 a.m. (New York City time) (i) in the case of a Special Event
Redemption, on the third Business Day immediately preceding the Special Event
Redemption Date for the purchase of the applicable Treasury Portfolio for
settlement on the Special Event Redemption Date, and (ii) in the case of any
Successful Remarketing prior to the Final Remarketing Date, on the date of such
Successful
14
Remarketing for the purchase of the applicable Treasury Portfolio for settlement
on the third Business Day immediately following the date of such Successful
Remarketing.
"TREASURY SECURITIES" means zero-coupon U.S. treasury securities that
mature on August 15, 2006 (CUSIP No.000000XX0).
"UNDERWRITERS" means the underwriters identified in Schedule II to the
Underwriting Agreement.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated May
19, 2003, among the Company and the Underwriters, including the Pricing
Agreement referred to therein.
"UNIT" means a Normal Unit or a Stripped Unit, as the case may be.
"VICE PRESIDENT" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
SECTION 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than the Officers'
Certificate provided for in Section 10.05) shall include:
(i) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is
necessary to enable such individual to express an
15
informed opinion as to whether or not such covenant or condition has
been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which its certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Purchase Contract Agent and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.01) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.
16
(c) The ownership of Units shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Unit shall bind every future Holder of
the same Unit and the Holder of every Certificate evidencing such Unit issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Units 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 Units. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Normal Units and the Outstanding Stripped Units, as
the case may be, on such record date, and no other Holders, shall be entitled to
take the relevant action with respect to the Normal Units or the Stripped Units,
as the case may be, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless taken
prior to or on the applicable Expiration Date by Holders of the requisite number
of Outstanding Units on such record date. Nothing contained in this paragraph
shall be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and be of no effect), and nothing contained
in this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite number of Outstanding Units on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Purchase Contract Agent in writing and to each Holder of Units in the manner set
forth in Section 1.06.
With respect to any record date set pursuant to this Section 1.04(e),
the Company may designate any date as the "EXPIRATION DATE" and from time to
time may change the Expiration Date to any earlier or later day; provided that
no such change shall be effective unless notice of the proposed new Expiration
Date is given to the Purchase Contract Agent in writing, and to each Holder of
Units in the manner set forth in Section 1.06, prior to or on the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
SECTION 1.05. Notices.
17
Any notice or communication is duly given if in writing and delivered
in Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Institutional Trust Services
If to the Company:
The Hartford Financial Services Group, Inc.
Xxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxxxxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Treasurer
with a copy to the General Counsel
Telecopier No.: (000) 000-0000
If to the Collateral Agent:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Institutional Trust Services
If to the Indenture Trustee:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Institutional Trust Services
The Purchase Contract Agent shall send to the Indenture Trustee at the
telecopier number set forth above a copy of any notices in the form of Exhibits
C, D, E or F it sends or receives.
18
SECTION 1.06. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Purchase Contract Agent, but such filing shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and the
Purchase Contract Agent shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 1.09. Separability Clause.
In case any provision in this Agreement or in the Units shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Units, 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
19
bound by all of the terms and conditions hereof and of the Units evidenced by
their Certificates by their acceptance of delivery of such Certificates.
SECTION 1.11. Governing Law.
This Agreement and the Units shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflicts of law provisions thereof.
SECTION 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Units), Contract
Adjustment Payments or other distributions shall not be paid on such date, but
Contract Adjustment Payments or such other distributions shall be paid on the
next succeeding Business Day, unless such Business Day is in the next succeeding
calendar year, in which case such Contract Adjustment Payments or other
distributions shall be paid on the immediately preceding Business Day, in each
case with the same force and effect as if made on such scheduled Payment Date;
provided that no interest shall accrue or be payable by the Company or to any
Holder in respect of such payment or distribution for the period from and after
any such scheduled Payment Date.
In any case where the Purchase Contract Settlement Date or any Early
Settlement Date or Cash Merger Early Settlement Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Units), Purchase
Contracts shall not be performed and Early Settlement and Cash Merger Early
Settlement shall not be effected on such date, but Purchase Contracts shall be
performed or Early Settlement or Cash Merger Early Settlement shall be effected,
as applicable, on the next succeeding Business Day with the same force and
effect as if made on such Purchase Contract Settlement Date, Early Settlement
Date or Cash Merger Early Settlement Date, as applicable.
SECTION 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.
SECTION 1.15. Appointment of Financial Institution as Agent for the
Company.
20
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
SECTION 1.16. No Waiver. No failure on the part of the Company, the
Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or
any of their respective agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Company, the Collateral Agent, the Securities Intermediary or any of their
respective agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming part
of each Unit evidenced thereby) shall be in substantially the form set forth in
Exhibit A hereto (in the case of Certificates evidencing Normal Units) or
Exhibit B hereto (in the case of Certificates evidencing Stripped Units), with
such letters, numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the Units are listed
or any depositary therefor, or as may, consistently herewith, be determined by
the officers of the Company executing such Certificates, as evidenced by their
execution of the Certificates.
The definitive Certificates shall be produced in any manner as
determined by the officers of the Company executing the Units evidenced by such
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (THE
21
"DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.
THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND
NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE
OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
SECTION 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of authentication
of the Units shall be in substantially the form set forth on the form of the
applicable Certificates.
ARTICLE 3
THE UNITS
SECTION 3.01. Amount; Form and Denominations.
The aggregate number of Units evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
12,000,000 (or 13,800,000 if the over-allotment option granted to the
Underwriters pursuant to the Underwriting Agreement is exercised in full),
except for Certificates authenticated, executed and delivered upon registration
of transfer of, in exchange for, or in lieu of, other Certificates pursuant to
Sections 3.04, 3.05, 3.09, 3.10, 3.13, 3.14 or 8.05.
The Certificates shall be issuable only in registered form and only in
denominations of a single Normal Unit or Stripped Unit and any integral multiple
thereof.
22
SECTION 3.02. Rights and Obligations Evidenced by the Certificates.
Each Normal Units Certificate shall evidence the number of Normal Units
specified therein, with each such Normal Unit representing (1) the ownership by
the Holder thereof of the Applicable Ownership Interest in Senior Notes or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
subject to the Pledge of such Applicable Ownership Interest in Senior Notes or
such Applicable Ownership Interest in the Treasury Portfolio (as specified in
clause (i) of the definition of such term), as the case may be, by such Holder
pursuant to the Pledge Agreement, and (2) the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Purchase
Contract Agent is hereby authorized, as attorney-in-fact for, and on behalf of,
the Holder of each Normal Unit, to pledge, pursuant to the Pledge Agreement, the
Applicable Ownership Interest in Senior Notes and the Applicable Ownership
Interest in the Treasury Portfolio (as specified in clause (i) of the definition
of such term), if any, forming a part of such Normal Unit, to the Collateral
Agent for the benefit of the Company, and to grant to the Collateral Agent, for
the benefit of the Company, a security interest in the right, title and interest
of such Holder in such Applicable Ownership Interest in Senior Notes and the
Applicable Ownership Interest in the Treasury Portfolio (as specified in clause
(i) of the definition of such term), if any, and in the Senior Notes underlying
the Applicable Ownership Interests in Senior Notes to secure the obligation of
the Holder under each Purchase Contract to purchase shares of Common Stock.
Upon the formation of a Stripped Unit pursuant to Section 3.13, each
Stripped Unit Certificate shall evidence the number of Stripped Units specified
therein, with each such Stripped Unit representing (1) the ownership by the
Holder thereof of a 1/20 undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such interest
by such Holder pursuant to the Pledge Agreement, and (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.
The Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and
on behalf of, the Holder of each Stripped Unit, to pledge, pursuant to the
Pledge Agreement, such Holder's interest in the Treasury Security forming a part
of such Stripped Unit to the Collateral Agent, for the benefit of the Company,
and to grant to the Collateral Agent, for the benefit of the Company, a security
interest in the right, title and interest of such Holder in such Treasury
Security to secure the obligation of the Holder under each Purchase Contract to
purchase shares of Common Stock.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Unit to any
of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
23
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board of Directors, its Chief Executive Officer, its President,
its Treasurer or one of its Vice Presidents. The signature of any of these
officers on the Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contracts evidenced by such
Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized officer of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.04. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Normal Units or Stripped Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.
24
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Units 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 Units evidenced thereby as
definitive Certificates.
SECTION 3.05. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "SECURITY REGISTRAR"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing Normal Units and Stripped Units.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Normal
Units or Stripped Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Normal Units or Stripped Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Normal Units
or Stripped Units, as the case may be, and be entitled to the same benefits and
subject to the same obligations under this Agreement as the Normal Units or
Stripped Units, as the case may be, evidenced by the Certificate surrendered
upon such registration of transfer or exchange.
25
Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Purchase Contract Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.04, 3.06, 3.09 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earliest to occur of any Early Settlement
Date with respect to such Certificate, any Cash Merger Early Settlement Date
with respect to such Certificate, the Purchase Contract Settlement Date or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Purchase
Contract Agent shall:
(i) if the Purchase Contract Settlement Date (including upon
any Cash Settlement) or an Early Settlement Date or a Cash Merger Early
Settlement Date with respect to such other Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such other
Certificate; or
(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Senior Notes, the
Treasury Securities, or the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance with
the applicable provisions of Section 3.15 and Article Five hereof.
SECTION 3.06. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. The Company hereby
designates DTC as the initial Depositary. Such Global Certificates shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.09. The Purchase Contract
Agent shall enter into an agreement with the
26
Depositary if so requested by the Company. Unless and until definitive, fully
registered Certificates have been issued to Beneficial Owners pursuant to
Section 3.09:
(i) the provisions of this Section 3.06 shall be in full
force and effect;
(ii) the Company shall be entitled to deal with the
Depositary for all purposes of this Agreement (including, without
limitation, making Contract Adjustment Payments and receiving
approvals, votes or consents hereunder) as the Holder of the Units and
the sole holder of the Global Certificates and shall have no obligation
to the Beneficial Owners;
(iii) to the extent that the provisions of this Section 3.06
conflict with any other provisions of this Agreement, the provisions of
this Section 3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be exercised
only through the Depositary and shall be limited to those established
by law and agreements between such Beneficial Owners and the Depositary
or the Depositary Participants.
Transfers of securities evidenced by Global Certificates shall be made through
the facilities of the Depositary, and any cancellation of, or increase or
decrease in the number of, such securities (including the creation of Stripped
Units and the recreation of Normal Units pursuant to Sections 3.13 and 3.14
respectively) shall be accomplished by making appropriate annotations on the
Schedule of Increases and Decreases for such Global Certificate.
SECTION 3.07. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any Units
registered in the name of the Depositary or the nominee of the Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
SECTION 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Units, the Company may, in its sole discretion,
appoint a successor Depositary with respect to the Units.
SECTION 3.09. Definitive Certificates.
If:
27
(i) the Depositary notifies the Company that it is unwilling
or unable to continue its services as securities depositary with
respect to the Units and no successor Depositary has been appointed
pursuant to Section 3.08 within 90 days after such notice; or
(ii) the Depositary ceases to be a "clearing agency"
registered under Section 17A of the Exchange Act when the Depositary is
required to be so registered to act as the Depositary and so notifies
the Company, and no successor Depositary has been appointed pursuant to
Section 3.08 within 90 days after such notice; or
(iii) the Company determines in its discretion that the
Global Certificates shall be exchangeable for definitive Certificates,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Units and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Units by the Depositary,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Depositary. The Company and the Purchase Contract Agent
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be authorized and protected in relying on, such
instructions. Each definitive Certificate so delivered shall evidence Units of
the same kind and tenor as the Global Certificate so surrendered in respect
thereof.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate, evidencing the same number
of Normal Units or Stripped Units, as the case may be, and bearing a Certificate
number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Purchase Contract Agent that such Certificate
has been acquired by a protected purchaser, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver to the Holder, in
lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Normal Units or Stripped Units, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to
28
authenticate, execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the earliest of
any Early Settlement Date with respect to such lost or mutilated Certificate,
any Cash Merger Early Settlement Date with respect to such lost or mutilated
Certificate, the Purchase Contract Settlement Date or the Termination Date. In
lieu of delivery of a new Certificate, upon satisfaction of the applicable
conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
(i) if the Purchase Contract Settlement Date or Early
Settlement Date or Cash Merger Early Settlement Date with respect to
such lost, stolen, destroyed or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts forming a part of the Units evidenced by such Certificate; or
(ii) if a Cash Settlement with respect to such lost or
mutilated Certificate or if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Senior
Notes underlying the Applicable Ownership Interests in Senior Notes,
the Treasury Securities or the appropriate Applicable Ownership
Interest in the Treasury Portfolio (as specified in clause (i) of the
definition of such term), as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance with
the applicable provisions of Section 3.15 and Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other fees and expenses (including, without
limitation, the fees and expenses of the Purchase Contract Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the Units
evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and
the Units evidenced thereby) shall be at any time enforceable by anyone, and
shall be entitled to all the benefits and be subject to all the obligations of
this Agreement equally and proportionately with any and all other Certificates
delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Units evidenced
29
thereby for purposes of (subject to any applicable record date) any payment or
distribution attributable to the Applicable Ownership Interest in Senior Notes
or the Applicable Ownership Interest in the Treasury Portfolio (if any) (as
specified in clause (ii) of the definition of such term), as applicable, payment
of Contract Adjustment Payments and performance of the Purchase Contracts and
for all other purposes whatsoever in connection with such Units, whether or not
such payment, distribution, or performance shall be overdue and notwithstanding
any notice to the contrary, and neither the Company nor the Purchase Contract
Agent, nor any agent of the Company or the Purchase Contract Agent, shall be
affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate, or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate. None of
the Company, the Purchase Contract Agent or any agent of the Company or the
Purchase Contract Agent will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of a Global Certificate or maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date or upon the transfer of Senior
Notes, or for delivery of the appropriate Applicable Ownership Interest in the
Treasury Portfolio or Treasury Securities, as the case may be, after the
occurrence of a Termination Event or pursuant to a Cash Settlement, an Early
Settlement or a Cash Merger Early Settlement, or upon the registration of
transfer or exchange of a Unit, or a Collateral Substitution or the recreation
of Normal Units shall, if surrendered to any Person other than the Purchase
Contract Agent, be delivered to the Purchase Contract Agent along with
appropriate written instructions regarding the cancellation thereof and, if not
already cancelled, shall be promptly cancelled by it. The Company may at any
time deliver to the Purchase Contract Agent for cancellation any Certificates
previously authenticated, executed and delivered hereunder which the Company may
have acquired in any manner whatsoever, and all Certificates so delivered shall,
upon an Issuer Order, be promptly cancelled by the Purchase Contract Agent. No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as provided
in this Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Purchase Contract Agent shall be disposed of in
accordance with its customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate
30
is delivered to the Purchase Contract Agent cancelled or with appropriate
written instructions regarding the cancellation thereof.
SECTION 3.13. Creation of Stripped Units by Substitution of Treasury
Securities.
Unless the Applicable Ownership Interests in the Treasury Portfolio
have replaced the Applicable Ownership Interests in Senior Notes as components
of the Normal Units, and subject to the conditions set forth in this Agreement,
a Holder may, at any time from and after the date of this Agreement and prior to
5:00 p.m. (New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, effect a Collateral Substitution and
separate the Applicable Ownership Interest in Senior Notes from the related
Purchase Contract in respect of such Holder's Normal Unit by substituting for
such Applicable Ownership Interest in Senior Notes, Treasury Securities in an
aggregate principal amount at maturity equal to the aggregate principal amount
of the Senior Notes underlying such Applicable Ownership Interest in Senior
Notes; provided that Holders may make Collateral Substitutions only in integral
multiples of 20 Normal Units. To effect such substitution, the Holder must:
(1) transfer to the Collateral Agent for deposit with the
Securities Intermediary Treasury Securities having an
aggregate principal amount at maturity equal to the
aggregate principal amount of the Senior Notes
underlying the Applicable Ownership Interests in
Senior Notes comprising part of such Normal Units;
and
(2) transfer the related Normal Units to the Purchase
Contract Agent accompanied by a notice to the
Purchase Contract Agent, substantially in the form of
Exhibit C hereto, (i) stating that the Holder has
deposited the relevant amount of Treasury Securities
to the Securities Intermediary and (ii) requesting
that the Purchase Contract Agent instruct the
Collateral Agent to release the Senior Notes
underlying the Applicable Ownership Interests in
Senior Notes comprising a part of such Normal Units,
whereupon the Purchase Contract Agent shall promptly
provide an instruction to such effect to the
Collateral Agent, substantially in the form of
Exhibit A to the Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (1) above
and the instruction described in clause (2) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Senior Notes from the Pledge, free
and clear of the Company's security interest therein, and the transfer of such
Senior Notes to the Purchase Contract Agent on behalf of the Holder. Upon
receipt of such Senior Notes, the Purchase Contract Agent shall promptly:
(i) cancel the related Normal Units;
31
(ii) transfer such Senior Notes to the Holder (such Senior
Notes shall be tradeable as a separate security, independent of the
resulting Stripped Units); and
(iii) authenticate, execute on behalf of such Holder and
deliver a Stripped Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled Normal Units.
Holders who elect to separate the Applicable Ownership Interests in
Senior Notes from the related Purchase Contracts by substituting Treasury
Securities for the Applicable Ownership Interest in Senior Notes shall be
responsible for any fees or expenses (including, without limitation, fees and
expenses payable to the Collateral Agent for its services as Collateral Agent)
in respect of the substitution, and neither the Company nor the Purchase
Contract Agent shall be responsible for any such fees or expenses.
If the Applicable Ownership Interests in the Treasury Portfolio have
replaced the Applicable Ownership Interests in Senior Notes as components of the
Normal Units and subject to the conditions set forth in this Agreement, a Holder
may, at any time on or prior to the second Business Day immediately preceding
the Purchase Contract Settlement Date, substitute Treasury Securities for the
Applicable Ownership Interest in the Treasury Portfolio included in such Normal
Units, but only in integral multiples of 12,500 Normal Units. In such an event,
the Holder shall transfer Treasury Securities having an aggregate principal
amount at maturity equal to the aggregate Stated Amount of the Normal Units for
which substitution is being made to the Collateral Agent, and the Purchase
Contract Agent shall instruct the Collateral Agent to release the Pledge of, and
transfer to the Holder, the appropriate Applicable Ownership Interests in the
Treasury Portfolio in the manner set forth above.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Normal Units or fails
to deliver Normal Units Certificates to the Purchase Contract Agent after
depositing Treasury Securities with the Collateral Agent, any distributions on
the Applicable Ownership Interest in Senior Notes or Applicable Ownership
Interest in the Treasury Portfolio constituting a part of such Normal Units
shall be held in the name of the Purchase Contract Agent or its nominee in trust
for the benefit of such Holder, until such Normal Units are so transferred or
the Normal Units Certificate is so delivered, as the case may be, or, such
Holder provides evidence satisfactory to the Company and the Purchase Contract
Agent that such Normal Units Certificate has been destroyed, lost or stolen,
together with any indemnity that may be required by the Purchase Contract Agent
and the Company.
Except as described in Section 5.02 or in this Section 3.13 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Normal Unit remains in effect, such Normal Units shall not be
separable into their constituent parts, and the rights and obligations of the
Holder in respect of the Applicable Ownership Interest in Senior Notes or
Applicable Ownership Interest in
32
the Treasury Portfolio, as the case may be, and the Purchase Contract comprising
such Normal Units may be acquired, and may be transferred and exchanged, only as
a Normal Unit.
SECTION 3.14. Recreation of Normal Units.
Unless the Applicable Ownership Interests in the Treasury Portfolio
have replaced the Applicable Ownership Interests in Senior Notes as components
of the Normal Units, and subject to the conditions set forth in this Agreement,
a Holder of Stripped Units may recreate Normal Units at any time on or prior to
5:00 p.m. (New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date; provided that Holders of Stripped Units
may only recreate Normal Units in integral multiples of 20 Stripped Units. To
recreate Normal Units, the Holder must:
(1) transfer to the Collateral Agent for deposit with the
Securities Intermediary Senior Notes having an
aggregate principal amount equal to the aggregate
principal amount at stated maturity of the Treasury
Securities comprising part of the Stripped Units; and
(2) transfer the related Stripped Units to the Purchase
Contract Agent accompanied by a notice to the
Purchase Contract Agent, substantially in the form of
Exhibit C hereto, (i) stating that the Holder has
transferred the relevant amount of Senior Notes to
the Securities Intermediary and (ii) requesting that
the Purchase Contract Agent instruct the Collateral
Agent to release the Treasury Securities underlying
such Stripped Units, whereupon the Purchase Contract
Agent shall promptly provide an instruction to such
effect to the Collateral Agent, substantially in the
form of Exhibit C to the Pledge Agreement.
Upon receipt of the Senior Notes described in clause (1) above and the
instruction described in clause (2) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer thereof to the Purchase Contract
Agent on behalf of the Holder. Upon receipt of such Treasury Securities, the
Purchase Contract Agent shall promptly:
(i) cancel the related Stripped Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver a Normal Unit Certificate executed by the Company in accordance
with Section 3.03 evidencing the same number of Purchase Contracts as
were evidenced by the cancelled Stripped Units.
33
Holders who elect to recreate Normal Units shall be responsible for any
fees or expenses (including, without limitation, fees and expenses payable to
the Collateral Agent for its services as Collateral Agent) in respect of the
recreation, and neither the Company nor the Purchase Contract Agent shall be
responsible for any such fees or expenses.
If the Applicable Ownership Interests in the Treasury Portfolio have
replaced the Applicable Ownership Interests in Senior Notes as components of the
Normal Units, a Holder of Stripped Units may at any time on or prior to the
second Business Day immediately preceding the Purchase Contract Settlement Date
substitute the Applicable Ownership Interest in the Treasury Portfolio for
Treasury Securities, but only in multiples of 12,500 Stripped Units. In such an
event, the Holder shall transfer to the Collateral Agent the Applicable
Ownership Interest in the Treasury Portfolio in an amount such that the
aggregate principal amount at maturity of the portion of such Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) is equal to the aggregate Stated Amount of the Purchase
Contracts underlying such Stripped Units, and the Purchase Contract Agent shall
instruct the Collateral Agent to release the Pledge of and transfer to the
Holder, the appropriate Treasury Securities in the manner set forth above.
Except as provided in Section 5.02 or in this Section 3.14 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
underlying a Stripped Unit remains in effect, such Stripped Unit shall not be
separable into its constituent parts and the rights and obligations of the
Holder of such Stripped Unit in respect of the 1/20 of a Treasury Security and
the Purchase Contract comprising such Stripped Unit may be acquired, and may be
transferred and exchanged, only as a Stripped Unit.
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination
Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the aggregate principal amount of Senior Notes
underlying the Applicable Ownership Interests in Senior Notes, the Applicable
Ownership Interests in the Treasury Portfolio or the Treasury Securities, as the
case may be, that are components of the Normal Units and the Stripped Units, as
the case may be, pursuant to the terms of the Pledge Agreement, the Purchase
Contract Agent shall request transfer instructions with respect to the
appropriate aggregate principal amount of Senior Notes underlying Applicable
Ownership Interest in Senior Notes or the Applicable Ownership Interests in the
Treasury Portfolio or Treasury Securities, as the case may be, from each Holder
by written request, substantially in the form of Exhibit D hereto, mailed to
such Holder at its address as it appears in the Security Register.
Upon book-entry transfer of the Normal Units or the Stripped Units or
delivery of a Normal Units Certificate or Stripped Units Certificate to the
Purchase Contract Agent with such transfer instructions, the Purchase Contract
Agent shall transfer the appropriate aggregate
34
principal amount of Senior Notes, the appropriate Applicable Ownership Interests
in the Treasury Portfolio or Treasury Securities, as the case may be, underlying
such Normal Units or Stripped Units, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in accordance with such
instructions and, in the case of the Senior Notes, in accordance with the terms
of the Supplemental Indenture No. 3. In the event a Holder of Normal Units or
Stripped Units fails to effect such transfer or delivery, the Senior Notes or
the appropriate Applicable Ownership Interests in the Treasury Portfolio or
Treasury Securities, as the case may be, underlying such Normal Units or
Stripped Units, as the case may be, and any distributions thereon, shall be held
in the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until the earlier to occur of:
(i) the transfer of such Normal Units, the Stripped Units or
surrender of the Normal Units Certificate or Stripped Units Certificate
or the receipt by the Company and the Purchase Contract Agent from such
Holder of satisfactory evidence that such Normal Units Certificate or
Stripped Units Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Purchase Contract Agent
and the Company; and
(ii) the expiration of the time period specified in the
abandoned property laws of the state in which the Purchase Contract
Agent holds such property.
SECTION 3.16. No Consent to Assumption.
Each Holder of a Unit, by acceptance thereof, shall be deemed expressly
to have withheld any consent to the assumption under Section 365 of the
Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.
ARTICLE 4
THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments
Preserved.
Any payment on the Senior Notes attributable to the related Applicable
Ownership Interest in Senior Notes or the Applicable Ownership Interest in the
Treasury Portfolio (as specified in clause (ii) of the definition of such term),
as the case may be, which is paid on any Payment Date shall, subject to receipt
thereof by the Purchase Contract Agent from the Collateral Agent as provided by
the terms of the Pledge Agreement, be paid to the Person in whose name the
Normal Units Certificate (or one or more Predecessor Normal Units Certificates)
of which
35
such Applicable Ownership Interest in Senior Notes or the Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, forms a part is
registered at the close of business on the Record Date for such Payment Date.
Each Normal Units Certificate evidencing Senior Notes or the
appropriate Applicable Ownership Interests in the Treasury Portfolio delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Normal Units Certificate shall carry the right to receive
accrued and unpaid interest or distributions, and to accrue future interest or
distributions, which were attributable to the Applicable Ownership Interest in
Senior Notes or the appropriate Applicable Ownership Interests in the Treasury
Portfolio underlying such other Normal Units Certificate.
In the case of any Normal Unit with respect to which (A) Cash
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.02 hereof, (B) Early Settlement of the underlying Purchase Contract is
properly effected pursuant to Section 5.07 hereof, (C) Cash Merger Early
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.04(b)(2) hereof, (D) a Collateral Substitution is properly effected
pursuant to Section 3.13, or (E) a Successful Initial Remarketing occurs with
respect to the Senior Notes underlying the Applicable Ownership Interests in
Senior Notes that are components of such Normal Unit, in each case on a date
that is after any Record Date and prior to or on the next succeeding Payment
Date, interest attributable to the Applicable Ownership Interest in Senior Notes
or distributions on the Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, underlying such Normal Unit otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Cash
Settlement, Early Settlement, Cash Merger Early Settlement, Collateral
Substitution or Initial Remarketing, and such payment or distributions shall,
subject to receipt thereof by the Purchase Contract Agent, be payable to the
Person in whose name the Normal Units Certificate (or one or more Predecessor
Normal Units Certificates) was registered at the close of business on the Record
Date.
Except as otherwise expressly provided in the immediately preceding
paragraph, in the case of any Normal Units with respect to which Cash
Settlement, Early Settlement or Cash Merger Early Settlement of the underlying
Purchase Contract is properly effected, or with respect to which a Collateral
Substitution has been effected, payments attributable to the related Applicable
Ownership Interests in Senior Notes or distributions on the appropriate
Applicable Ownership Interests in the Treasury Portfolio, as the case may be,
that would otherwise be payable or made after the Purchase Contract Settlement
Date, Early Settlement Date, Cash Merger Early Settlement Date or the date of
the Collateral Substitution, as the case may be, shall not be payable hereunder
to the Holder of such Normal Units; provided, however, that to the extent that
such Holder continues to hold Separate Senior Notes or the Applicable Ownership
Interest in the Treasury Portfolio that formerly comprised a part of such
Holder's Normal Units, such Holder shall be entitled to receive interest on such
Separate Senior Notes or distributions on the Applicable Ownership Interests in
the Treasury Portfolio.
36
SECTION 4.02. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Senior Notes, but only to the extent instructed in
writing by the Holders as described below. Upon receipt of notice of any meeting
at which holders of Senior Notes are entitled to vote or upon any solicitation
of consents, waivers or proxies of holders of Senior Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of Normal Units a notice:
(i) containing such information as is contained in the
notice or solicitation;
(ii) stating that each Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of
Senior Notes entitled to vote) shall be entitled to instruct the
Purchase Contract Agent as to the exercise of the voting rights
pertaining to the Senior Notes, or any portion thereof, underlying the
Applicable Ownership Interests in Senior Notes comprising a part of
their Normal Units; and
(iii) stating the manner in which such instructions may be
given.
Upon the written request of the Holders of Normal Units on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum principal amount of Senior Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Normal Unit, the Purchase Contract Agent shall
abstain from voting the principal amount of the Senior Notes underlying the
Applicable Ownership Interests in Senior Notes comprising a part of such Normal
Unit. The Company hereby agrees, if applicable, to solicit Holders of Normal
Units to timely instruct the Purchase Contract Agent in order to enable the
Purchase Contract Agent to vote such Senior Notes.
The Holders of Normal Units and Stripped Units shall have no voting or
other rights in respect of Common Stock.
SECTION 4.03. Special Event Redemption.
(a) If the Company elects to redeem the Senior Notes on any Payment
Date following the occurrence of a Special Event as permitted by the Indenture,
it shall notify the Collateral Agent in writing, of the occurrence of any
Special Event, of its intention to redeem the Senior Notes and of the Special
Event Redemption Date. On the Special Event Redemption Date, the Collateral
Agent shall surrender the Pledged Senior Notes to the Indenture Trustee against
delivery of an amount equal to the aggregate Redemption Price for such Pledged
Senior Notes.
37
Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral Agent
shall cause the Securities Intermediary to apply an amount equal to the
aggregate Redemption Amount of such funds to purchase on behalf of the Holders
of Normal Units the Treasury Portfolio and promptly remit the remaining portion
of such funds to the Purchase Contract Agent for payment to the Holders of such
Normal Units.
(b) Upon the occurrence of a Special Event Redemption, (i) the
Applicable Ownership Interests in the Treasury Portfolio (as specified in clause
(i) of the definition of such term) will be substituted as Collateral for the
Pledged Applicable Ownership Interests in Senior Notes and the related Pledged
Senior Notes and will be held by the Collateral Agent in accordance with the
terms of the Pledge Agreement to secure the obligation of each Holder of a
Normal Unit to purchase the Common Stock of the Company under the Purchase
Contract constituting a part of such Normal Unit, (ii) the Holders of Normal
Units and the Collateral Agent shall have such security interest rights and
obligations with respect to such Applicable Ownership Interests in the Treasury
Portfolio (as specified in clause (i) of the definition of such term) as the
Holders of Normal Units and the Collateral Agent had in respect of the
Applicable Ownership Interests in Senior Notes and the related Pledged Senior
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement, and (iii) any reference herein to the Senior Notes or
Applicable Ownership Interests in Senior Notes shall be deemed to be a reference
to such Applicable Ownership Interests in the Treasury Portfolio (as specified
in clause (i) of the definition of such term). The Company may cause to be made
in any Normal Units Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of the Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i) of the definition of such term) for Applicable Ownership
Interests in Senior Notes and the related Pledged Senior Notes as Collateral.
(c) The Holders of Separate Senior Notes shall directly receive the
Redemption Price for the Separate Senior Notes.
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall obligate the Holder of the related
Units to purchase, and the Company to sell, on the Purchase Contract Settlement
Date at a price equal to the Stated Amount (the "PURCHASE PRICE"), a number of
newly issued shares of Common Stock (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "SETTLEMENT RATE" is equal to:
38
(i) if the Adjusted Applicable Market Value (as defined
below) is greater than or equal to $56.8750 (the "THRESHOLD
APPRECIATION PRICE"), 0.8791 shares of Common Stock per Purchase
Contract;
(ii) if the Adjusted Applicable Market Value is less than the
Threshold Appreciation Price but greater than $45.5000 (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contact
having a value equal to the Stated Amount divided by the Adjusted
Applicable Market Value, rounded upward or downward to the nearest
1/10,000th of a share;
(iii) if the Adjusted Applicable Market Value is less than or
equal to the Reference Price, 1.0989 shares of Common Stock per
Purchase Contract;
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, subject to adjustments set forth under Section 5.04 hereof.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a), the Applicable Market Value, and (ii) at
the time of and after any adjustment of the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a), the
Applicable Market Value multiplied by a fraction of which the numerator shall be
the Settlement Rate immediately after such adjustment pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of this Section 5.04(a) and the denominator
shall be the Settlement Rate immediately prior to such adjustment; provided,
however, that if such adjustment to the Settlement Rate is required to be made
pursuant to the occurrence of any of the events contemplated by paragraph (1),
(2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) during the period taken
into consideration for determining the Applicable Market Value, appropriate and
customary adjustments shall be made to the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(ii) if the Common Stock is not listed for trading on the
NYSE on any such date, the closing sale price per share (or, if no
closing price is reported, the last reported sale price) as reported in
the composite transactions for the principal United States national or
regional securities exchange on which the Common Stock is so listed;
39
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the last closing sale price
per share as reported by The Nasdaq National Market, Inc.;
(iv) if the Common Stock is not so reported by the Nasdaq
National Market, Inc., the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation
Bureau or similar organization; or
(v) if the bid price referred to in clause (iv) is not
available, the market value of Common Stock on such date as determined
by a nationally recognized independent investment banking firm retained
by the Company for purposes of determining the Closing Price.
A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
(b) Each Holder of a Normal Unit or a Stripped Unit, by its acceptance
of such Unit:
(i) irrevocably authorizes the Purchase Contract Agent to
enter into and perform the related Purchase Contract on its behalf as
its attorney-in-fact (including, without limitation, the execution of
Certificates on behalf of such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
(iii) covenants and agrees to perform its obligations under
such Purchase Contract for so long as such Holder remains a Holder of a
Normal Unit or a Stripped Unit;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to
enter into and perform this Agreement and the Pledge Agreement on its
behalf and in its name as its attorney-in-fact;
(vi) consents to, and agrees to be bound by, the Pledge of
such Holder's right, title and interest in and to the Collateral
Account, including the Applicable Ownership Interests in Senior Notes,
the Senior Notes underlying the Applicable Ownership Interests in
Senior Notes and the Applicable Ownership Interests in the Treasury
Portfolio (as specified in clause (i) of the definition of such term)
or the Treasury Securities pursuant to the Pledge Agreement; and
40
(vii) for United States federal, state and local income and
franchise tax purposes, agrees to (i) treat an acquisition of the
Normal Units as an acquisition of the Applicable Ownership Interests in
Senior Notes and Purchase Contracts constituting the Normal Units, (ii)
treat the Applicable Ownership Interests in Senior Notes and the Senior
Notes as indebtedness and (iii) treat itself as the owner of the
applicable interest in the Collateral Account, including the Applicable
Ownership Interests in Senior Notes, the Senior Notes underlying the
Applicable Ownership Interests in Senior Notes and the Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause
(i) of the definition of such term) or the Treasury Securities,
provided that upon a Termination Event, the rights of the Holder of such Units
under the Purchase Contract may be enforced without regard to any other rights
or obligations.
(c) Each Holder of a Normal Unit or a Stripped Unit, by its acceptance
thereof, further covenants and agrees that to the extent and in the manner
provided in Section 5.02 hereof and the Pledge Agreement, but subject to the
terms thereof, Proceeds of the Applicable Ownership Interests in Senior Notes,
the Treasury Securities or the Applicable Ownership Interests in the Treasury
Portfolio (as specified in clause (i) of the definition of such term), as
applicable, on the Purchase Contract Settlement Date, shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such Proceeds.
(d) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts underlying the
Certificate so transferred and the Pledge Agreement. The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
SECTION 5.02. Remarketing; Payment of Purchase Price.
(a) (i) Unless a Special Event Redemption has occurred prior to the
Initial Remarketing Date, the Company shall engage the Remarketing Agent
pursuant to the Remarketing Agreement for Remarketing the Senior Notes. By 11:00
a.m. (New York City time) on the Business Day immediately preceding the Initial
Remarketing Date, the Purchase Contract Agent shall notify the Remarketing Agent
of the aggregate principal amount of Pledged Senior Notes, and the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal amount of
Separate Senior Notes (if any) that are to be remarketed pursuant to clause (ii)
below. Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, will present for Remarketing the Pledged Senior Notes, and the
Custodial Agent, pursuant to clause (ii) below, will present for Remarketing the
Separate Senior Notes, to the Remarketing Agent. Upon receipt of such notice
41
from the Purchase Contract Agent and Custodial Agent and such Pledged Senior
Notes and Separate Senior Notes (if any) from the Collateral Agent and Custodial
Agent, the Remarketing Agent will, on the Initial Remarketing Date, use its
reasonable efforts to remarket (based on the Reset Rate) (the "INITIAL
REMARKETING") such Pledged Senior Notes and Separate Senior Notes on such date
at a price of approximately 100.50% (or, if the Remarketing Agent is unable to
remarket the Pledged Senior Notes and Separate Senior Notes at such rate, at a
rate below 100.50% in the discretion of the Remarketing Agent, but in no event
less than 100%, (net of any Remarketing Fee and any other fees and commissions)
of the sum of the Treasury Portfolio Purchase Price plus the Separate Senior
Notes Purchase Price. If the Remarketing Agent is able to remarket the Pledged
Senior Notes and Separate Senior Notes at a price equal to or greater than 100%
(net of any Remarketing Fee and any other fees and commissions) of the Treasury
Portfolio Purchase Price plus the Separate Senior Notes Purchase Price and such
remarketing has settled in accordance with the Remarketing Agreement (a
"SUCCESSFUL INITIAL REMARKETING"), the portion of the proceeds from such
Successful Initial Remarketing equal to the Treasury Portfolio Purchase Price
will be applied to purchase the Treasury Portfolio. The Remarketing Agent may
deduct as a remarketing fee (the "REMARKETING FEE") an amount up to the lesser
of (i) 25 basis points (0.25%) of the sum of the Treasury Portfolio Purchase
Price plus the Separate Senior Notes Purchase Price and (ii) the amount of the
proceeds of such Remarketing in excess of the Treasury Portfolio Purchase Price
plus the Separate Senior Notes Purchase Price. None of the Company, the Purchase
Contract Agent, or any Holders of Normal Units or holders of Separate Senior
Notes on whose behalf Pledged Senior Notes or Separate Senior Notes are so
remarketed will otherwise be responsible for the payment of any Remarketing Fee
in connection therewith. With respect to Separate Senior Notes, any proceeds of
the Initial Remarketing in excess of the Remarketing Fee attributable to the
Separate Senior Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Senior Notes. With respect to Pledged Senior Notes, any
proceeds of the Initial Remarketing in excess of the sum of the Treasury
Portfolio Purchase Price plus the Remarketing Fee with respect to such Pledged
Senior Notes will be remitted to the Purchase Contract Agent for payment to the
Holders of the related Normal Units. The Applicable Ownership Interests in the
Treasury Portfolio will be substituted for the Applicable Ownership Interests in
Senior Notes and the appropriate Applicable Ownership Interests in the Treasury
Portfolio (as specified in clause (i) of the definition of such term) will be
pledged to the Collateral Agent to secure the obligation of the Holders of
Normal Units to pay the Purchase Price for the Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date.
Following the occurrence of a Successful Initial Remarketing, the
Holders of Normal Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) as the Holder of Normal Units and the Collateral Agent
had in respect of the Applicable Ownership Interests in Senior Notes, subject to
the Pledge thereof as provided in the Pledge Agreement, and any reference to the
Applicable Ownership Interest in Senior Notes herein or in the Certificates
shall be deemed to be a reference to such Applicable Ownership Interest in the
Treasury Portfolio and any reference herein or in the Certificates to
42
interest attributable to Applicable Ownership Interests in Senior Notes shall be
deemed to be a reference to corresponding distributions on such Applicable
Ownership Interests in the Treasury Portfolio. The Company may cause to be made
in any Normal Units Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate to reflect the
substitution of such Applicable Ownership Interest in the Treasury Portfolio for
an Applicable Ownership Interest in Senior Notes.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Senior Notes and the Separate Senior Notes (if any)
in the Initial Remarketing (other than to the Company) at a price not less than
100% (net of any Remarketing Fee and any other fees and commissions) of the sum
of the Treasury Portfolio Purchase Price plus the Separate Senior Notes Purchase
Price or the Initial Remarketing is not settled in accordance with the
Remarketing Agreement for any reason, including the failure to fulfill a
condition precedent set forth in the Remarketing Agreement, the Initial
Remarketing will be deemed to have failed (a "FAILED INITIAL REMARKETING"). Upon
a Failed Initial Remarketing, the Remarketing Agent shall return the Pledged
Senior Notes and Separate Senior Notes (if any) subject to such Remarketing to
the Collateral Agent or the Custodial Agent, as the case may be.
(ii) Prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the applicable Remarketing Date, but
no earlier than the Payment Date immediately preceding such date,
Holders of Separate Senior Notes may elect to have their Separate
Senior Notes remarketed under the Remarketing Agreement by delivering
their Separate Senior Notes, along with a notice of such election,
substantially in the form of Exhibit F to the Pledge Agreement, to the
Custodial Agent. After such time, such election shall become an
irrevocable election to have such Separate Senior Notes remarketed in
such Remarketing and, if such Remarketing fails, in any subsequent
Remarketing. The Custodial Agent shall hold Separate Senior Notes in an
account separate from the Collateral Account in which the Pledged
Senior Notes shall be held. Holders of Separate Senior Notes electing
to have their Separate Senior Notes remarketed will also have the right
to withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G to the Pledge Agreement, on or
prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the applicable Remarketing Date, upon which
notice the Custodial Agent shall return such Separate Senior Notes to
such Holder. Promptly after 11:00 a.m. on the Business Day immediately
preceding the applicable Remarketing Date, the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of the
Separate Senior Notes to be remarketed and will deliver to the
Remarketing Agent for remarketing all such Separate Senior Notes
delivered to the Custodial Agent pursuant to Section 5.07(c) of the
Pledge Agreement and not validly withdrawn prior to such date.
(iii) Not later than seven calendar days nor more than 15
calendar days prior to the applicable Remarketing Date, the Company
shall request the Depositary or its
43
nominee to notify the Beneficial Owners or Depositary Participants
holding Units of the procedures to be followed in such Remarketing.
(iv) The Company agrees to use commercially reasonable
efforts to ensure that, if required by applicable law, a registration
statement with regard to the full amount of the Senior Notes to be
remarketed in the Initial Remarketing, the Second Remarketing, the
Third Remarketing or the Final Remarketing, as the case may be, shall
be effective with the Securities and Exchange Commission in a form that
will enable the Remarketing Agent to rely on it in connection with such
Remarketing.
(v) The Company shall cause a notice of a Failed Remarketing
to be published (with a copy of such notice to be provided to the
Purchase Contract Agent) no later than the second Business Day
immediately following the date on which such Remarketing failed, 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.
(b) (i) Unless a Special Event Redemption has occurred prior to the
Second Remarketing Date, if a Failed Initial Remarketing occurs, the Remarketing
Agent will use its reasonable efforts to remarket the Senior Notes (a "SECOND
REMARKETING") on the Second Remarketing Date. By 11:00 a.m. (New York City time)
on the Business Day immediately preceding the Second Remarketing Date for such
Second Remarketing, the Purchase Contract Agent shall notify the Remarketing
Agent of the aggregate principal amount of Pledged Senior Notes, and the
Custodial Agent shall notify the Remarketing Agent of the aggregate principal
amount of Separate Senior Notes (if any) that are to be remarketed pursuant to
Section 5.02(a)(ii). Concurrently, the Collateral Agent, pursuant to the terms
of the Pledge Agreement, and the Custodial Agent, pursuant to Section
5.02(a)(ii), will present for Remarketing the Pledged Senior Notes and the
Separate Senior Notes (if any) that are to be remarketed to the Remarketing
Agent. Upon receipt of such notice from the Purchase Contract Agent and the
Custodial Agent and such Pledged Senior Notes and Separate Senior Notes (if any)
from the Collateral Agent and the Custodial Agent, the Remarketing Agent will,
on the Second Remarketing Date, use its reasonable efforts to remarket (based on
the Reset Rate) such Pledged Senior Notes and Separate Senior Notes on such date
at a price of approximately 100.50% (or, if the Remarketing Agent is unable to
remarket the Pledged Senior Notes and Separate Senior Notes at such rate, at a
rate below 100.50% in the discretion of the Remarketing Agent, but in no event
less than 100%, (net of any Remarketing Fee and any other fees and commissions)
of the sum of the Treasury Portfolio Purchase Price plus the Separate Senior
Notes Purchase Price. If the Remarketing Agent is able to remarket the Pledged
Senior Notes and Separate Senior Notes at a price equal to or greater than 100%
(net of any Remarketing Fee and any other fees and commissions) of the Treasury
Portfolio Purchase Price plus the Separate Senior Notes Purchase Price and such
remarketing is settled in accordance with the Remarketing Agreement (a
"SUCCESSFUL SECOND REMARKETING"), the portion of the proceeds from such
Successful Second Remarketing equal to the Treasury Portfolio Purchase Price
will be applied to purchase the Treasury Portfolio. The Remarketing Agent may
deduct the Remarketing Fee from any amount
44
of such proceeds in excess of the sum of the Treasury Portfolio Purchase Price
plus the Separate Senior Notes Purchase Price. None of the Company, the Purchase
Contract Agent or any Holders of Normal Units or holders of Separate Senior
Notes on whose behalf Pledged Senior Notes or Separate Senior Notes are so
remarketed will otherwise be responsible for the payment of any Remarketing Fee
in connection therewith. With respect to Separate Senior Notes, any proceeds of
the Second Remarketing in excess of the Remarketing Fee attributable to the
Separate Senior Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Senior Notes. With respect to Pledged Senior Notes, any
proceeds of the Second Remarketing in excess of the sum of the Treasury
Portfolio Purchase Price plus the Remarketing Fee with respect to such Pledged
Senior Notes will be remitted to the Purchase Contract Agent for payment to the
Holders of the related Normal Units. The Applicable Ownership Interests in the
Treasury Portfolio will be substituted for the Applicable Ownership Interests in
Senior Notes and the appropriate Applicable Ownership Interests in the Treasury
Portfolio (as specified in clause (i) of the definition of such term) will be
pledged to the Collateral Agent to secure the obligation of the Holders of
Normal Units to pay the Purchase Price for the Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date.
Following the occurrence of a Successful Second Remarketing, the
Holders of Normal Units and the Collateral Agent shall have such security
interests, rights and obligations with respect to the Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) as the Holder of Normal Units and the Collateral Agent
had in respect of the Applicable Ownership Interests in Senior Notes, subject to
the Pledge thereof as provided in the Pledge Agreement, and any reference to
Applicable Ownership Interests in Senior Notes herein or in the Certificates
shall be deemed to be a reference to such Applicable Ownership Interests in the
Treasury Portfolio and any reference herein or in the Certificates to interest
attributable to Applicable Ownership Interests in Senior Notes shall be deemed
to be a reference to corresponding distributions on such Applicable Ownership
Interests in the Treasury Portfolio. The Company may cause to be made in any
Normal Units Certificates thereafter to be issued such change in phraseology and
form (but not in substance) as may be appropriate to reflect the substitution of
such Applicable Ownership Interests in the Treasury Portfolio for Applicable
Ownership Interests in Senior Notes.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Senior Notes and Separate Senior Notes (if any) in a
Second Remarketing (other than to the Company) at a price not less than 100%
(net of any Remarketing Fee and any other fees and commissions) of the sum of
the Treasury Portfolio Purchase Price plus the Separate Senior Notes Purchase
Price or the Second Remarketing is not settled in accordance with the
Remarketing Agreement for any reason, including the failure to fulfill a
condition precedent set forth in the Remarketing Agreement, the Second
Remarketing will be deemed to have failed (a "FAILED SECOND REMARKETING"). Upon
a Failed Second Remarketing, the Remarketing Agent shall return the Pledged
Senior Notes and the Separate Senior Notes (if any) subject to such Remarketing
to the Collateral Agent or the Custodial Agent, as the case may be.
45
(ii) Unless a Special Event Redemption has occurred prior to
the Third Remarketing Date, if a Failed Second Remarketing occurs, the
Remarketing Agent will use its reasonable efforts to remarket the
Senior Notes (a "THIRD REMARKETING") on the Third Remarketing Date. By
11:00 a.m. (New York City time) on the Business Day immediately
preceding the Third Remarketing Date for such Third Remarketing, the
Purchase Contract Agent shall notify the Remarketing Agent of the
aggregate principal amount of Pledged Senior Notes, and the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal
amount of Separate Senior Notes (if any) that are to be remarketed
pursuant to Section 5.02(a)(ii). Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, and the Custodial Agent,
pursuant to Section 5.02(a)(ii), will present for Remarketing the
Pledged Senior Notes and the Separate Senior Notes (if any) that are to
be remarketed to the Remarketing Agent. Upon receipt of such notice
from the Purchase Contract Agent and the Custodial Agent and such
Pledged Senior Notes and Separate Senior Notes (if any) from the
Collateral Agent and the Custodial Agent, the Remarketing Agent will,
on the Third Remarketing Date, use its reasonable efforts to remarket
(based on the Reset Rate) such Pledged Senior Notes and the Separate
Senior Notes on such date at a price of approximately 100.50% (or, if
the Remarketing Agent is unable to remarket the Pledged Senior Notes
and the Separate Senior Notes at such rate, at a rate below 100.50% in
the discretion of the Remarketing Agent, but in no event less than
100%, (net of any Remarketing Fee and any other fees and commissions)
of the sum of the Treasury Portfolio Purchase Price plus the Separate
Senior Notes Purchase Price. If the Remarketing Agent is able to
remarket the Pledged Senior Notes and the Separate Senior Notes at a
price equal to or greater than 100% (net of any Remarketing Fee and any
other fees and commissions) of the Treasury Portfolio Purchase Price
plus the Separate Senior Notes Purchase Price and such remarketing is
settled in accordance with the Remarketing Agreement (a "SUCCESSFUL
THIRD REMARKETING"), the portion of the proceeds from such Successful
Third Remarketing equal to the Treasury Portfolio Purchase Price will
be applied to purchase the Treasury Portfolio. The Remarketing Agent
may deduct the Remarketing Fee from any amount of such proceeds in
excess of the sum of the Treasury Portfolio Purchase Price plus the
Separate Senior Notes Purchase Price. None of the Company, the Purchase
Contract Agent or any Holders of Normal Units or holders of Separate
Senior Notes on whose behalf Pledged Senior Notes or Separate Senior
Notes are so remarketed will otherwise be responsible for the payment
of any Remarketing Fee in connection therewith. With respect to
Separate Senior Notes, any proceeds of the Third Remarketing in excess
of the Remarketing Fee attributable to the Separate Senior Notes will
be remitted to the Custodial Agent for payment to the holders of
Separate Senior Notes. With respect to Pledged Senior Notes, any
proceeds of the Third Remarketing in excess of the sum of the Treasury
Portfolio Purchase Price plus the Remarketing Fee with respect to such
Pledged Senior Notes will be remitted to the Purchase Contract Agent
for payment to the Holders of the related Normal Units. The Applicable
Ownership Interests in the Treasury Portfolio will be substituted for
the Applicable Ownership Interests in Senior Notes and the appropriate
Applicable Ownership Interests in the Treasury Portfolio (as specified
in
46
clause (i) of the definition of such term) will be pledged to the
Collateral Agent to secure the obligation of the Holders of Normal
Units to pay the Purchase Price for the Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date.
Following the occurrence of a Successful Third Remarketing, the Holders
of Normal Units and the Collateral Agent shall have such security interests,
rights and obligations with respect to the Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of such term)
as the Holder of Normal Units and the Collateral Agent had in respect of the
Applicable Ownership Interests in Senior Notes, subject to the Pledge thereof as
provided in the Pledge Agreement, and any reference to the Applicable Ownership
Interests in Senior Notes herein or in the Certificates shall be deemed to be a
reference to such Applicable Ownership Interests in the Treasury Portfolio and
any reference to interest attributable to the Applicable Ownership Interests in
Senior Notes herein or in the Certificates shall be deemed to be a reference to
corresponding distributions on such Applicable Ownership Interests in the
Treasury Portfolio. The Company may cause to be made in any Normal Units
Certificates thereafter to be issued such change in phraseology and form (but
not in substance) as may be appropriate to reflect the substitution of such
Applicable Ownership Interests in the Treasury Portfolio for Applicable
Ownership Interests in Senior Notes.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Senior Notes and the Separate Senior Notes (if any)
in a Third Remarketing (other than to the Company) at a price not less than 100%
(net of any Remarketing Fee and any other fees and commissions) of the sum of
the Treasury Portfolio Purchase Price plus the Separate Senior Notes Purchase
Price or the Third Remarketing is not settled in accordance with the Remarketing
Agreement for any reason, including the failure to fulfill a condition precedent
set forth in the Remarketing Agreement, the Third Remarketing will be deemed to
have failed (a "FAILED THIRD REMARKETING"). Upon a Failed Third Remarketing, the
Remarketing Agent shall return the Pledged Senior Notes and the Separate Senior
Notes (if any) subject to such Remarketing to the Collateral Agent or the
Custodial Agent, as the case may be.
(c) (i) Unless a Special Event Redemption, an Early Settlement or a
Cash Merger Early Settlement has occurred prior to the Final Remarketing Date,
if no Successful Remarketing has occurred prior to the Final Remarketing Date,
each Holder of Normal Units shall have the right to satisfy such Holder's
obligations under the Purchase Contract on the Purchase Contract Settlement Date
in cash by notifying the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto of its intention to pay in cash
("CASH SETTLEMENT") prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date;
provided that such Holder may only effect a Cash Settlement in integral
multiples of 20 Units. Promptly following 5:00 p.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
the Purchase Contract Agent shall notify the Collateral Agent and the Indenture
Trustee of the receipt of such notices from Holders intending to make a Cash
Settlement.
47
(ii) A Holder of a Normal Unit who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement
shall pay the Purchase Price to the Securities Intermediary for deposit
in the Collateral Account prior to 5:00 p.m. (New York City time) on
the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in immediately available
funds payable to or upon the order of the Securities Intermediary. Any
cash received by the Collateral Agent shall be invested promptly by the
Securities Intermediary in Permitted Investments pursuant to written
instructions received from the Company and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase
Contracts in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in respect
of the investment earnings from such Permitted Investments in excess of
the Purchase Price for the shares of Common Stock to be purchased by
such Holder shall be distributed to the Purchase Contract Agent when
received for payment to the Holder.
(iii) If a Holder of a Normal Unit does not notify the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with Section 5.02(c)(i) above, or does notify the Purchase
Contract Agent in accordance with Section 5.02(c)(i) above but fails to
make such payment as required by Section 5.02(c)(ii) above, such Holder
shall be deemed to have consented to the disposition of the Pledged
Senior Notes pursuant to the Final Remarketing as described in Section
5.02(d) below.
(iv) Promptly after 5:00 p.m. (New York City time) on the
fourth Business Day preceding the Purchase Contract Settlement Date,
the Collateral Agent, based on cash payments received by the Collateral
Agent pursuant to Section 5.02(c)(ii) hereof, shall promptly notify the
Purchase Contract Agent and the Indenture Trustee of the aggregate
principal amount of Pledged Senior Notes to be tendered for purchase in
the Remarketing in a notice pursuant to the terms of the Pledge
Agreement.
(d) (i) Unless a Special Event Redemption, an Early Settlement or a
Cash Merger Early Settlement has occurred prior to the Final Remarketing Date,
if a Failed Third Remarketing has occurred, the Senior Notes of such Holders of
Normal Units who have not notified the Purchase Contract Agent of their
intention to effect a Cash Settlement as provided in Section 5.02(c)(i) above,
or who have so notified the Purchase Contract Agent in accordance with Section
5.02(c)(i) above but have failed to make such payment as required by Section
5.02(c)(ii) above, and the Separate Senior Notes of any holder who has elected
for its Separate Senior Notes to be remarketed pursuant to Section 5.02(a)(ii)
will be sold by the Remarketing Agent (the "FINAL REMARKETING") on the third
Business Day immediately preceding the Purchase Contract Settlement Date (the
"FINAL REMARKETING DATE"). In order to facilitate the Final Remarketing, the
Purchase Contract Agent, based on the notices specified in Section 5.02(c)(iv),
and the Collateral Agent, based on the notices specified in Section 5.02(a)(ii),
shall notify the Remarketing Agent, by 11:00 a.m. (New York City time) on the
Business Day immediately
48
preceding the Final Remarketing Date, of the aggregate principal amount of
Pledged Senior Notes or aggregate principal amount of Separate Senior Notes that
are to be remarketed pursuant to Section 5.02(a)(ii), as the case may be.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, and the Custodial Agent, pursuant to Section 5.02(a)(ii), will
present for Remarketing the Pledged Senior Notes and Separate Senior Notes (if
any) that are to be remarketed to the Remarketing Agent.
(ii) Upon receipt of such notice from the Purchase Contract
Agent and the Collateral Agent and such Pledged Senior Notes and
Separate Senior Notes (if any) from the Collateral Agent or Custodial
Agent, as set forth in clause (i) above, the Remarketing Agent will, on
the Final Remarketing Date, use its reasonable efforts to remarket
(based on the Reset Rate) such Pledged Senior Notes and Separate Senior
Notes on such date at a price equal to approximately 100.50% (or, if
the Remarketing Agent is unable to remarket the Pledged Senior Notes
and the Separate Senior Notes at such rate, at a rate below 100.50% in
the discretion of the Remarketing Agent, but in no event less than
100%, net of the Final Remarketing Fee and any other fees and
commissions) of the aggregate principal amount of such Pledged Senior
Notes and Separate Senior Notes being remarketed, as provided in the
Remarketing Agreement. If the Remarketing Agent is able to remarket the
Senior Notes and Separate Senior Notes at a price equal to or greater
than 100% (net of the Final Remarketing Fee and any other fees and
commissions) of the aggregate principal amount of the Pledged Senior
Notes and Separate Senior Notes (if any) and such remarketing is
settled in accordance with the Remarketing Agreement (a "SUCCESSFUL
FINAL REMARKETING"), the Remarketing Agent will remit the proceeds
attributable to the Remarketing of the Pledged Senior Notes from such
Successful Final Remarketing to the Collateral Agent. The Remarketing
Agent may deduct as the remarketing fee (the "FINAL REMARKETING FEE")
an amount up to the lesser of (i) 25 basis points (0.25%) of the
aggregate principal amount of the remarketed Pledged Senior Notes and
Separate Senior Notes (if any) and (ii) the amount of the proceeds of a
Successful Final Remarketing in excess of the aggregate principal
amount of the remarketed Pledged Senior Notes and Separate Senior Notes
(if any). With respect to Separate Senior Notes, any proceeds of the
Final Remarketing in excess of the Final Remarketing Fee attributable
to the Separate Senior Notes will be remitted to the Custodial Agent
for payment to the holders of Separate Senior Notes. The proceeds from
the Remarketing remitted to the Collateral Agent shall be invested by
the Collateral Agent in Permitted Investments, in accordance with the
Pledge Agreement, and then applied to satisfy in full the obligations
of such Holders of Normal Units to pay the Purchase Price for the
shares of Common Stock under the related Purchase Contracts on the
Purchase Contract Settlement Date. Any proceeds in excess of those
required to pay the Purchase Price and the Final Remarketing Fee will
be remitted to the Purchase Contract Agent for payment to the Holders
of the related Normal Units.
(iii) If, in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the Pledged Senior Notes and Separate
Senior Notes (if any) at a price not less
49
than 100% (net of the Final Remarketing Fee and any other fees and
commissions) of the aggregate principal amount of the Pledged Senior
Notes and Separate Senior Notes to be remarketed in the Final
Remarketing (other than to the Company) or the Final Remarketing is not
settled in accordance with the Remarketing Agreement for any reason,
including the failure to fulfill a condition precedent set forth in the
Remarketing Agreement, the remarketing will be deemed to have failed (a
"FAILED FINAL REMARKETING"). Upon a Failed Final Remarketing, the
Remarketing Agent shall return the remarketed Pledged Senior Notes and
Separate Senior Notes (if any) to the Collateral Agent or the Custodial
Agent, as the case may be. Upon a Failed Final Remarketing, a default
shall be deemed to have occurred under this Agreement and the Pledge
Agreement and in accordance with the terms of the Pledge Agreement, the
Collateral Agent, for the benefit of the Company, shall exercise its
rights as a secured party with respect to the Pledged Applicable
Ownership Interests in Senior Notes and the related Pledged Senior
Notes, including, without limitation, those actions specified in
paragraph 5.02(e)(i) below; provided, that if upon a Failed Final
Remarketing, the Collateral Agent exercises such rights for the benefit
of the Company with respect to the Pledged Applicable Ownership
Interests in Senior Notes and related Pledged Senior Notes, any accrued
and unpaid interest on the Pledged Senior Notes attributable to such
Applicable Ownership Interests in Senior Notes shall become payable by
the Company to the Purchase Contract Agent for payment to the
Beneficial Owner of the related Normal Unit.
(e) With respect to any Pledged Senior Notes which are subject to a
Failed Final Remarketing, and any Pledged Senior Notes with respect to which the
Holder has notified the Purchase Contract Agent of his intent to effect Cash
Settlement and failed to deliver the Purchase Price pursuant to Section
5.02(c)(ii), in each case resulting in an event of default under this Agreement,
the Collateral Agent for the benefit of the Company reserves all of its rights
as a secured party with respect thereto and, subject to applicable law and
paragraph 5.02(h) below, may, in full satisfaction of the Holders' obligations
under the Purchase Contracts among other things, (A) retain Pledged Applicable
Ownership Interests in Senior Notes and the related Pledged Senior Notes in
accordance with applicable law or (B) dispose of such Pledged Senior Notes in
accordance with applicable law, which in each case shall constitute payment in
full for the aggregate Purchase Price for the shares of Common Stock to be
purchased under the Purchase Contracts.
(f) Any distribution to Holders of any payments described above shall
be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Security Register.
(g) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the terms
of the Pledge Agreement cause the Pledged Senior Notes to be released
from the Pledge, free and clear
50
of any security interest of the Company, and transferred to the
Purchase Contract Agent for delivery to the Holder thereof or its
designee as soon as practicable; and
(ii) subject to the receipt thereof, the Purchase Contract
Agent shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Senior Notes (or, if no such instructions are given to
the Purchase Contract Agent by the Holder, the Purchase Contract Agent
shall hold such Senior Notes, and any interest payment thereon, in the
name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder until the expiration of the time period
specified in the abandoned property laws of the relevant state where
such property is held).
(h) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement, Cash Merger Early Settlement or Cash Settlement, are payable solely
out of the proceeds of any Collateral pledged to secure the obligations of the
Holders, and in no event will Holders be liable for any deficiency between the
proceeds of the disposition of Collateral and the Purchase Price.
(i) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates thereof to
the Holder of the related Units unless the Company shall have received payment
for the Common Stock to be purchased thereunder in the manner herein set forth.
SECTION 5.03. Issuance of Shares of Common Stock. Unless a Termination
Event, an Early Settlement or a Cash Merger Early Settlement shall have
occurred, subject to Section 5.04(b), on the Purchase Contract Settlement Date
upon receipt of the aggregate Purchase Price payable on all Outstanding Units,
the Company shall issue and deposit with the Purchase Contract Agent, for the
benefit of the Holders of the Outstanding Units, one or more certificates
representing newly issued shares of Common Stock registered in the name of the
Purchase Contract Agent (or its nominee) as custodian for the Holders (such
certificates for shares of Common Stock, together with any dividends or
distributions for which a record date and payment date for such dividend or
distribution has occurred after the Purchase Contract Settlement Date, being
hereinafter referred to as the "PURCHASE CONTRACT SETTLEMENT FUND") to which the
Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date, Early
Settlement Date or Cash Merger Early Settlement Date, as the case may be,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith in exchange
therefor a certificate representing that number of newly issued whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Units then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.09 and any dividends or distributions with respect to
51
such shares constituting part of the Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so surrendered shall forthwith
be cancelled. Such shares shall be registered in the name of the Holder or the
Holder's designee as specified in the settlement instructions provided by the
Holder to the Purchase Contract Agent. If any shares of Common Stock issued in
respect of a Purchase Contract are to be registered to a Person other than the
Person in whose name the Certificate evidencing such Purchase Contract is
registered (but excluding any Depositary or nominee thereof), no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Certificate evidencing such
Purchase Contract or has established to the satisfaction of the Company that
such tax either has been paid or is not payable.
SECTION 5.04. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in effect at
the close of business on the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be increased by
dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination; and
(ii) the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately at the opening of business on the
day following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, warrants or options, other
than pursuant to any dividend reinvestment plans or share purchase plans, to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Units upon settlement of the Purchase Contracts underlying such
Units) entitling them, for a period expiring within 45 days after the record
date for the determination of shareholders entitled to receive such rights,
warrants or options, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of Common Stock on
the date of announcement of such issuance,
52
the Settlement Rate in effect at the close of business on the date of such
announcement shall be increased by dividing such Settlement Rate by a fraction
of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date of such
announcement plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price; and
(ii) the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date of such
announcement plus the number of shares of Common Stock so offered for
subscription or purchase,
such increase to become effective immediately after the opening of business on
the Business Day following the date of such announcement. The Company agrees
that it shall notify the Purchase Contract Agent if any issuance of such rights,
warrants or options is cancelled or not completed following the announcement
thereof and the Settlement Rate shall thereupon be readjusted to the Settlement
Rate in effect immediately prior to the date of such announcement. For the
purposes of this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include any shares issuable in respect of any scrip certificates issued in
lieu of fractions of shares of Common Stock. The Company agrees that it shall
not issue any such rights, warrants or options in respect of shares of Common
Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the close of business on the day preceding 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 close of business on the day preceding 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 at the opening of
business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including shares of capital stock, securities, cash and property but excluding
any rights, warrants or options referred to in paragraph (2) of this Section
5.04(a), any dividend or distribution paid exclusively in cash and any dividend
or distribution referred to in paragraph (1) of this Section 5.04(a)), the
Settlement Rate in effect at the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution shall be
adjusted by dividing such rate by a fraction of which:
53
(i) the numerator shall be the Current Market Price per share
of Common Stock on the date fixed for such determination less the then
fair market value (as reasonably determined by the Board of Directors,
whose determination shall be conclusive and the basis for which shall
be described in a Board Resolution) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of
Common Stock; and
(ii) the denominator shall be such Current Market Price per
share of Common Stock,
such adjustment to become effective at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution. In any case in which this paragraph (4) is
applicable, paragraph (2) of this Section 5.04(a) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed in
a Reorganization Event to which Section 5.04(b) applies, as part of a
distribution referred to in paragraph (4) of this Section or as a regular
periodic cash dividend or distribution) in an aggregate amount that, combined
together with (I) the aggregate amount of any other distributions (other than
regular periodic cash dividends or distributions) to all holders of its Common
Stock made exclusively in cash within the 12 months preceding the date of
payment of such distribution (the "TRAILING 12 MONTH PERIOD") and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (II) the aggregate amount of any cash plus the fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) of consideration (other than
consideration payable in respect of any odd- lot tender offer) payable in
respect of any tender or exchange offer by the Company or any of its
subsidiaries and calculated as of the expiration of such tender or exchange
offer for all or any portion of the Common Stock concluded within the Trailing
12 Month Period and in respect of which no adjustment pursuant to this paragraph
(5) or paragraph (6) of this Section has been made, exceeds 15% of the product
of the Current Market Price per share of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution multiplied by the number of shares of Common Stock outstanding on
such date, then, in such case, the Settlement Rate in effect at the close of
business on such record date shall be adjusted by dividing such rate by a
fraction of which:
(i) the numerator shall be the Current Market Price of Common
Stock on such record date less the amount of cash so distributed (and
not excluded as provided above) applicable to one share of Common
Stock; and
(ii) the denominator shall be the Current Market Price of
Common Stock,
54
such increase to be effective at the opening of business on the day following
the record date; provided, however, that in the event the portion of cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price per share of Common Stock on the record date, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
holder of a Unit shall have the right to receive upon settlement of the Units
the amount of cash such Holder would have received had such Holder settled each
Unit on the record date. In the event that such dividend or distribution is not
so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or distribution
had not been declared.
(6) If the Company or any subsidiary of the Company shall make a
tender or exchange offer (other than any odd-lot tender offer) for all or any
portion of the Common Stock and upon expiration of such tender or exchange offer
(as amended upon the expiration thereof) the Company or its subsidiary shall be
required to pay to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares (as
herein defined) any consideration, then if the sum of (I) the fair market value
of the aggregate consideration to be paid in such tender offer or exchange offer
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be described in a Board Resolution)
plus (II) the aggregate of the cash plus the fair market value (as reasonably
determined by the Board of Directors, whose determination shall be conclusive
and the basis for which shall be described in a Board Resolution), as of the
expiration of such tender or exchange offer, of consideration payable in respect
of any other tender or exchange offer (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 Common Stock expiring within the 12 months
preceding the expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to this paragraph (6) has been made, plus (III) the
aggregate amount of any distributions (other than regular periodic cash
dividends or distributions) to all holders of Common Stock made exclusively in
cash within the 12 months preceding the expiration of such tender or exchange
offer and in respect of which no adjustment pursuant to paragraph (5) has been
made, exceeds 15% of the product of the Current Market Price per share of Common
Stock as of the last time (the "EXPIRATION TIME") tenders could have been made
pursuant to such tender or exchange offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) on
the Expiration Time, then, the Settlement Rate in effect at the close of
business on the day of the Expiration Time shall be adjusted by dividing by a
fraction:
(i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per share of Common Stock on the date
of the Expiration Time and (II) the number of shares of Common Stock
outstanding (including any tendered shares) on the date of the
Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to
shareholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of
55
clause (I) the acceptance, up to any maximum specified in the terms of
the tender or exchange offer, of Purchased Shares); and
(ii) the denominator of which shall be equal to the product
of (A) the Current Market Price per share of Common Stock as of the
Expiration Time and (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time
less the number of all shares validly tendered and not withdrawn as of
the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "PURCHASED SHARES"),
such adjustment to become effective at the opening of business on the
date following the date of the Expiration Time.
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.04(b) applies) shall be deemed to
involve:
(i) a distribution of such securities other than Common Stock
to all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution"
and the "date fixed for such determination" within the meaning of
paragraph (4) of this Section); and
(ii) a subdivision, split or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior
to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon
which such subdivision, split or combination becomes effective" within
the meaning of paragraph (3) of this Section).
(8) The "CURRENT MARKET PRICE" per share of Common Stock on any date
of determination means the average of the daily Closing Prices on each of the 20
consecutive Trading Days ending not later than the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date," when used with respect to any issuance or distribution, shall
mean the first date on which Common Stock trades regular way on such exchange or
in such market without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided,
56
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.
(10) The Company may, but shall not be required to, make such
increases in the Settlement Rate, in addition to those required by this Section,
as the Board of Directors considers to be advisable in order to avoid or
diminish any income tax to any holders of shares of Common Stock resulting from
any dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes or for any other reason.
(11) The Company has entered into a Rights Agreement dated as of
November 1, 1995 (the "RIGHTS AGREEMENT") with The Bank of New York pursuant to
which share purchase rights (the "RIGHTS") have been, and may in the future be,
issued in respect of shares of Common Stock. Each share of Common Stock issued
upon settlement of any Purchase Contract pursuant to this Article 5 shall be
entitled to receive the appropriate number of Rights, if any, and the
certificates representing the Common Stock issued upon such settlement shall
bear such legends, if any, in each case as provided by and subject to the terms
of the Rights Agreement as in effect at the time of such settlement. If after
the date of this Agreement the Rights separate from the Common Stock in
accordance with the provisions of the Rights Agreement so that a Holder would
not be entitled to receive any Rights in respect of the Common Stock issuable
upon settlement of such Purchase Contract, the Settlement Rate will be adjusted
as provided in this Section 5.04 on the separation date, subject to readjustment
in the event of the expiration, termination or redemption of the Rights. In lieu
of any such adjustment, the Company may amend the Rights Agreement to provide
that upon settlement Holders will receive, in addition to the Common Stock
issuable upon such settlement, the Rights that would have attached to such
shares of Common Stock if the Rights had not become separated from the Common
Stock pursuant to the provisions of the Rights Agreement. If the Company
hereafter adopts any stockholder rights plan similar to the Rights Agreement, a
Holder shall be entitled to receive upon settlement of its Purchase Contracts in
addition to the shares of Common Stock issuable upon settlement the related
rights for the Common Stock, whether or not the rights under the future
stockholder rights plan have separated from the Common Stock at the time of
settlement, but otherwise subject to the generally applicable terms of such
plan, and no additional adjustment to the Settlement Rate shall be made for the
future stockholder rights plan under this Section 5.04.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the shares of Common
Stock outstanding immediately prior to the merger or
57
consolidation are not exchanged for cash, securities or other property
of the Company or another corporation);
(ii) any sale, transfer, lease or conveyance to another
Person of the property of the Company as an entirety or substantially
as an entirety;
(iii) any statutory share exchange of the Company with
another Person (other than in connection with a merger or acquisition);
or
(iv) any liquidation, dissolution or termination of the
Company other than as a result of or after the occurrence of a
Termination Event (any event described in clauses (i), (ii), (iii) and
(iv), a "REORGANIZATION EVENT"),
each Purchase Contract shall become, without the consent of the Holder of the
Unit representing such Purchase Contract, an agreement to purchase only the kind
of securities, cash and other property receivable upon consummation of such
Reorganization Event by a holder of Common Stock immediately prior to the
closing date of such Reorganization Event.
The amount of such securities, cash and other property receivable upon
settlement of each such Purchase Contract after the consummation of the
Reorganization Event shall be based on the value as of such settlement date of
the hypothetical amount of securities, cash and other property that would have
been received upon consummation of the Reorganization Event in exchange for the
maximum number of shares of Common Stock deliverable under a Purchase Contract
immediately prior to the closing date of the Reorganization Event (collectively,
the "EXCHANGE PROPERTY"). In determining the kind and amount of the Exchange
Property pursuant to the foregoing, it will be assumed that 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 Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon such
Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).
The actual amount of Exchange Property receivable upon settlement of
each Purchase Contract shall be (1) in the case of settlement on the Purchase
Contract Settlement Date or pursuant to Section 5.04(b)(2), a variable amount
based upon the applicable Settlement Rate and
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the Adjusted Applicable Market Value of the Exchange Property at such time and
(2) in the case of any Early Settlement, determined in accordance with the
procedures described under Section 5.07 using the Settlement Rate that results
in the minimum amount of Exchange Property being delivered under such Purchase
Contract.
For purposes of this Section 5.04(b)(1) and Section 5.04(b)(2), the
term "Adjusted Applicable Market Value" shall be deemed to refer to the
"Adjusted Applicable Market Value" of the Exchange Property, and such value
shall be determined (A) with respect to any publicly traded securities that
compose all or part of the Exchange Property, based on the Closing Price of such
securities, (B) in the case of any cash that composes all or part of the
Exchange Property, based on the amount of such cash and (C) in the case of any
other property that composes all or part of the Exchange Property, based on the
value of such property, as determined by a nationally recognized independent
investment banking firm retained by the Company for this purpose; provided that
prior to the separation of the Rights or any similar stockholder rights from the
Common Stock, such Rights or similar stockholder rights shall be deemed to have
no value. The term "Closing Price" shall be deemed to refer to the closing sale
price, last quoted bid price or mid-point of the last bid and ask prices, as the
case may be, of any publicly traded securities that comprise all or part of the
Exchange Property. The term "Trading Day" shall be deemed to refer to any
publicly traded securities that comprise all or part of the Exchange Property.
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Unit shall have
the rights provided by this Section 5.04(b). Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 5.04. The above provisions of
this Section 5.04 shall similarly apply to successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with or
into another Person, any merger of another Person into the Company (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock) in which 30% or more of the
total consideration paid to the Company's shareholders consists of cash or cash
equivalents (a "CASH MERGER"), then a Holder of a Unit may settle ("CASH MERGER
EARLY SETTLEMENT") its Purchase Contract, upon the conditions set forth below,
at the Settlement Rate in effect immediately prior to the closing of the Cash
Merger; provided that (i) the Cash Merger Early Settlement Date (as defined
below) is no later than the fifth Business Day immediately preceding the
Purchase Contract Settlement Date and (ii) no Cash Merger Early Settlement will
be permitted pursuant to this Section 5.04(b)(2) unless, at the time such Cash
Merger Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Cash Merger Early
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Settlement, if such a Registration Statement is required (in the view of
counsel, which need not be in the form of a written opinion, for the Company)
under the Securities Act. If such a Registration Statement is so required, the
Company covenants and agrees to use commercially reasonable efforts to (A) have
in effect a Registration Statement covering any securities to be delivered in
respect of the Purchase Contracts being settled and (B) provide a Prospectus in
connection therewith, in each case in a form that may be used in connection with
such Cash Merger Early Settlement.
Within five Business Days of the completion of a Cash Merger, the
Company shall provide written notice to Holders of Units of such completion of a
Cash Merger, which shall specify the deadline for submitting the notice to
settle early in cash pursuant to this Section 5.04(b)(2), the date on which such
Cash Merger Early Settlement shall occur (which date shall be 10 days after the
date of such written notice by the Company, but which shall in no event be later
than the fifth Business Day immediately preceding the Purchase Contract
Settlement Date) (the "CASH MERGER EARLY SETTLEMENT DATE"), the applicable
Settlement Rate and the amount (per share of Common Stock) of cash, securities
and other consideration receivable by the Holder upon settlement.
Subject to the succeeding sentence, Normal Units Holders and Stripped
Units Holders may only effect Cash Merger Early Settlement pursuant to this
Section 5.04(b)(2) in integral multiples of 20 Normal Units or Stripped Units,
as the case may be. If Applicable Ownership Interests in the Treasury Portfolio
have replaced Applicable Ownership Interests in Senior Notes as components of
the Normal Units, Normal Units Holders may only effect Cash Merger Early
Settlement pursuant to this Section 5.04(b)(2) in multiples of 12,500 Normal
Units. Other than the provisions relating to timing of notice and settlement,
which shall be as set forth above, the provisions of Section 5.01(a) shall apply
with respect to a Cash Merger Early Settlement pursuant to this Section
5.04(b)(2).
In order to exercise the right to effect Cash Merger Early Settlement
with respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, no later than 5:00 p.m. (New York City time) on the third
Business Day immediately preceding the Cash Merger Early Settlement Date, such
Certificate to the Purchase Contract Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds) in an amount equal to
the product of (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Cash Merger Early
Settlement.
If a Holder properly effects an effective Cash Merger Early Settlement
in accordance with the provisions of this Section 5.04(b)(2), the Company will
deliver (or will cause the Collateral Agent to deliver) to the Holder on the
Cash Merger Early Settlement Date:
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(i) the kind and amount of securities, cash and other property
receivable upon such Cash Merger 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 Cash Merger (based on the Settlement Rate in effect at such time),
assuming such Holder of Common Stock is not a Constituent Person or an
Affiliate of a Constituent Person to the extent such Cash Merger
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 Cash Merger (provided that
if the kind or amount of securities, cash and other property receivable
upon such Cash Merger is not the same for each non-electing share, then
for the purpose of this Section 5.04(b)(2), the kind and amount of
securities, cash and other property receivable upon such Cash Merger 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). For
the avoidance of doubt, for the purposes of determining the Adjusted
Applicable Market Value (in connection with determining the appropriate
Settlement Rate to be applied in the foregoing sentence), the date of
the closing of the Cash Merger shall be deemed to be the Purchase
Contract Settlement Date;
(ii) the Senior Notes, the Applicable Ownership Interests in
the Treasury Portfolio or Treasury Securities, as the case may be,
related to the Purchase Contracts with respect to which the Holder is
effecting a Cash Merger Early Settlement;
(iii) any accrued and unpaid Contract Adjustment Payments to
but not including the Cash Merger Early Settlement Date payable to such
Holder; and
(iv) if so required under the Securities Act, a Prospectus as
contemplated by this Section 5.04(b)(2).
(c) All calculations and determinations pursuant to this Section 5.04
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
(d) The Normal Units or the Stripped Units of the Holders who do not
elect Cash Merger Early Settlement in accordance with the foregoing will
continue to remain outstanding and be subject to settlement on the Purchase
Contract Settlement Date in accordance with the terms hereof.
SECTION 5.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.04 (or if
the Company is not aware of such occurrence, as soon as practicable after
becoming so aware):
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(i) compute the adjusted Settlement Rate in accordance with
Section 5.04 and prepare and transmit to the Purchase Contract Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) provide a written notice to the Holders of the Units of
the occurrence of such event and a statement in reasonable detail
setting forth the method by which the adjustment to the Settlement Rate
was determined and setting forth the adjusted Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of Units to determine whether any facts
exist which may require any adjustment of the Settlement Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall be fully authorized and protected in relying on any Officers' Certificate
delivered pursuant to Section 5.05(a)(i) and any adjustment contained therein
and the Purchase Contract Agent shall not be deemed to have knowledge of any
adjustment unless and until it has received such certificate. The Purchase
Contract Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at the time be issued or delivered with respect to any
Purchase Contract; and the Purchase Contract Agent makes no representation with
respect thereto. The Purchase Contract Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
SECTION 5.06. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments (including any accrued and unpaid 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 Purchase Contract Agent or the Company, if, prior to or on the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon and after the occurrence of a Termination Event, the Units shall
thereafter represent the right to receive the Senior Notes, the Treasury
Securities or the appropriate Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, forming part of such Units, in accordance with
the provisions of Section 5.04 of the Pledge Agreement. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business
62
Days thereafter give written notice to the Purchase Contract Agent, the
Collateral Agent and the Holders, at their addresses as they appear in the
Security Register.
SECTION 5.07. Early Settlement. (a) Subject to and upon compliance with
the provisions of this Section 5.07, at the option of the Holder thereof,
Purchase Contracts underlying Units may be settled early ("EARLY SETTLEMENT") at
any time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that no
Early Settlement will be permitted pursuant to this Section 5.07 unless, at the
time such Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration
Statement is so required, the Company covenants and agrees to use commercially
reasonable efforts to (A) have in effect a Registration Statement covering any
securities to be delivered in respect of the Purchase Contracts being settled
and (B) provide a Prospectus in connection therewith, in each case in a form
that may be used in connection with such Early Settlement.
(b) In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, at any time prior to 5:00 p.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
such Certificate to the Purchase Contract Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early on the reverse thereof duly completed and accompanied by payment
(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
payable on such Payment Date with respect to such Purchase Contracts.
Except as provided in the immediately preceding sentence and subject to
the last paragraph of Section 5.02, no payment 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. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying any Units 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 Units and if such requirements
are first satisfied after 5:00
63
p.m. (New York City time) on a Business Day or on a day that is not a Business
Day, the "EARLY SETTLEMENT DATE" with respect to such Units shall be the next
succeeding Business Day.
Upon the receipt of such Certificate and Early Settlement Amount from
the Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 5.06
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) the Purchase Contract Agent has received from such Holder, and
paid to the Company as confirmed in writing by the Company, the related Early
Settlement Amount and (C) all conditions to such Early Settlement have been
satisfied.
Subject to the succeeding sentence, Holders of Normal Units or Stripped
Units may only effect Early Settlement pursuant to this Section 5.07 in integral
multiples of 20 Normal Units or Stripped Units, as the case may be. If
Applicable Ownership Interests in the Treasury Portfolio have replaced
Applicable Ownership Interests in Senior Notes as components of the Normal
Units, Normal Units Holders may only effect Early Settlement pursuant to this
Section 5.07 in integral multiples of 12,500 Normal Units.
Upon Early Settlement of the Purchase Contracts, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments (including any accrued and unpaid Contract Adjustment
Payments) with respect to such Purchase Contracts shall immediately and
automatically terminate.
(c) Upon Early Settlement of Purchase Contracts by a Holder of the
related Units, the Company shall issue, and the Holder shall be entitled to
receive, 0.8791 shares of Common Stock on account of each Purchase Contract as
to which Early Settlement is effected (the "EARLY SETTLEMENT RATE"). The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted pursuant to Section 5.04.
(d) 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, together with payment
in lieu of any fraction of a share, as provided in Section 5.09; and
(ii) the Senior Notes underlying the Applicable Ownership
Interests in Senior Notes or the Applicable Ownership Interests in the
Treasury Portfolio, as applicable, in the case of Normal Units, or the
related Treasury Securities, in the case of Stripped Units, to be
released from the Pledge by the Collateral Agent and transferred, in
each case, to the Purchase Contract Agent for delivery to the Holder
thereof or its designee.
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(e) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Senior Notes, the
Applicable Ownership Interests in the Treasury Portfolio or Treasury Securities,
as the case may be, from the Securities Intermediary, as applicable, the
Purchase Contract Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Units:
(i) transfer to the Holder Senior Notes, the Applicable
Ownership Interests in the Treasury Portfolio or Treasury Securities,
as the case may be, forming a part of such Units,
(ii) deliver to the Holder a certificate or certificates for
the full number of shares of Common Stock issuable upon such Early
Settlement, together with payment in lieu of any fraction of a share,
as provided in Section 5.09, and
(iii) if so required under the Securities Act, deliver a
Prospectus for the shares of Common Stock issuable upon such Early
Settlement as contemplated by Section 5.07(a).
(f) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(g) A Holder of a Unit who effects Early Settlement may elect to have
the Senior Notes no longer a part of a Normal Unit remarketed in accordance with
the provisions of Section 5.02.
SECTION 5.08. Intentionally Omitted.
SECTION 5.09. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date, or upon Early Settlement or Cash Merger 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 or Cash
Merger Early Settlement, the Company, through the Purchase Contract Agent, shall
make a cash payment in respect of such fractional interest in an amount equal to
the percentage of such fractional share times the
65
Applicable Market Value calculated as if the date of such settlement were the
Purchase Contract Settlement Date. The Company shall provide the Purchase
Contract Agent from time to time with sufficient funds to permit the Purchase
Contract Agent to make all cash payments required by this Section 5.09 in a
timely manner.
SECTION 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable
to the initial issuance and delivery of the shares of Common Stock pursuant to
the Purchase Contracts; provided, however, that the Company shall not be
required to pay any such tax or taxes which may be payable in respect of any
exchange of or substitution for a Certificate evidencing a Unit 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 Units evidenced thereby, other than
in the name of the Purchase Contract Agent, as custodian for such Holder, and
the Company shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 5.11. Contract Adjustment Payments.
(a) Subject to Section 5.11(d), the Company shall pay, on each Payment
Date, the Contract Adjustment Payments payable in respect of each Purchase
Contract to the Person in whose name a Certificate is registered at the close of
business on the Record Date relating to such Payment Date. The Contract
Adjustment Payments will be payable at the office of the Purchase Contract Agent
in Borough of Manhattan, New York City maintained for that purpose. If the
book-entry system for the Units has been terminated, the Contract Adjustment
Payments will be payable, 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 Security Register, or by wire transfer to the account designated by such
Person by a prior written notice to the Purchase Contract Agent. If any date on
which Contract Adjustment Payments are to be made is not a Business Day, then
payment of the Contract Adjustment Payments payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest in
respect of any such delay); provided that if such Business Day is in the next
succeeding calendar year, then payment of the Contract Adjustment Payments will
be made on the Business Day immediately preceding such Business Day. Contract
Adjustment Payments payable for any period will be computed on the basis of a
360-day year of twelve 30-day months. The Contract Adjustment Payments will
accrue from May 23, 2003.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay future Contract Adjustment Payments (including any accrued
Contract Adjustment Payments) shall cease.
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(c) Each Certificate delivered under this Agreement upon registration
of transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the recreation of Normal Units) any other Certificate
shall carry the right to accrued and unpaid Contract Adjustment Payments, which
right was carried by the Purchase Contracts underlying such other Certificates.
(d) In the case of any Unit with respect to which Early Settlement
(but not Cash Merger Early Settlement) of the underlying Purchase Contract is
effected on a date that is after any Record Date and prior to or on the next
succeeding Payment Date, Contract Adjustment Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement, and such Contract Adjustment Payments shall be paid to the Person in
whose name the Certificate evidencing such Unit is registered at the close of
business on such Record Date. Except as otherwise expressly provided in the
immediately preceding sentence and the right to receive accrued and unpaid
Contract Adjustment Payments as set forth in Section 5.04(b)(2), in the case of
any Unit with respect to which Early Settlement or Cash Merger Early Settlement
of the underlying Purchase Contract is effected, Contract Adjustment Payments
that would otherwise be payable after the Early Settlement or Cash Merger Early
Settlement Date with respect to such Purchase Contract shall not be payable.
(e) 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.
(f) In the event (x) of any payment by, or distribution of assets of,
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution, winding-up, liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, or (y) subject to the provisions of Section
5.11(h) below, that (i) a default shall have occurred and be continuing with
respect to the payment of principal, interest or any other monetary amounts due
and payable on any Senior Indebtedness and such default shall have continued
beyond the period of grace, if any, specified in the instrument evidencing such
Senior Indebtedness (and the Purchase Contract Agent shall have received written
notice thereof from the Company or one or more holders of Senior Indebtedness or
their representative or representatives or the trustee or trustees under any
indenture pursuant to which any such Senior Indebtedness may have been issued),
or (ii) the maturity of any Senior Indebtedness shall have been accelerated
because of a default in respect of such Senior Indebtedness (and the Purchase
Contract Agent shall have received written notice thereof from the Company or
one or more holders of Senior Indebtedness or their representative or
representatives or the trustee or trustees under any indenture pursuant to which
any such Senior Indebtedness may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be
entitled to receive, in the case of clause (x) above, payment of all
amounts due or to become due upon all Senior Indebtedness and, in the
case of subclauses (i) and (ii) of clause (y) above, payment of all
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amounts due thereon, or provision shall be made for such payment in
money or money's worth, before the Holders of any of the Units are
entitled to receive any Contract Adjustment Payments on the Purchase
Contracts underlying the Units;
(ii) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities, to
which the Holders of any of the Units would be entitled except for the
provisions of Section 5.11(e) through (q), including any such payment
or distribution which may be payable or deliverable by reason of the
payment of any other indebtedness of the Company being subordinated to
the payment of such Contract Adjustment Payments on the Purchase
Contracts underlying the Units, shall be paid or delivered by the
Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the representative or representatives of the holders of Senior
Indebtedness or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may
have been issued, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented by
each, to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness, before any payment or distribution is made of such
Contract Adjustment Payments to the Holders of such Units; and
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being
subordinated to the payment of Contract Adjustment Payments on the
Purchase Contracts underlying the Units, shall be received by the
Purchase Contract Agent or the Holders of any of the Units when such
payment or distribution is prohibited pursuant to Section 5.11(e)
through (q), such payment or distribution shall be paid over to the
representative or representatives of the holders of Senior Indebtedness
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Senior Indebtedness may have been
issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
(g) For purposes of Section 5.11(e) through (q), the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
Person provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in Section 5.11(e) through
(q) with respect to such Contract Adjustment Payments on the Units to the
payment of all Senior Indebtedness which may at the time be outstanding;
provided that (i) the indebtedness or guarantee of indebtedness, as the case may
be, that constitutes Senior
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Indebtedness is assumed by the Person, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of each such holder adversely affected
thereby, altered by such reorganization or readjustment;
(h) Any failure by the Company to make any payment on or perform any
other obligation under Senior Indebtedness, other than any indebtedness incurred
by the Company or assumed or guaranteed, directly or indirectly, by the Company
for money borrowed (or any deferral, renewal, extension or refunding thereof) or
any indebtedness or obligation as to which the provisions of Section 5.11(e)
through (g) shall have been waived by the Company in the instrument or
instruments by which the Company incurred, assumed, guaranteed or otherwise
created such indebtedness or obligation, shall not be deemed a default or event
of default if (i) the Company shall be disputing its obligation to make such
payment or perform such obligation and (ii) either (A) no final judgment
relating to such dispute shall have been issued against the Company which is in
full force and effect and is not subject to further review, including a judgment
that has become final by reason of the expiration of the time within which a
party may seek further appeal or review, and (B) in the event a judgment that is
subject to further review or appeal has been issued, the Company shall in good
faith be prosecuting an appeal or other proceeding for review and a stay of
execution shall have been obtained pending such appeal or review.
(i) Subject to the irrevocable payment in full of all Senior
Indebtedness, the Holders of the Units shall be subrogated (equally and ratably
with the holders of all obligations of the Company which by their express terms
are subordinated to Senior Indebtedness of the Company to the same extent as
payment of the Contract Adjustment Payments in respect of the Purchase Contracts
underlying the Units is subordinated and which are entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all such Contract Adjustment
Payments owing on the Units shall be paid in full, and as between the Company,
its creditors other than holders of such Senior Indebtedness and the Holders, no
such payment or distribution made to the holders of Senior Indebtedness by
virtue of Section 5.11(e) through (q) that otherwise would have been made to the
Holders shall be deemed to be a payment by the Company on account of such Senior
Indebtedness, it being understood that the provisions of Section 5.11(e) through
(q) are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
(j) Nothing contained in Section 5.11(e) through (q) or elsewhere in
this Agreement or in the Units is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders such Contract Adjustment Payments on the Units as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and creditors of
the Company other
69
than the holders of Senior Indebtedness, nor shall anything herein or therein
prevent the Purchase Contract Agent or any Holder from exercising all remedies
otherwise permitted by applicable law upon default under this Agreement, subject
to the rights, if any, under Section 5.11(e) through (q), of the holders of
Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
(k) Upon payment or distribution of assets of the Company referred to
in Section 5.11(e) through (q), the Purchase Contract Agent and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or Purchase Contract Agent or other
person making any payment or distribution, delivered to the Purchase Contract
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to these Section 5.11(e) through (q).
(l) The Purchase Contract Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee or representative on behalf of such
holder) to establish that such notice has been given by a holder of Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Purchase Contract Agent determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to Section 5.11(e) through (q), the Purchase Contract Agent may request
such Person to furnish evidence to the reasonable satisfaction of the Purchase
Contract Agent as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
Section 5.11(e) through (q), and, if such evidence is not furnished, the
Purchase Contract Agent may defer payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
(m) Nothing contained in Section 5.11(e) through (q) shall affect the
obligations of the Company to make, or prevent the Company from making, payment
of the Contract Adjustment Payments, except as otherwise provided in these
Section 5.11(e) through (q).
(n) Each Holder of Units, by its acceptance thereof, authorizes and
directs the Purchase Contract Agent on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in Section
5.11 (e) through (q) and appoints the Purchase Contract Agent its
attorney-in-fact, as the case may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Purchase
Contract Agent of any fact known to the Company that would prohibit the making
of any payment of moneys to or
70
by the Purchase Contract Agent in respect of the Units pursuant to the
provisions of this Section. Notwithstanding the provisions of Section 5.11(e)
through (q) or any other provisions of this Agreement, the Purchase Contract
Agent shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of moneys to or by the Purchase
Contract Agent, or the taking of any other action by the Purchase Contract
Agent, unless and until the Purchase Contract Agent shall have received written
notice thereof mailed or delivered to the Purchase Contract Agent at its
Institutional Trust Services department from the Company, any Holder, or the
holder or representative of any Senior Indebtedness; provided that if at least
two Business Days prior to the date upon which by the terms hereof any such
moneys may become payable for any purpose, the Purchase Contract Agent shall not
have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Purchase Contract Agent shall have full power and authority to receive such
moneys and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to or on or after such date.
(p) The Purchase Contract Agent in its individual capacity shall be
entitled to all the rights set forth in this Section with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness and nothing in this Agreement shall deprive the Purchase
Contract Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Senior
Indebtedness to enforce the subordination herein shall at any time or in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any noncompliance by the Company with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with.
(r) Nothing in this Section 5.11 shall apply to claims of, or payments
to, the Purchase Contract Agent under or pursuant to Section 7.07.
(s) With respect to the holders of Senior Indebtedness, (i) the duties
and obligations of the Purchase Contract Agent shall be determined solely by the
express provisions of this Agreement; (ii) the Purchase Contract Agent shall not
be liable to any such holders if it shall, acting in good faith, mistakenly pay
over or distribute to the Holders or to the Company or any other Person cash,
property or securities to which any holders of Senior Indebtedness shall be
entitled by virtue of this Section 5.11 or otherwise; (iii) no implied covenants
or obligations shall be read into this Agreement against the Purchase Contract
Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a
fiduciary as to such holders.
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ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock.
Each Holder of a Unit shall have the right, which is absolute and
unconditional, (i) to receive each Contract Adjustment Payment with respect to
the Purchase Contract comprising part of such Unit on the respective Payment
Date for such Unit and (ii) except upon and following a Termination Event, to
purchase shares of Common Stock pursuant to such Purchase Contract and, in each
such case, to institute suit for the enforcement of any such right to receive
Contract Adjustment Payments and the right to purchase shares of Common Stock,
and such rights shall not be impaired without the consent of such Holder.
SECTION 6.02. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder, and thereafter all rights and remedies of such
Holder shall continue as though no such proceeding had been instituted.
SECTION 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.04. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right upon a default
or remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.05. Undertaking for Costs.
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All parties to this Agreement agree, and each Holder of a Unit, by its
acceptance of such Unit shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Purchase Contract Agent for any
action taken, suffered or omitted by it as Purchase Contract Agent, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and costs against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section shall not apply to any suit instituted by the Purchase Contract Agent,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Units, or to any suit instituted by
any Holder for the enforcement of interest on any Senior Notes or Contract
Adjustment Payments on or after the respective Payment Date therefor in respect
of any Unit held by such Holder, or for enforcement of the right to purchase
shares of Common Stock under the Purchase Contracts constituting part of any
Unit held by such Holder.
SECTION 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Units, such duties and
only such duties as are specifically set forth in this Agreement, the Pledge
Agreement and the Remarketing Agreement and no implied covenants or obligations
shall be read into this Agreement, the Pledge Agreement or the Remarketing
Agreement against the Purchase Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part, may,
with respect to the Units, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Purchase Contract Agent and
73
conforming to the requirements of this Agreement or the Pledge Agreement or the
Remarketing Agreement, as applicable, but in the case of any certificates or
opinions which by any provision hereof are specifically required to be furnished
to the Purchase Contract Agent, the Purchase Contract Agent shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Agreement, the Pledge Agreement or the Remarketing
Agreement, as applicable (but need not confirm or investigate the accuracy of
the mathematical calculations or other facts stated therein).
(b) No provision of this Agreement, the Pledge Agreement or the
Remarketing Agreement shall be construed to relieve the Purchase Contract Agent
from liability for its own grossly negligent action, its own grossly negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
conclusively determined by a court of competent jurisdiction that the Purchase
Contract Agent was grossly negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement or the
Remarketing Agreement shall require the Purchase Contract Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement, the Pledge Agreement and the Remarketing Agreement relating to
the conduct or affecting the liability of or affording protection to the
Purchase Contract Agent shall be subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement and the Remarketing Agreement in its capacity as Purchase
Contract Agent.
SECTION 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Units, as their names and
74
addresses appear in the Security Register, notice of such default hereunder,
unless such default shall have been cured or waived.
SECTION 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may, in the absence of bad faith,
conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, 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;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement or the Remarketing Agreement the Purchase Contract Agent shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting to take any action hereunder or thereunder, the Purchase Contract Agent
(unless other evidence be herein specifically prescribed in this Agreement) may,
in the absence of bad faith on its part, conclusively rely upon an Officers'
Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Purchase Contract Agent, in its discretion, may make
reasonable further inquiry or investigation into such facts or matters related
to the execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be entitled to examine the relevant
books, records and premises of the Company, personally or by agent or attorney;
(6) the Purchase Contract Agent may execute any of the powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees or an Affiliate of the Purchase
Contract Agent and the Purchase Contract Agent shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee or an Affiliate of the Purchase Contract Agent appointed with due care
by it hereunder;
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(7) the Purchase Contract Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Holders pursuant to this Agreement, unless
such Holders shall have offered to the Purchase Contract Agent security or
indemnity satisfactory to the Purchase Contract Agent against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(8) the Purchase Contract Agent shall not be liable for any action
taken, suffered, or omitted to be taken by it in the absence of bad faith or
gross negligence by it;
(9) the Purchase Contract Agent shall not be deemed to have notice of
any adjustment to the Settlement Rate, the occurrence of a Termination Event or
any default hereunder unless a Responsible Officer of the Purchase Contract
Agent has actual knowledge thereof or unless written notice of any event which
is in fact such an adjustment, occurrence or default is received by a
Responsible Officer at the Corporate Trust Office of the Purchase Contract
Agent, and such notice references the Units and this Agreement;
(10) the Purchase Contract Agent may request that the Company deliver
an Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Agreement, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded;
(11) the rights, privileges, protections, immunities and benefits
given to the Purchase Contract Agent, including, without limitation, its right
to be indemnified, are extended to, and shall be enforceable by, the Purchase
Contract Agent in each of its capacities hereunder, and to each officer,
director, employee of the Purchase Contract Agent and each agent, custodian and
other Person employed, in any capacity whatsoever, by the Purchase Contract
Agent to act hereunder and shall survive the resignation or removal of the
Purchase Contract Agent and the termination of this Agreement; and
(12) The Purchase Contract Agent shall not be required to initiate or
conduct any litigation or collection proceedings hereunder and shall have no
responsibilities with respect to any default hereunder except as expressly set
forth herein.
SECTION 7.04. Not Responsible for Recitals or Issuance of Units.
The recitals contained herein, in the Pledge Agreement, the Remarketing
Agreement and in the Certificates shall be taken as the statements of the
Company, and the Purchase Contract Agent assumes no responsibility for their
accuracy or validity. The Purchase Contract Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Units, or of the
Pledge Agreement or the Pledge or the Collateral and shall have no
responsibility for
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perfecting or maintaining the perfection of any security interest in the
Collateral. The Purchase Contract Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.05. May Hold Units.
Any Security Registrar or any other agent of the Company, or the
Purchase Contract Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Units and may otherwise deal with
the Company, the Collateral Agent or any other Person with the same rights it
would have if it were not Security Registrar or such other agent, or the
Purchase Contract Agent. The Company may become the owner or pledgee of Units.
SECTION 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not
be segregated from the Purchase Contract Agent's other funds except to the
extent required by law or provided herein. The Purchase Contract Agent shall be
under no obligation to invest or pay interest on any money received by it
hereunder except as otherwise provided hereunder or agreed in writing with the
Company.
SECTION 7.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder, under the Pledge Agreement and under the
Remarketing Agreement as the Company and the Purchase Contract Agent shall from
time to time agree in writing;
(2) except as otherwise expressly provided for herein, to reimburse
the Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent in
accordance with any provision of this Agreement, the Pledge Agreement and the
Remarketing Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel) in connection with the negotiation,
preparation, execution and delivery and performance of this Agreement, the
Pledge Agreement and the Remarketing Agreement and any modification, supplement
or waiver of any of the terms thereof, except any such expense, disbursement or
advance as may be attributable to its gross negligence, willful misconduct or
bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent and each of its directors, officers, agents and
employees (collectively, the "INDEMNITEES") for, and to hold each Indemnitee
harmless against, any loss, claim, damage, fine, penalty, liability or expense
(including reasonable fees and expenses of counsel) incurred without gross
negligence, willful misconduct or bad faith on its part, arising out of or in
connection with the
77
acceptance or administration of its duties hereunder and under the Pledge
Agreement and the Remarketing Agreement, including the Indemnitees' reasonable
costs and expenses of defending themselves against any claim (whether asserted
by the Company, a Holder or any other person) or liability in connection with
the exercise or performance of any of the Purchase Contract Agent's powers or
duties hereunder or thereunder.
The provisions of this Section shall survive the resignation and
removal of the Purchase Contract Agent and the termination of this Agreement.
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which
shall be a Person organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a Person in the Borough of Manhattan, New York City, qualified
and eligible under this Article and willing to act on reasonable terms. If such
Person publishes or files 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 Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published or filed. If at any time the Purchase
Contract Agent shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Units delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by
78
Section 7.10 shall not have been delivered to the Purchase Contract Agent within
30 days after such Act, the Purchase Contract Agent being removed may petition
any court of competent jurisdiction for the appointment of a successor Purchase
Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section
310(b) of the TIA, as if the Purchase Contract Agent were an indenture
trustee under an indenture qualified under the TIA, and shall fail to
resign after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Unit for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible
under Section 7.08 and shall fail to resign after written request
therefor by the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of
the Purchase Contract Agent or of its property shall be appointed or
any public officer shall take charge or control of the Purchase
Contract Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Unit for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Purchase Contract Agent and the appointment of a successor Purchase Contract
Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract Agent shall have
been so appointed by the Company and accepted appointment in the manner required
by Section 7.10, any Holder who has been a bona fide Holder of a Unit for at
least six months, on behalf of itself and all others similarly situated, or the
Purchase Contract Agent may petition at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Security Register. Each notice shall include the name of the successor Purchase
Contract Agent and the address of its Corporate Trust Office.
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SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph (a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Purchase Contract Agent, shall be the successor of the
Purchase Contract Agent hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract Agent
may adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Purchase
Contract Agent had itself authenticated and executed such Units.
SECTION 7.12. Preservation of Information; Communications to Holders.
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(a) The Purchase Contract Agent shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as "APPLICANTS")
apply in writing to the Purchase Contract Agent, and furnish to the Purchase
Contract Agent reasonable proof that each such applicant has owned a Unit 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 Units and is
accompanied by a copy of the form of proxy or other communication which such
Applicants propose to transmit, then the Purchase Contract Agent shall mail to
all the Holders copies of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Purchase Contract Agent of the materials to be mailed and of payment, or
provision for the payment, of the reasonable expenses of such mailing.
SECTION 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise expressly provided in this Agreement,
the Purchase Contract Agent assumes no obligations and shall not be subject to
any liability under this Agreement, the Pledge Agreement, the Remarketing
Agreement or any Purchase Contract in respect of the obligations of the Holder
of any Unit thereunder. The Company agrees, and each Holder of a Certificate, by
its acceptance thereof, shall be deemed to have agreed, that the Purchase
Contract Agent's execution of the Certificates on behalf of the Holders shall be
solely as agent and attorney-in-fact for the Holders, and that the Purchase
Contract Agent shall have no obligation to perform such Purchase Contracts on
behalf of the Holders, except to the extent expressly provided in Article Five
hereof. Anything contained in this Agreement to the contrary notwithstanding, in
no event shall the Purchase Contract Agent or its officers, directors, employees
or agents be liable under this Agreement, the Pledge Agreement or the
Remarketing Agreement to any third party for indirect, incidental, special,
punitive, or consequential loss or damage of any kind whatsoever, including lost
profits, whether or not the likelihood of such loss or damage was known to the
Purchase Contract Agent and regardless of the form of action.
SECTION 7.14. Tax Compliance.
(a) The Purchase Contract 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 Units or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Units. 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.
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(b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any written direction received from the Company with respect
to the execution or certification of any required documentation and the
application of such requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement conclusively
rely on any such direction in accordance with the provisions of Section
7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Purchase Contract Agent, at any time and from time to
time, may enter into one or more agreements supplemental hereto, in form
satisfactory to the Company and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.04(b); or
(5) except as provided for in Section 5.04, cure any
ambiguity, correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, or make any other
provisions with respect to such matters or questions arising under this
Agreement, provided that such action shall not adversely affect the
interests of the Holders in any material respect.
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SECTION 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Units voting together as one class, including without limitation the
consent of the Holders obtained in connection with a tender or an exchange
offer, by Act of said Holders delivered to the Company and the Purchase Contract
Agent, the Company, when authorized by a Board Resolution, and the Purchase
Contract Agent may enter into an agreement or agreements supplemental hereto for
the purpose of modifying in any manner the terms of the Purchase Contracts, or
the provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the unanimous consent of the Holders of
each outstanding Purchase Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
unless such change is not adverse to the Holders, impair the right of
the Holder of any Purchase Contract to receive distributions on the
related Collateral or otherwise adversely affect the Holder's rights in
or to such Collateral or adversely alter the rights in or to such
Collateral;
(3) impair the Holders' right to institute suit for the
enforcement of any Purchase Contract or any Contract Adjustment
Payments;
(4) reduce the number of shares of Common Stock or the amount
of any other property to be purchased pursuant to any Purchase
Contract, increase the price to purchase shares of Common Stock or any
other property upon settlement of any Purchase Contract or change the
Purchase Contract Settlement Date or the right to Early Settlement or
Cash Merger Early Settlement or otherwise adversely affect the Holder's
rights under the Purchase Contract;
(5) reduce any Contract Adjustment Payments or change any
place where, or the coin or currency in which, any Contract Adjustment
Payment is payable; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any modification
or amendment to the provisions of this Agreement, the Purchase
Contracts or the Pledge Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Normal Units or the Stripped Units, then only the affected class
of Holders as of the record date for the Holders entitled to vote thereon will
be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; and provided, further, that the unanimous consent
of the
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Holders of each outstanding Purchase Contract of such class affected thereby
shall be required to approve any amendment or proposal specified in clauses (1)
through (6) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.01) shall be fully authorized and protected
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such supplemental agreement is authorized or permitted by this
Agreement and that any and all conditions precedent to the execution and
delivery of such supplemental agreement have been satisfied. The Purchase
Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.
SECTION 8.05. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.
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ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions.
The Company covenants that it will not consolidate with, convert into,
or merge with and into, any other corporation or sell, assign, transfer, lease
or convey all or substantially all of its properties and assets to any Person,
unless:
(i) either the Company shall be the continuing corporation, or
the successor (if other than the Company) shall be a corporation
organized and existing under the laws of the United States of America
or a State thereof or the District of Columbia and such corporation
shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement, the Pledge Agreement, the Indenture
(including any supplement thereto) and the Remarketing Agreement by one
or more supplemental agreements in form reasonably satisfactory to the
Purchase Contract Agent and the Collateral Agent, executed and
delivered to the Purchase Contract Agent and the Collateral Agent by
such corporation; and
(ii) the Company or such successor corporation, as the case
may be, shall not, immediately after such consolidation, conversion,
merger, sale, assignment, transfer, lease or conveyance, be in default
of payment obligations under the Purchase Contracts, this Agreement,
the Pledge Agreement, the Indenture (including any supplement thereto)
or the Remarketing Agreement or in material default in the performance
of any other covenants under any of the foregoing agreements.
SECTION 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of The Hartford Financial Services Group, Inc., any or all of the
Certificates evidencing Units issuable hereunder which theretofore shall not
have been signed by the Company and delivered to the Purchase Contract Agent;
and, upon the order of such successor corporation, instead of the Company, and
subject to all the terms, conditions and limitations in this Agreement
prescribed, the Purchase Contract Agent shall authenticate and execute on behalf
of the Holders and deliver any Certificates which previously shall have been
signed and delivered by the officers of the Company to the Purchase Contract
Agent for authentication and execution, and any Certificate evidencing Units
which such successor corporation thereafter shall cause to be signed and
delivered to the Purchase Contract Agent for that purpose. All the Certificates
85
issued shall in all respects have the same legal rank and benefit under this
Agreement as the Certificates theretofore or thereafter issued in accordance
with the terms of this Agreement as though all of such Certificates had been
issued at the date of the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Units
thereafter to be issued as may be appropriate.
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent.
The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such merger, consolidation, share exchange, sale, assignment,
transfer, lease or conveyance, and any such assumption, complies with the
provisions of this Article and that all conditions precedent to the consummation
of any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Units that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or upon Early Settlement or Cash Merger
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 recreation of Normal Units and where
notices and demands to or upon the Company in respect of the Units and this
Agreement may be served. The Company will give prompt written notice to the
Purchase Contract Agent of the location, and any change in the location, of such
office or agency. The Company initially designates the Corporate Trust Office of
the Purchase Contract Agent as such office of the Company. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Purchase Contract Agent with the address thereof, such
presentations,
86
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Company hereby appoints the Purchase Contract Agent as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Units the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.
SECTION 10.03. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Units evidenced by Outstanding Certificates.
SECTION 10.04. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
SECTION 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate,
stating whether or not to the knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions hereof, and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 10.06. ERISA.
Each Holder from time to time of the Units that is a Plan or who used
assets of a Plan to purchase Units hereby represents that either (i) no portion
of the assets used by such Holder to acquire the Normal Units constitutes assets
of the Plan or (ii) the purchase or holding of the Normal Units by such
purchaser or transferee will not constitute a non-exempt prohibited
87
transaction under Section 406 of ERISA or Section 4973 of the Code or similar
violation under any applicable laws.
SECTION 10.07. Tax Treatment. The Company covenants and agrees, and by
purchasing a Normal Unit or Stripped Unit each Holder agrees, for United States
federal, state and local income and franchise tax purposes, to (i) treat a
Holder's acquisition of the Normal Units or Stripped Units as the acquisition of
the Applicable Ownership Interest in Senior Notes or the Applicable Ownership
Interest in the Treasury Portfolio or the Treasury Securities, as the case may
be, and Purchase Contracts constituting the Normal Units or Stripped Units, as
the case may be, (ii) treat each Holder as the owner of the applicable interest
in the Collateral Account, including the Applicable Ownership Interests in
Senior Notes and Applicable Ownership Interests in the Treasury Portfolio or the
Treasury Securities and (iii) treat the Senior Notes as indebtedness of the
Company.
[SIGNATURES ON THE FOLLOWING PAGE]
88
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
By: /s/ Xxxx X. Xxxxxxxx
_______________________________________
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President and
Treasurer
JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: /s/ Xxxxxx Xxxxxx
_______________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
EXHIBIT A
(FORM OF FACE OF NORMAL UNIT CERTIFICATE)
[For inclusion in Global Certificates only - THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS THE
NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS
CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE
(OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. ______ CUSIP No. __________
Number of Normal Units:______________
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
Normal Units
This Normal Units Certificate certifies that [Cede & Co.] [_______] is
the registered Holder of the number of Normal Units set forth above [For
inclusion in Global Certificates only - or such other number of Normal Units
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto], which number shall not exceed ________. Each Normal Unit
consists of (i) either (a) the beneficial ownership by the Holder of a 5%
undivided beneficial interest in $1,000 principal amount of Senior Notes due
August 16, 2008 (the "APPLICABLE OWNERSHIP INTEREST IN SENIOR NOTES") of The
Hartford Financial Services Group, Inc., a
Delaware corporation (the "COMPANY"), subject to the Pledge of the Applicable
Ownership Interest in Senior Notes by such Holder pursuant to the Pledge
Agreement, or (b) upon the occurrence of a Special Event Redemption prior to the
Purchase Contract Settlement Date or a Successful Remarketing of the Senior
Notes prior to the Final Remarketing Date, the appropriate Applicable Ownership
Interest in the Treasury Portfolio subject to the Pledge of such Applicable
Ownership Interest in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) by such Holder pursuant to the Pledge Agreement, and
(ii) the rights and obligations of the Holder under one Purchase Contract with
the Company. All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Applicable Ownership Interest in
Senior Notes or the Applicable Ownership Interest in the Treasury Portfolio (as
specified in clause (i) of the definition of such term), as the case may be,
constituting part of each Normal Unit evidenced hereby have been pledged to the
Collateral Agent, for the benefit of the Company, to secure the obligations of
the Holder under the Purchase Contract comprising part of such Normal Unit.
The Pledge Agreement provides that all payments of the principal amount
attributable to the Applicable Ownership Interests in Senior Notes or the
Applicable Ownership Interests in the Treasury Portfolio (as specified in clause
(i) of the definition of such term), as the case may be, or interest or
distributions attributable to the Applicable Ownership Interests in Senior Notes
or the Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (ii) of the definition of such term), as the case may be, constituting
part of the Normal Units received by the Securities Intermediary shall be paid
by wire transfer in same day funds (i) in the case of (A) interest attributable
to the Applicable Ownership Interests in Senior Notes or Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (ii) of the
definition of such term), as the case may be, and (B) any payments of principal
on Senior Notes or with respect to the Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of such term),
as the case may be, that have been released from the Pledge pursuant to the
Pledge Agreement, to the Purchase Contract Agent to the account designated by
the Purchase Contract Agent, no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Securities Intermediary (provided
that in the event such payment is received by the Securities Intermediary on a
day that is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30 a.m., New York
City time, on the next succeeding Business Day) and (ii) in the case of payments
with respect to the principal amount of Pledged Senior Notes or with respect to
the Applicable Ownership Interests in the Treasury Portfolio (as specified in
clause (i) of the definition of such term), to the Company on the Purchase
Contract Settlement Date (as described herein) in accordance with the terms of
the Pledge Agreement, in full satisfaction of the respective obligations of the
Holders of the Normal Units of which such Applicable Ownership Interests in
Senior Notes or the Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i) of the definition of such term), as the case may be, are
a part under the Purchase Contracts forming a part of such Normal Units.
Interest on Pledged Senior Notes and
A-2
distributions on the Applicable Ownership Interests in the Treasury Portfolio
(as specified in clause (ii) of the definition of such term), as the case may
be, forming part of Normal Units evidenced hereby, which are payable quarterly
in arrears on February 16, May 16, August 16, and November 16 of each year,
commencing August 16, 2003 (a "PAYMENT DATE"), shall, subject to receipt thereof
by the Purchase Contract Agent from the Securities Intermediary, be paid to the
Person in whose name this Normal Units Certificate (or a Predecessor Normal
Units Certificate) is registered at the close of business on the Record Date for
such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $50.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$0.01 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 or Cash Merger Early
Settlement with respect to such Purchase Contract, 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 any Pledged Senior Notes pursuant to the Remarketing or
the appropriate Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i) of the definition of such term), as the case may be,
pledged to secure the obligations under such Purchase Contract of the Holder of
the Normal Units of which such Purchase Contract is a part.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Normal Units as an acquisition of the Applicable
Ownership Interest in Senior Notes and Purchase Contracts constituting the
Normal Units, (ii) treat itself as owner of the applicable interest in the
Collateral Account, including the Applicable Ownership Interests in Senior Notes
and the Applicable Ownership Interests in the Treasury Portfolio and (iii) treat
the Senior Notes as indebtedness of the Company.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Normal Unit evidenced hereby, an amount (the
"CONTRACT ADJUSTMENT PAYMENTS") equal to 4.44% per year of the Stated Amount.
Such Contract Adjustment Payments shall be payable to the Person in whose name
this Normal Units Certificate is registered at the close of business on the
Record Date for such Payment Date.
Interest on Senior Notes underlying Applicable Ownership Interests in
Senior Notes and distributions on the Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (ii) of the definition of such term)
and the Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the
Normal Units has been terminated, the Contract Adjustment Payments will be
payable, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such
A-3
Person's address as it appears on the Security Register, or by wire transfer to
the account designated by such Person by a prior written notice to the Purchase
Contract Agent.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Normal Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
The Hartford Financial Services Group, Inc.
By: _______________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: JPMORGAN CHASE BANK,
not individually but solely as
Attorney-in-Fact of such Holder
By: _______________________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
DATED: __________________
A-5
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Normal Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: ___________________________
Name: Xxxxxx Xxxxxx
Title: Vice President
Dated: ____________________
A-6
(FORM OF REVERSE OF NORMAL UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of May 23, 2003 (as may be supplemented from time
to time, the "PURCHASE CONTRACT AGREEMENT"), between the Company and JPMorgan
Chase Bank, as Purchase Contract Agent (including its successors hereunder, the
"PURCHASE CONTRACT AGENT"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Purchase Contract Agent, the Company, and the Holders and of
the terms upon which the Normal Units Certificates are, and are to be, executed
and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Normal Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "PURCHASE
PRICE"), a number of shares of Common Stock equal to the Settlement Rate, unless
an Early Settlement, a Cash Merger Early Settlement or a Termination Event with
respect to the Units of which such Purchase Contract is a part shall have
occurred. The "SETTLEMENT RATE" is equal to:
(1) if the Adjusted Applicable Market Value (as defined below)
is greater than or equal to $56.8750 (the "THRESHOLD APPRECIATION
PRICE"), 0.8791 shares of Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than the
Threshold Appreciation Price but greater than $45.5000 (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contact
having a value equal to the Stated Amount divided by the Adjusted
Applicable Market Value, rounded upward or downward to the nearest
1/10,000th of a share; and
(3) if the Adjusted Applicable Market Value is less than or
equal to the Reference Price, 1.0989 shares of Common Stock per
Purchase Contract;
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Normal Units 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 (in the case of an Early Settlement) or applicable Settlement Rate (in the
case of a Cash Merger Early Settlement).
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
A-7
immediately preceding the Purchase Contract Settlement Date subject to
adjustments set forth under Section 5.04 of the Purchase Contract Agreement.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(2) if Common Stock is not listed for trading on the NYSE on
any such date, the closing sale price (or, if no closing price is
reported, the last reported Sale price) per share as reported in the
composite transactions for the principal United States national or
regional securities exchange on which Common Stock is so listed;
(3) if Common Stock is not so listed on a United States
national or regional securities exchange, the last closing sale price
per share as reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid
price for Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the market value of
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company.
A "TRADING DAY" means a day on which Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market
A-8
at the close of business and (2) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that is
the primary market for the trading of Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Normal Units Certificate may pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement or from the proceeds of the Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) or a Remarketing of the related Pledged Senior Notes.
Unless the Applicable Ownership Interests in the Treasury Portfolio have
replaced the Applicable Ownership Interests in Senior Notes as components of
Normal Units, a Holder of Normal Units who (1) does not, on or prior to 5:00
p.m. (New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, notify the Purchase Contract Agent of its
intention to effect a Cash Settlement, or who does so notify the Purchase
Contract Agent but fails to make an effective Cash Settlement prior to 5:00 p.m.
(New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, or (2) on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day prior to the Purchase Contract Settlement
Date, does not make an effective Early Settlement, shall pay the Purchase Price
for the shares of Common Stock to be delivered under the related Purchase
Contract from the proceeds of the sale of the related Pledged Senior Notes held
by the Collateral Agent unless the Holder has previously made a Cash Merger
Early Settlement. Unless the Applicable Ownership Interests in the Treasury
Portfolio have replaced the Applicable Ownership Interests in Senior Notes as
components of Normal Units, such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement on the Final Remarketing
Date. If the Applicable Ownership Interests in the Treasury Portfolio have
replaced the Applicable Ownership Interests in Senior Notes as components of
Normal Units, a Holder of Normal Units who does not notify the Purchase Contract
Agent, on or prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date of its intention to
effect a Cash Settlement shall pay the Purchase Price for the shares of Common
Stock to be delivered under the related Purchase Contract from the proceeds at
maturity of the Applicable Ownership Interests in the Treasury Portfolio (as
defined in clause (i) of the definition of such term).
If, as provided in the Purchase Contract Agreement, upon the occurrence
of a Failed Final Remarketing, the Collateral Agent, for the benefit of the
Company, exercises its rights as a secured creditor with respect to the Pledged
Applicable Ownership Interests in Senior Notes and related Pledged Senior Notes
related to this Normal Units Certificate, any accrued and unpaid interest on the
Pledged Senior Notes attributable to such Applicable Ownership Interests in
Senior Notes will become payable by the Company to the holder of this Normal
Units Certificate in the manner provided for in the Purchase Contract Agreement.
A-9
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
Under the terms of the Pledge Agreement and the Purchase Contract
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Senior Notes, but only
to the extent instructed in writing by the Holders. Upon receipt of notice of
any meeting at which holders of Senior Notes are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Senior Notes, the
Purchase Contract Agent shall, as soon as practicable thereafter, mail to the
Normal Units Holders a notice:
(1) containing such information as is contained in the notice
or solicitation;
(2) stating that each Normal Units Holder on the record date
set by the Purchase Contract Agent therefor (which, to the extent
possible, shall be the same date as the record date for determining the
holders of Senior Notes entitled to vote) shall be entitled to instruct
the Purchase Contract Agent as to the exercise of the voting rights
pertaining to the aggregate principal amount of Pledged Senior Notes
underlying the Applicable Ownership Interests in Senior Notes
constituting a part of such Holder's Normal Units; and
(3) stating the manner in which such instructions may be
given.
Upon the written request of the Normal Units Holders on such record date,
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum aggregate principal amount of Pledged Senior Notes as to
which any particular voting instructions are received. In the absence of
specific instructions from the Holder of a Normal Unit, the Purchase Contract
Agent shall abstain from voting the Pledged Senior Notes underlying the
Applicable Ownership Interests in Senior Notes constituting a part of such
Holder's Normal Unit.
Upon the occurrence of a Special Event Redemption, the Collateral Agent
shall surrender the Pledged Senior Notes against delivery of an amount equal to
the aggregate Redemption Price of the Pledged Senior Notes and shall deposit
funds in the Collateral Account in exchange for the Pledged Senior Notes.
Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral Agent
shall cause the Securities Intermediary to apply an amount equal to the
aggregate Redemption Amount of such funds to purchase on behalf of the Holders
of Normal Units, the Treasury Portfolio and promptly (a) transfer the Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) to the Collateral Account to secure the obligations of
each Holder of Normal Units to purchase shares of Common Stock
A-10
under the Purchase Contracts constituting a part of such Normal Units, (b)
transfer the Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (ii) of the definition of such term) to the Purchase
Contract Agent for the benefit of the Holders of such Normal Units and (c) remit
the remaining portion of such funds to the Purchase Contract Agent for payment
to the Holders of such Normal Units.
Upon the occurrence of a Successful Remarketing of Senior Notes prior
to the Final Remarketing Date, pursuant to the terms of the Remarketing
Agreement, the Remarketing Agent will apply an amount equal to the Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Normal Units,
the Treasury Portfolio, and, after deducting the Remarketing Fee to the extent
permitted under the terms of the Remarketing Agreement, promptly remit the
remaining portion of such proceeds of such Successful Remarketing to the
Purchase Contract Agent for payment to the Holders of such Normal Units.
Following the occurrence of (i) a Special Event Redemption prior to the
Purchase Contract Settlement Date, or (ii) a Successful Remarketing of the
Senior Notes prior to the Final Remarketing Date, the Holders of Normal Units
and the Collateral Agent shall have such security interest rights and
obligations with respect to the Applicable Ownership Interests in the Treasury
Portfolio (as specified in clause (i) of the definition of such term) as the
Holder of Normal Units and the Collateral Agent had in respect of the Applicable
Ownership Interests in Senior Notes, as the case may be, subject to the Pledge
thereof as provided in the Pledge Agreement and any reference herein to the
Applicable Ownership Interests in Senior Notes shall be deemed to be a reference
to such Applicable Ownership Interests in Treasury Portfolio.
The Normal Units Certificates are issuable only in registered form and
only in denominations of a single Normal Unit and any integral multiple thereof.
The transfer of any Normal Units Certificate will be registered and Normal Units
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The Security Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase Contract
Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute a Treasury Security for Applicable Ownership Interests in Senior
Notes, thereby creating 20 Stripped Units, shall be responsible for any fees or
expenses payable in connection therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract underlying a Normal
Units remains in effect, such Normal Units shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such Normal
Units in respect of the Applicable Ownership Interests in Senior Notes and
Purchase Contracts constituting such Normal Units may be transferred and
exchanged only as a Normal Unit.
Unless the Applicable Ownership Interests in the Treasury Portfolio
have replaced the Applicable Ownership Interests in Senior Notes as components
of the Normal Units, and subject
A-11
to the conditions set forth in the Purchase Contract Agreement, the Holder of
Normal Units may substitute, at any time prior to 5:00 p.m. (New York City time)
on the fifth Business Day immediately preceding the Purchase Contract Settlement
Date, for the Applicable Ownership Interests in Senior Notes securing such
Holder's obligations under the related Purchase Contracts, Treasury Securities
in an aggregate principal amount at maturity equal to the aggregate principal
amount of the Senior Notes underlying the aggregate Applicable Ownership
Interests in Senior Notes in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such Collateral Substitution,
each Unit for which such Pledged Treasury Securities secures the Holder's
obligation under the Purchase Contract shall be referred to as a "STRIPPED
UNIT". A Holder may make such Collateral Substitution only in integral multiples
of 20 Normal Units for 20 Stripped Units.
If the Applicable Ownership Interests in the Treasury Portfolio have
replaced the Applicable Ownership Interests in Senior Notes as components of the
Normal Units, a Holder may, at any time on or prior to the second Business Day
immediately preceding the Purchase Contract Settlement Date, substitute Treasury
Securities for the Applicable Ownership Interests in the Treasury Portfolio, but
only in integral multiples of 12,500 Normal Units. In such an event, the Holder
shall transfer Treasury Securities having an aggregate principal amount at
maturity equal to the aggregate Stated Amount of the Normal Units for which such
substitution is being made to the Collateral Agent, and the Purchase Contract
Agent shall instruct the Collateral Agent to release the Pledge of and transfer
to the Holder the appropriate Applicable Ownership Interests in the Treasury
Portfolio.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Normal Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City. If the book-entry system for the Normal Units
has been terminated, the Contract Adjustment Payments will be payable, 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 Security Register, or by
wire transfer to the account designated by such Person by a prior written notice
to the Purchase Contract Agent.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Applicable Ownership Interests in Senior Notes
and the related
A-12
Pledged Senior Notes, or the appropriate Pledged Applicable Ownership Interests
in the Treasury Portfolio (as specified in clause (i) of the definition of such
term), as the case may be, from the Pledge in accordance with the provisions of
the Pledge Agreement. Normal Units shall thereafter represent the right to
receive Senior Notes in an aggregate principal amount equal to the aggregate
principal amount represented by the Applicable Ownership Interests in Senior
Notes forming a part of such Normal Units or the appropriate Applicable
Ownership Interests in the Treasury Portfolio forming a part of such Normal
Units in accordance with the terms of the Purchase Contract Agreement and the
Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Units may be settled early at any time prior to 5:00 p.m. (New York
City time) on the fifth Business Day immediately preceding the Purchase Contract
Settlement Date ("EARLY SETTLEMENT") as provided in the Purchase Contract
Agreement, but only in integral multiples of 20 Units. In order to exercise the
right to effect Early Settlement with respect to any Purchase Contract evidenced
by this Certificate, the Holder of this Normal Units Certificate shall deliver
to the Purchase Contract Agent at the Corporate Trust Office an Election to
Settle Early form set forth below duly completed and accompanied by payment in
the form of immediately available funds payable to the order of 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 next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Senior Notes underlying the Pledged Applicable Ownership
Interests in Senior Notes or the Pledged Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of such term)
underlying such Units 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 Normal
Unit as to which Early Settlement is effected equal to 0.8791 shares of Common
Stock per Purchase Contract (the "EARLY SETTLEMENT RATE"). The Early Settlement
Rate shall be adjusted in the same manner and at the same time as the Settlement
Rate is adjusted as provided in Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Normal Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Normal Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement, but only in integral multiples of
X-00
00 Xxxxx. Xxxx Xxxx Merger Early Settlement of Purchase Contracts by a Holder of
the related Normal Units, the Pledged Senior Notes underlying the Pledged
Applicable Ownership Interests in Senior Notes or Pledged Applicable Ownership
Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) underlying such Normal Units shall be released from the
Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Normal Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Normal Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Normal Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the Normal Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or federal law providing for
reorganization or liquidation, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Purchase Contract Agent to enter into and perform the Purchase
Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Applicable Ownership
Interests in Senior Notes (and the related Senior Notes) or the appropriate
Applicable Ownership Interests in the Treasury Portfolio (as specified in clause
(i) of the definition of such term), as the case may be, underlying this Normal
Units Certificate pursuant to the Pledge Agreement. The Holder further covenants
and agrees that, to the extent and in the manner provided in the Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments with respect to the Applicable Ownership Interests in a Senior Note or
the appropriate Applicable Ownership Interests in the Treasury Portfolio (as
specified in clause (i) of the definition of such term), as the case may be, on
the Purchase Contract Settlement Date shall be paid by the Collateral Agent to
the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflicts of law provisions thereof.
A-14
Prior to due presentment of this Certificate for registration of
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Normal Units Certificate is registered as the owner of the
Normal Units evidenced hereby for the purpose of receiving payments of interest
attributable to the Applicable Ownership Interests in Senior Notes, receiving
payments of Contract Adjustment Payments (subject to any applicable record
date), performance of the Purchase Contracts and for all other purposes
whatsoever, whether or not any payments in respect thereof be overdue and
notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
A-15
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ___________________ Custodian __________________
(cust) (minor)
Under Uniform Gifts to Minors Act of ___________
________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
____________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Normal Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Normal Units Certificates on the books of The Hartford Financial Services
Group, Inc., with full power of substitution in the premises.
Dated: ____________________ Signature __________________________________
NOTICE: The signature to this assignment
must correspond with the name as it appears
upon the face of the within Normal Units
Certificates in every particular, without
alteration or enlargement or any change
whatsoever.
Signature Guarantee: _________________________
A-16
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Normal Units evidenced
by this Normal Units Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated:_______________ _____________________________________
Signature
Signature Guarantee: ________________
(If assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii) Please print name and address of
provide a guarantee of your signature: Registered Holder:
________________________________ _____________________________________
Name Name
________________________________ _____________________________________
Address Address
_______________________________ _____________________________________
_______________________________ _____________________________________
_______________________________ _____________________________________
Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-17
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Normal Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement following a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts underlying the number
of Normal Units evidenced by this Normal Units Certificate specified below. The
undersigned Holder directs that a certificate for shares of Common Stock or
other securities deliverable upon such [Early Settlement] [Cash Merger Early
Settlement] be registered in the name of, and delivered, together with a check
in payment for any fractional share and any Normal Units Certificate
representing any Normal Units evidenced hereby as to which [Early Settlement]
[Cash Merger 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. The Senior Notes or Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, related to
the Purchase Contracts with respect to which the Holder is effecting settlement
deliverable upon such [Early Settlement] [Cash Merger Early Settlement] will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the undersigned,
the undersigned will pay any transfer tax payable incident thereto.
Dated: _______________________ ________________________________
Signature
Signature Guarantee: _______________________
A-18
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Normal REGISTERED HOLDER
Units Certificates are to be registered
in the name of and delivered to and
Senior Notes or the Applicable Ownership
Interests in the Treasury Portfolio, as
the case may be, are to be transferred
to a Person other than the Holder,
please print such Person's name and
address:
Please print name and address of
Registered Holder:
________________________________
Name ______________________________________
Name
________________________________
Address ______________________________________
Address
_______________________________
_______________________________ ______________________________________
_______________________________ ______________________________________
______________________________________
Social Security or other
Taxpayer Identification
Number, if any
______________________________________
A-19
Transfer Instructions for Senior Notes or the Applicable Ownership Interests in
the Treasury Portfolio, as the case may be, transferable upon [Early Settlement]
[Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-20
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Normal Units evidenced by this Global Certificate is
________. The following increases or decreases in this Global Certificate have
been made:
Number of Normal
Amount of increase in Amount of decrease in Units evidenced by this
Number of Normal Number of Normal Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
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A-21
EXHIBIT B
(FORM OF FACE OF STRIPPED UNIT CERTIFICATE)
[For inclusion in Global Certificate only - THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. ____ CUSIP No. ___________
Number of Stripped Units:___________
The Hartford Financial Services Group, Inc.
Stripped Units
This Stripped Units Certificate certifies that [Cede & Co.]
[__________________] is the registered Holder of the number of Stripped Units
set forth above [For inclusion in Global Certificates only - or such other
number of Stripped Units as is reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto], which number shall not exceed
___________. Each Stripped Unit consists of (i) a 1/20 undivided beneficial
ownership interest of a Treasury Security having a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract with The
Hartford Financial Services Group, Inc., a Delaware corporation (the "COMPANY").
All capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each Stripped Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract comprising part of such Stripped Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Stripped Units
Certificate to purchase, and the Company, to sell, on August 16, 2006 (the
"PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $50.00 (the "STATED
AMOUNT"), a number of newly issued shares of common stock, par value $0.01 per
share ("COMMON STOCK"), of the Company, equal to the Settlement Rate, unless
prior to or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event, an Early Settlement or a Cash Merger Early Settlement with
respect to such Purchase Contract, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "PURCHASE PRICE") for the shares of Common Stock purchased pursuant to each
Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the
Purchase Contract Settlement Date by application of the proceeds from the
Treasury Securities at maturity pledged to secure the obligations of the Holder
under such Purchase Contract of the Stripped Units of which such Purchase
Contract is a part.
Each Purchase Contract evidenced hereby obligates the Holder to agree,
for United States federal, state and local income and franchise tax purposes, to
(i) treat an acquisition of the Stripped Units as an acquisition of the Treasury
Securities and Purchase Contracts constituting the Stripped Units and (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Treasury Securities.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Stripped Unit evidenced hereby, an amount
(the "CONTRACT ADJUSTMENT PAYMENTS") equal to 4.44% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Stripped Units Certificate is registered at the close of
business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the Units
has been terminated, the Contract Adjustment Payments will be payable, 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 Security Register, or by
wire transfer to the account designated by such Person by a prior written notice
to the Purchase Contract Agent.
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.
B-2
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Stripped Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
The Hartford Financial Services Group, Inc.
By:____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: JPMORGAN CHASE BANK,
not individually but solely as
Attorney-in-Fact of such Holder
By:____________________________________
Authorized Officer
Dated:_____________________
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Stripped Units referred to in the within-mentioned
Purchase Contract Agreement.
By: JPMORGAN CHASE BANK,
as Purchase Contract Agent
By: _______________________
Authorized Officer
Dated:_________________
B-4
(REVERSE OF STRIPPED UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of May 23, 2003 (as may be supplemented from time
to time, the "PURCHASE CONTRACT AGREEMENT") between the Company and JPMorgan
Chase Bank, as Purchase Contract Agent (including its successors thereunder,
herein called the "PURCHASE CONTRACT AGENT"), to which the Purchase Contract
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Purchase Contract Agent, the Company and the
Holders and of the terms upon which the Stripped Units Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Stripped Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "PURCHASE
PRICE") a number of newly issued shares of Common Stock equal to the Settlement
Rate, unless an Early Settlement, a Cash Merger Early Settlement or a
Termination Event with respect to the Units of which such Purchase Contract is a
part shall have occurred. The "SETTLEMENT RATE" is equal to:
(1) if the Adjusted Applicable Market Value (as defined below)
is greater than or equal to $56.8750 (the "THRESHOLD APPRECIATION
PRICE"), 0.8791 shares of Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than the
Threshold Appreciation Price but greater than $45.5000 (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contact
having a value equal to the Stated Amount divided by the Adjusted
Applicable Market Value, rounded upward or downward to the nearest
1/10,000th of a share; and
(3) if the Adjusted Applicable Market Value is less than or
equal to the Reference Price, 1.0989 shares of Common Stock per
Purchase Contract;
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Stripped Units 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 (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
The "APPLICABLE MARKET VALUE" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day
B-5
immediately preceding the Purchase Contract Settlement Date, subject to
adjustments set forth under Section 5.04 hereof.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means the:
(1) closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(2) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price (or, if no closing price is
reported, the last reported Sale price) per share as reported in the
composite transactions for the principal United States national or
regional securities exchange on which the Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States
national or regional securities exchange, the last closing sale price
per share as reported by The Nasdaq Stock Market, Inc.;
(4) if the Common Stock is not so reported, the last quoted
bid price for the Common Stock in the over-the-counter market as
reported by the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the market value of
the Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company.
B-6
A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Stripped Unit shall pay the Purchase Price for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting an Early Settlement or, if applicable, a Cash Merger Early
Settlement of each such Purchase Contract or by applying a principal amount of
the Pledged Treasury Securities underlying such Holder's Stripped Unit equal to
the Stated Amount of such Purchase Contract to the purchase of the Common Stock.
A Holder of Stripped Units who (1) on or prior to 5:00 p.m. (New York City time)
on the fifth Business Day prior to the Purchase Contract Settlement Date, does
not make an effective Early Settlement, or (2) on or prior to 5:00 p.m. (New
York City time) on the fifth Business Day prior to the Purchase Contract
Settlement Date, does not make an effective Cash Merger 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 Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) forming a part of each Stripped Unit. A Stripped Unit shall
thereafter represent the right to receive the Proceeds of the Treasury Security
forming a part of such Stripped Unit, in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement.
The Stripped Units Certificates are issuable only in registered form
and only in denominations of a single Stripped Unit and any integral multiple
thereof. The transfer of any Stripped Units Certificate will be registered and
Stripped Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the
B-7
Purchase Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase Contract
Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes, for Treasury Securities, thereby recreating Normal
Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract underlying a Stripped Unit remains in effect, such Stripped
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Stripped Unit in respect of the Treasury
Security and the Purchase Contract constituting such Stripped Unit may be
transferred and exchanged only as a Stripped Unit.
Unless the Applicable Ownership Interests in the Treasury Portfolio
have replaced the Applicable Ownership Interests in Senior Notes as components
of the Normal Units and subject to the conditions set forth in the Purchase
Contract Agreement, a Holder of Stripped Units may recreate, at any time prior
to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, Normal Units by delivering to
the Securities Intermediary Senior Notes with an aggregate principal amount,
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement. From and after such substitution, the Holder's Units shall be
referred to as a "NORMAL UNIT". Any such creation of Normal Units may be
effected only in multiples of 20 Stripped Units for 20 Normal Units.
If the Applicable Ownership Interests in the Treasury Portfolio have
replaced the Applicable Ownership Interests in Senior Notes as a components of
the Normal Units, a Holder may, at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date, substitute the
Applicable Ownership Interests in the Treasury Portfolio for the Treasury
Securities, but only in integral multiples of 12,500 Stripped Units. In such an
event, the Holder shall transfer to the Collateral Agent the Applicable
Ownership Interest in the Treasury Portfolio in an amount such that the
aggregate principal amount at maturity of the portion of such Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) is equal to the aggregate Stated Amount of the Purchase
Contracts underlying such Stripped Units, and the Purchase Contract Agent shall
instruct the Collateral Agent to release the Pledge of and transfer to the
Holder the Treasury Securities.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Stripped Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Holder, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Security Register.
B-8
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Units 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 Contract evidenced by this Certificate,
the Holder of this Stripped Units Certificate shall deliver to the Purchase
Contract Agent at the Corporate Trust Office an Election to Settle Early form
set forth below duly completed and accompanied by payment in the form of
immediately available funds payable to the order of 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 next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities underlying such Units 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 Stripped Unit as to which Early Settlement
is effected equal to 0.8791 shares of Common Stock per Purchase Contract (the
"EARLY SETTLEMENT RATE"). The Early Settlement Rate shall be adjusted in the
same manner and at the same time as the Settlement Rate is adjusted as provided
in Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Stripped Units may
effect Cash Merger Early Settlement of the Purchase Contract underlying such
Stripped Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Stripped Units, the Pledged Treasury Securities underlying
such Stripped Units shall be released from the Pledge as provided in the Pledge
Agreement.
Upon registration of transfer of this Stripped Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Stripped Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
B-9
The Holder of this Stripped Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Stripped Units evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the debtor under the Bankruptcy
Code or subject to other similar state or Federal law providing for
reorganization, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities underlying this Stripped Units
Certificate pursuant to the Pledge Agreement. The Holder further covenants and
agrees, that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged Treasury Securities
on the Purchase Contract Settlement Date shall be paid by the Collateral Agent
to the Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of a majority of the
Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law provisions thereof.
Prior to due presentment of this Certificate for registration or
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Stripped Units Certificate is registered as the owner of the
Stripped Units evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
ABBREVIATIONS
B-10
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ______________________Custodian_______________________
(cust) (minor)
Under Uniform Gifts to Minors Act of__________________
______________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
______________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Stripped Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________ attorney to transfer said
Stripped Units Certificates on the books of The Hartford Financial Services
Group, Inc., with full power of substitution in the premises.
Dated: _______________________ ________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Stripped Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ________________________________
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of Stripped Units evidenced
by this Stripped Units Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the undersigned at
the address indicated below unless a different name and address have been
indicated below. If shares are to be registered in the name of a Person other
than the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: ________________________________ ____________________________________
Signature
Signature Guarantee: ______________
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii)
provide a guarantee of your signature: Please print name and address of
Registered Holder:
_______________________________________ ____________________________________
Name Name
_______________________________________ ____________________________________
Address Address
_______________________________________ ____________________________________
_______________________________________ ____________________________________
_______________________________________ ____________________________________
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
B-12
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Stripped Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement upon a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts underlying the number
of Stripped Units evidenced by this Stripped Units Certificate specified below.
The option to effect [Early Settlement] [Cash Merger Early Settlement] may be
exercised only with respect to Purchase Contracts underlying Stripped Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock or
other securities deliverable upon such [Early Settlement] [Cash Merger Early
Settlement] be registered in the name of, and delivered, together with a check
in payment for any fractional share and any Stripped Units Certificate
representing any Stripped Units evidenced hereby as to which Cash Merger 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] [Cash Merger Early Settlement] will be transferred in accordance
with the transfer instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ____________________________ ____________________________________
Signature
Signature Guarantee:___________________
B-13
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Stripped REGISTERED HOLDER
Units Certificates are to be registered
in the name of and delivered to and
Pledged Treasury Securities are to be
transferred to a Person other than the
Holder, please print such Person's name
and address:
Please print name and address of
Registered Holder:
_______________________________________
Name ____________________________________
Name
_______________________________________
Address ____________________________________
_______________________________________ Address
_______________________________________ ____________________________________
_______________________________________ ____________________________________
____________________________________
Social Security or other
Taxpayer Identification
Number, if any
____________________________________
B-14
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
B-15
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Stripped Units evidenced by this Global Certificate is 0.
The following increases or decreases in this Global Certificate have been made:
Number of Stripped
Amount of increase in Amount of decrease in Units evidenced by this
Number of Stripped Number of Stripped Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
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B-16
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
JPMorgan Chase Bank
The Purchase Contract Agent
4 New York Plaza, 15th Floor,
New York, New York 10004
Attention: Institutional Trust Services
Re: [_______ Normal Units] [_______ Stripped Units] of The Hartford
Financial Services Group, Inc., a Delaware corporation (the "COMPANY").
The undersigned Holder hereby notifies you that it has delivered to
JPMorgan Chase Bank, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate principal amount of [Senior Notes] [Treasury
Securities] in exchange for the [Pledged Senior Notes] [Pledged Treasury
Securities] held in the Collateral Account, in accordance with the Pledge
Agreement, dated as of May __, 2003 (the "PLEDGE AGREEMENT"; unless otherwise
defined herein, terms defined in the Pledge Agreement are used herein as defined
therein), between you, the Company, the Collateral Agent, the Custodial Agent
and the Securities Intermediary. The undersigned Holder has paid all applicable
fees and expenses relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Senior Notes] [Pledged Treasury Securities]
related to such [Normal Units] [Stripped Units].
Date: _________________________________ ____________________________________
Signature
Signature Guarantee: ____________________
Please print name and address of Registered Holder:
_______________________________________ ____________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
_______________________________________
_______________________________________
_______________________________________
_______________________________________
C-2
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_______________________________________
_______________________________________
Attention:
Telecopy: __________
Re: [__________ Normal Units] [______ Stripped Units] of The
Hartford Financial Services Group, Inc., a Delaware
corporation (the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of May __,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of Normal Units and [Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) and]
Stripped Units from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Senior Notes] [Applicable Ownership Interests (as specified in clause (i)
of the definition of such term) in the Treasury Portfolio] [the Treasury
Securities] compromising a portion of your ownership interest in _____ [Normal
Units] [Stripped Units] have been released and are being held by us for your
account pending receipt of transfer instructions with respect to such [Senior
Notes][Treasury Securities] (the "RELEASED SECURITIES").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [Normal
Units][Stripped Units] effected through book-entry or by delivery to us of your
[Normal Units Certificate][Stripped Units Certificate], we shall transfer the
Released Securities by book-entry transfer or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any distributions thereon, shall be
held in our name, or a nominee in trust for your benefit, until such time as
such [Normal Units][Stripped Units] are transferred or your [Normal Units
Certificate] [Stripped Units Certificate] is surrendered or satisfactory
evidence is provided that such [Normal Units Certificate][Stripped Units
Certificate] has been destroyed, lost or stolen, together with any
indemnification that we or the Company may require.
Date: By: JPMORGAN CHASE BANK,
as the Purchase Contract Agent
____________________________________
Name:
Title: Authorized Signatory
D-2
EXHIBIT E
NOTICE TO SETTLE BY CASH
JPMorgan Chase Bank
The Purchase Contract Agent
4 New York Plaza, 15th Floor,
New York, New York 10004
Attention: Institutional Trust Services
Re: _______ Normal Units of The Hartford Financial Services
Group, Inc., a Delaware corporation (the "COMPANY")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02(c) of the Purchase Contract Agreement, dated as of May __,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers' check or wire transfer, in immediately
available funds), $______ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company with respect to _____ Purchase Contracts
on the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holder's election to make such Cash Settlement with respect to the Purchase
Contracts related to such Holder's Normal Units.
Date: _________________________________ ____________________________________
Signature
Signature Guarantee:________________
Please print name and address of Registered Holder:
E-1
