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EXHIBIT 4.8
THE CHUBB CORPORATION
and
BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of June [ ], 2003
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ARTICLE 1DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions.............................................................................. 1
SECTION 1.02. Compliance Certificates and Opinions..................................................... 16
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent................................... 16
SECTION 1.04. Acts of Holders; Record Dates............................................................ 17
SECTION 1.05. Notices.................................................................................. 18
SECTION 1.06. Notice to Holders; Waiver................................................................ 19
SECTION 1.07. Effect of Headings and Table of Contents................................................. 20
SECTION 1.08. Successors and Assigns................................................................... 20
SECTION 1.09. Separability Clause...................................................................... 20
SECTION 1.10. Benefits of Agreement.................................................................... 20
SECTION 1.11. Governing Law............................................................................ 20
SECTION 1.12. Legal Holidays........................................................................... 20
SECTION 1.13. Counterparts............................................................................. 21
SECTION 1.14. Inspection of Agreement.................................................................. 21
SECTION 1.15. Appointment of Financial Institution as Agent for the Company............................ 21
SECTION 1.16. No Waiver................................................................................ 21
ARTICLE 2CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.......................................................... 21
SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication.......................... 22
ARTICLE 3THE UNITS
SECTION 3.01. Amount; Form and Denominations........................................................... 23
SECTION 3.02. Rights and Obligations Evidenced by the Certificates..................................... 23
SECTION 3.03. Execution, Authentication, Delivery and Dating........................................... 24
SECTION 3.04. Temporary Certificates................................................................... 25
SECTION 3.05. Registration; Registration of Transfer and Exchange...................................... 25
SECTION 3.06. Book-Entry Interests..................................................................... 27
SECTION 3.07. Notices to Holders....................................................................... 27
SECTION 3.08. Appointment of Successor Depositary...................................................... 27
SECTION 3.09. Definitive Certificates.................................................................. 28
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates....................................... 28
SECTION 3.11. Persons Deemed Owners.................................................................... 30
SECTION 3.12. Cancellation............................................................................. 30
SECTION 3.13. Creation of Treasury Units by Substitution of Treasury Securities........................ 31
SECTION 3.14. Recreation of Corporate Units............................................................ 32
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event.............................. 34
SECTION 3.16. No Consent to Assumption................................................................. 35
ARTICLE 4THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY
PORTFOLIO
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SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved................................. 35
SECTION 4.02. Notice and Voting........................................................................ 36
SECTION 4.03. Special Event Redemption................................................................. 37
ARTICLE 5THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock....................................................... 38
SECTION 5.02. Remarketing; Payment of Stated Amount.................................................... 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......................................................................... 62
SECTION 5.08. Intentionally Omitted.................................................................... 65
SECTION 5.09. No Fractional Shares..................................................................... 65
SECTION 5.10. Charges and Taxes........................................................................ 65
SECTION 5.11. Contract Adjustment Payments............................................................. 66
SECTION 5.12. Deferral of Contract Adjustment Payments................................................. 71
ARTICLE 6REMEDIES
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.................................................................... 73
SECTION 6.06. Waiver of Stay or Extension Laws......................................................... 73
ARTICLE 7THE 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........................................................................... 76
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
SECTION 7.09. Resignation and Removal; Appointment of Successor........................................ 78
SECTION 7.10. Acceptance of Appointment by Successor................................................... 79
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................................................ 80
SECTION 7.14. Tax Compliance........................................................................... 81
ARTICLE 8SUPPLEMENTAL AGREEMENTS
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SECTION 8.01. Supplemental Agreements Without Consent of Holders....................................... 82
SECTION 8.02. Supplemental Agreements with Consent of Holders.......................................... 82
SECTION 8.03. Execution of Supplemental Agreements..................................................... 83
SECTION 8.04. Effect of Supplemental Agreements........................................................ 84
SECTION 8.05. Reference to Supplemental Agreements..................................................... 84
ARTICLE 9CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under
Certain Conditions............................................................................. 84
SECTION 9.02. Rights and Duties of Successor Corporation............................................... 85
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent............ 85
ARTICLE 10COVENANTS
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......................................................... 86
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. Tax Treatment........................................................................... 87
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EXHIBITS
Exhibit A - Form of Corporate Units Certificate
Exhibit B - Form of Treasury 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
Exhibit F - Notice from Purchase Contract Agent to Collateral Agent
Exhibit G - Form of Remarketing Agreement
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PURCHASE CONTRACT AGREEMENT, dated as of June [ ], 2003,
between THE CHUBB CORPORATION, a New Jersey corporation (the
"COMPANY"), and BANK ONE TRUST COMPANY, N.A., a national banking
association, 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" means the receipt at any time prior to the
earlier of the date of any Successful Remarketing and the Purchase
Contract Settlement Date by the audit committee of the
Board of Directors of a written report in accordance with Statement on
Auditing Standards ("SAS") No. 97, "Amendment to SAS No. 50-Reports on
the Application of Accounting Principles," from the Company's
independent auditors, provided at the request of the management of the
Company, to the effect that, as a result of a change in accounting
rules after the date of original issuance of the Senior Notes, the
Company must either (a) account for the Purchase Contracts as
derivatives under SFAS 133 (or any successor accounting standard) or
(b) account for the Units using the if-converted method under SFAS 128
(or any successor accounting standard), and that such accounting
treatment will cease to apply upon redemption of the Senior Notes.
"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" shall mean, with respect to a
Corporate Unit and the Treasury Portfolio represented by such Corporate
Unit, (i) a 2.5% 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 0.025% 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 the Senior Notes that are represented by Corporate Units.
"APPLICANTS" has the meaning set forth in Section 7.12(b).
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"BANKRUPTCY CODE" means title 11 of the United States Code, or
any other law of the United States that from time to time provides a
uniform system of bankruptcy laws.
"BENEFICIAL OWNER" means, with respect to a Book-Entry
Interest, a Person who is the beneficial owner of such Book-Entry
Interest as reflected on the books of the 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 any other day on which banking institutions and
trust companies in New York City, New York are permitted 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 DTC is
closed.
"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 Corporate Units Certificate or a
Treasury 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.
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"COLLATERAL ACCOUNT" has the meaning set forth in Section
1.01(d) of the Pledge Agreement.
"COLLATERAL AGENT" means BNY Midwest Trust Company, an
Illinois trust company, 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
Corporate Unit in connection with the creation of a Treasury Unit from
such Corporate Unit, (x) the substitution for the Pledged Senior Note
represented by such Corporate Unit by Treasury Securities in accordance
with Section 3.13, or (y) the substitution for the Pledged Applicable
Ownership Interest in the Treasury Portfolio represented by such
Corporate Unit by Treasury Securities in accordance with Section 3.13,
or (ii) with respect to a Treasury Unit in connection with the
recreation of a Corporate Unit from such Treasury Unit, (x) the
substitution for the Pledged Treasury Securities represented by such
Treasury Unit (if the Applicable Ownership Interest in the Treasury
Portfolio has not replaced the Senior Note represented by the Corporate
Unit) by Senior Notes in accordance with Section 3.14, or (y) the
substitution for the Pledged Treasury Securities represented by such
Treasury Unit (if the Applicable Ownership Interest in the Treasury
Portfolio has replaced the Senior Note represented by the Corporate
Unit) by the appropriate Applicable Ownership Interest in the Treasury
Portfolio in accordance with Section 3.14.
"COMMON STOCK" means the common stock, par value $1.00 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 [ ]% 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 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000
(Fax: (000) 000-0000).
"CORPORATE UNIT" means the collective rights and obligations
of a Holder of a Corporate Units Certificate in respect of (i) the
Purchase Contracts represented thereby and (ii) the Senior Notes (or
the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be) (subject in each case (except for the
appropriate Applicable Ownership Interest specified in clause (ii) of
the definition of such term) to the Pledge thereof) represented
thereby.
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"CORPORATE UNITS CERTIFICATE" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Corporate Units specified on such certificate.
"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).
"CUSTODIAL AGENT" means BNY Midwest Trust Company, an Illinois
trust company, 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.
"DEFERRED CONTRACT ADJUSTMENT PAYMENTS" has the meaning
provided in Section 5.12.
"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.
"EXCHANGE PROPERTY" has the meaning set forth in Section
5.04(b).
"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).
5
"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).
"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 each such Depositary Participant acting at the
direction of the Beneficial Owners holding through such Depositary
Participant.
"INDEBTEDNESS" means indebtedness of any kind of the Company.
"INDENTURE" means the Indenture, dated as of October 25, 1989,
between the Company and the Indenture Trustee (including any provisions
of the TIA that are deemed incorporated therein), pursuant to which the
Senior Notes will be issued.
"INDENTURE TRUSTEE" means Bank One Trust Company, N.A.
(successor in interest to The First National Bank of Chicago), 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
6
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).
"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)
Corporate Units representing Senior Notes or Applicable
Ownership Interests in the Treasury Portfolio that have been
theretofore deposited with the Purchase Contract Agent in
trust for the Holders of such Corporate Units and (y) Treasury
Units;
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(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
Senior Notes, the Treasury Securities or the appropriate Applicable
Ownership Interest (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, as the case may be, in each case
represented by the Units (it being understood that the appropriate
Applicable Ownership Interest (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio shall not be subject
to the Pledge).
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"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of
June [ ], 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" 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 Corporate Units
Certificate or a Predecessor Treasury Units Certificate.
"PREDECESSOR CORPORATE UNITS CERTIFICATE" of any particular
Corporate Units Certificate means every previous Corporate Units
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Corporate Units evidenced
thereby; and, for the purposes of this definition, any Corporate Units
Certificate authenticated and delivered under Section 3.10 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen Corporate
Units Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed,
lost or stolen Corporate Units Certificate.
"PREDECESSOR TREASURY UNITS CERTIFICATE" of any particular
Treasury Units Certificate means every previous Treasury Units
Certificate evidencing all or a portion of the rights and obligations
of the Company and the Holder under the Treasury Units evidenced
thereby; and, for the purposes of this definition, any Treasury Units
Certificate authenticated and delivered under Section 3.10 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen Treasury Units
Certificate shall be deemed to evidence the same rights and obligations
of the Company and the Holder as the mutilated, destroyed, lost or
stolen Treasury Units Certificate.
"PRICING COMMITTEE RESOLUTIONS" means the resolutions of the
Pricing Committee of the Company's Board of Directors dated as of [ ],
2003, including Exhibit B thereto, setting forth the terms and
conditions of the Senior Notes.
"PRIMARY TREASURY DEALER" shall mean a primary U.S. government
securities dealer.
"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.
9
"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
purchase contract represented by such Unit and obligating the Company
(i) to sell, against the Holder's payment of the Stated Amount, shares
of Common Stock and (ii) to pay the Holder thereof Contract Adjustment
Payments, in each case on the terms and subject to the conditions set
forth in Article Five hereof.
"PURCHASE CONTRACT AGENT" means the Person named as the
"PURCHASE CONTRACT AGENT" in the first paragraph of this Agreement
until a successor Purchase Contract Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter
"PURCHASE CONTRACT AGENT" shall mean such Person 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.
"PURCHASED SHARES" has the meaning set forth in Section
5.04(a)(6).
["PUT RIGHT" has the meaning set forth in Exhibit B to the
Pricing Committee Resolutions.]
"QUOTATION AGENT" means any Primary Treasury Dealer selected
by the Company.
"RECORD DATE" for any distribution or 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 less than sixty Business Days prior to such Payment
Date.
"REDEMPTION AMOUNT" means, for each Senior Note, an amount
equal to the product of the principal amount of that Senior Note and a
fraction, the numerator of which is the Treasury Portfolio Purchase
Price and the denominator of which is the Applicable Principal Amount.
"REDEMPTION PRICE" means, for each Senior Note, the Redemption
Amount plus any accrued and unpaid interest on such Senior Note to but
excluding the Special Event Redemption Date.
"REFERENCE DEALER" means a dealer engaged in trading of
convertible securities.
10
"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.
"REMARKETED SENIOR NOTES" means, as of the applicable
Remarketing Date, the Senior Notes that are represented by Corporate
Units, and each Separate Senior Note for which the Holder has elected
to have such Separate Senior Note included in the applicable
Remarketing.
"REMARKETING" means the remarketing of the Senior Notes by the
Remarketing Agent pursuant to the Remarketing Agreement.
"REMARKETING AGENT" means the remarketing agent specified in
the Remarketing Agreement.
"REMARKETING AGREEMENT" means the Remarketing Agreement
substantially in the form of Exhibit G hereto to be entered into prior
to the Initial Remarketing Date among the Company, the Remarketing
Agent and the Purchase Contract Agent, as amended from time to time.
"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).
"REMARKETING PER SENIOR NOTE PRICE" means the Treasury
Portfolio Purchase Price divided by the number of Senior Notes
represented by Corporate Units and remarketed in the Initial
Remarketing, the Second Remarketing or the Third Remarketing, as the
case may be.
"REORGANIZATION EVENT" has the meaning set forth in Section
5.04(b).
"RESET RATE" means (i) in the case of a Successful Remarketing
prior to the Final Remarketing Date, the interest rate per annum on the
Senior Notes determined by the Remarketing Agent as necessary to
remarket the Remarketed Senior Notes at a price per Remarketed Senior
Note such that the aggregate price for the Remarketed Senior Notes is
equal to approximately (but not less than) 100.50% of the sum of the
Treasury Portfolio Purchase Price and Separate Senior Notes Purchase
Price, and (ii) in the case of a Successful Remarketing on the Final
Remarketing Date, the interest rate per annum on the Senior Notes
determined by the Remarketing Agent as necessary to remarket the
Remarketed Senior Notes at a price per Remarketed Senior Note such that
the aggregate price for the Remarketed Senior Notes is equal to
approximately 100.50% (but not less than 100%, net of any Remarketing
Fee) of the aggregate principal amount of the Remarketed Senior Notes;
provided that if there are no Corporate Units
11
outstanding and none of the Holders elect to have Separate Senior Notes
held by them remarketed, or in the case of a Failed Remarketing, the
interest rate payable on the Senior Notes will not be reset and the
interest rate payable on the Senior Notes shall continue to be [ ]% per
year; provided further that in no event shall the Reset Rate exceed the
maximum rate, if any, permitted by applicable law.
"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).
"RIGHTS AGREEMENT" 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.
"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 BNY Midwest Trust Company, an
Illinois trust company, 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 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 are no longer
represented by Corporate Units.
"SEPARATE SENIOR NOTES PURCHASE PRICE" means the amount in
cash equal to the product of the Remarketing Per Senior Note Price
multiplied by the number of Separate Senior Notes remarketed in the
Initial Remarketing, the Second Remarketing or the Third Remarketing,
as the case may be.
"SETTLEMENT RATE" has the meaning set forth in Section 5.01.
"SPECIAL EVENT" means either a Tax Event or an Accounting
Event.
12
"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 $25.00.
"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).
"TAX EVENT" means the receipt by the Company of an opinion of
counsel, rendered by a law firm having a recognized national law
practice, at any time prior to the earlier of the date of any
Successful Remarketing and the Purchase Contract Settlement Date, to
the effect that, as a result of any amendment to, change in or
announced proposed change in the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority
thereof or therein, or as a result of any official administrative
decision, pronouncement, judicial decision or action interpreting or
applying such laws or regulations, which amendment or change is
effective or which proposed change, pronouncement, action or decision
is announced on or after the date of original issuance of the Senior
Notes, there is more than an insubstantial increase in the risk that
interest payable by the Company on the Senior Notes is not, or within
90 days of the date of such opinion, will not be, deductible by the
Company, in whole or in part, for United States federal income tax
purposes.
"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;
13
(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
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.
"TREASURY PORTFOLIO" means a portfolio of (1) 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 (2) (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.
14
"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 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(i) zero-coupon U.S. treasury
securities that mature on July 15, 2006 (CUSIP No. ________) and,
during the period between July 15, 2006 and August 15, 2006, the
Proceeds from such Treasury Securities, and (ii) zero-coupon U.S.
treasury securities that mature on August 15, 2006 (CUSIP No. [ ]).
"TREASURY UNIT" means, following the substitution of Treasury
Securities for Pledged 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 Treasury Units Certificate in respect of
(i) the Purchase Contracts represented thereby and (ii) such Treasury
Securities (subject to the Pledge thereof) represented thereby.
"TREASURY UNITS CERTIFICATE" means a certificate evidencing
the rights and obligations of a Holder in respect of the number of
Treasury Units specified on such certificate.
"UNDERWRITERS" means the underwriters identified in Schedule
II to the Underwriting Agreement.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement,
dated November 25, 2002, among the Company and the Underwriters.
"UNIT" means a Corporate Unit or a Treasury 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 1.2. 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, except that in the case of any such application or
request as to which the furnishing of such document is specifically
required by any provision of this Agreement relating to such particular
application or request, no additional certificate need be furnished.
15
Every certificate 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 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
contained in such certificate are based;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or
investigation as is necessary to enable such individual to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
SECTION 1.3. 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 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given
or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in
person or by an agent duly appointed in writing; and, except as herein
otherwise expressly
16
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 that the
Purchase Contract Agent deems sufficient.
(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
Corporate Units and the Outstanding Treasury Units, as the case may be,
on such record date, and no other Holders, shall be entitled to take
the relevant action with respect to the Corporate Units or the Treasury
Units, as the case may be, whether or not such Holders remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken 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
17
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 1.5. Notices.
Any notice or communication is duly given if in writing and
delivered in Person or mailed by first-class mail (registered or
certified, return receipt requested), telecopier (with receipt
confirmed) or overnight air courier guaranteeing next day delivery, to
the others' address; provided that notice shall be deemed given to the
Purchase Contract Agent only upon receipt thereof:
If to the Purchase Contract Agent:
Bank One Trust Company, N.A.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Fax: (000) 000-0000
If to the Company:
The Chubb Corporation
00 Xxxxxxxx Xxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
Fax: (000) 000-0000
If to the Collateral Agent:
BNY Midwest Trust Company
0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Finance
Fax: (000) 000-0000
If to the Indenture Trustee:
Bank One Trust Company, N.A.
000 Xxxx 00xx Xxxxxx
00
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Fax: (000) 000-0000
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.
SECTION 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to each Holder affected by such event, at its address as it
appears in the 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 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction
hereof.
SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company
and the Purchase Contract Agent shall bind their respective successors
and assigns, whether so expressed or not.
SECTION 1.9. 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.
19
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 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 Purchase Contracts represented by the
Units shall be governed by, and construed in accordance with, the laws
of the State of New York.
SECTION 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement, the Purchase
Contracts or the Senior Notes), 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 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 2.1. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract
represented by each Unit evidenced thereby) shall be in substantially
the form set forth in Exhibit A hereto (in the case of Certificates
evidencing Corporate Units) or Exhibit B hereto (in the case of
Certificates evidencing Treasury Units), with such letters, numbers or
other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be
required by the rules of any securities exchange on which the 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 Certificates
evidencing the Units, 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
21
IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS
CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE
OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED
IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.2. 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 3.1. 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 [ ], except for Certificates authenticated,
executed and delivered upon registration of transfer of, in exchange
for, or in lieu of, other Certificates pursuant to Sections 3.04, 3.05,
3.10, 3.13, 3.14 or 8.05.
The Certificates shall be issuable only in registered form and
only in denominations of a single Corporate Unit or Treasury Unit and
any integral multiple thereof.
22
SECTION 3.2. Rights and Obligations Evidenced by the
Certificates.
Each Corporate Units Certificate shall evidence the number of
Corporate Units specified therein, with each such Corporate Unit
representing (1) the ownership by the Holder thereof of a beneficial
interest in a Senior Note or the Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, subject to the Pledge of such
Senior Note or the Applicable Ownership Interest (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio,
as the case may be, by such Holder pursuant to the Pledge Agreement,
and (2) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Purchase Contract Agent is
hereby authorized, as attorney-in-fact for, and on behalf of, the
Holder of each Corporate Unit, to pledge, pursuant to the Pledge
Agreement, the Senior Note and the Applicable Ownership Interest (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio, if any, represented by such Corporate 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 Senior Note and
the Applicable Ownership Interest (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio, if any, to secure
the obligation of the Holder under each Purchase Contract to pay the
Stated Amount of such Purchase Contract and thereby purchase shares of
Common Stock.
Upon the formation of a Treasury Unit pursuant to Section
3.13, each Treasury Unit Certificate shall evidence the number of
Treasury Units specified therein, with each such Treasury Unit
representing (1) the ownership by the Holder thereof of a 1/40
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 Treasury
Unit, to pledge, pursuant to the Pledge Agreement, such Holder's
interest in the Treasury Security represented by such Treasury 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 pay the Stated Amount of such Purchase Contract
and thereby purchase shares of Common Stock.
Prior to the purchase of shares of Common Stock under any
Purchase Contract, such Purchase Contract shall not entitle the Holder
of the Unit representing such Purchase Contract 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 3.3. 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 Vice Chairman of the Board
of Directors, its Chief Executive Officer, its President, its
Treasurer, its Secretary 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.
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 3.4. 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 that are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with such letters,
numbers or other marks of identification or designation and such
legends or endorsements printed, lithographed or engraved thereon as
may be required by the rules of any securities exchange on which the
Corporate Units or Treasury Units, as the case may be, are 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 3.5. Registration; Registration of Transfer and
Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust
Office a register (the "SECURITY REGISTER") in which, subject to such
reasonable regulations as it may prescribe, the Purchase Contract Agent
shall provide for the registration of Certificates and of transfers of
Certificates (the Purchase Contract Agent, in such capacity, the
"SECURITY REGISTRAR"). The Security Registrar shall record separately
the registration and transfer of the Certificates evidencing Corporate
Units and Treasury Units.
Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the Company shall execute and deliver to
the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of any authorized
denominations, like tenor, and evidencing a like number of Corporate
Units or Treasury Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for
other Certificates, of any authorized denominations and evidencing a
like number of Corporate Units or Treasury Units, as the case may be,
upon surrender of the Certificates to be exchanged at the Corporate
Trust Office. Whenever any Certificates are so surrendered for
exchange, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver the Certificates that the
Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same
number of Corporate Units or Treasury Units, as the case may be, and be
entitled to the same benefits and subject to the same obligations under
this Agreement as the Corporate Units or Treasury Units, as the case
may be, evidenced by the Certificate surrendered upon such registration
of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Purchase Contract
Agent) be duly endorsed, or be accompanied by a written
25
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
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
represented by 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 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the
form of one or more fully registered Global Certificates, to be
delivered to the Depositary or its custodian by, or on behalf of, the
Company. The Company hereby designates DTC as the initial Depositary.
Such Global Certificates shall initially be registered on the books and
records of the Company in the name of Cede & Co., the nominee of the
Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.09. The Purchase
Contract Agent shall enter into an agreement with the Depositary if so
requested by the Company. Unless and until definitive, fully registered
Certificates have been issued to Beneficial Owners pursuant to Section
3.09:
26
(i) the provisions of this Section 3.06 shall be in
full force and effect;
(ii) the Company and the Purchase Contract Agent
shall be entitled to deal with the Depositary for all purposes
of this Agreement (including, without limitation, making
payments of 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 Treasury Units and the recreation of Corporate 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 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company or the Company's
agent shall give such notices and communications to the Holders and,
with respect to any 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 3.8. 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 3.9. Definitive Certificates.
If:
(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
27
(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 evidencing the Units shall be prepared by the
Company and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates evidencing 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 Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase
Contract Agent (i) evidence to their satisfaction of the destruction,
loss or theft of any Certificate, and (ii) such security or indemnity
as may be required by them to hold each of them and any agent of any of
them harmless, then, in the absence of notice to the Company or the
Purchase Contract Agent that such Certificate has been acquired by a
protected purchaser, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver to the
Holder, in lieu of any such destroyed, lost or stolen Certificate, a
new Certificate, evidencing the same number of Corporate Units or
Treasury Units, as the case may be, and bearing a Certificate number
not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall not be obligated to authenticate,
execute on behalf of the Holder, and deliver to the Holder, a
Certificate on or after the Business Day immediately preceding the
earliest of any Early Settlement Date 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:
28
(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 represented by
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, the Treasury Securities or the
appropriate Applicable Ownership Interest (as specified in
clause (i) of the definition of such term) 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.
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 thereby for purposes of (subject to any applicable record
date) any payment or distribution on the Senior Notes or on the
Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio (if any), 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.
29
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 Corporate 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 that 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 is delivered to
the Purchase Contract Agent cancelled or for cancellation.
SECTION 3.13. Creation of Treasury Units by Substitution of
Treasury Securities.
Unless the Treasury Portfolio has replaced the Senior Notes
represented by the Corporate 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
Senior Notes represented by such Holder's Corporate Units from the
Purchase Contracts so represented by substituting, for such Senior
Notes, Treasury Securities in an aggregate principal amount at maturity
equal to the aggregate principal amount of such
30
Senior Notes; provided that Holders may make such Collateral
Substitutions only in integral multiples of 40 Corporate Units. To
effect such substitution, the Holder must:
(1) deposit with the Securities Intermediary
Treasury Securities having an aggregate
principal amount at maturity equal to the
aggregate principal amount of the Senior
Notes represented by such Corporate Units;
and
(2) transfer the related Corporate Units to the
Purchase Contract Agent accompanied by a
notice to the Purchase Contract Agent,
substantially in the form of Exhibit C
hereto, (i) stating that the Holder has
deposited the relevant amount of Treasury
Securities with the Securities Intermediary
and (ii) requesting that the Purchase
Contract Agent instruct the Collateral Agent
to release the Senior Notes represented by
such Corporate Units, whereupon the Purchase
Contract Agent shall promptly provide an
instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit
A to the Pledge Agreement.
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 Corporate Units;
(ii) transfer the Senior Notes to the Holder (such
Senior Notes shall be tradeable as a separate security,
independent of the resulting Treasury Units); and
(iii) authenticate, execute on behalf of such Holder
and deliver Treasury Units in book-entry form or, if
applicable, in the form of a Treasury Units Certificate
executed by the Company in accordance with Section 3.03,
representing the same number of Purchase Contracts as were
represented by the cancelled Corporate Units.
Holders who elect to separate the Senior Notes from the
related Purchase Contracts and to substitute Treasury Securities for
such 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 Treasury Portfolio has replaced the Senior Notes
represented by the Corporate 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 Interests in the Treasury Portfolio
31
represented by such Corporate Units, but only in integral multiples of
4,000 Corporate Units. In such an event, the Holder shall transfer
Treasury Securities to the Securities Intermediary, 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 Corporate Units or fails to deliver Corporate Units Certificates to
the Purchase Contract Agent after depositing Treasury Securities with
the Securities Intermediary, any distributions on the Senior Notes or
Applicable Ownership Interest in the Treasury Portfolio represented by
such Corporate Units shall be held in the name of the Purchase Contract
Agent or its nominee in trust for the benefit of such Holder, until
such Corporate Units are so transferred or the Corporate Units
Certificate is so delivered, as the case may be, or, such Holder
provides evidence satisfactory to the Company and the Purchase Contract
Agent that such Corporate Units 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 represented by a Corporate Unit remains in effect,
such Corporate Units shall not be separable into the Purchase Contracts
and Senior Notes or Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, represented thereby, and the rights and
obligations of the Holder in respect of the Senior Notes or Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, and
the Purchase Contract represented by such Corporate Units may be
acquired, and may be transferred and exchanged, only as a Corporate
Unit.
SECTION 3.14. Recreation of Corporate Units.
Unless the Treasury Portfolio has replaced the Senior Notes
represented by the Corporate Units, and subject to the conditions set
forth in this Agreement, a Holder of Treasury Units may recreate
Corporate 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 Treasury Units may
only recreate Corporate Units in integral multiples of 40 Treasury
Units. To recreate Corporate Units, the Holder must:
(1) transfer to the Securities Intermediary
Senior Notes having an aggregate principal
amount equal to the aggregate principal
amount at stated maturity of the Treasury
Securities represented by the Treasury
Units; and
(2) transfer the related Treasury Units to the
Purchase Contract Agent accompanied by a
notice to the Purchase Contract Agent,
substantially in the form of Exhibit C
hereto, (i) stating that the Holder has
transferred the relevant amount of Senior
Notes to the Securities Intermediary and
(ii)
32
requesting that the Purchase Contract Agent
instruct the Collateral Agent to release the
Treasury Securities represented by such
Treasury Units, whereupon the Purchase
Contract Agent shall promptly provide an
instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit
C to the Pledge Agreement.
Upon receipt of the 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 Treasury Units;
(ii) transfer the Treasury Securities to the Holder;
and
(iii) authenticate, execute on behalf of such Holder
and deliver Corporate Units in book-entry form or, if
applicable, in the form of a Corporate Units Certificate
executed by the Company in accordance with Section 3.03,
representing the same number of Purchase Contracts as were
represented by the cancelled Treasury Units.
Holders who elect to recreate Corporate 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 Treasury Portfolio has replaced the Senior Notes
represented by the Corporate 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 Treasury Securities, but only in
multiples of 4,000 Treasury Units. In such an event, the Holder shall
transfer the appropriate Applicable Ownership Interests in the Treasury
Portfolio to the Collateral Agent, and the Purchase Contract Agent
shall instruct the Collateral Agent to release the Pledge of and
transfer to the Holder 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 represented by a Treasury Unit remains in effect,
such Treasury Unit shall not be separable into its constituent parts
and the rights and obligations of the Holder of such Treasury Unit in
respect of the 1/40 of a Treasury Security and the Purchase Contract
represented by such Treasury Unit may be acquired, and may be
transferred and exchanged, only as a Treasury Unit.
33
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 Senior Notes, the appropriate
Applicable Ownership Interests in the Treasury Portfolio or the
Treasury Securities, as the case may be, represented by the Corporate
Units or the Treasury Units, as the case may be, pursuant to the terms
of the Pledge Agreement, the Purchase Contract Agent shall request
transfer instructions with respect to such Senior Notes, the
appropriate 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 Corporate Units or the
Treasury Units or delivery of a Corporate Units Certificate or Treasury
Units Certificate to the Purchase Contract Agent with such transfer
instructions, the Purchase Contract Agent shall transfer the Senior
Notes, the appropriate Applicable Ownership Interests in the Treasury
Portfolio or Treasury Securities, as the case may be, represented by
such Corporate Units or Treasury Units, as the case may be, to such
Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of Corporate
Units or Treasury Units fails to effect such transfer or delivery, the
Senior Notes, the appropriate Applicable Ownership Interests in the
Treasury Portfolio or Treasury Securities, as the case may be,
represented by such Corporate Units or Treasury Units, as the case may
be, and any distributions thereon, shall be held in the name of the
Purchase Contract Agent or its nominee in trust for the benefit of such
Holder, until the earlier to occur of:
(i) the transfer of such Corporate Units or Treasury
Units or surrender of the Corporate Units Certificate or
Treasury Units Certificate or the receipt by the Company and
the Purchase Contract Agent from such Holder of satisfactory
evidence that such Corporate Units Certificate or Treasury
Units Certificate has been destroyed, lost or stolen, together
with any indemnity that may be required by the Purchase
Contract Agent and the Company; and
(ii) the expiration of the time period specified in
the abandoned property laws of the relevant State in which the
Purchase Contract Agent holds such property.
SECTION 3.16. No Consent to Assumption.
Each Holder of a 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.
34
ARTICLE 4
THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
SECTION 4.1. Interest Payments; Rights to Interest Payments
Preserved.
Any payment on any Senior Note or on the appropriate
Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio, as the case may be,
which is paid on any Payment Date shall, subject to receipt thereof by
the Purchase Contract Agent from the Collateral Agent as provided by
the terms of the Pledge Agreement, be paid to the Person in whose name
the Corporate Units Certificate (or one or more Predecessor Corporate
Units Certificates) representing such Senior Note or the appropriate
Applicable Ownership Interests in the Treasury Portfolio, as the case
may be, is registered at the close of business on the Record Date for
such Payment Date.
Each Corporate 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 Corporate Units
Certificate shall carry the right to accrued and unpaid interest or
distributions, and to accrue interest or distributions, which were
carried by the Senior Notes or the appropriate Applicable Ownership
Interests in the Treasury Portfolio represented by such other Corporate
Units Certificate.
In the case of any Corporate Unit with respect to which (A)
Cash Settlement of the Purchase Contract represented by such Corporate
Unit is properly effected pursuant to Section 5.02 hereof, (B) Early
Settlement of the Purchase Contract represented by such Corporate Unit
is properly effected pursuant to Section 5.07 hereof, (C) Cash Merger
Early Settlement of the Purchase Contract represented by such Corporate
Unit 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 Note that is represented by such Corporate Unit, in each case on
a date that is after any Record Date and prior to or on the next
succeeding Payment Date, interest on the Senior Notes or distributions
on the appropriate Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, represented by such Corporate 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 Corporate Units Certificate (or one or more
Predecessor Corporate Units Certificates) was registered at the close
of business on the Record Date.
Except as otherwise expressly provided in the immediately
preceding paragraph, in the case of any Corporate Units with respect to
which Cash Settlement, Early Settlement or Cash Merger Early Settlement
of the Purchase Contract represented by such Corporate Unit is properly
effected, or with respect to which a Collateral Substitution has been
effected, payments on the related Senior Notes or distributions on the
appropriate Applicable Ownership Interests in the
35
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 Corporate Units; provided, however, that to the extent
that such Holder continues to hold Separate Senior Notes or Applicable
Ownership Interests in the Treasury Portfolio that were formerly
represented by such Holder's Corporate 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.
SECTION 4.2. 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 Corporate Units a notice:
(i) containing such information as is contained in
the notice or solicitation;
(ii) stating that each Holder on the record date set
by the Purchase Contract Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Senior Notes, as the case may be,
entitled to vote) shall be entitled to instruct the Purchase
Contract Agent as to the exercise of the voting rights
pertaining to such Senior Notes represented by their Corporate
Units; and
(iii) stating the manner in which such instructions
may be given.
Upon the written request of the Holders of Corporate Units on such
record date received by the Purchase Contract Agent at least six days
prior to such meeting, the Purchase Contract Agent shall endeavor
insofar as practicable to vote or cause to be voted, in accordance with
the instructions set forth in such requests, the maximum number of
Senior Notes, as the case may be, as to which any particular voting
instructions are received. In the absence of specific instructions from
the Holder of a Corporate Unit, the Purchase Contract Agent shall
abstain from voting the Senior Notes represented by such Corporate
Unit. The Company hereby agrees, if applicable, to solicit Holders of
Corporate Units to timely instruct the Purchase Contract Agent in order
to enable the Purchase Contract Agent to vote such Senior Notes.
The Holders of Corporate Units and Treasury Units shall have
no voting or other rights in respect of Common Stock.
SECTION 4.3. Special Event Redemption.
36
(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 that
a Special Event has occurred and that it intends to redeem the Senior
Notes and 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.
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 Corporate Units the Treasury
Portfolio and promptly remit the remaining portion of such funds to the
Purchase Contract Agent for payment to the Holders of such Corporate
Units.
(b) Upon the occurrence of a Special Event Redemption, (i) the
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio will be substituted
as Collateral for the Pledged Senior Notes and will be held by the
Securities Intermediary in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of a Corporate Unit
to pay the Stated Amount of the related Purchase Contract and thereby
purchase Common Stock of the Company thereunder, (ii) the Holders of
Corporate Units and the Collateral Agent shall have such security
interest rights and obligations with respect to such Applicable
Ownership Interests (as specified in clause (i) of the definition of
such term) as the Holders of Corporate Units and the Collateral Agent
had in respect of the 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 shall be deemed to be a reference
to such Applicable Ownership Interests (as specified in clause (i) of
the definition of such term) in the Treasury Portfolio. The Company may
cause to be made in any Corporate Units Certificates thereafter to be
issued such change in phraseology and form (but not in substance) as
may be appropriate to reflect the substitution of the Applicable
Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio for 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 5.1. 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, 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 such Purchase
Contract shall have occurred. The "SETTLEMENT RATE" is equal to:
37
(i) if the Adjusted Applicable Market Value (as
defined below) is greater than $[ ] (the "THRESHOLD
APPRECIATION PRICE"), [ ] shares of Common Stock per Purchase
Contract;
(ii) if the Adjusted Applicable Market Value is less
than or equal to the Threshold Appreciation Price but greater
than or equal to $[ ] (the "REFERENCE PRICE"), the number of
shares of Common Stock per Purchase Contract having a value
equal to the Stated Amount divided by the Adjusted Applicable
Market Value;
(iii) if the Adjusted Applicable Market Value is less
than the Reference Price, [ ] shares of Common Stock per
Purchase Contract;
in each case subject to adjustment as provided in Section 5.04 (and in
each case rounded upward or downward to the nearest 1/10,000th of a
share).
The "APPLICABLE MARKET VALUE" means the average of the Closing
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 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 (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;
38
(iii) if the Common Stock is not so listed on a
United States national or regional securities exchange, the
last reported 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 Corporate Unit or a Treasury Unit, by its
acceptance of such Unit:
(i) irrevocably authorizes the Purchase Contract
Agent to enter into and perform the Purchase Contract
represented thereby 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 Corporate Unit or a Treasury Unit
representing such Purchase Contract;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract
Agent to enter into and perform this Agreement and the Pledge
Agreement on its behalf 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 Senior Notes and the
Applicable Ownership Interests (as specified in clause (i) of
the definition of such term) in the Treasury Portfolio or the
Treasury Securities pursuant to the Pledge Agreement; and
39
(vii) for United States federal, state and local
income and franchise tax purposes, agrees to (i) treat an
acquisition of the Corporate Units as an acquisition of the
Senior Note and Purchase Contract represented by each
Corporate Unit, (ii) treat the Senior Notes as indebtedness of
the Company and (iii) treat itself as the owner of the
applicable interest in the Collateral Account, including the
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 Corporate Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees that to the extent and
in the manner provided in Section 5.02 and the Pledge Agreement, but
subject to the terms thereof, the Treasury Securities, the Applicable
Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, [or a portion of the Proceeds of
the Holder's exercise of the Put Right equal to the Stated Amount,] 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 portion of the] 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 represented by such Certificate and the Pledge
Agreement and the transferor shall be released from the obligations
under this Agreement, the Purchase Contracts represented by 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 5.2. Remarketing; Payment of Stated Amount.
(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 from the Purchase Contract Agent and Custodial Agent
and the Pledged Senior Notes and Separate Senior Notes (if
any) from the Collateral Agent and Custodial Agent,
40
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 (but not less than) 100.50% 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 not less than 100.50% of the Treasury Portfolio
Purchase Price plus the Separate Senior Notes Purchase Price
(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 shall deduct as
a remarketing fee (the "REMARKETING FEE") an amount not
execeeding 25 basis points (0.25%) 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 Corporate Units or holders of
Separate Senior Notes whose Senior Notes or Separate Senior
Notes, as applicable, are so remarketed will otherwise be
responsible for the payment of any Remarketing Fee in
connection therewith. With respect to Separate Senior Notes,
the proceeds of a Successful 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, the proceeds of a Successful 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 Corporate Units. The
Treasury Portfolio will be substituted for the Pledged Senior
Notes and the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the
Treasury Portfolio will be pledged to the Collateral Agent to
secure the obligation of the Holders of Corporate Units to pay
the Stated Amount for the Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date.
Following the occurrence of a Successful Initial Remarketing,
the Holders of Corporate Units and the Collateral Agent shall
have such security interests, rights and obligations with
respect to the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury
Portfolio as the Holder of Corporate Units and the Collateral
Agent had in respect of the Senior Notes, subject to the
Pledge thereof as provided in the Pledge Agreement, and any
reference herein or in the Certificates to the Senior Notes
shall be deemed to be a reference to such Applicable Ownership
Interests in the Treasury Portfolio and any reference herein
or in the Certificates to interest on the 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 Corporate Units
Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of such Applicable
Ownership Interests in the Treasury Portfolio for Senior
Notes.
41
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 100.50%
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 is
not fulfilled, 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 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.
By 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 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 use it in connection with
such Remarketing.
42
(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) on the Business Day
immediately following the applicable Remarketing Date, in a
daily newspaper in the English language of general circulation
in the City of New York, which is expected to be The Wall
Street Journal.
(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 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 (but not less than) 100.50%
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 not less than 100.50% of the Treasury
Portfolio Purchase Price plus the Separate Senior Notes
Purchase Price (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 shall 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 Corporate Units or holders of Separate
Senior Notes whose 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, the 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, the 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 Corporate
Units. The Treasury Portfolio will be substituted for the
43
Pledged Senior Notes and the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio will be pledged to the
Collateral Agent to secure the obligation of the Holders of
Corporate Units to pay the Stated Amount 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 Corporate Units and the Collateral Agent shall
have such security interests, rights and obligations with
respect to the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury
Portfolio as the Holder of Corporate Units and the Collateral
Agent had in respect of the related Senior Notes, subject to
the Pledge thereof as provided in the Pledge Agreement, and
any reference herein or in the Certificates to the Senior
Notes shall be deemed to be a reference to such Applicable
Ownership Interests in the Treasury Portfolio and any
reference herein or in the Certificates to interest on the
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 Corporate Units Certificates thereafter to be
issued such change in phraseology and form (but not in
substance) as may be appropriate to reflect the substitution
of such Applicable Ownership Interests in the Treasury
Portfolio for 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 100.50% 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 is not fulfilled, 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.
(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
44
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 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 Separate Senior Notes on such date at a price
of approximately (but not less than) 100.50% 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 not less than 100.50% of the Treasury
Portfolio Purchase Price plus the Separate Senior Notes
Purchase Price (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 shall
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 Agreement or any Holders of
Corporate Units or holders of Separate Senior Notes whose
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, the 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, the 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 Corporate Units. The Treasury Portfolio
will be substituted for the Pledged Senior Notes and the
appropriate Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury
Portfolio will be pledged to the Collateral Agent to secure
the obligation of the Holders of Corporate Units to pay the
Stated Amount 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 Corporate Units and the Collateral Agent shall
have such security interests (with respect to the Collateral
Agent), rights and obligations with respect to the Applicable
Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in
respect of the Senior Notes, subject to the Pledge thereof as
provided in the Pledge Agreement, and any reference herein or
in the Certificates to the Senior Notes shall be deemed to be
a reference to such Applicable Ownership Interests in the
Treasury Portfolio and any reference herein or in the
Certificates to interest on the 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 Corporate Units
Certificates thereafter to be issued such change in
phraseology and form (but not in
45
substance) as may be appropriate to reflect the substitution
of such Applicable Ownership Interests in the Treasury
Portfolio for 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 100.50% of the
sum of the Treasury Portfolio Purchase Price plus the Separate
Senior Notes Purchase Price or the Thrid 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 is not fulfilled, 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 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. 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.
(ii) A Holder of a Corporate Unit who has so notified
the Purchase Contract Agent of its intention to effect a Cash
Settlement shall pay the Stated Amount 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 so received shall be invested promptly
by the Securities Intermediary in Permitted Investments and
paid to the Company on the Purchase Contract Settlement Date
in settlement of the Purchase Contracts in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds
received by the Securities Intermediary in respect of the
investment earnings from such Permitted Investments in excess
of the Stated Amount 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.
46
(iii) If a Holder of a Corporate Unit does not notify
the Purchase Contract Agent of its intention to make a Cash
Settlement in accordance with paragraph 5.02(c)(i) above, or
does notify the Purchase Contract Agent in accordance with
paragraph 5.02(c)(i) above but fails to make such payment as
required by paragraph 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
paragraph 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 Securities Intermediary 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 Senior Notes to be tendered for purchase
in the Final 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
Corporate Units who have not notified the Purchase Contract
Agent of their intention to effect a Cash Settlement as
provided in paragraph 5.02(c)(i) above, or who have so
notified the Purchase Contract Agent in accordance with
paragraph 5.02(c)(i) above but have failed to make such
payment as required by paragraph 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 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, to be remarketed. Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, and the
Custodial Agent shall cause such Pledged Senior Notes and
Separate Senior Notes to be presented to the Remarketing Agent
for Remarketing.
(ii) Upon receipt of such notice from the Purchase
Contract Agent and the Collateral Agent and the 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 shall, on the Final 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 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 price, at a price
below 100.50%, but in no event less than 100%, net of the
Final Remarketing Fee) of the
47
aggregate principal amount of such 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) of the
aggregate principal amount of the Senior Notes and Separate
Senior Notes (if any) (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 Securities Intermediary. The
Remarketing Agent shall deduct as the remarketing fee (the
"FINAL REMARKETING FEE") an amount not exceeding 25 basis
points (0.25%) of the aggregate principal amount of the
remarketed Pledged Senior Notes and Separate Senior Notes (if
any); provided that such fee shall be payable out of, and only
to the extent of, remarketing proceeds, if any, in excess of
such amount. 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 Securities Intermediary 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 Corporate Units to pay the
Stated Amount 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 Stated
Amount and the Final Remarketing Fee will be remitted to the
Purchase Contract Agent for payment to the Holders of the
related Corporate 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 than
100% (net of the Final Remarketing Fee) 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 is not fulfilled, 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 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 such Senior Notes, any accrued and unpaid interest
on such Senior Notes shall become payable by the Company to
the Purchase Contract Agent for payment to the Beneficial
Owner of the Corporate Units to which such Senior Notes
relate.
48
(e) With respect to any Pledged Senior Notes which are subject
to a Failed Final Remarketing, and any Senior Notes that are components
of a Corporate Unit 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(b)(ii),
in each case resulting in an event of default under this Agreement, the
Collateral Agent for the benefit of the Company reserves all of its
rights as a secured party with respect thereto and, subject to
applicable law and paragraph 5.02(i) below, may, in full satisfaction
of the Holders' obligations under the Purchase Contracts among other
things, (A) retain the Senior Notes in accordance with applicable law
or (B) dispose of the 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) (i) Unless a Holder of a Treasury Unit or a
Corporate Unit (if the Treasury Portfolio has replaced the
Senior Notes represented by such Corporate Unit) effects an
Early Settlement of the Purchase Contract represented by such
Unit through the early delivery of cash to the Purchase
Contract Agent in the manner described in Section 5.07 or a
Cash Merger Early Settlement of the Purchase Contract
represented by such Unit through the early delivery of cash to
the Purchase Contract Agent in the manner described in Section
5.04(b)(2), each Holder of a Treasury Unit or a Corporate Unit
who intends to effect Cash Settlement of the Purchase Contract
represented by such Unit shall so notify the Purchase Contract
Agent by use of a notice in substantially the form of Exhibit
E hereto prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract
Settlement Date. Prior to 11:00 a.m. (New York City time) on
the next succeeding Business Day, the Purchase Contract Agent
shall notify the Collateral Agent of the receipt of such
notices from such Holders intending to make a Cash Settlement.
Holders of Treasury Units may make Cash Settlements only in
integral multiples of 40 Corporate Units.
(ii) A Holder of a Treasury Unit or a Corporate Unit
(if the Treasury Portfolio has replaced the Senior Note
represented by such Corporate Unit) who has so notified the
Purchase Contract Agent of its intention to make a Cash
Settlement in accordance with paragraph 5.02(f)(i) above shall
pay the Stated Amount 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 Securities Intermediary shall be invested
promptly by the Collateral Agent in Permitted Investments and
paid to the Company on the Purchase Contract Settlement Date
in settlement of the Purchase Contract in accordance with the
terms of this Agreement and the Pledge Agreement. Any funds
received by the Securities Intermediary in respect of the
investment earnings from the investment in such Permitted
Investments in excess of the Stated Amount for the shares of
Common Stock to be
49
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 Treasury Unit or a Corporate
Unit (if the Treasury Portfolio has replaced the Senior Note
represented by such Corporate Unit) fails to notify the
Purchase Contract Agent of its intention to make a Cash
Settlement in accordance with Section 5.02(f)(i), or does
notify the Purchase Contract Agent as provided in Section
5.02(f)(i) of its intention to pay the Stated Amount in cash,
but fails to make such payment as required by Section
5.02(f)(ii), then upon the maturity of the Pledged Treasury
Securities or the appropriate Applicable Ownership Interests
(as specified in clause (i) of the definition of such term) in
the Treasury Portfolio held by the Securities Intermediary on
or prior to the Business Day immediately preceding the
Purchase Contract Settlement Date, the principal amount of the
Treasury Securities or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio received by the
Collateral Agent shall be invested promptly in Permitted
Investments. On the Purchase Contract Settlement Date, an
amount equal to the Stated Amount shall be remitted to the
Company as payment of such Holder's obligation to pay such
Stated Amount under the related Purchase Contracts without
receiving any instructions from the Holder. In the event the
sum of the Proceeds from related Pledged Treasury Securities
or the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the
Treasury Portfolio and the Proceeds from such Permitted
Investments is in excess of the aggregate Stated Amount, the
Collateral Agent shall cause the Securities Intermediary to
distribute such excess to the Purchase Contract Agent for the
benefit of the Holder of the related Treasury Units or
Corporate Units when received.
(g) 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.
(h) 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,
the appropriate Applicable Ownership Interests (as specified
in clause (i) of the definition of such term) in the Treasury
Portfolio or the Pledged Treasury Securities, as the case may
be, represented by the relevant Units to be released from the
Pledge, free and clear of any security interest of the
Company, and transferred to the Purchase Contract Agent for
delivery to the Holder thereof or its designee as soon as
practicable; and
(ii) subject to the receipt thereof, the Purchase
Contract Agent shall, by book-entry transfer or other
appropriate procedures, in accordance with written
instructions provided by the Holder thereof, transfer such
Senior Notes, or the appropriate
50
Applicable Ownership Interests (as specified in clause (i) of
the definition of such term) in the Treasury Portfolio or such
Treasury Securities, as the case may be (or, if no such
instructions are given to the Purchase Contract Agent by the
Holder, the Purchase Contract Agent shall hold such Senior
Notes or the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the
Treasury Portfolio or such Treasury Securities, as the case
may be, and any interest payment thereon, in the name of the
Purchase Contract Agent or its nominee in trust for the
benefit of such Holder until the expiration of the time period
specified in the abandoned property laws of the relevant state
where such property is held).
(i) The obligations of the Holders to pay the Stated Amount
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 Stated Amount.
(j) 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 of the Stated Amount for the Common
Stock to be purchased thereunder in the manner herein set forth.
SECTION 5.3. 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 Stated Amount 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 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
51
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 5.4. 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 represented by 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,
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
52
Common Stock that 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:
(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
53
(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 that 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 quarterly cash distribution) in an aggregate
amount that, combined together with (I) the aggregate amount of any
other distributions (other than regular quarterly cash 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 10% 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,
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
54
again be adjusted to be the Settlement Rate that 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 quarterly cash 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 10% 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) at 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 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"),
55
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 twenty (20) consecutive Trading Days ending on the
earlier of such date of determination and the day before the "ex date"
with respect to the issuance or distribution requiring the 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, 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.
56
(11) The Company has entered into a Rights Agreement dated as of March
12, 1999 (the "RIGHTS AGREEMENT") with First Chicago Trust Company 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 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"),
57
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 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 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 comprise all or part of the Exchange Property, based on
the Closing Price of such securities, (B) in the case of any cash that
comprises all or part of the Exchange Property, based on the amount of
such cash and (C) in the case of any other property that comprises 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;
58
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 or 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 each case in which 30% or more of the total
consideration paid to the Company's shareholders consists of cash or
cash equivalents (a "CASH MERGER"), a Holder of a Unit may settle
("CASH MERGER EARLY SETTLEMENT") the Purchase Contract represented by
such Unit, 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 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. If a Holder effects a Cash Merger Early Settlement of some
or all of its Purchase Contracts, such Holder shall be entitled to
receive, on the Cash Merger Early Settlement Date, the aggregate amount
of any Deferred Contract Adjustment Payments and any Accrued and Unpaid
Contract Adjustment Payments since the immediately preceding Payment
Date with respect to such Purchase Contracts. The Company shall pay
such amount as a credit against the amount otherwise payable by the
Holders to effect such Cash Merger Early Settlement.
59
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, including the amount of Contract Adjustment Payments
receivable upon settlement.
Corporate Units Holders and Treasury Units Holders may only effect Cash
Merger Early Settlement pursuant to this Section 5.04(b)(2) in integral
multiples of 40 Corporate Units or Treasury Units, as the case may be.
If the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units, Corporate Units Holders may only effect Cash
Merger Early Settlement pursuant to this Section 5.04(b)(2) in
multiples of 4,000 Corporate 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, less the amount of any Contract Adjustment
Payments payable to the Holder on the Cash Merger Early Settlement
Date.
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:
(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
60
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; and
(iii) 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 Corporate Units or the Treasury 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 5.5. 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):
(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
61
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 5.6. 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 and any Deferred Contract Adjustment Payments), if
the Company shall have such obligation, and the rights and obligations
of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action
by any Holder, the 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 solely 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, represented by 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 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 5.7. 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 represented by 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.
62
(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 a.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 sum of (A) the product of (I) the Stated
Amount, times (II) the number of Purchase Contracts with
respect to which the Holder has elected to effect Early
Settlement, plus (B) 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, less
(ii) the amount of any Deferred Contract Adjustment
Payments payable to such Holder as a result of such Early
Settlement.
Except as provided in the immediately preceding sentence, no payment
shall be made upon Early Settlement of any Purchase Contract on account
of any Contract Adjustment Payments accrued on such Purchase Contract
since the immediately preceding Payment Date or on account of any
dividends on the Common Stock issued upon such Early Settlement.
However, a Holder effecting an Early Settlement of some or all of its
Purchase Contracts shall be entitled to receive, on the date it
receives the shares of Common Stock referred to in Section 5.07(d), the
amount of any Deferred Contract Adjustment Payments with respect to
such Purchase Contracts, calculated as of the immediately preceding
Payment Date. The amount of such Deferred Contract Adjustment Payments
shall be credited against the amount otherwise payable by the Holder to
effect such Early Settlement as set forth in clause (ii) above. If the
foregoing requirements are first satisfied with respect to Purchase
Contracts represented by 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 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
63
in writing by the Company, the related Early Settlement Amount and (C)
all conditions to such Early Settlement have been satisfied.
Holders of Treasury Units may only effect Early Settlement pursuant to
this Section 5.07 in integral multiples of 40 Treasury Units. If the
Treasury Portfolio has replaced the Senior Notes represented by the
Corporate Units, Corporate Units Holders may only effect Early
Settlement pursuant to this Section 5.07 in integral multiples of 4,000
Corporate Units.
Upon Early Settlement of the Purchase Contracts, the rights of the
Holders to receive and the obligation of the Company to pay any accrued
and unpaid Contract Adjustment Payments since the immediately preceding
Payment Date and any future 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, [ ] 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 related Senior Notes or the Applicable
Ownership Interests in the Treasury Portfolio, as applicable,
in the case of Corporate Units, or the related Treasury
Securities, in the case of Treasury Units, to be released from
the Pledge by the Collateral Agent and transferred, in each
case, to the Purchase Contract Agent for delivery to the
Holder thereof or its designee.
(e) Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and the
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 the Senior Notes, the
Applicable Ownership Interests in the Treasury Portfolio or
Treasury Securities, as the case may be, represented by such
Xxxxx,
00
(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 represented by 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 represented by a Corporate Unit
remarketed in accordance with the provisions of Section 5.02.
SECTION 5.8. Intentionally Omitted.
SECTION 5.9. 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 that
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 that 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 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
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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) and Section 5.12, 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 the
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 June [ ], 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 and any Deferred Contract
Adjustment Payments) shall cease.
(c) Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of (including
as a result of a Collateral Substitution or the recreation of Corporate
Units) any other Certificate shall carry the right to accrued and
unpaid Contract Adjustment Payments and Deferred Contract Adjustment
Payments, which right was carried by the Purchase Contracts represented
by such other Certificates.
(d) In the case of any Unit with respect to which Early
Settlement or Cash Merger Early Settlement of the Purchase Contract
represented by such Unit 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 or
Cash Merger 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, in the case of any Unit with respect to which
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Early Settlement or Cash Merger Early Settlement of the Purchase
Contract represented by such Unit 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 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 Indebtedness and such default shall have continued
beyond the period of grace, if any, specified in the instrument
evidencing such Indebtedness (and the Purchase Contract Agent shall
have received written notice thereof from the Company or one or more
holders of Indebtedness or their representative or representatives or
the trustee or trustees under any indenture pursuant to which any such
Indebtedness may have been issued), or (ii) the maturity of any
Indebtedness shall have been accelerated because of a default in
respect of such Indebtedness (and the Purchase Contract Agent shall
have received written notice thereof from the Company or one or more
holders of Indebtedness or their representative or representatives or
the trustee or trustees under any indenture pursuant to which any such
Indebtedness may have been issued), then:
(i) the holders of all 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 Indebtedness and,
in the case of subclauses (i) and (ii) of clause (y) above,
payment of all 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 represented by
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), 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 Indebtedness or to the trustee or trustees under
any indenture under which any instruments evidencing any of
such Indebtedness may have been issued, ratably according to
the aggregate amounts remaining unpaid on account of such
Indebtedness held or represented by each, to the extent
necessary to make payment in full of all Indebtedness
remaining unpaid after giving effect to any concurrent payment
or distribution (or provision therefor) to the holders of such
Indebtedness, before any
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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, 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
Indebtedness or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any such
Indebtedness may have been issued, ratably as aforesaid, for
application to the payment of all Indebtedness remaining
unpaid until all such Indebtedness shall have been paid in
full, after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders of such
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
Indebtedness which may at the time be outstanding; provided that (i)
the indebtedness or guarantee of indebtedness, as the case may be, that
constitutes Indebtedness is assumed by the Person, if any, resulting
from any such reorganization or readjustment, and (ii) the rights of
the holders of the 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 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
Indebtedness, the Holders of the Units shall be subrogated (equally and
ratably with the holders of all obligations of the Company
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which by their express terms are subordinated to Indebtedness of the
Company to the same extent as payment of the Contract Adjustment
Payments in respect of the Purchase Contracts represented by the Units
is subordinated and which are entitled to like rights of subrogation)
to the rights of the holders of Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable
to the Indebtedness until all such Contract Adjustment Payments owing
on the Units shall be paid in full, and as between the Company, its
claimholders other than holders of such Indebtedness and the Holders,
no such payment or distribution made to the holders of 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 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 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 claimholders other than the holders
of 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 claimholders of the
Company other than the holders of 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 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
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 Indebtedness (or a trustee or representative on
behalf of such holder) to establish that such notice has been given by
a holder of 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 Indebtedness to
participate in any payment or distribution pursuant to Section 5.11(e)
through (q), the Purchase Contract Agent may request
69
such Person to furnish evidence to the reasonable satisfaction of the
Purchase Contract Agent as to the amount of 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 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 from the Company, any Holder, or the holder or
representative of any 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 Indebtedness at the time held by it, to the same extent
as any other holder of 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
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.
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(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 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 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.
SECTION 5.12. Deferral of Contract Adjustment Payments. (a)
The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until
no later than the Purchase Contract Settlement Date (or, in the event
of an effective Early Settlement or Cash Merger Early Settlement, the
Early Settlement Date or Cash Merger Early Settlement Date, as the case
may be), but only if the Company shall give the Holders and the
Purchase Contract Agent written notice of its election to defer such
payment (specifying the amount to be deferred) at least ten Business
Days prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the Record Date
or Payment Date with respect to payment of such Contract Adjustment
Payments to the NYSE or other applicable self-regulatory organization
or to Holders, but in any event not less than one Business Day prior to
such Record Date. If the Company so elects to defer Contract Adjustment
Payments, the Company shall pay additional Contract Adjustment Payments
on such deferred installments of Contract Adjustment Payments at a rate
equal to [ ]% per annum, compounding on each succeeding Payment Date,
until such deferred installments are paid in full (such deferred
installments of Contract Adjustment Payments together with the accrued
additional Contract Adjustment Payments thereon, being referred to
herein as the "DEFERRED CONTRACT ADJUSTMENT PAYMENTS"). Deferred
Contract Adjustment Payments shall be due on the next succeeding
Payment Date except to the extent that payment is deferred pursuant to
this Section.
(b) In the event that the Company elects to defer the payment
of Contract Adjustment Payments on the Purchase Contracts until the
Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement
Date or Cash Merger Early Settlement Date, as the case may be), each
Holder will receive on the Purchase Contract Settlement Date, Early
Settlement Date or Cash Merger Early Settlement Date, as applicable,
the aggregate amount of Deferred Contract Adjustment Payments to the
extent such amounts are not deducted from the Stated Amount in the case
of a Cash Settlement, any Early Settlement or any Cash Merger Early
Settlement. The Company shall pay such amount on the Purchase Contract
Settlement Date (or, in the event of an effective Early Settlement or
Cash Merger Early Settlement, the Early
71
Settlement Date or Cash Merger Early Settlement Date, as the case may
be) in the manner described in Section 5.11(a).
(c) In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until all Deferred
Contract Adjustment Payments have been paid, the Company shall not, and
shall not permit any of its subsidiaries to, declare or pay dividends
on, make distributions with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its capital stock
or their capital stock; provided that the Company's subsidiaries will
not be restricted from declaring or paying such dividends, or making
such distributions, to the Company or any of the Company's other
subsidiaries as a result of the foregoing.
ARTICLE 6
REMEDIES
SECTION 6.1. 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) subject to Article 5, to receive each Contract
Adjustment Payment with respect to the Purchase Contract represented by
such Unit on the applicable Payment Date 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 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined
adversely to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company and such Holder shall be
restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of such Holder shall
continue as though no such proceeding had been instituted.
SECTION 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates in the
last paragraph of Section 3.10, no right or remedy herein conferred
upon or reserved to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in
72
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right 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 6.5. Undertaking for Costs.
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
represented by any Unit held by such Holder.
SECTION 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay
or extension law wherever enacted, 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
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THE PURCHASE CONTRACT AGENT
SECTION 7.1. 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 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.
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(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 7.2. 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 addresses appear in the Security Register, notice of such
default hereunder, unless such default shall have been cured or waived.
SECTION 7.3. 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, Senior Note, 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,
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
75
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 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 appointed with due care by it hereunder;
(7) the Purchase Contract Agent shall be under no obligation
to exercise any of the rights or powers vested in it by this Agreement
at the request or direction of any of the Holders pursuant to this
Agreement, unless such Holders shall have offered to the Purchase
Contract Agent security or indemnity satisfactory to the Purchase
Contract Agent against the costs, expenses and liabilities which might
be incurred by it in compliance with such request or direction;
(8) the Purchase Contract Agent shall not be liable for any
action taken, suffered, or omitted to be taken by it in the absence of
bad faith or gross negligence by it;
(9) the Purchase Contract Agent shall not be deemed to have
notice of any default hereunder unless a Responsible Officer of the
Purchase Contract Agent has actual knowledge thereof or unless written
notice of any event that is in fact such a default is received by the
Purchase Contract Agent at the Corporate Trust Office of the Purchase
Contract Agent, and such notice references the 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 agent, custodian and other Person employed to
act hereunder; 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 7.4. Not Responsible for Recitals or Issuance of
Units.
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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
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 7.5. 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 7.6. 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 7.7. 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")
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for, and to hold it 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
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 7.8. 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 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. 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 7.9. 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.
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(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 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
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applicable Security Register. Each notice shall include the name of the
successor Purchase Contract Agent and the address of its Corporate
Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Purchase Contract Agent, every such successor Purchase Contract Agent
so appointed shall execute, acknowledge and 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.
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SECTION 7.12. Preservation of Information; Communications to
Holders.
(a) The Purchase Contract Agent shall preserve, in as current
a form as is reasonably practicable, the names and addresses of Holders
received by the Purchase Contract Agent in its capacity as Security
Registrar.
(b) If three or more Holders (herein referred to as
"APPLICANTS") apply in writing to the Purchase Contract Agent, and
furnish to the Purchase Contract Agent reasonable proof that each such
applicant has owned a 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 8.1. 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 8.2. 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 right to institute suit for the
enforcement of any Purchase Contract or payment of 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 Corporate Units or the Treasury Units,
then only the affected class of Holders as of the record date for the
Holders entitled to vote thereon will be entitled to vote on such
amendment or proposal, and such amendment or proposal shall not be
effective except with the consent of Holders of not less than a
majority of such class; and provided, further, that the unanimous
consent of the Holders of each outstanding Purchase Contract of such
class affected thereby shall be required to approve any amendment or
proposal specified in clauses (1) through (6) above.
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It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
agreement, but it shall be sufficient if such Act shall approve the
substance thereof.
SECTION 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by,
any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement, the
Purchase Contract Agent shall be provided, and (subject to Section
7.01) shall be fully authorized and protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
agreement is authorized or permitted by this Agreement and an Officers'
Certificate stating 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 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance therewith, and
such supplemental agreement shall form a part of this Agreement for all
purposes; and every Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered
hereunder, shall be bound thereby.
SECTION 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any supplemental agreement
pursuant to this Article may, and shall if required by the Purchase
Contract Agent, bear a notation in form approved by the Purchase
Contract Agent as to any matter provided for in such supplemental
agreement. If the Company shall so determine, new Certificates so
modified as to conform, in the opinion of the Purchase Contract Agent
and the Company, to any such supplemental agreement may be prepared and
executed by the Company and authenticated, executed on behalf of the
Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.1. Covenant Not to Consolidate, Merge, Convey,
Transfer or Lease Property Except under Certain Conditions.
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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 9.2. 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 Chubb
Corporation, 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 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.
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SECTION 9.3. 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 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 an Officers' Certificate 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 10.1. 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 10.2. 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 Corporate
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 Bank One Trust Company, N.A., 00 Xxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxx Xxxx Entrance, New York, New York 10041 as such office
of the Company. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Purchase
Contract Agent with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address
set forth in the previous sentence, 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
86
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 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock the full number
of shares of Common Stock issuable against tender of payment in respect
of all Purchase Contracts represented by the Units evidenced by
Outstanding Certificates.
SECTION 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock that may
be issued against tender of payment in respect of any Purchase Contract
represented by the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
SECTION 10.5. 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 10.6. Tax Treatment. The Company covenants and agrees,
and by purchasing a Corporate 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 Corporate Units as the
acquisition of the Senior Note and Purchase Contracts represented by
the Corporate Units, (ii) treat the Senior Notes as indebtedness of the
Company and (iii) each Holder as the owner of the applicable interest
in the Collateral Account, including the Senior Notes and Applicable
Ownership Interests in the Treasury Portfolio or the Treasury
Securities.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
THE CHUBB CORPORATION
By: _______________________________
Name:
Title:
BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By: _______________________________
Name:
Title:
EXHIBIT A
(FORM OF FACE OF CORPORATE 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 Corporate Units: 18,400,000
THE CHUBB CORPORATION
Corporate Units
This Corporate Units Certificate certifies that [Cede & Co.] [_______] is
the registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only - or such other number of Corporate Units
as is reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto]. Each Corporate Unit represents (i) either (a) the beneficial
ownership by the Holder of $25.00 principal amount of Senior Notes due August
16, 2008 (the "SENIOR NOTES") of The Chubb Corporation, a New Jersey corporation
(the "COMPANY"), subject to the Pledge of such Senior Note 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
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract with 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 Senior Notes or the appropriate
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, as the case may be, represented by each
Corporate Unit evidenced hereby have been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract represented by such Corporate Unit.
The Pledge Agreement provides that all payments of the principal amount
with respect to any of the Pledged Senior Notes or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, or interest or distributions on
any Pledged Senior Notes (as defined in the Pledge Agreement) or the appropriate
Applicable Ownership Interests (as specified in clause (ii) of the definition of
such term) in the Treasury Portfolio, as the case may be, represented by the
Corporate Units received by the Securities Intermediary shall be paid by wire
transfer in same day funds (i) in the case of (A) interest on Pledged Senior
Notes or distributions with respect to the appropriate Applicable Ownership
Interests (as specified in clause (ii) of the definition of such term) in the
Treasury Portfolio, as the case may be, and (B) any payments of the principal
amount of any Senior Notes or with respect to the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, that have been released from the
Pledge pursuant to the Pledge Agreement, to the Purchase Contract Agent to the
account designated by the Purchase Contract Agent, no later than 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 the Senior
Notes or with respect to the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio, to the Company on the Purchase Contract Settlement Date (as described
herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Corporate Units
representing such Pledged Senior Notes or the Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio, as the case may be, under the Purchase Contracts represented by such
Corporate Units. Interest on the Senior Notes and distributions on the
appropriate Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio, as the case may be,
represented by a Corporate Units evidenced hereby, which are payable quarterly
in arrears on February 16, May 16, August 16, and
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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 Corporate Units
Certificate (or a Predecessor Corporate Units Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 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
Stated Amount for the shares of Common Stock purchased pursuant to each Purchase
Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase
Contract Settlement Date by application of payment received in respect of the
principal amount with respect to any Pledged Senior Notes pursuant to the
Remarketing or the appropriate Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio, as the
case may be, pledged to secure the obligations under such Purchase Contract of
the Holder of the Corporate 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 Corporate Units as an acquisition of the Senior
Notes and Purchase Contracts represented by the Corporate Units, (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Senior Notes and the Applicable Ownership Interests in the Treasury
Portfolio and (iii) treat each Purchase Contract as a forward purchase contract
for the purchase of Common Stock.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract represented by a Corporate Unit evidenced hereby, an amount (the
"CONTRACT ADJUSTMENT PAYMENTS") equal to [ ]% per year of the Stated Amount.
Such Contract Adjustment Payments shall be payable to the Person in whose name
this Corporate Units Certificate is registered at the close of business on the
Record Date for such Payment Date. The Company may, at its option, defer such
Contract Adjustment Payments.
Interest on the Senior Notes and distributions on the Applicable Ownership
Interests (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 Corporate
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.
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Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this Corporate Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
The Chubb Corporation
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: BANK ONE TRUST COMPANY,
N.A.,not individually but solely
as Attorney-in-Fact of such Holder
By:
----------------------------------
Name:
Title:
DATED:
----------------------------------
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CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Corporate Units Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY,
N.A., as Purchase Contract
Agent
By:
-------------------------------
Name:
Title:
Dated:
----------------------------------
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(FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of June [ ], 2003 (as may be supplemented from time to time,
the "PURCHASE CONTRACT AGREEMENT"), between the Company and Bank One Trust
Company, N.A., as Purchase Contract Agent (including its successors hereunder,
the "PURCHASE CONTRACT AGENT"), to which Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and immunities
thereunder of the Purchase Contract Agent, the Company, and the Holders and of
the terms upon which the Corporate Units Certificates are, and are to be,
executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 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. The "SETTLEMENT RATE" is
equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is greater
than $[ ] (the "THRESHOLD APPRECIATION PRICE"), [ ] shares of Common Stock per
Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than or equal to the
Threshold Appreciation Price but greater than or equal to $[ ] (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contract having a
value equal to the Stated Amount divided by the Adjusted Applicable Market
Value; and
(3) if the Adjusted Applicable Market Value is less than the Reference
Price, [ ] shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby that is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Stated Amount, 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).
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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 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 reported 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-8
A "TRADING DAY" means a day on which Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate Units Certificate may pay the Stated Amount 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 (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio or a Remarketing of the related Pledged Senior Notes. Unless
the Treasury Portfolio has replaced the Senior Notes represented by Corporate
Units, a Holder of Corporate 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 Stated Amount
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 Treasury Portfolio has replaced the Senior Notes
represented by Corporate Unit, such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement on the Final Remarketing
Date. If the Treasury Portfolio has replaced the Senior Notes represented by
Corporate Units, a Holder of Corporate Units who does not notify the Purchase
Contract Agent, on or prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date of its
intention to effect a Cash Settlement shall pay the Stated Amount for the shares
of Common Stock to be delivered under the related Purchase Contract from the
proceeds at maturity of the Applicable Ownership Interests (as defined in clause
(i) of the definition of such term) in the Treasury Portfolio.
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 Corporate 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 Corporate
Units Certificate in the manner provided for in the Purchase Contract Agreement.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received
A-9
payment of the aggregate Stated Amount for the shares of Common Stock to be
purchased thereunder in the manner set forth in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby and all obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Senior
Notes or the appropriate Applicable Ownership Interests (as specified in clause
(i) of the definition of such term) in the Treasury Portfolio represented by
each Corporate Unit from the Pledge. A Corporate Unit shall thereafter represent
the right to receive the Senior Note or the appropriate Applicable Ownership
Interests in the Treasury Portfolio represented by such Corporate Units in
accordance with the terms of the Purchase Contract Agreement and the Pledge
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
Corporate Units Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Corporate 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 Senior Notes represented
by such Holder's Corporate Units; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Corporate 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 Senior Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Purchase Contract Agent
shall abstain from voting the Senior Note evidenced by such Corporate 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
A-10
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 Corporate Units, the Treasury Portfolio and
promptly (a) transfer the Applicable Ownership Interests (as specified in clause
(i) of the definition of such term) in the Treasury Portfolio to the Collateral
Account to secure the obligations of each Holder of Corporate Units to purchase
shares of Common Stock under the Purchase Contracts represented by such
Corporate Units, (b) transfer the Applicable Ownership Interests (as specified
in clause (ii) of the definition of such term) in the Treasury Portfolio to the
Purchase Contract Agent for the benefit of the Holders of such Corporate Units
and (C) remit the remaining portion of such funds to the Purchase Contract Agent
for payment to the Holders of such Corporate Units.
Upon the occurrence of a Successful 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 Corporate Units, the
Treasury Portfolio, and, after deducting the Remarketing Fee to the extent
permitted under the terms of the Remarketing Agreement, promptly remit the
remaining portion of such proceeds of such Successful Remarketing to the
Purchase Contract Agent for payment to the Holders of such Corporate 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 Corporate Units
and the Collateral Agent shall have such security interest rights and
obligations with respect to the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in respect of the Senior
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement and any reference herein to the Senior Notes shall be deemed to
be a reference to such Treasury Portfolio.
The Corporate Units Certificates are issuable only in registered form and
only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Units Certificate will be registered and
Corporate Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute a Treasury Security for a Senior Note, thereby creating Treasury
Units, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract represented by a Corporate Units remains in effect, such
Corporate Units shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Corporate Units in
A-11
respect of the Senior Notes and Purchase Contract represented by such Corporate
Units may be transferred and exchanged only as a Corporate Unit.
Unless the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units, and subject to the conditions set forth in the Purchase
Contract Agreement, the Holder of Corporate 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 Pledged 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 Pledged 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 "TREASURY UNIT". A Holder may make such Collateral Substitution
only in integral multiples of 40 Corporate Units for 40 Treasury Units.
If the Treasury Portfolio has replaced the Senior Notes represented by the
Corporate 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 4,000 Corporate Units. In such an
event, the Holder shall transfer Treasury Securities 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 Corporate 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 Corporate
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 Company has the right to defer payment of all or part of the Contract
Adjustment Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date (or in the event of an effective Early
Settlement or Cash Merger Early Settlement, the Early Settlement Date or Cash
Merger Early Settlement Date, as the case may be). If the Company so elects to
defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Purchase Contract Payments
at a rate equal to [ ]% per annum, compounding on each succeeding Payment Date,
until such deferred installments are paid. In the event that the Company elects
to defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early
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Settlement Date or Cash Merger Early Settlement Date, as the case may be), each
Holder will receive on the Purchase Contract Settlement Date, Early Settlement
Date or Cash Merger Early Settlement Date, as applicable, the aggregate amount
of Deferred Contract Adjustment Payments to the extent such fees are not
deducted from the Stated Amount in the case of a Cash Settlement or any Early
Settlement or Cash Merger Early Settlement.
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 Senior Notes or the appropriate Applicable Ownership Interests (as specified
in clause (i) of the definition of such term) in the Treasury Portfolio, as the
case may be, from the Pledge in accordance with the provisions of the Pledge
Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
represented by 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. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contract evidenced by this Certificate, the Holder
of this Corporate 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:
(1) (A) the product of (I) the Stated Amount, times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect Early
Settlement, plus (B) 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, less
(2) the amount of any Deferred Contract Adjustment Payments payable to
such Holder as a result of such Early Settlement.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Senior Notes or Pledge Applicable Ownership Interests (as
specified in clause (i) of the
A-13
definition of such term) represented by 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
represented by a Corporate Unit as to which Early Settlement is effected equal
to [ ] 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 Corporate Units may
effect Cash Merger Early Settlement of the Purchase Contract represented by such
Corporate 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 Corporate Units, the Pledged Senior Notes or Pledged
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio represented by such Corporate Units shall
be released from the Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Corporate Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Corporate Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Corporate Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts represented by the Corporate Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform 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 Senior Notes or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, represented by this Corporate
Units Certificate pursuant to the Pledge Agreement. The Holder further covenants
and agrees that, to the extent and in the manner provided in the Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments with respect to the aggregate principal amount of the Pledged Senior
Notes or the appropriate Applicable Ownership Interests (as specified in clause
(i) of the definition of such term) in the Treasury Portfolio, as the case may
be, on the Purchase Contract Settlement Date shall be paid by
A-14
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.
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
Corporate Units Certificate is registered as the owner of the Corporate Units
evidenced hereby for the purpose of receiving payments of interest payable on
the 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 Corporate Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Corporate Units Certificates on the books of The Chubb Corporation, with
full power of substitution in the premises.
Dated: __________________________ Signature ______________________________
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Corporate Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
A-16
Signature Guarantee:__________________________________
A-17
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 represented by the number of Corporate Units
evidenced by this Corporate Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:_________________________________ ____________________________________
Signature
Signature Guarantee:_________________
(if assigned to another person)
If shares are to be registered in
the name of and delivered to a
Person other than the Holder, REGISTERED HOLDER
please (i) print such Person's Please print name and address of
name and address and (ii) provide Registered Holder:
a guarantee of your signature:
_________________________________ _____________________________________
Name Name
_________________________________ _____________________________________
Address Address
_________________________________ _____________________________________
_________________________________ _____________________________________
_________________________________ _____________________________________
Name Social Security or other
Taxpayer Identification
Number, if any _____________________________________
A-18
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Corporate 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 represented by the
number of Corporate Units evidenced by this Corporate Units Certificate
specified below. The undersigned Holder directs that a certificate for shares of
Common Stock 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 Corporate Units
Certificate representing any Corporate 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. Pledged Senior Notes or
the appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, 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-19
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 REGISTERED HOLDER
Corporate Units Certificates are
to be registered in the name of
and delivered to and Pledged
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-20
Transfer Instructions for Pledged 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-21
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Corporate
Amount of increase Amount of decrease Units evidenced by
in Number of in Number of this Global Signature of
Corporate Units Corporate Units Certificate authorized signatory
evidenced by the evidenced by the following such of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
---- ------------------ ------------------ -------------------- --------------
A-22
EXHIBIT B
(FORM OF FACE OF TREASURY UNIT CERTIFICATE
For Treasury Units containing Treasury securities maturing
on July 15, 2006)
[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. 000000XX0
Number of Treasury Units: [ ]
The Chubb Corporation
Treasury Units
This Treasury Units Certificate certifies that [Cede & Co.]
[ ] is the registered Holder of the number of Treasury Units
set forth above [For inclusion in Global Certificates only - or such other
number of Treasury Units as is reflected in the Schedule of
B-1
Increases or Decreases in Global Certificate attached hereto]. Each Treasury
Unit represents (i) a 1/40 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 Chubb Corporation, a New Jersey corporation (the "COMPANY").
All capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities represented by
each Treasury Unit evidenced hereby have been pledged to the Collateral Agent,
for the benefit of the Company, to secure the obligations of the Holder under
the Purchase Contract represented by such Treasury Unit. Each Purchase Contract
evidenced hereby obligates the Holder of this Treasury Units Certificate to
purchase, and the Company to sell, on August 16, 2006 (the "PURCHASE CONTRACT
SETTLEMENT DATE"), at a price equal to $25.00 (the "STATED AMOUNT"), a number of
newly issued shares of common stock, par value $1.00 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 Stated Amount for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the proceeds from the Treasury Securities at maturity pledged to secure the
obligations of the Holder under such Purchase Contract of the Treasury 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 Treasury Units as an acquisition of the Treasury
Securities and Purchase Contracts represented by the Treasury Units, (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Treasury Securities and (iii) treat each Purchase Contract as a forward
purchase contract for the purchase of Common Stock.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract represented by a Treasury Unit evidenced hereby, an amount (the
"CONTRACT ADJUSTMENT PAYMENTS") equal to [ ]% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Treasury Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.
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 Treasury 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
B-2
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 Treasury Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company and the Holder specified above have caused
this instrument to be duly executed.
The Chubb Corporation
By:
----------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts)
By: BANK ONE TRUST COMPANY, N.A.,
not individually but solely as
Attorney-in-Fact of such Holder
By:
----------------------------------------
Authorized Officer
Dated:
---------------------
B-4
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By:
-----------------------------------
Authorized Officer
Dated:
-----------------
B-5
(REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of June [ ], 2003 (as may be supplemented from time to time,
the "PURCHASE CONTRACT AGREEMENT") between the Company and Bank One Trust
Company, N.A., 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 Treasury Units Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 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. The "SETTLEMENT RATE" is
equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is greater
than $[ ] (the "THRESHOLD APPRECIATION PRICE"), [ ] shares of Common Stock per
Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than or equal to the
Threshold Appreciation Price but greater than or equal to $[ ] (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contract having a
value equal to the Stated Amount divided by the Adjusted Applicable Market
Value; and
(3) if the Adjusted Applicable Market Value is less than the Reference
Price, [ ] shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Stated Amount, 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).
B-6
The "APPLICABLE MARKET VALUE" means the average of the Closing Prices per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date,
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 reported 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-7
A "TRADING DAY" means a day on which the Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Stated Amount for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement, 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 represented by such Holder's
Treasury Unit equal to the Stated Amount of such Purchase Contract to the
purchase of the Common Stock. A Holder of Treasury Units who (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, (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, or (3) 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 Stated Amount 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 stated amount for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Company has the right to defer payment of all or part of the Contract
Adjustment Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date (or in the event of an effective Early
Settlement or Cash Merger Early Settlement, the Early Settlement Date or Cash
Merger Early Settlement Date, as the case may be). If the Company so elects to
defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Purchase Contract Payments
at a rate equal to [ ]% per annum, compounding on each succeeding Payment
Date, until such deferred installments are paid. In the event that the Company
elects to defer the payment of Contract Adjustment Payments on the Purchase
Contracts until the Purchase Contract Settlement Date (or, in the event of an
effective Early Settlement or Cash Merger Early Settlement, the Early Settlement
Date or Cash Merger Early Settlement, as the case may be), each Holder will
receive on
B-8
the Purchase Contract Settlement Date or Early Settlement Date, as applicable,
the aggregate amount of Deferred Contract Adjustment Payments to the extent such
fees are not deducted from the Stated Amount in the case of a Cash Settlement or
any Early Settlement or Cash Merger Early Settlement.
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) represented
by each Treasury Unit. A Treasury Unit shall thereafter represent the right to
receive the Proceeds of the Treasury Security represented by such Treasury Unit,
in accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
The Treasury Units Certificates are issuable only in registered form and
only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes, for Treasury Securities, thereby recreating Corporate
Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract represented by a Treasury Unit remains in effect, such
Treasury Unit shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract represented by such Treasury Unit may be
transferred and exchanged only as a Treasury Unit.
Unless the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units and subject to the conditions set forth in the Purchase
Contract Agreement, a Holder of Treasury 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, Corporate 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 Xxxxxxxx
X-0
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Units shall be referred to as a "CORPORATE UNIT". Any such creation
of Corporate Units may be effected only in multiples of 40 Treasury Units for 40
Corporate Units.
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 Treasury 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.
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 Treasury Securities from the Pledge in accordance with the provisions of the
Pledge Agreement. A Treasury Unit shall thereafter represent the right to
receive the interest in the Treasury Security represented by such Treasury Unit,
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
represented by 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 Treasury 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) (A) the product of (I) the Stated Amount, times (II) the number of
Purchase Contracts with respect to which the Holder has elected to effect Early
Settlement, plus (B) 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
(ii) the amount of any Deferred Contract Adjustment Payments payable to
such Holder as a result of such Early Settlement.
B-10
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities represented by 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 represented by a Treasury Unit as to which Early
Settlement is effected equal to [ ] 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 Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract represented by such
Treasury 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 Treasury Units, the Pledged Treasury Securities
represented by such Treasury Units shall be released from the Pledge as provided
in the Pledge Agreement.
Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts represented by the Treasury Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities represented by this Treasury
Units Certificate pursuant to the Pledge Agreement. The Holder further covenants
and agrees, that, to the extent and in the manner provided in the Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect to the aggregate principal amount of the Pledged Treasury
Securities on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
B-11
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.
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
Treasury Units Certificate is registered as the owner of the Treasury Units
evidenced hereby for the purpose of receiving payments of interest on the
Treasury Securities, receiving payments of 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
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
B-12
--------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
--------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing _____________ attorney to transfer said
Treasury Units Certificates on the books of The Chubb Corporation, with full
power of substitution in the premises.
Dated:
------------------------------ ----------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Treasury Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
-----------------------------------
B-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts represented by the number of Treasury Units
evidenced by this Treasury Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:
------------------------------ ----------------------------------------
Signature
Signature Guarantee:
--------------------
(if assigned to another person)
If shares are to be registered in
the name of and delivered to a REGISTERED HOLDER
Person other than the Holder, please
(i) print such Person's name and
address and (ii) provide a guarantee Please print name and address of
of your signature: Registered Holder:
------------------------------------ ----------------------------------------
Name Name
------------------------------------ ----------------------------------------
Address Address
------------------------------------ ----------------------------------------
------------------------------------ ----------------------------------------
------------------------------------ ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ----------------------------------------
B-14
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury 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 represented by the
number of Treasury Units evidenced by this Treasury Units Certificate specified
below. The option to effect [Early Settlement] [Cash Merger Early Settlement]
may be exercised only with respect to Purchase Contracts represented by Treasury
Units with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of Common
Stock 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 Treasury Units Certificate
representing any Treasury 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-15
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 REGISTERED HOLDER
Treasury 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-16
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
B-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Treasury
Amount of increase Amount of decrease Units evidenced by
in Number of in Number of this Global
Treasury Units Treasury Units Certificate Signature of authorized
evidenced by the evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
----------------- ------------------ ------------------ -------------------- -----------------------
B-18
EXHIBIT C
(FORM OF FACE OF TREASURY UNIT CERTIFICATE
For Treasury Units containing Treasury Securities
maturing on August 15, 2006)
[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.]
CUSIP No. 000000XX0
Number of Treasury Units: [ ]
The Chubb Corporation
Treasury Units
This Treasury Units Certificate certifies that [Cede & Co.]
[__________________] is the registered Holder of the number of Treasury Units
set forth above [For inclusion in Global Certificates only - or such other
number of Treasury Units as is reflected in the Schedule of Increases or
Decreases in Global Certificate attached hereto]. Each Treasury Unit represents
(i) a 1/40 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
C-1
Purchase Contract with The Chubb Corporation, a New Jersey corporation (the
"COMPANY"). All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Treasury Securities represented by
each Treasury Unit evidenced hereby have been pledged to the Collateral Agent,
for the benefit of the Company, to secure the obligations of the Holder under
the Purchase Contract represented by such Treasury Unit. Each Purchase Contract
evidenced hereby obligates the Holder of this Treasury Units Certificate to
purchase, and the Company to sell, on August 16, 2006 (the "PURCHASE CONTRACT
SETTLEMENT DATE"), at a price equal to $25.00 (the "STATED AMOUNT"), a number of
newly issued shares of common stock, par value $1.00 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 Stated Amount for the shares of Common
Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by application
of the proceeds from the Treasury Securities at maturity pledged to secure the
obligations of the Holder under such Purchase Contract of the Treasury 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 Treasury Units as an acquisition of the Treasury
Securities and Purchase Contracts represented by the Treasury Units, (ii) treat
itself as owner of the applicable interest in the Collateral Account, including
the Treasury Securities and (iii) treat each Purchase Contract as a forward
purchase contract for the purchase of Common Stock.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract represented by a Treasury Unit evidenced hereby, an amount (the
"CONTRACT ADJUSTMENT PAYMENTS") equal to [ ]% per year of the Stated Amount.
Such Contract Adjustment Payments shall be payable to the Person in whose name
this Treasury Units Certificate is registered at the close of business on the
Record Date for such Payment Date. The Company may, at its option, defer such
Contract Adjustment Payments.
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 Treasury 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.
C-2
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this Treasury Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
C-3
IN WITNESS WHEREOF, the Company and the Holder specified above have caused
this instrument to be duly executed.
The Chubb Corporation
By:
-------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: BANK ONE TRUST COMPANY,
N.A., not individually but solely as
Attorney-in-Fact of such Holder
By:
-------------------------------------
Authorized Officer
Dated:
---------------------
C-4
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By:
-------------------------------------
Authorized Officer
Dated:
---------------------
C-5
(REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of June [ ], 2003 (as may be supplemented from time to time,
the "PURCHASE CONTRACT AGREEMENT") between the Company and Bank One Trust
Company, N.A., 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 Treasury Units Certificates are, and are
to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 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. The "SETTLEMENT RATE" is
equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is greater
than $[ ] (the "THRESHOLD APPRECIATION PRICE"), [ ] shares of Common Stock per
Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than or equal to the
Threshold Appreciation Price but greater than or equal to $[ ] (the "REFERENCE
PRICE"), the number of shares of Common Stock per Purchase Contract having a
value equal to the Stated Amount divided by the Adjusted Applicable Market
Value; and
(3) if the Adjusted Applicable Market Value is less than the Reference
Price, [ ] shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Stated Amount, 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).
C-6
The "APPLICABLE MARKET VALUE" means the average of the Closing Prices per
share of Common Stock on each of the 20 consecutive Trading Days ending on the
third Trading Day immediately preceding the Purchase Contract Settlement Date,
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 reported 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.
C-7
A "TRADING DAY" means a day on which the Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (2) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the Common
Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Stated Amount for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement, 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 represented by such Holder's
Treasury Unit equal to the Stated Amount of such Purchase Contract to the
purchase of the Common Stock. A Holder of Treasury Units who (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, (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, or (3) 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 Stated Amount 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 stated amount for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Company has the right to defer payment of all or part of the Contract
Adjustment Payments in respect of each Purchase Contract until no later than the
Purchase Contract Settlement Date (or in the event of an effective Early
Settlement or Cash Merger Early Settlement, the Early Settlement Date or Cash
Merger Early Settlement Date, as the case may be). If the Company so elects to
defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Purchase Contract Payments
at a rate equal to [ ]% per annum, compounding on each succeeding Payment Date,
until such deferred installments are paid. In the event that the Company elects
to defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement, as the case may be), each Holder will receive on
C-8
the Purchase Contract Settlement Date or Early Settlement Date, as applicable,
the aggregate amount of Deferred Contract Adjustment Payments to the extent such
fees are not deducted from the Stated Amount in the case of a Cash Settlement or
any Early Settlement or Cash Merger Early Settlement.
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) represented
by each Treasury Unit. A Treasury Unit shall thereafter represent the right to
receive the Proceeds of the Treasury Security represented by such Treasury Unit,
in accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
The Treasury Units Certificates are issuable only in registered form and
only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes, for Treasury Securities, thereby recreating Corporate
Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract represented by a Treasury Unit remains in effect, such
Treasury Unit shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract represented by such Treasury Unit may be
transferred and exchanged only as a Treasury Unit.
Unless the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units and subject to the conditions set forth in the Purchase
Contract Agreement, a Holder of Treasury 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, Corporate 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
C-9
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Units shall be referred to as a "CORPORATE UNIT". Any such creation
of Corporate Units may be effected only in multiples of 40 Treasury Units for 40
Corporate Units.
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 Treasury 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.
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 Treasury Securities from the Pledge in accordance with the provisions of the
Pledge Agreement. A Treasury Unit shall thereafter represent the right to
receive the interest in the Treasury Security represented by such Treasury Unit,
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
represented by 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 Treasury 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) (A) the product of (I) the Stated Amount, times (II) the number of
Purchase Contracts with respect to which the Holder has elected to effect Early
Settlement, plus (B) 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
(ii) the amount of any Deferred Contract Adjustment Payments payable to
such Holder as a result of such Early Settlement.
C-10
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities represented by 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 represented by a Treasury Unit as to which Early
Settlement is effected equal to [ ] 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 Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract represented by such
Treasury 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 Treasury Units, the Pledged Treasury Securities
represented by such Treasury Units shall be released from the Pledge as provided
in the Pledge Agreement.
Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts represented by the Treasury Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Treasury Securities represented by this Treasury
Units Certificate pursuant to the Pledge Agreement. The Holder further covenants
and agrees, that, to the extent and in the manner provided in the Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments in respect to the aggregate principal amount of the Pledged Treasury
Securities on the Purchase Contract Settlement Date shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
C-11
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.
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
Treasury Units Certificate is registered as the owner of the Treasury Units
evidenced hereby for the purpose of receiving payments of interest on the
Treasury Securities, receiving payments of 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
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
C-12
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________________ attorney to
transfer said Treasury Units Certificates on the books of The Chubb Corporation,
with full power of substitution in the premises.
Dated:
_______________________ _______________________________________________
Signature
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Treasury Units Certificates
in every particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
________________________________________________
C-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts represented by the number of Treasury Units
evidenced by this Treasury Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated:--------------------------------- ---------------------------------------
Signature
Signature Guarantee: ------------------
(if assigned to another person)
If shares are to be registered in the
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 ---------------------------------------
C-14
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury 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 represented by the
number of Treasury Units evidenced by this Treasury Units Certificate specified
below. The option to effect [Early Settlement] [Cash Merger Early Settlement]
may be exercised only with respect to Purchase Contracts represented by Treasury
Units with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of Common
Stock 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 Treasury Units Certificate
representing any Treasury 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:
-------------------
C-15
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 Treasury 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 ---------------------------------------
C-16
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
C-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Treasury
Amount of increase Amount of decrease Units evidenced by
in Number of in Number of this Global Signature of
Treasury Units Treasury Units Certificate authorized signatory
evidenced by the evidenced by the following such of Purchase Contract
Date Global Certificate Global Certificate decrease or increase Agent
C-18
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Bank One Trust Company, N.A.
The Purchase Contract Agent
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Corporate Trust Administration
Re: [_______ Corporate Units] [_______ Treasury Units (maturing on
[June][August] 15, 2006) of The Chubb Corporation, a New Jersey corporation (the
"COMPANY").
The undersigned Holder hereby notifies you that it has delivered to BNY
Midwest Trust Company, 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 June [ ], 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 [Corporate Units] [Treasury Units (maturing on [June][August]
15, 2006) ].
Date:
___________________ ______________________________________
Signature
Signature Guarantee:__________________
D-1
Please print name and address of Registered Holder:
--------------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
---------------------------------
---------------------------------
---------------------------------
D-2
EXHIBIT E
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
____________________________________________
____________________________________________
Attention:
Telecopy: __________
Re: [__________ Corporate Units] [______ Treasury Units (maturing on
[July][August] 15, 2006)] of The Chubb Corporation, a New Jersey
corporation (the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of June [ ],
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 Corporate Units and [Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) and]
Treasury 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 _____ [Corporate Units]
[Treasury Units] have been released and are being held by us for your account
pending receipt of transfer instructions with respect to such [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 [Corporate
Units][Treasury Units] effected through book-entry or by delivery to us of your
[Corporate Units Certificate][Treasury Units Certificate], we shall transfer the
Released Securities by book-entry transfer or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any distributions thereon, shall be
held in our name, or a nominee in trust for your benefit, until such time as
such [Corporate Units][Treasury Units] are transferred or your [Corporate Units
Certificate] [Treasury Units Certificate] is surrendered or satisfactory
evidence
E-1
is provided that such [Corporate Units Certificate][Treasury Units Certificate]
has been destroyed, lost or stolen, together with any indemnification that we or
the Company may require.
Date: By: BANK ONE TRUST COMPANY, N.A.,
as the Purchase Contract Agent
____________________________________
Name:
Title: Authorized Signatory
E-2
EXHIBIT F
NOTICE TO SETTLE BY CASH
Bank One Trust Company, N.A.
The Purchase Contract Agent
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Corporate Trust Administration
Re: [_______ Corporate Units] [Treasury Units (maturing
[July][August] 15, 2006)] of The Chubb Corporation, a
New Jersey corporation (the "COMPANY")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.02 of the Purchase Contract Agreement, dated as of June [ ], 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 Stated Amount 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 Holders' election to make such
Cash Settlement with respect to the Purchase Contracts related to such Holder's
[Corporate Units] [Treasury Units (maturing [July][August] 15, 2006)].
Date:
________________________ ____________________________________
Signature
Signature Guarantee:
________________
Please print name and address of Registered Holder:
F-1
EXHIBIT G
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Purchase Contract through Remarketing)
BNY Midwest Trust Company
The Collateral Agent
0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Finance
Fax: (000) 000-0000
Re: __________ Corporate Units of The Chubb Corporation, a
New Jersey corporation (the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of June [ ],
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 Corporate Units from time to time.
In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on notices of [Early Settlements][Cash Settlements] received from Holders
of Corporate Units as of 5:00 p.m. (New York City time), on the fifth Business
Day immediately preceding the ______ Remarketing Date, we hereby notify you that
an aggregate principal amount of $______ Senior Notes are to be tendered for
purchase in the Remarketing.
Date: By: BANK ONE TRUST COMPANY, N.A.,
as the Purchase Contract Agent
Name: ______________________
Title: Authorized Signatory
G-1
EXHIBIT H
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
4 World Financial Center, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Bank One Trust Company, N.A.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
This Agreement is dated [Insert Date] (the "AGREEMENT") by and between The
Chubb Corporation, a New Jersey corporation (the "COMPANY"), Citigroup Global
Markets Inc. ("CITIGROUP"), Xxxxxxx, Xxxxx & Co. ("XXXXXXX SACHS"), Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ("XXXXXXX XXXXX") and Bank One Trust
Company, N.A., a national banking association, not individually but solely as
Purchase Contract Agent (the "PURCHASE CONTRACT AGENT") and as attorney-in-fact
of the holders of Purchase Contracts (as defined in the Purchase Contract
Agreement referred to below).
Section 1. Definitions.
(a) Capitalized terms used and not defined in this Agreement shall have
the meanings set forth in the Purchase Contract Agreement, dated as of June __,
2003, between the Company and Bank One Trust Company, N.A., as Purchase Contract
Agent, as amended from time to time (the "PURCHASE CONTRACT AGREEMENT").
(b) As used in this Agreement, the following terms have the following
meanings:
"PRELIMINARY PROSPECTUS" means any preliminary prospectus relating to the
Remarketed Senior Notes included in the Registration Statement, including the
documents incorporated by reference therein as of the date of such Preliminary
Prospectus; and any reference to any amendment or supplement to such Preliminary
Prospectus shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus, under the Exchange Act, and incorporated by
reference in such Preliminary Prospectus.
"PROSPECTUS" means the prospectus relating to the Remarketed Senior Notes,
in the form in which first filed, or transmitted for filing, with the Commission
after the effective date of the Registration Statement pursuant to Rule 424(b),
including the documents incorporated by reference therein as of the date of such
Prospectus; and any reference to any amendment or supplement to such Prospectus
shall be deemed to refer to and include any documents filed after
H-1
the date of such Prospectus, under the Exchange Act, and incorporated by
reference in such Prospectus.
"REGISTRATION STATEMENT" means a registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT") prepared by the
Company covering, inter alia, the Remarketing of the Remarketed Senior Notes
pursuant to Section 5(a) hereunder, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in such
registration statement, and any post-effective amendments thereto.
"REMARKETED SENIOR NOTES" means the Pledged Senior Notes and the Separate
Senior Notes, if any, subject to Remarketing as identified to the Remarketing
Agent by the Purchase Contract Agent and the Custodial Agent, respectively,
after 11:00 a.m., New York City time, on the Business Day immediately preceding
the applicable Remarketing Date, and shall include: (a) (i) in the case of the
Initial Remarketing, the Second Remarketing and the Third Remarketing, the
Pledged Senior Notes and (ii) in the case of the Final Remarketing, the Senior
Notes of the Holders of Corporate Units who have not notified the Purchase
Contract Agent prior to 5:00 p.m. on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date of their intention to effect a
Cash Settlement of the related Purchase Contracts pursuant to the terms of the
Purchase Contract Agreement or who have so notified the Purchase Contract Agent
but failed to make the required cash payment on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date pursuant to the
terms of the Purchase Contract Agreement, and (b) the Separate Senior Notes of
the holders of Separate Senior Notes, if any, who have elected to have their
Separate Senior Notes be remarketed in such Remarketing pursuant to the terms of
the Purchase Contract Agreement.
"REMARKETING" means the remarketing of the Remarketed Senior Notes
pursuant to this Remarketing Agreement.
"REMARKETING AGENT" means any of Citigroup, Xxxxxxx Sachs or Xxxxxxx Xxxxx
appointed as the Remarketing Agent by the Company pursuant to Section 2(a)
hereof.
"REMARKETING MATERIALS" means the Preliminary Prospectus, the Prospectus
or any other information furnished by the Company to the Remarketing Agent for
distribution to investors in connection with the Remarketing.
"SENIOR NOTES" means the senior notes due August 16, 2008 of the Company.
"TRANSACTION DOCUMENTS" means this Agreement, the Purchase Contract
Agreement, the Pledge Agreement and the Indenture, in each case as amended or
supplemented from time to time.
Section 2. Appointment and Obligations of the Remarketing Agent.
(a) On or before the 20th Business Day prior to the Initial Remarketing
Date (the "APPOINTMENT DATE"), the Company shall send written notice appointing
any of Citigroup, Xxxxxxx Sachs or Xxxxxxx Xxxxx as the exclusive Remarketing
Agent, subject to the terms and conditions set forth herein, for the purpose of
(i) Remarketing the Remarketed Senior Notes on behalf of the holders thereof,
(ii) determining, in consultation with the Company, in the manner provided for
herein and in the Purchase Contract Agreement and the Indenture, the Reset Rate
for the Senior Notes, and (iii) performing such other duties as are assigned to
the Remarketing Agent in the Transaction Documents. Each of Citigroup, Xxxxxxx
Sachs and Xxxxxxx Xxxxx
H-2
hereby agree that if the Company chooses to appoint it as the Remarketing Agent,
it shall, subject to the terms and conditions set forth herein, accept such
appointment by the Company as the exclusive Remarketing Agent.
(b) Unless a Special Event Redemption has occurred prior to such date, on
the third Business Day immediately preceding May 16, 2006 (the "INITIAL
REMARKETING DATE"), the Remarketing Agent shall use its reasonable efforts to
remarket ("INITIAL REMARKETING") the Remarketed Senior Notes, at a price (the
"REMARKETING PRICE"), based on the Reset Rate, equal to approximately (but not
less than) 100.50% of the sum of the Treasury Portfolio Purchase Price and the
Separate Senior Notes Purchase Price.
(c) In the case of a Failed Initial Remarketing and unless a Special Event
Redemption has occurred prior to such date, on the third Business Day
immediately preceding June 16, 2006 (the "SECOND REMARKETING DATE"), the
Remarketing Agent shall use its reasonable efforts to remarket (the "SECOND
REMARKETING") the Remarketed Senior Notes at the Remarketing Price. In the case
of a Failed Second Remarketing and unless a Special Event Redemption has
occurred prior to such date, on the third Business Day immediately preceding
July 16, 2006 (the "THIRD REMARKETING DATE"), the Remarketing Agent shall use
its reasonable efforts to remarket (the "THIRD REMARKETING") the Remarketed
Senior Notes at the Remarketing Price. In the case of a Failed Third Remarketing
and unless a Special Event Redemption has occurred prior to such date, on the
third Business Day immediately preceding the Purchase Contract Settlement Date
(the "FINAL REMARKETING DATE"), the Remarketing Agent shall use its reasonable
efforts to remarket (the "FINAL REMARKETING") the Remarketed Senior Notes at a
price (the "FINAL REMARKETING PRICE"), based on the Reset Rate, equal to
approximately 100.50% (or, if the Remarketing Agent is unable to remarket the
Remarketed Senior Notes at such rate, at a rate below 100.50%, but in no event
less than 100%, net of the Remarketing Fee) of the aggregate principal amount of
the Remarketed Senior Notes being remarketed in such Final Remarketing. It is
understood and agreed that the Remarketing on any Remarketing Date, other than
the Final Remarketing Date, will be considered successful and no further
attempts will be made if the resulting proceeds are at least 100.25% (net of the
Remarketing Fee) of the sum of the Treasury Portfolio Purchase Price and the
Separate Senior Notes Purchase Price. It is further understood and agreed that
the Final Remarketing will be considered successful if the resulting proceeds
are at least 100% (net of the Remarketing Fee) of the aggregate principal amount
of the Remarketed Senior Notes.
(d) In connection with each Remarketing, the Remarketing Agent shall
determine, in consultation with the Company, the rate per annum, rounded to the
nearest one-thousandth (0.001) of one percent per annum, that the Senior Notes
should bear (the "RESET RATE") in order for the Remarketed Senior Notes to have
an aggregate market value equal to the Remarketing Price or the Final
Remarketing Price, as the case may be, and that in the sole reasonable
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Senior Notes at the Remarketing Price or Final Remarketing Price, as
the case may be, in such Remarketing, provided that such rate shall not exceed
the maximum interest rate permitted by law.
(e) In the event of a Failed Remarketing or if no Senior Notes are
included in Corporate Units, and if none of the holders of the Separate Senior
Notes elect to have Senior
H-3
Notes be remarketed in such Remarketing, the applicable interest rate on the
Senior Notes will not be reset and will continue to be the Coupon Rate set forth
in the Indenture, as supplemented from time to time.
(f) If, by 4:00 p.m. (New York City time) on the applicable Remarketing
Date, the Remarketing Agent is unable to remarket all of the Remarketed Senior
Notes at the Remarketing Price or the Final Remarketing Price, as the case may
be, pursuant to the terms and conditions hereof, a Failed Remarketing shall be
deemed to have occurred, and the Remarketing Agent shall advise, by telephone
the Depositary, the Purchase Contract Agent and the Company, and return the
Remarketed Senior Notes to the Collateral Agent or the Custodial Agent, as the
case may be. Whether or not there has been a Failed Remarketing will be
determined in the sole reasonable discretion of the Remarketing Agent.
(g) In the event of a Successful Remarketing, by approximately 4:30 p.m.
(New York City time) on the applicable Remarketing Date, the Remarketing Agent
shall advise, by telephone:
(1) the Depositary, the Purchase Contract Agent and the Company of
the Reset Rate determined by the Remarketing Agent in such Remarketing and
the number of Remarketed Senior Notes sold in such Remarketing;
(2) each purchaser (or the Depositary Participant thereof) of
Remarketed Senior Notes of the Reset Rate and the number of Remarketed
Senior Notes such purchaser is to purchase; and
(3) each such purchaser to give instructions to its Depositary
Participant to pay the purchase price on the third business day
immediately following the date of such Successful Remarketing in same day
funds against delivery of the Remarketed Senior Notes purchased through
the facilities of the Depositary.
The Remarketing Agent shall also, if required by the Securities Act or the
rules and regulations promulgated thereunder, deliver to each purchaser a
Prospectus in connection with the Remarketing.
(h) After deducting any fees specified in Section 4 below, the proceeds
from a Successful Remarketing (i) with respect to the Senior Notes that are
components of the Corporate Units, shall be paid to the Collateral Agent in
accordance with Sections 5.07 and 7.03 of the Pledge Agreement, as the case may
be, and Section 5.02 of the Purchase Contract Agreement and (ii) with respect to
the Separate Senior Notes, shall be paid to the Custodial Agent for payment to
the holders of such Separate Senior Notes in accordance with Section 5.02 of the
Purchase Contract Agreement and Section 7.03 of the Pledge Agreement.
(i) The right of each holder of Separate Senior Notes or Corporate Units
to have Remarketed Senior Notes remarketed and sold on any Remarketing Date
shall be subject to the conditions that (i) the Remarketing Agent conducts an
(A) Initial Remarketing, (B) a Second Remarketing in the event of a Failed
Initial Remarketing, (C) a Third Remarketing in the event of a Failed Second
Remarketing and (D) a Final Remarketing in the event of a Failed Third
Remarketing, each pursuant to the terms of this Agreement, (ii) a Special Event
Redemption has not occurred prior to such Remarketing Date, (iii) the
Remarketing Agent is able to find a
H-4
purchaser or purchasers for Remarketed Senior Notes at the Remarketing Price or
the Final Remarketing Price, as the case may be, based on the Reset Rate, and
(iv) such purchaser or purchasers deliver the purchase price therefor to the
Remarketing Agent as and when required.
(j) It is understood and agreed that the Remarketing Agent shall not have
any obligation whatsoever to purchase any Remarketed Senior Notes, whether in
the Remarketing or otherwise, and shall in no way be obligated to provide funds
to make payment upon tender of Remarketed Senior Notes for Remarketing or to
otherwise expend or risk its own funds or incur or to be exposed to financial
liability in the performance of its duties under this Agreement, and without
limitation of the foregoing, the Remarketing Agent shall not be deemed an
underwriter of the Remarketed Senior Notes. Neither the Company nor the
Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Remarketed Senior Notes for Remarketing.
Section 3. Representations and Warranties of the Company.
The Company represents and warrants (i) on and as of the date any
Remarketing Materials are first distributed in connection with the Remarketing
(the "COMMENCEMENT DATE"), (ii) on and as of the applicable Remarketing Date and
(iii) on and as of the settlement date relating to such Remarketing Date, that:
(a) Each of the representations and warranties of the Company as set forth
in Sections 1(a) through 1(aa) of the Underwriting Agreement dated June __, 2003
(the "UNDERWRITING AGREEMENT") among the Company and the Underwriters identified
in Schedule II thereto, is true and correct as if made on each of the dates
specified above; provided that for purposes of this Section 3(a), any reference
in such sections of the Underwriting Agreement to (i) the "Registration
Statement", the "Prospectus" or the "Preliminary Prospectus" shall be deemed to
refer to such terms as defined herein and (ii) the "Closing Date" shall be
deemed to refer to the applicable Remarketing Date.
(b) The Registration Statement, if any, in the form heretofore delivered
or to be delivered to the Remarketing Agent, has been declared effective by the
Commission in such form; and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission.
(c) The documents incorporated by reference in the Prospectus, when they
were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and
H-5
warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information relating to the Remarketing Agent furnished
in writing to the Company by the Remarketing Agent or its counsel expressly for
use in the Prospectus.
(d) The Registration Statement, if any, conforms (and the Prospectus, if
any, and any further amendments or supplements to the Registration Statement or
the Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform) in all material respects to the requirements of
the Securities Act and the rules and regulations promulgated thereunder, and the
Registration Statement and the Remarketing Materials (and any amendment or
supplement thereto) as of their respective effective or filing dates and as of
the Commencement Date, applicable Remarketing Date and Purchase Contract
Settlement Date do not and will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; provided that no representation
and warranty is made as to any statement of eligibility on Form T-1 filed or
incorporated by reference as part of the Registration Statement, the Prospectus
or the Remarketing Materials, or as to information relating to the Remarketing
Agent contained in or omitted from the Registration Statement, the Prospectus or
the Remarketing Materials in reliance upon and in conformity with written
information furnished to the Company by the Remarketing Agent.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
Section 4. Fees.
(a) In the event of a Successful Remarketing of the Remarketed Senior
Notes prior to the Final Remarketing Date, the Remarketing Agent may retain as a
remarketing fee (the "REMARKETING FEE") an amount not exceeding 25 basis points
(0.25%) of the sum of the Treasury Portfolio Purchase Price and the Separate
Senior Note Purchase Price.
(b) In the event of a Successful Final Remarketing, the Remarketing Agent
may retain as the Remarketing Fee an amount not exceeding 25 basis points
(0.25%) of the principal amount of the Remarketed Senior Notes.
Section 5. Covenants of the Company.
The Company covenants and agrees as follows:
(a) If and to the extent the Remarketed Senior Notes are required (in the
view of counsel, which need not be in the form of a written opinion, for either
the Remarketing Agent or the Company) to be registered under the Securities Act
as in effect at the time of the Remarketing,
(1) to prepare the Registration Statement and the Prospectus, in a
form approved by the Remarketing Agent, to file any such Prospectus
pursuant to the Securities Act within the period required by the
Securities Act and the rules and regulations thereunder and to use
commercially reasonable efforts to cause the
H-6
Registration Statement to be declared effective by the Commission prior to
the second Business Day immediately preceding the applicable Remarketing
Date;
(2) to file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the
Remarketing Agent, be required by the Securities Act or requested by the
Commission;
(3) to advise the Remarketing Agent, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Remarketing Agent with copies thereof;
(4) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a Prospectus is required in connection with the offering or
sale of the Remarketed Senior Notes;
(5) to advise the Remarketing Agent, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of the Prospectus, of the
suspension of the qualification of any of the Remarketed Senior Notes for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information, and, in the event of the
issuance of any stop order or of any order preventing or suspending the
use of any Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(6) to furnish promptly to the Remarketing Agent such copies of the
following documents as the Remarketing Agent shall reasonably request: (A)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits); (B) the Preliminary Prospectus and any amended or supplemented
Preliminary Prospectus, (C) the Prospectus and any amended or supplemented
Prospectus; and (D) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if at any time when delivery
of a prospectus is required in connection with the Remarketing, any event
shall have occurred as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or if for any other reason
it shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Securities Act or
the Exchange Act, to notify the Remarketing Agent and, upon its request,
to file such document and to prepare and furnish without charge to the
Remarketing Agent and to any dealer in securities as many copies as the
Remarketing Agent may from time to time reasonably request of an amended
or supplemented Prospectus that will correct such statement or omission or
effect such compliance;
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(7) prior to filing with the Commission (A) any amendment to the
Registration Statement or supplement to the Prospectus or (B) any
Prospectus pursuant to Rule 424 under the Securities Act, to furnish a
copy thereof to the Remarketing Agent and counsel to the Remarketing
Agent; and not to file any such amendment or supplement that shall be
reasonably disapproved by the Remarketing Agent promptly after reasonable
notice;
(8) as soon as practicable, but in any event not later than eighteen
months, after the effective date of the Registration Statement, to make
"generally available to its security holders" an "earnings statement" of
the Company and its subsidiaries complying with (which need not be
audited) Section 11(a) of the Securities Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158 under the
Securities Act). The terms "GENERALLY AVAILABLE TO ITS SECURITY HOLDERS"
and "EARNINGS STATEMENT" shall have the meanings set forth in Rule 158
under the Securities Act; and
(9) to take such action as the Remarketing Agent may reasonably
request in order to qualify the Remarketed Senior Notes for offer and sale
under the securities or "blue sky" laws of such jurisdictions as the
Remarketing Agent may reasonably request; provided that in no event shall
the Company be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction.
(b) To pay: (1) the costs incident to the preparation and printing of the
Registration Statement, if any, any Prospectus and any other Remarketing
Materials and any amendments or supplements thereto; (2) the costs of
distributing the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto; (3) any fees
and expenses of qualifying the Remarketed Senior Notes under the securities laws
of the several jurisdictions as provided in Section 5(a)(9) and of preparing,
printing and distributing a Blue Sky Memorandum, if any (including any related
fees and expenses of counsel to the Remarketing Agent); (4) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
and the Remarketing Agent hereunder; and (5) the reasonable fees and expenses of
counsel to the Remarketing Agent in connection with their duties hereunder.
(c) To furnish the Remarketing Agent with such information and documents
as the Remarketing Agent may reasonably request in connection with the
transactions contemplated hereby, and to make reasonably available to the
Remarketing Agent and any accountant, attorney or other advisor retained by the
Remarketing Agent such information that parties would customarily require in
connection with a due diligence investigation conducted in accordance with
applicable securities laws and to cause the Company's officers, directors,
employees and accountants to participate in all such discussions and to supply
all such information reasonably requested by any such Person in connection with
such investigation.
Section 6. Conditions to the Remarketing Agent's Obligations.
The obligations of the Remarketing Agent hereunder shall be subject to the
following conditions:
(a) The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall
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have been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.
(b) (1) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, (2) trading of any securities of the
Company shall not have been materially suspended or limited on the New York
Stock Exchange, (3) a general moratorium on commercial banking activities in New
York shall not have been declared by either Federal or New York State
authorities, or (4) there shall not have occurred a material adverse change in
the financial markets, any outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war or other calamity or crisis, if the effect of any such event specified in
this clause (4) in the judgment of the Remarketing Agent makes it impracticable
or inadvisable to proceed with the Remarketing or the delivery of the Remarketed
Senior Notes on the terms and in the manner contemplated in the Transaction
Documents.
(c) The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the applicable
Remarketing Date, and the Company, the Purchase Contract Agent and the
Collateral Agent shall have performed in all material respects all covenants and
agreements contained herein or in the Purchase Contract Agreement or Pledge
Agreement to be performed on their part at or prior to such Remarketing Date.
(d) The Company shall have furnished to the Remarketing Agent a
certificate, dated the applicable Remarketing Date, of the Chief Executive
Officer and the Treasurer satisfactory to the Remarketing Agent stating that:
(1) no order suspending the effectiveness of the Registration Statement, if any,
or prohibiting the sale of the Remarketed Senior Notes is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of such
officers, threatened by the Commission; (2) the representations and warranties
of the Company in Section 3 are true and correct on and as of the applicable
Remarketing Date and the Company has performed in all material respects all
covenants and agreements contained herein to be performed on its part at or
prior to such Remarketing Date; and (3) the Registration Statement, as of its
effective date, and the Remarketing Materials, as of their respective dates, did
not contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus did not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) On the applicable Remarketing Date, the Remarketing Agent shall have
received a letter addressed to the Remarketing Agent and dated such date, in
form and substance satisfactory to the Remarketing Agent, of Ernst & Young LLP,
the independent accountants of the Company, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
with respect to certain financial information contained in the Remarketing
Materials, if any.
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(f) Each of (1) the General Counsel to the Company, (2) Debevoise &
Xxxxxxxx, counsel to the Company and (3) Drinker, Xxxxxx & Xxxxx LLP, New Jersey
counsel to the Company, shall have furnished to the Remarketing Agent its
opinion, addressed to the Remarketing Agent and dated the Remarketing Date, in
form and substance reasonably satisfactory to the applicable Remarketing Agent
addressing such matters as are set forth in such counsel's opinion furnished
pursuant to Sections 6(b), 6(c) and 6(d) of the Underwriting Agreement, adapted
as necessary to relate to the securities being remarketed hereunder and to the
Remarketing Materials, if any, or to any changed circumstances or events
occurring subsequent to the date of this Agreement, such adaptations being
reasonably acceptable to counsel to the Remarketing Agent.
(g) Xxxxx Xxxx & Xxxxxxxx, counsel for the Remarketing Agent, shall have
furnished to the Remarketing Agent its opinion, addressed to the Remarketing
Agent and dated the applicable Remarketing Date, in form and substance
satisfactory to the Remarketing Agent.
(h) Subsequent to the execution and delivery of this Agreement and prior
to the applicable Remarketing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate an
improvement, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
Section 7. Indemnification.
(a) The Company will indemnify and hold harmless the Remarketing Agent,
its partners, directors and officers and each person, if any, who controls the
Remarketing Agent within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Remarketing Agent may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, or any amendments or supplement thereto, or any related Preliminary
Prospectus or preliminary prospectus supplement, or any other Remarketing
Materials, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Remarketing Agent
for any legal or other expenses reasonably incurred by the Remarketing Agent in
connection with investigating or defending any such losses, claims, damages,
liabilities or action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by the Remarketing Agent specifically for use therein.
(b) The Remarketing Agent will indemnify and hold harmless the Company,
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Securities Act or otherwise, insofar as such losses,
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claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus or any amendment or
supplement thereto, or any related Preliminary Prospectus or Preliminary
Prospectus supplement, or any other Remarketing Materials, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by the Remarketing Agent specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this section of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In the case of parties
indemnified pursuant to subsection (a) above, counsel to the indemnified parties
shall be selected by the Remarketing Agent. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
Section 8. Contribution.
(a) If the indemnification provided for in Section 7 is unavailable to or
insufficient to hold harmless an indemnified party under Sections 7(a) or 7(b),
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Remarketing Agent on the other from the offering of the Remarketed
Senior Notes or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportions as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the
H-11
relative fault of the Company on the one hand and the Remarketing Agent on the
other in connection with the statements of omissions which resulted in such
losses, claims, damages or liabilities as well as any relevant equitable
considerations. The relative benefits received by the Company on one hand and
the Remarketing Agent on the other hand in connection with the Remarketing shall
be deemed to be in the same proportions as the aggregate principal amount of the
Remarketed Senior Notes less the fee paid to the Remarketing Agent on the one
hand and the fee paid to the Remarketing Agent on the other hand bear to the
aggregate principal amount of the Remarketed Senior Notes. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company on the
one hand or the Remarketing Agent on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this subsection (a) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (a). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (a) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (a), the Remarketing Agent shall not be required
to contribute any amount in excess of the amount by which the fees received by
it under Section 4 exceeds the amount of any damages which the Remarketing Agent
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(b) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Remarketing Agent and to each person, if any, who controls the Remarketing Agent
within the meaning of the Securities Act; and the obligations of the Remarketing
Agent under this Section 8 shall be in addition to any liability which the
Remarketing Agent may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act.
(c) The indemnity and contribution provisions contained in Section 7 and
this Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Remarketing Agent or any person controlling the
Remarketing Agent, or the Company, its officers or director or any controlling
person of the Company, and the completion of the Remarketing.
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Section 9. Resignation and Removal of the Remarketing Agent.
Citigroup, Xxxxxxx Sachs or Xxxxxxx Xxxxx (the "Remarketing Agent
Candidates") may resign and be discharged from their duties and obligations
hereunder, and the Company may remove any of the Remarketing Agent Candidates,
by giving 30 days' prior written notice, in the case of a resignation, to the
Company and the Depositary and, in the case of a removal, to the removed
Remarketing Agent Candidate and the Depositary; provided, however, that if only
one Remarketing Agent Candidate remains:
(a) such Remarketing Agent Candidate may not resign without
reasonable cause; and
(b) no such resignation nor any such removal shall become effective until
the Company shall have appointed at least one nationally recognized
broker-dealer as successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in which
it shall have agreed to conduct the Remarketing in accordance with the
Transaction Documents in all material respects.
In any such case, the Company will use commercially reasonable efforts to
appoint a successor Remarketing Agent and enter into such a remarketing
agreement with such person as soon as reasonably practicable. The provisions of
Section 7 and Section 8 shall survive the resignation or removal of any
Remarketing Agent Candidate pursuant to this Agreement.
Section 10. Dealing in Securities.
The Remarketing Agent, when acting as a Remarketing Agent or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the Remarketed Senior Notes, Corporate Units,
Treasury Units or any of the securities of the Company (together, the
"SECURITIES"). The Remarketing Agent may exercise any vote or join in any action
which any beneficial owner of such Securities may be entitled to exercise or
take pursuant to the Indenture with like effect as if it did not act in any
capacity hereunder. The Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or have an interest in any financial or
other transaction with the Company as freely as if it did not act in any
capacity hereunder.
Section 11. Remarketing Agent's Performance; Duty of Care.
The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement and the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into this Agreement or any of the Transaction Documents. In
the absence of bad faith on the part of the Remarketing Agent, the Remarketing
Agent may conclusively rely upon any document furnished to it, as to the truth
of the statements expressed in any of such documents. The Remarketing Agent
shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties except as otherwise set forth herein. The Remarketing Agent, acting
under this Agreement, shall incur no liability to the Company or to any holder
of Remarketed Senior Notes in its individual capacity or as Remarketing Agent
for any action or failure to act, on its part in connection with a Remarketing
or otherwise, except if such liability is judicially determined to have resulted
from its failure to comply with the material terms of this Agreement or the
gross negligence or willful misconduct on its part. The
H-13
provisions of this Section 11 shall survive the termination of this Agreement
and shall survive the resignation or removal of any Remarketing Agent pursuant
to this Agreement.
Section 12. Termination.
This Agreement shall automatically terminate (i) as to the Remarketing
Agent on the effective date of the resignation or removal of the Remarketing
Agent pursuant to Section 9 and (ii) on the earlier of (x) any Special Event
Redemption Date and (y) the Purchase Contract Settlement Date. If this Agreement
is terminated pursuant to any of the other provisions hereof, except as
otherwise provided herein, the Company shall not be under any liability to the
Remarketing Agent and the Remarketing Agent shall not be under any liability to
the Company, except that if this Agreement is terminated by the Remarketing
Agent because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Remarketing Agent for all of its out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by it. Section 7, Section 8 and Section 11 hereof shall survive the
termination of this Agreement or the resignation or removal of the Remarketing
Agent.
Section 13. Notices.
All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Remarketing Agent Candidates, shall be delivered or sent
by mail, telex or facsimile transmission to:
Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000
Telecopier No.: [ ]
Attention: General Counsel
Xxxxxxx Xxxxx & Co.
[85 Broad Street]
[New York, NY 10004]
Telecopier No.: [ ]
Attention: [ ]
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
[4 World Financial Center, North Tower]
[New York, NY 10080]
Telecopier No.: [ ]
Attention: [ ]
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to The Chubb Corporation, 00 Xxxxxxxx Xxxx Xxxx,
Xxxxxx, Xxx Xxxxxx 00000-0000, Attention: General Counsel (Telecopier No.:
(000) 000-0000); and
H-14
(c) if to the Purchase Contract Agent, shall be delivered or sent by
mail, telex or facsimile transmission to Bank One Trust Company, N.A. , 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Corporate Trust
Administration.
Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof.
Section 14. Persons Entitled to Benefit of Agreement.
This Agreement shall inure to the benefit of and be binding upon each
party hereto and its respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
Remarketing Agent and the person or persons, if any, who control the Remarketing
Agent within the meaning of Section 15 of the Securities Act and (y) the
indemnity agreement of the Remarketing Agent contained in Section 7(b) of this
Agreement shall be deemed to be for the benefit of the Company's directors and
officers who sign the Registration Statement, if any, and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any
person, other than the persons referred to herein, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
Section 15. Survival.
The respective indemnities, representations, warranties and agreements of
the Company and the Remarketing Agent contained in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall survive any
Remarketing and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
Section 16. Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of New York, without regard to conflicts of laws principles.
Section 17. Judicial Proceedings.
(a) Each party hereto expressly accepts and irrevocably submits to the
non-exclusive jurisdiction of the United States Federal or New York State court
sitting in the Borough of Manhattan, The City of New York, New York, over any
suit, action or proceeding arising out of or relating to this Agreement or the
Securities. To the fullest extent it may effectively do so under applicable law,
each party hereto irrevocably waives and agrees not to assert, by way of motion,
as a defense or otherwise, any claim that it is not subject to the jurisdiction
of any such court, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.
(b) Each party hereto agrees, to the fullest extent that it may
effectively do so under applicable law, that a judgment in any suit, action or
proceeding of the nature referred to in
X-00
Xxxxxxx 00(x) brought in any such court shall be conclusive and binding upon
such party, subject to rights of appeal and may be enforced in the courts of the
United States of America or the State of New York (or any other court the
jurisdiction to which the Company is or may be subject) by a suit upon such
judgment.
Section 18. Counterparts.
This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be
deemed to be an original but all such counterparts shall together constitute one
and the same instrument.
Section 19. Headings.
The headings herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.
Section 20. Severability.
If any provision of this Agreement shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular
case in any or all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule or public policy or for any other reason, then, to
the extent permitted by law, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.
Section 21. Amendments.
This Agreement may be amended by an instrument in writing signed by the
parties hereto. The Company agrees that it will not enter into, cause or permit
any amendment or modification of the Transaction Documents or any other
instruments or agreements relating to the Senior Notes or the Corporate Units
that would in any way adversely affect the rights, duties or obligations of any
of Citigroup, Xxxxxxx Xxxxx or Xxxxxxx Xxxxx, each as a potential Remarketing
Agent, without the prior written consent of the Remarketing Agent Candidates.
Section 22. Successors and Assigns.
The rights and obligations of the Company hereunder may not be assigned or
delegated to any other Person without the prior written consent of the
Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder
may not be assigned or delegated to any other Person (other than an affiliate of
the Remarketing Agent) without the prior written consent of the Company.
If the foregoing correctly sets forth the agreement by and between the
Company, the Remarketing Agent and the Purchase Contract Agent, please indicate
your acceptance in the space provided for that purpose below.
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[SIGNATURES ON THE FOLLOWING PAGE]
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Very truly yours,
THE CHUBB CORPORATION
By:
---------------------------------
Xxxx X. Xxxxxxxx
Chief Executive Officer
CONFIRMED AND ACCEPTED:
CITIGROUP GLOBAL MARKETS INC.
By:
--------------------------------------
XXXXXXX, SACHS & CO.
By:
--------------------------------------
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------
BANK ONE TRUST COMPANY, N.A.
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the Holders
of the Purchase Contracts
By:
--------------------------------------
