THE HARTFORD FINANCIAL SERVICES GROUP, INC.
and
[____________],
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of September 13, 2002
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATIONS
SECTION 1.01. Definitions .................................................................. 1
SECTION 1.02. Compliance Certificates and Opinions ......................................... 15
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent ....................... 16
SECTION 1.04. Acts of Holders; Record Dates ................................................ 16
SECTION 1.05. Notices ...................................................................... 18
SECTION 1.06. Notice to Holders; Waiver .................................................... 19
SECTION 1.07. Effect of Headings and Table of Contents ..................................... 19
SECTION 1.08. Successors and Assigns ....................................................... 19
SECTION 1.09. Separability Clause .......................................................... 19
SECTION 1.10. Benefits of Agreement ........................................................ 19
SECTION 1.11. Governing Law ................................................................ 20
SECTION 1.12. Legal Holidays ............................................................... 20
SECTION 1.13. Counterparts ................................................................. 20
SECTION 1.14. Inspection of Agreement ...................................................... 20
SECTION 1.15. Appointment of Financial Institution as Agent for the Company ................ 20
SECTION 1.16. No Waiver .................................................................... 21
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally .............................................. 21
SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication .............. 22
ARTICLE 3
THE UNITS
SECTION 3.01. Amount; Form and Denominations ............................................... 22
SECTION 3.02. Rights and Obligations Evidenced by the Certificates ......................... 22
SECTION 3.03. Execution, Authentication, Delivery and Dating ............................... 23
SECTION 3.04. Temporary Certificates ....................................................... 24
SECTION 3.05. Registration; Registration of Transfer and Exchange .......................... 25
SECTION 3.06. Book-Entry Interests ........................................................ 26
SECTION 3.07. Notices to Holders .......................................................... 27
SECTION 3.08. Appointment of Successor Depositary ......................................... 27
SECTION 3.09. Definitive Certificates ..................................................... 27
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates .......................... 28
SECTION 3.11. Persons Deemed Owners ....................................................... 29
SECTION 3.12. Cancellation ................................................................ 30
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SECTION 3.13. Creation of Treasury Units by Substitution of Treasury Securities ........... 30
SECTION 3.14. Recreation of Corporate Units ............................................... 32
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event ................. 33
SECTION 3.16. No Consent to Assumption .................................................... 34
ARTICLE 4
THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved .................... 34
SECTION 4.02. Notice and Voting ........................................................... 35
SECTION 4.03. Special Event Redemption .................................................... 36
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock .......................................... 37
SECTION 5.02. Remarketing; Payment of Purchase Price ...................................... 39
SECTION 5.03. Issuance of Shares of Common Stock .......................................... 47
SECTION 5.04. Adjustment of Settlement Rate ............................................... 48
SECTION 5.05. Notice of Adjustments and Certain Other Events .............................. 56
SECTION 5.06. Termination Event; Notice ................................................... 57
SECTION 5.07. Early Settlement ............................................................ 58
SECTION 5.08. Intentionally Omitted ....................................................... 60
SECTION 5.09. No Fractional Shares ........................................................ 60
SECTION 5.10. Charges and Taxes ........................................................... 60
SECTION 5.11. Contract Adjustment Payment ................................................. 61
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract Adjustment Payments and to
Purchase Shares of Common Stock .................................................... 66
SECTION 6.02. Restoration of Rights and Remedies .......................................... 66
SECTION 6.03. Rights and Remedies Cumulative .............................................. 67
SECTION 6.04. Delay or Omission Not Waiver ................................................ 67
SECTION 6.05. Undertaking for Costs ....................................................... 67
SECTION 6.06. Waiver of Stay or Extension Laws ............................................ 67
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities ......................................... 68
SECTION 7.02. Notice of Default ........................................................... 69
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SECTION 7.03. Certain Rights of Purchase Contract Agent ................................... 69
SECTION 7.04. Not Responsible for Recitals or Issuance of Units ........................... 71
SECTION 7.05. May Hold Units .............................................................. 71
SECTION 7.06. Money Held in Custody ....................................................... 71
SECTION 7.07. Compensation and Reimbursement .............................................. 72
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility ..................... 72
SECTION 7.09. Resignation and Removal; Appointment of Successor ........................... 73
SECTION 7.10. Acceptance of Appointment by Successor ...................................... 74
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business ................. 75
SECTION 7.12. Preservation of Information; Communications to Holders ...................... 75
SECTION 7.13. No Obligations of Purchase Contract Agent ................................... 75
SECTION 7.14. Tax Compliance .............................................................. 76
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders .......................... 76
SECTION 8.02. Supplemental Agreements with Consent of Holders ............................. 77
SECTION 8.03. Execution of Supplemental Agreements ........................................ 78
SECTION 8.04. Effect of Supplemental Agreements ........................................... 78
SECTION 8.05. Reference to Supplemental Agreements ........................................ 79
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except
under Certain Conditions ........................................................... 79
SECTION 9.02. Rights and Duties of Successor Corporation .................................. 80
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract Agent 80
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts ........................................ 80
SECTION 10.02. Maintenance of Office or Agency ............................................. 81
SECTION 10.03. Company to Reserve Common Stock ............................................. 81
SECTION 10.04. Covenants as to Common Stock ................................................ 81
SECTION 10.05. Statements of Officers of the Company as to Default ......................... 82
SECTION 10.06. ERISA ....................................................................... 82
SECTION 10.07. Tax Treatment ............................................................... 82
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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
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PURCHASE CONTRACT AGREEMENT, dated as of September 13, 2002, between THE
HARTFORD FINANCIAL SERVICES GROUP, INC., a Delaware corporation (the "COMPANY"),
and [________], a _________, 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, when the Certificates
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 APPLICATIONS
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 by the Company of a written opinion
from the Company's independent auditors to the effect that, as a result of a
change in accounting rules after the date hereof, the Company must either (i)
account for the Purchase Contract as a
derivative under SFAS 133 or (ii) account for the Corporate Units using the
if-converted method under SFAS 128, and that such accounting treatment will
cease to apply upon redemption, if any, of the Senior Notes.
"ACT" has the meaning, with respect to any Holder, set forth in Section
1.04.
"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
Units and the U.S. Treasury Portfolio contained in a Corporate Unit, (i) a 5%
undivided beneficial ownership interest in a $1,000 face amount of treasury
securities (or principal or interest strips thereof) included in such Treasury
Portfolio that matures on or prior to November 15, 2006 and (ii) for (x) the
scheduled interest payment date on the Senior Notes that occurs prior to the
Final Remarketing Date, in the case of a Successful Remarketing on or prior to
the Final Remarketing Date, or (y) each scheduled interest payment on the Senior
Notes that occurs after the Special Event Redemption Date and on or before the
Purchase Contract Settlement Date, in the case of a Special Event Redemption
prior to the Purchase Contract Settlement Date, a ____% undivided beneficial
ownership interest in a $1,000 face amount of treasury securities (or principal
or interest strips thereof) included in such Treasury Portfolio that matures on
or prior to November 15, 2006, in each of the following cases.
"APPLICABLE PRINCIPAL AMOUNT" means the aggregate principal amount of the
Senior Notes that are components of Corporate Units on the Special Event
Redemption Date.
"APPLICANTS" has the meaning set forth in Section 7.12(b).
"BANKRUPTCY CODE" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"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
2
Participant or as an indirect participant, in each case in accordance with the
rules of such Depositary).
"BOARD OF DIRECTORS" means the board of directors of the Company or a duly
authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Purchase Contract Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global Certificate,
registered in the name of a Depositary or a nominee thereof, ownership and
transfers of which shall be maintained and made through book entries by such
Depositary as described in Section 3.06.
"BUSINESS DAY" or "BUSINESS DAY" means any day other than a Saturday or
Sunday or a day on which banking institutions or trust companies in New York
City, New York are authorized or required by applicable law to remain closed or
a day on which the Indenture Trustee or the Collateral Agent is closed for
business; provided that for purposes of the second paragraph of Section 1.12
only, the term "Business Day" shall also be deemed to exclude any day on which
trading on the New York Stock Exchange, Inc. is closed or suspended.
"CASH MERGER" has the meaning set forth in Section 5.04(b)(2).
"CASH MERGER EARLY SETTLEMENT" has the meaning set forth in Section
5.04(b)(2).
"CASH MERGER EARLY SETTLEMENT DATE" has the meaning set forth in Section
5.04(b)(2).
"CASH SETTLEMENT" has the meaning set forth in Section 5.02(c)(i).
"CERTIFICATE" means a Corporate Units Certificate or a Treasury Units
Certificate.
"CLEARING AGENCY" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Units and in whose name, or in the name of a nominee of that organization,
shall be registered a Global Certificate and which shall undertake to effect
book-entry transfers and pledges of the Units.
"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(e) of the Pledge
Agreement.
3
"COLLATERAL ACCOUNT" has the meaning set forth in Section 1.01(e) of the
Pledge Agreement.
"COLLATERAL AGENT" means _________, as Collateral Agent under the Pledge
Agreement until a successor Collateral Agent shall have become such pursuant to
the applicable provisions of the Pledge Agreement, and thereafter "Collateral
Agent" shall mean the Person who is then the Collateral Agent thereunder.
"COLLATERAL SUBSTITUTION" has the meaning set forth in Section 3.13.
"COMMON STOCK" means the common stock, par value $0.01 per share, of the
Company.
"COMPANY" means the Person named as the "COMPANY" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean such
successor.
"CONSTITUENT PERSON" has the meaning set forth in Section 5.04(b).
"CONTRACT ADJUSTMENT PAYMENTS" means the payments payable by the Company
on the Payment Dates in respect of each Purchase Contract, at a rate per year of
[___]% 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
_________, New York, New York _____, Attention: _________.
"CORPORATE UNIT" means the collective rights and obligations of a Holder
of a Corporate Unit Certificate in respect of the Senior Notes or an appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
subject in each case to the Pledge thereof, and the related Purchase Contract;
provided 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.
"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 ________, as Custodial Agent under the Pledge
Agreement until a successor Custodial Agent shall have become such pursuant to
the applicable provisions
4
of the Pledge Agreement, and thereafter "Custodial Agent" shall mean the Person
who is then the Custodial Agent thereunder.
"DEPOSITARY" means a clearing agency registered under the Exchange Act
that is designated to act as Depositary for the Units as contemplated by
Sections 3.06, 3.07, 3.08 and 3.09.
"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.
"EXERCISE DATE" has the meaning set forth in Section 5.02(e).
"EXPIRATION DATE" has the meaning set forth in Section 1.04(e).
"EXPIRATION TIME" has the meaning set forth in Section 5.04(a)(6).
"FAILED FINAL REMARKETING" has the meaning set forth in Section 5.02(d).
"FAILED INITIAL REMARKETING" has the meaning set forth in Section
5.02(a).
"FAILED REMARKETING" shall mean either (i) Failed Initial Remarketing,
(ii) Failed Second Remarketing or (iii) Failed Third Remarketing.
"FAILED SECOND REMARKETING" has the meaning set forth in Section 5.02(b).
5
"FAILED THIRD REMARKETING" has the meaning set forth in Section 5.02(d).
"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 a Clearing Agency 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 in determining whether the Holders of the requisite number of
Units have voted on any matter, then for the purpose of such determination only
(and not for any other purpose hereunder), if the Unit remains in the form of
one or more Global Certificates and if the Depositary that is the registered
holder of such Global Certificate has sent an omnibus proxy assigning voting
rights to the Depositary Participants to whose accounts the Units are credited
on the record date, the term "HOLDER" shall mean such Depositary Participant
acting at the direction of the Beneficial Owners.
"INDENTURE" means the Senior Indenture, dated as of October 20, 1995,
between the Company and the Indenture Trustee (including any provisions of the
TIA that are deemed incorporated therein), pursuant to which the Senior Notes
will be issued.
"INDENTURE TRUSTEE" means JPMorgan Chase Bank (formerly The Chase
Manhattan Bank (National Association)), as trustee under the Indenture, or any
successor thereto.
"INITIAL REMARKETING" has the meaning set forth in Section 5.02(a).
"INITIAL REMARKETING DATE" means the third Business Day immediately
preceding August 16, 2006.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request signed
in the name of the Company by (i) either its Chief Executive Officer, its
President or one of its Vice Presidents, and (ii) either its Corporate Secretary
or one of its Assistant Corporate Secretaries or its Treasurer or one of its
Assistant Treasurers, and delivered to the Purchase Contract Agent.
"NON-ELECTING SHARE" has the meaning set forth in Section 5.04(b).
"SENIOR NOTES" means the series of notes designated the senior notes due
November 16, 2008 to be issued by the Company under the Indenture as of the date
hereof.
6
"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, (i) Treasury Units and (ii)
Corporate Units for which the underlying Senior Notes or Applicable
Ownership Interests in the Treasury Portfolio have been theretofore
deposited with the Purchase Contract Agent in trust for the Holders of
such Corporate Units;
(ii) Units evidenced by Certificates theretofore cancelled by the
Purchase Contract Agent or delivered to the Purchase Contract Agent for
cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Units evidenced by Certificates in exchange for or in lieu of
which other Certificates have been authenticated, executed on behalf of
the Holder and delivered
7
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,
commencing November 16, 2002.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1.01(e) 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, in each case constituting a part of the Units.
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of September 13,
2002, among the Company, the Collateral 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.
"PLEDGED SENIOR NOTES" has the meaning set forth in Section 1.01(e) of the
Pledge Agreement.
"PREDECESSOR CERTIFICATE" means a Predecessor Corporate Units Certificate
or a
8
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.
"PRIMARY TREASURY DEALER" shall mean a primary U.S. government securities
dealer in New York City.
"PROCEEDS" has the meaning set forth in Section 1.01(e) of the Pledge
Agreement.
"PRO RATA" shall mean pro rata to each Holder according to the aggregate
Stated Amount of the Units held by such Holder in relation to the aggregate
Stated Amount of all Units outstanding.
"PROSPECTUS" means the prospectus relating to the delivery of shares of
any securities in connection with an Early Settlement pursuant to Section 5.07
or a Cash Merger Early Settlement of Purchase Contracts pursuant to Section
5.04(b)(2), in the form in which first filed, or transmitted for filing, with
the Commission after the effective date of the Registration Statement pursuant
to Rule 424(b) under the Securities Act, including the documents incorporated by
reference therein as of the date of such Prospectus.
"PURCHASE CONTRACT" means, with respect to any Unit, the contract forming
a part of such Unit and obligating the Company to (i) sell, and the Holder of
such Unit to purchase, shares of Common Stock and (ii) pay the Holder thereof
Contract Adjustment Payments, in each case on the terms and subject to the
conditions set forth in Article 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
9
appointed pursuant to this Agreement.
"PURCHASE CONTRACT SETTLEMENT DATE" means November 16, 2006.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in Section
5.03.
"PURCHASE PRICE" has the meaning set forth in Section 5.01.
"PURCHASED SHARES" has the meaning set forth in Section 5.04(a)(6).
"PUT PRICE" has the meaning set forth in Section 5.02(e).
"PUT RIGHT"has the meaning set forth in Section 5.02(e).
"QUOTATION AGENT" means any Primary Treasury Dealer selected by the
Company.
"RECORD DATE" for any distribution and Contract Adjustment Payment payable
on any Payment Date means, as to any Global Certificate or any other
Certificate, the first day of the 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:
(a) in the case of a Special Event Redemption occurring prior to the
Purchase Contract Settlement Date, the product of the principal amount of that
Senior Note and a fraction whose numerator is the applicable Treasury Portfolio
Purchase Price and whose denominator is the appropriate Applicable Principal
Amount, and
(b) in the case of a Special Event Redemption occurring on or after the
Purchase Contract Settlement Date, the principal amount of such Senior Note.
"REDEMPTION PRICE" means the applicable Redemption Amount, and any accrued
and unpaid interest thereon.
"REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.
"REFERENCE PRICE" has the meaning set forth in Section 5.01.
"REGISTRATION STATEMENT" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of any securities in connection with an Early Settlement on the Early
Settlement Date or a Cash Merger Early
10
Settlement of Purchase Contracts on the Cash Merger Early Settlement Date under
Section 5.04(b)(2), including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in such registration
statement, and any post-effective amendments thereto.
"REMARKETING" means the remarketing of the Senior Notes by the Remarketing
Agent pursuant to the Remarketing Agreement.
"REMARKETING AGENT" means [ ], or any successor remarketing agent
appointed by the Company pursuant to the Remarketing Agreement.
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of
September 13, 2002, among the Company, the Remarketing Agent and the Purchase
Contract Agent.
"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 held as components of 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 the interest rate on the Senior Notes determined by the
Remarketing Agent (i) in the case of a Successful Remarketing prior to the Final
Remarketing Date, as the rate necessary to remarket the Senior Notes at a price
per Senior Note such that the aggregate price for the Senior Notes remarketed is
equal to approximately 100.50% (but not less than 100%) of the sum of the
Treasury Portfolio Purchase Price and the Separate Senior Notes Purchase Price,
and (ii) in the case of a Successful Remarketing on the Final Remarketing Date,
as the rate necessary to remarket the Senior Notes at a price per Senior Note
such that the aggregate price for the Senior Notes remarketed is equal to
approximately 100.50% (but not less than 100%) of the aggregate principal amount
of the Senior Notes remarketed; provided that if there are no Corporate Units
outstanding and none of the Holders elect to have Separate Senior Notes held by
them remarketed, or in the case of a Failed Remarketing or a Failed Final
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 the Coupon
Rate; 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.
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"SECOND REMARKETING" has the meaning set forth in Section 5.02(b).
"SECOND REMARKETING DATE" means the third Business Day immediately
preceding September 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 _________, as Securities Intermediary
under the Pledge Agreement until a successor Securities Intermediary shall have
become such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "SECURITIES INTERMEDIARY" shall mean such successor or any subsequent
successor who is appointed pursuant to the Pledge Agreement.
"SECURITY REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings set forth in Section 3.05.
"SENIOR INDEBTEDNESS" means, indebtedness of any kind of the Company
unless the instrument under which such indebtedness is incurred expressly
provides that it is on a parity in right of payment with or subordinate in right
of payment to the Contract Adjustment Payments.
"SEPARATE SENIOR NOTES" means Senior Notes that are no longer a component
of 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 an Accounting Event or a Tax Event.
"SPECIAL EVENT REDEMPTION" shall mean that a Special Event has occurred
and is continuing and the Senior Notes have been called for redemption pursuant
to the Indenture.
"SPECIAL EVENT REDEMPTION DATE" means the date upon which a Special Event
Redemption is to occur.
"STATED AMOUNT" means $50.00.
"SUCCESSFUL FINAL REMARKETING" has the meaning set forth in Section
5.02(d).
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"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 (iii) a Successful Final Remarketing.
"SUCCESSFUL SECOND REMARKETING" has the meaning set forth in Section
5.02(b).
"SUCCESSFUL THIRD REMARKETING" has the meaning set forth in Section
5.02(b).
"SUPPLEMENTAL INDENTURE" means the Supplemental Indenture to the
Indenture, entered into between the Company and the Indenture Trustee on the
date hereof.
"TAX EVENT" means the receipt by the Company of an opinion of counsel,
rendered by a law firm having a recognized national tax practice, 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 issuance of Senior Notes, there is more than
an insubstantial increase in the risk that interest payable by us on the senior
notes is not, or within 90 days of the date of such opinion, will not be,
deductible by us, 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, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;
(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, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days; or
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(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 October 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 UNIT" means, following the substitution of Treasury Securities
for Senior Notes 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 such Treasury Securities, subject to
the Pledge thereof, and the related Purchase Contract.
"TREASURY UNITS CERTIFICATE" means a certificate evidencing the rights and
obligations of a Holder in respect of the number of Treasury Unit specified on
such certificate.
"TREASURY PORTFOLIO" means (1) treasury securities (or principal or
interest strips thereof) that mature on or prior to November 15, 2006 in an
aggregate amount equal to the principal amount of the senior notes included in
Equity Corporate Units, and (2) (x) if there is a successful remarketing prior
to the third business day preceding the Purchase Contract Settlement Date,
treasury securities (or principal or interest strips thereof) that mature on or
prior to November 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 aggregate principal amount
of Senior Notes included in the Corporate Units, or (y) if a Special Event
Redemption occurs prior to Purchase Contract Settlement Date, treasury
securities (or principal or interest strips thereof) that mature on or prior to
the business day immediately preceding each scheduled interest payment date
after the Special Event Redemption Date in an aggregate amount equal to the
aggregate interest payment (assuming no reset of the interest rate)
14
that would have been due on that interest payment date on the aggregate
principal amount of the Senior Notes included in the Corporate Units.
"TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate price
quoted by the 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 prior to the Purchase Contract Payment Date, on the third Business
Day immediately preceding the Special Event Redemption Date for the purchase of
the applicable Treasury Portfolio for settlement on such Special Event
Redemption Date, and (ii) in the case of any Successful Remarketing, 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 any treasury securities (or principal or
interest strips thereof) that mature on or prior to November 15, 2006.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated September
13, 2002, between the Company and the Underwriters identified in Schedule II
thereto.
"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 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Agreement
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Agreement (other than the Officers' Certificate
provided for in Section 10.05) shall include:
(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
15
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such individual, he
or she has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which its certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Agreement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Purchase
Contract Agent and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "ACT" of the Holders signing
such instrument or instruments. Proof
16
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Agreement and (subject to Section
7.01) conclusive in favor of the Purchase Contract Agent and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase Contract
Agent deems sufficient.
(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, the Company
may designate any date as the "EXPIRATION DATE" and from time to time may change
the Expiration Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration Date is given to
the Purchase Contract Agent in writing, and to each Holder of Units in the
manner set forth in Section 1.06, prior to or on the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the Company shall be deemed to have initially
designated the 180th day after such record date as the
17
Expiration Date with respect thereto, subject to its right to change the
Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable record
date.
SECTION 1.05. Notices.
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:
[Name]
[Address]
Telecopier No.:
Attention:
If to the Company:
The Hartford Financial Services Group, Inc.
Xxxxxxxx Xxxxx, Xxxxxxxx
Xxxxxxxxxxx 00000-0000
Telecopier No.:
Attention: [Treasurer]
If to the Collateral Agent:
[ ]
Telecopier No.:
Attention:
If to the Indenture Trustee:
[ ]
Telecopier No.:
Attention:
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 1.06. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed,
18
first-class postage prepaid, to each Holder affected by such event, at its
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Agreement provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Purchase
Contract Agent, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Purchase Contract
Agent shall constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and the
Purchase Contract Agent shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 1.09. Separability Clause.
In case any provision in this Agreement or in the Units shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Units, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and, to the extent provided hereby, the Holders, any benefits or any
legal or equitable right, remedy or claim under this Agreement. The Holders from
time to time shall be beneficiaries of this Agreement and shall be 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.
19
This Agreement and 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 or the Units), Contract
Adjustment Payments or other distributions shall not be paid on such date, but
Contract Adjustment Payments or such other distributions shall be paid on the
next succeeding Business Day with the same force and effect as if made on such
Payment Date, provided that no interest shall accrue or be payable by the
Company or to any Holder for the period from and after any such Payment Date.
In any case where any Purchase Contract Settlement Date, 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.
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
20
exercise, and no course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Company, the Collateral Agent, the
Securities Intermediary or any of their respective agents of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy. The remedies herein are cumulative and are
not exclusive of any remedies provided by law.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract forming part of
each Unit evidenced thereby) shall be in substantially the form set forth in
Exhibit A hereto (in the case of Certificates evidencing 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 Units evidenced by such
Certificates, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Certificate authenticated, executed on behalf of the Holders
and delivered hereunder shall bear a legend in substantially the following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION (THE "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
21
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN."
SECTION 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of authentication of
the Units shall be in substantially the form set forth on the form of the
applicable Certificates.
ARTICLE 3
THE UNITS
SECTION 3.01. Amount; Form and Denominations.
The aggregate number of Units evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
6,000,000 (6,600,000 if the over-allotment option granted in the Underwriting
Agreement is exercised in full), except for Certificates authenticated, executed
and delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to 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.
SECTION 3.02. 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
22
Purchase Contract Agent, as attorney-in-fact for, and on behalf of, the Holder
of each Corporate Unit shall pledge, pursuant to the Pledge Agreement, the
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,
forming a part of such Corporate Unit, to the Collateral Agent and grant to the
Collateral Agent a security interest in the right, title and interest of such
Holder in such 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, for the benefit of the Company, to secure the obligation of the
Holder under each Purchase Contract to 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 1/20 undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such Treasury
Security 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, as attorney-in-fact for, and on behalf of, the
Holder of each Treasury Unit shall pledge, pursuant to the Pledge Agreement, the
Treasury Securities forming a part of such Treasury Unit, to the Collateral
Agent and grant to the Collateral Agent a security interest in the right, title
and interest of such Holder in such Treasury Securities, for the benefit of the
Company, to secure the obligation of the Holder under each Purchase Contract to
purchase shares of Common Stock.
Prior to the purchase of shares of Common Stock under each Purchase
Contract, such Purchase Contracts shall not entitle the Holder of a Unit to any
of the rights of a holder of shares of Common Stock, including, without
limitation, the right to vote or receive any dividends or other payments or to
consent or to receive notice as a shareholder in respect of the meetings of
shareholders or for the election of directors of the Company or for any other
matter, or any other rights whatsoever as a shareholder of the Company.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
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, its Chief Executive Officer, its President, its Treasurer
or one of its Vice Presidents. The signature of any of these officers on the
Certificates may be manual or facsimile.
23
Certificates bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates or did not
hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until such
Certificate has been executed on behalf of the Holder by the manual signature of
an authorized officer of the Purchase Contract Agent, as such Holder's
attorney-in-fact. Such signature by an authorized officer of the Purchase
Contract Agent shall be conclusive evidence that the Holder of such Certificate
has entered into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or be
valid or obligatory for any purpose unless there appears on such Certificate a
certificate of authentication substantially in the form provided for herein
executed by an authorized officer of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.04. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates which are in
substantially the form set forth in Exhibit A or Exhibit B hereto, as the case
may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
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.
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.
24
SECTION 3.05. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "SECURITY REGISTRAR"). The Security
Registrar shall record separately the registration and transfer of the
Certificates evidencing 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
which the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange of a
Certificate shall evidence the ownership of the same number of Corporate Units
or Treasury Units, as the case may be, and be entitled to the same benefits and
subject to the same obligations, under this Agreement as the Corporate Units or
Treasury Units, as the case may be, evidenced by the Certificate surrendered
upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer or
exchange shall (if so required by the Purchase Contract Agent) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Purchase Contract Agent duly executed, by the Holder thereof
or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.04, 3.06 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
25
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 of any Early Settlement Date for such Certificate, any Cash Merger
Early Settlement Date for 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, an Early Settlement
Date or a Cash Merger Early Settlement Date with respect to such other
Certificate has occurred, deliver the shares of Common Stock issuable in
respect of the Purchase Contracts forming a part of the Units evidenced
by such other Certificate; or
(ii) if a Cash Settlement, an Early Settlement or a Cash Merger
Early Settlement Date with respect to such other Certificate shall have
occurred, 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 in the
Treasury Portfolio, as the case may be, evidenced thereby, in each case
subject to the applicable conditions and in accordance with the applicable
provisions of Section 3.15 and Article Five hereof.
SECTION 3.06. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of one
or more fully registered Global Certificates, to be delivered to the Depositary
or its custodian by, or on behalf of, the Company. The Company hereby designates
DTC as the initial Depositary. Such Global Certificates shall initially be
registered on the books and records of the Company in the name of Cede & Co.,
the nominee of the Depositary, and no Beneficial Owner will receive a definitive
Certificate representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.09. The Purchase Contract Agent
shall enter into an agreement with the Depositary if so requested by the
Company. Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.09:
(i) the provisions of this Section 3.06 shall be in full force and
effect;
(ii) the Company shall be entitled to deal with the Depositary for
all purposes of this Agreement (including, without limitation, making
Contract Adjustment Payments and receiving approvals, votes or consents
hereunder) as the Holder of the Units and the sole holder of the Global
Certificates and shall have no obligation to the Beneficial Owners;
(iii) to the extent that the provisions of this Section 3.06
conflict with any other provisions of this Agreement, the provisions of
this Section 3.06 shall control; and
26
(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.
SECTION 3.07. Notices to Holders.
Whenever a notice or other communication to the Holders is required to be
given under this Agreement, the Company or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Units
registered in the name of the Depositary or the nominee of the Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
SECTION 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Units, the Company may, in its sole discretion,
appoint a successor Depositary with respect to the Units.
SECTION 3.09. Definitive Certificates.
If:
(i) the Depositary elects to discontinue its services as securities
depositary with respect to the Units and a successor Depositary is not
appointed pursuant to Section 3.08 within 90 days after such
discontinuance; or
(ii) the Depositary ceases to be a clearing agency registered under
the Exchange Act when the Depositary is required to be so registered to
act as the Depositary and notifies the Company, and a successor Depositary
is not appointed pursuant to Section 3.08 within 90 days after the date
the Company is so notified; or
(iii) the Company determines in its discretion that the Global
Certificates shall be exchangeable for definitive Certificates,
then (x) definitive Certificates shall be prepared by the Company with respect
to such Units and delivered to the Purchase Contract Agent and (y) upon
surrender of the Global Certificates representing the Units by the Depositary,
accompanied by registration instructions, the Company shall cause definitive
Certificates to be delivered to Beneficial Owners in accordance with the
instructions of the Depositary. The Company and the Purchase Contract Agent
shall not be liable for any delay in delivery of such instructions and may
conclusively rely on and shall be authorized and protected in relying on, such
instructions. Each definitive Certificate so delivered shall evidence Units of
the same kind and tenor as the Global Certificate so surrendered in
27
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 for such lost or
mutilated Certificate, any Cash Merger Early Settlement Date for such lost or
mutilated Certificate, the Purchase Contract Settlement Date or the Termination
Date. In lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt of appropriate
registration or transfer instructions from such Holder, the Purchase Contract
Agent shall:
(i) if the Purchase Contract Settlement Date, Early Settlement Date
or Cash Merger Early Settlement Date with respect to such lost, stolen,
destroyed or mutilated Certificate has occurred, deliver the shares of
Common Stock issuable in respect of the Purchase Contracts forming a part
of the Units evidenced by such Certificate; or
(ii) if a Cash Settlement with respect to such lost or mutilated
Certificate shall have occurred 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.
28
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 the purpose of
(subject to any applicable record date) receiving distributions 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, as applicable, receiving
Contract Adjustment Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any distributions on the Senior Notes
or Applicable Ownership Interests (as specified in clause (ii) of the definition
of such term) in the Treasury Portfolio, as applicable, or Contract Adjustment
Payments payable on the Purchase Contracts, each constituting a part of the
Units evidenced thereby shall be overdue and notwithstanding any notice to the
contrary, and neither the Company nor the Purchase Contract Agent, nor any agent
of the Company or the Purchase Contract Agent, shall be affected by notice to
the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent, from giving effect
to any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate. None of
the Company, the Purchase Contract Agent nor 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
29
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 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 which the Company may have
acquired in any manner whatsoever, and all Certificates so delivered shall, upon
an Issuer Order, be promptly cancelled by the Purchase Contract Agent. No
Certificates shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates cancelled as provided
in this Section, except as expressly permitted by this Agreement. All cancelled
Certificates held by the Purchase Contract Agent shall be disposed of in
accordance with its customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate 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 as a
component of the Corporate Units as a result of Successful Remarketing of the
Senior Notes prior to the Final Remarketing Date or a Special Event Redemption
prior to the Purchase Contract Settlement Date (in which case no Collateral
Substitution shall be permitted) and subject to the conditions set forth in this
Agreement, a Holder may separate the Senior Notes from the related Purchase
Contracts in respect of such Holder's Corporate Units by substituting for such
Senior Notes Treasury Securities in an aggregate principal amount at maturity
equal to the aggregate principal amount of such Senior Notes (a "COLLATERAL
SUBSTITUTION"), 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. 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 comprising part of such Corporate Units;
and
30
(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 transferred the
relevant amount of Treasury Securities to the
Securities Intermediary and (ii) requesting that the
Purchase Contract Agent instruct the Collateral Agent
to release the Senior Notes underlying 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 thereof, 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 a Treasury Units Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled 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.
Holders may make Collateral Substitutions only in integral multiples of
20 Corporate Units. If the Treasury Portfolio has replaced the Senior Notes as a
component of the Corporate Units as a result of the Successful Remarketing of
the Senior Notes prior to the Final Remarketing Date or a Special Event
Redemption prior to the Purchase Contract Settlement Date, 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 multiples of [___]
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 in the
manner set forth above.
31
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 Collateral Agent, any
distributions on the Senior Notes constituting a part of 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 or a Cash Merger Early
Settlement, for so long as the Purchase Contract underlying a Corporate Unit
remains in effect, such Corporate Units shall not be separable into its
constituent parts, 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 comprising 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 as a
component of the Corporate Units as a result of the Successful Remarketing of
the Senior Notes prior to the Final Remarketing Date or a Special Event
Redemption prior to the Purchase Contract Settlement Date (in which case no
Collateral Substitution shall be permitted) 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, by:
(1) depositing with the Securities Intermediary Senior
Notes having an aggregate principal amount equal to the
aggregate principal amount at maturity of the Treasury
Securities comprising part of the Treasury Units; and
(2) transferring 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) requesting that the Purchase
Contract Agent instruct the Collateral Agent to release
the Treasury Securities underlying 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.
32
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 thereof, 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 a Corporate Unit Certificate executed by the Company in
accordance with Section 3.03 evidencing the same number of Purchase
Contracts as were evidenced by the cancelled 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.
Holders of Treasury Units may only recreate Corporate Units in integral
multiples of 20 Treasury Units. If the Treasury Portfolio has replaced the
Senior Notes as a component of the Corporate Units as a result of the Successful
Remarketing of the Senior Notes prior to the Final Remarketing Date or a Special
Event Redemption prior to the Purchase Contract Settlement Date, 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 multiples
of [___] Treasury 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
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 or a Cash Merger Early
Settlement, for so long as the Purchase Contract underlying a Treasury Unit
remains in effect, such Treasury Unit shall not be separable into its
constituent parts and the rights and obligations of the Holder of such Treasury
Unit in respect of the 1/20 of a Treasury Security and the Purchase Contract
comprising such Treasury Unit may be acquired, and may be transferred and
exchanged, only as a Treasury Unit.
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination
Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract
33
Agent of the Senior Notes, the appropriate Applicable Ownership Interests in the
Treasury Portfolio or the Treasury Securities, as the case may be, underlying
the Corporate Units and 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, underlying such Corporate Units or Treasury Units, as the case may
be, to such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of Corporate Units or
Treasury Units fails to effect such transfer or delivery, the Senior Notes, the
appropriate Applicable Ownership Interests in the Treasury Portfolio or Treasury
Securities, as the case may be, underlying such Corporate Units or Treasury
Units, as the case may be, and any 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 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 4.01. 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) of which such Senior Note or the
appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, forms a part is registered at the close of business on the Record
Date for such Payment Date.
Each 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 underlying such other Corporate Units
Certificate.
In the case of any Corporate Unit with respect to which (A) Cash
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.02 hereof, (B) Early Settlement of the underlying Purchase Contract is
properly effected pursuant to Section 5.07 hereof, (C) Cash Merger Early
Settlement of the underlying Purchase Contract is properly effected pursuant to
Section 5.04(b)(2) hereof, or (D) a Collateral Substitution is effected, 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, underlying 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 or Collateral Substitution, and
such 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 sentence, in the case of any Corporate Units with
respect to which Cash Settlement, Early Settlement or Cash Merger Early
Settlement of the underlying Purchase Contract is properly effected, or with
respect to which a Collateral Substitution has been effected, distributions on
the related Senior Notes or the appropriate Applicable Ownership Interests in
the Treasury Portfolio, as the case may be, that would otherwise be payable
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 that formerly comprised a part of
35
such Holder's Corporate Units, such Holder shall be entitled to receive interest
on such Separate Senior Notes.
SECTION 4.02. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Senior Notes, but only to the extent instructed in
writing by the Holders as described below. Upon receipt of notice of any meeting
at which holders of Senior Notes are entitled to vote or upon any solicitation
of consents, waivers or proxies of holders of Senior Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of 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 underlying 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 underlying 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 4.03. Special Event Redemption.
(a) Upon the occurrence of a Special Event Redemption prior to the
earlier of (A) the date of a Successful Remarketing and (B) the Purchase
Contract Settlement Date, the Company may, at its option, redeem the Senior
Notes in whole, but not in part, at the Redemption Price. If the Company so
elects to redeem the Senior Notes, it shall notify the Collateral Agent in
writing that a Special Event Redemption has occurred. The Company shall deposit
in the Collateral
36
Account in exchange for the Pledged Senior Notes an amount equal to the
Redemption Price. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent shall cause the Securities Intermediary to apply an amount
equal to the 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 prior to the
Purchase Contract Settlement Date, 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 Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligation of each Holder of a Corporate Unit to
purchase the Common Stock of the Company under the Purchase Contract
constituting a part of such Corporate Unit. Following the occurrence of a
Special Event Redemption prior to the earlier of (i) the date of a Successful
Remarketing or (ii) the Purchase Contract Settlement 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 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 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) If the Special Event Redemption occurs after the Purchase Contract
Settlement Date, the Company shall remit in exchange for the Senior Notes
outstanding on such date an amount equal to the Redemption Price to the Purchase
Contract Agent for payment to the Holders of such Senior Notes.
(d) The Holders of Separate Senior Notes shall directly receive the
redemption price for the Separate Senior Notes.
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall obligate the Holder of the related
Units to purchase, and the Company to sell, on the Purchase Contract Settlement
Date at a price equal to the Stated Amount (the "PURCHASE PRICE"), a number of
newly issued shares of Common Stock (subject to Section 5.09) equal to the
Settlement Rate unless an Early Settlement has occurred in accordance
37
with Section 5.07 hereof or a Cash Merger Early Settlement has occurred in
accordance with Section 5.04(b)(2) hereof or, prior to or on the Purchase
Contract Settlement Date, there shall have occurred a Termination Event with
respect to the Units of which such Purchase Contract is a part. The "SETTLEMENT
RATE" is equal to:
(i) if the Applicable Market Value (as defined below) is
greater than or equal to $[______] (the "THRESHOLD APPRECIATION
PRICE"), [_______] shares of Common Stock per Purchase Contract;
(ii) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $[______] (the "REFERENCE PRICE"),
the number of shares of Common Stock per Purchase Contact having a
value equal to the Stated Amount divided by the Applicable Market
Value;
(iii) if the Applicable Market Value is less than or equal to
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 "CLOSING PRICE" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(ii) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price per share as reported in the
composite transactions for the principal United States national or
regional securities exchange on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the closing sale price per
share as reported by The Nasdaq National Market, Inc.;
(iv) 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
38
(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
for this purpose by the Company.
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 thereof:
(i) irrevocably authorizes the Purchase Contract Agent to
enter into and perform the related Purchase Contract on its behalf as
its attorney-in-fact (including, without limitation, the execution of
Certificates on behalf of such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
(iii) covenants and agrees to perform its obligations under
such Purchase Contract for so long as such Holder remains a Holder of a
Corporate Unit or a Treasury Unit;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to
enter into and perform this Agreement and the Pledge Agreement on its
behalf and in its name as its attorney-in-fact;
(vi) consents to, and agrees to be bound by, the Pledge of
such Holder's right, title and interest in and to the Collateral
Account, including the 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
(vii) for United States federal income tax purposes, agrees to
(i) treat an acquisition of the Corporate Units as an acquisition of
the Senior Note and Purchase Contract constituting the Corporate Units,
(ii) treat the Senior Notes as indebtedness 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
39
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, Proceeds of the Senior Notes, the Treasury Securities or the
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, as applicable, on the Purchase Contract
Settlement Date, shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such Proceeds.
(d) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts underlying the
Certificate so transferred and the Pledge Agreement. The Company covenants and
agrees, and each Holder of a Certificate, by its acceptance thereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
SECTION 5.02. Remarketing; Payment of Purchase Price.
(a) (i) The Company shall engage the Remarketing Agent pursuant to the
Remarketing Agreement for Remarketing the Senior Notes. Unless a Special Event
Redemption has occurred prior to the Initial Remarketing Date, the Purchase
Contract Agent or the Custodial Agent shall notify, by 11:00 a.m. (New York City
time) on the Business Day immediately preceding the Initial Remarketing Date,
the Remarketing Agent of the aggregate principal amount of Senior Notes that are
part of Corporate Units, or aggregate principal amount of Separate Senior Notes
that are to be remarketed pursuant to clause (ii) below, as the case may be,
that are to be remarketed. Concurrently, the Collateral Agent, pursuant to the
terms of the Pledge Agreement, will present for Remarketing such Senior Notes,
or 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 or Collateral Agent and such Senior
Notes from the Collateral Agent or Custodial Agent, the Remarketing Agent will,
on the Initial Remarketing Date, use its reasonable efforts to remarket (based
on the Reset Rate) (the "INITIAL REMARKETING") such Senior Notes on such date at
a price of approximately 100.50% (but not less than 100%) 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 Senior Notes at a price (net of
fees and commissions) equal to or greater than 100% 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. In addition, the Remarketing Agent may deduct
as a remarketing fee (the "REMARKETING FEE") an amount equal to 25 basis points
(0.25%) of the sum of the Treasury Portfolio Purchase Price plus the Separate
Senior
40
Notes Purchase Price from any amount of such proceeds in excess of the sum of
the Treasury Portfolio Purchase Price plus the Separate Senior Notes Purchase
Price. With respect to Separate Senior Notes, any proceeds of the Initial
Remarketing in excess of the Remarketing Fee attributable to the Separate Senior
Notes will be remitted to the Custodial Agent for payment to the holders of
Separate Senior Notes. With respect to Senior Notes that are part of Corporate
Units, any proceeds of the Initial Remarketing in excess of the sum of the
Treasury Portfolio Purchase Price plus the Remarketing Fee with respect to such
Senior Notes will be remitted to the Purchase Contract Agent for payment to the
Holders of the related Corporate Units. Neither the Company, the Purchase
Contract Agent, nor any Corporate Units Holders whose Senior Notes are so
remarketed will otherwise be responsible for the payment of any Remarketing Fee
in connection therewith. The Treasury Portfolio will be substituted for the
Senior Notes of Holders of Corporate Units 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
Corporate Units Holders' obligation to pay the Purchase Price for the Common
Stock under the related Purchase Contracts on the Purchase Contract Settlement
Date.
Following the occurrence of a Successful Initial Remarketing, the
Holders of 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.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the related Senior Notes in the Initial Remarketing (other than
to the Company) at a price (net of fees and commissions) not less than 100% of
the sum of the Treasury Portfolio Purchase Price plus the Separate Senior Notes
Purchase Price or 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 remarketed Senior Notes 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 second
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
Collateral Agent. After such
41
time, such election shall become an irrevocable election to have such
Separate Senior Notes remarketed in such Remarketing and, if such
Remarketing fails, in any subsequent Remarketing. The Custodial Agent
shall hold Separate Senior Notes in an account separate from the
Collateral Account in which the Pledged Senior Notes (as defined in the
Pledge Agreement) 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,
prior to 5:00 p.m. (New York City time) on the second Business Day
immediately preceding the applicable Remarketing Date, upon which
notice the Custodial Agent shall return such Separate Senior Notes to
such Holder. Promptly after 11:00 a.m. on the Business Day immediately
preceding the applicable Remarketing Date, the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of the
Separate Senior Notes to be remarketed and will deliver to the
Remarketing Agent for remarketing all such Separate Senior Notes
delivered to the Custodial Agent pursuant to the 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, including, without limitation, the
procedures to be followed if any Holder elects to exercise its Put
Right set forth under Section 5.02(e) in the event of a Failed Final
Remarketing.
(iv) If required by applicable law, the Company agrees to use
its commercially reasonable efforts to ensure that a registration
statement with regard to the full amount of the Senior Notes to be
remarketed in the Initial Remarketing, the Second Remarketing, the
Third Remarketing or the Final Remarketing, as the case may be, shall
be effective with the Securities and Exchange Commission in a form that
will enable the Remarketing Agent to rely on it in connection with such
Remarketing.
(v) The Company shall cause a notice of a Failed Remarketing
and a Failed Final 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. On the Business Day immediately
preceding the Second Remarketing Date for such Second Remarketing, the
Collateral Agent, pursuant to the terms of the Pledge Agreement, or the
Custodial Agent, pursuant to Section 5.02(a)(ii), will present for Remarketing
the Pledged Senior Notes and the Separate Senior Notes that are to be remarketed
to the
42
Remarketing Agent. Upon receipt of such Senior Notes from the Collateral Agent
or Custodial Agent, the Remarketing Agent will, on the Second Remarketing Date,
use its reasonable efforts to remarket (based on the Reset Rate) such Senior
Notes on such date at a price of approximately 100.50% (but not less than 100%)
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 Senior
Notes at a price (net of fees and commissions) equal to or greater than 100% 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. In addition, the Remarketing
Agent may deduct the Remarketing Fee from any amount of such proceeds in excess
of the sum of the Treasury Portfolio Purchase Price plus the Separate Senior
Notes Purchase Price. With respect to Separate Senior Notes, any proceeds of the
Second Remarketing in excess of the Remarketing Fee attributable to the Separate
Senior Notes will be remitted to the Custodial Agent for payment to the holders
of Separate Senior Notes. With respect to Senior Notes that are part of
Corporate Units, any proceeds of the Second Remarketing in excess of the sum of
the Treasury Portfolio Purchase Price plus the Remarketing Fee with respect to
such Senior Notes will be remitted to the Purchase Contract Agent for payment to
the Holders of the related Corporate Units. Neither the Company nor any
Corporate Units Holders whose Senior Notes are so remarketed will otherwise be
responsible for the payment of any Remarketing Fee in connection therewith. The
Treasury Portfolio will be substituted for the Senior Notes of Holders of
Corporate Units 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 Corporate Units Holders'
obligation to pay the Purchase Price for the Common Stock under the related
Purchase Contracts on the Purchase Contract Settlement Date. Following the
occurrence of a Successful Second Remarketing, the Holders of 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.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the related Senior Notes in a Second Remarketing (other than to
the Company) at a price (net of fees and commissions) not less than 100% of the
sum of the Treasury Portfolio Purchase Price plus the Separate Senior Notes
Purchase Price or 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
43
return the remarketed Senior Notes 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. On
the Business Day immediately preceding the Third Remarketing Date for
such Third Remarketing, the Collateral Agent, pursuant to the terms of
the Pledge Agreement, or the Custodial Agent, pursuant to Section
5.02(a)(ii), will present for Remarketing the Pledged Senior Notes and
the Separate Senior Notes that are to be remarketed to the Remarketing
Agent. Upon receipt of such Senior Notes from the Collateral Agent or
Custodial Agent, the Remarketing Agent will, on the Third Remarketing
Date, use its reasonable efforts to remarket (based on the Reset Rate)
such Senior Notes on such date at a price of approximately 100.50% (but
not less than 100%) 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 Senior Notes at a price (net of fees and
commissions) equal to or greater than 100% 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. In addition,
the Remarketing Agent may deduct the Remarketing Fee from any amount of
such proceeds in excess of the sum of the Treasury Portfolio Purchase
Price plus the Separate Senior Notes Purchase Price. With respect to
Separate Senior Notes, any proceeds of the Third Remarketing in excess
of the Remarketing Fee attributable to the Separate Senior Notes will
be remitted to the Custodial Agent for payment to the holders of
Separate Senior Notes. With respect to Senior Notes that are part of
Corporate Units, any proceeds of the Third Remarketing in excess of the
sum of the Treasury Portfolio Purchase Price plus the Remarketing Fee
with respect to such Senior Notes will be remitted to the Purchase
Contract Agent for payment to the Holders of the related Corporate
Units. Neither the Company nor any Corporate Units Holders whose Senior
Notes are so remarketed will otherwise be responsible for the payment
of any Remarketing Fee in connection therewith. The Treasury Portfolio
will be substituted for the Senior Notes of Holders of Corporate Units
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 Corporate Units
Holders' obligation to pay the Purchase Price for the Common Stock
under the related Purchase Contracts on the Purchase Contract
Settlement Date. Following the occurrence of a Successful Third
Remarketing, the Holders of 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
44
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 related Senior Notes in a Third Remarketing (other than to
the Company) at a price (net of fees and commissions) not less than 100% of the
sum of the Treasury Portfolio Purchase Price plus the Separate Senior Notes
Purchase Price or 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 remarketed Senior Notes 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, in each case prior to the Purchase Contract
Settlement Date, or a Successful Remarketing of the Senior Notes prior to the
Final Remarketing Date has occurred, each Holder who intends to pay in cash to
satisfy such Holder's obligations under the Purchase Contract on the Purchase
Contract Settlement Date shall notify 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") the Purchase Price for the shares of Common Stock to be
purchased pursuant to the related Purchase Contract, and deliver the related
Corporate Units at the office of the Purchase Contract Agent in New York City.
Such notice shall be given prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date.
Immediately following 11:00 a.m. (New York City time) on the fourth 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 in
accordance with paragraph 5.02(c)(i) above shall pay the Purchase Price
to the Securities Intermediary for deposit in the Collateral Account
prior to 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 each case in immediately available funds payable to or
upon the order of the Securities Intermediary. Any cash received by the
Collateral Agent shall be invested promptly by the Securities
Intermediary in Permitted Investments 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
45
Purchase Price for the shares of Common Stock to be purchased by such
Holder shall be distributed to the Purchase Contract Agent when
received for payment to the Holder.
(iii) If a Holder of a Corporate Unit fails to 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 11:00 a.m. (New York City time) on the
fourth Business Day preceding the Purchase Contract Settlement Date,
the Collateral Agent, based on cash payments received by the Collateral
Agent pursuant to Section 5.02(c)(i) hereof, shall notify the Purchase
Contract Agent and the Indenture Trustee of the aggregate principal
amount of Senior Notes to be tendered for purchase in the Remarketing
in a notice pursuant to the terms of the Pledge Agreement.
(v) If required by applicable law, the Company agrees to use
its commercially reasonable efforts to ensure that a registration
statement with regard to the full amount of the Senior Notes to be
remarketed in the Final Remarketing shall be effective with the
Securities and Exchange Commission in a form that will enable the
Remarketing Agent to rely on it in connection with the Final
Remarketing.
(d) (i) Unless 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 has occurred, the Senior Notes of Corporate Units
Holders 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, 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), or 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 Senior Notes that are part of Corporate Units
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 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 or the Collateral Agent and such Senior Notes from the Collateral
Agent or Custodial Agent, as
46
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 Senior Notes on such date at a price equal to
approximately 100.50% (but not less than 100%) of the aggregate
principal amount of such Senior Notes, as provided in the Remarketing
Agreement. If the Remarketing Agent is able to remarket the Senior
Notes at a price (net of fees and commissions) equal to or greater than
100% of the aggregate principal amount of Senior Notes (a "SUCCESSFUL
FINAL REMARKETING"), the Remarketing Agent will remit the proceeds from
such Successful Final Remarketing to the Collateral Agent; provided
that the Remarketing Agent may deduct as the remarketing fee (the
"FINAL REMARKETING FEE") an amount equal to 25 basis points (0.25%) of
the aggregate principal amount of the remarketed Senior Notes from any
amount of the proceeds of a Successful Final Remarketing in excess of
the aggregate principal amount of the remarketed Senior Notes. With
respect to Separate Senior Notes, any proceeds of the Final Remarketing
in excess of the Final Remarketing Fee attributable to the Separate
Senior Notes will be remitted to the Custodial Agent for payment to the
holders of Separate Senior Notes. The proceeds from the Remarketing
remitted to the Collateral Agent shall be invested by the Collateral
Agent in Permitted Investments, in accordance with the Pledge
Agreement, and then applied to satisfy in full such Corporate Units
Holders' obligations to pay the Purchase Price for the shares of Common
Stock under the related Purchase Contracts on the Purchase Contract
Settlement Date. Any proceeds in excess of those required to pay the
Purchase Price and the Final Remarketing Fee will be remitted to the
Purchase Contract Agent for payment to the Holders of the related
Corporate Units.
(iii) If, in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the related Senior Notes of such
Holders of Corporate Units at a price not less than 100.0% of the
Stated Amount or 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 Senior Notes 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 such Senior Notes, including, without limitation, those
actions specified in paragraph 5.02(e) 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.
(e) (A) With respect to any Senior Notes which are subject to a Failed
Final Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph 5.02(i) below, shall, in full satisfaction of the
Holders' obligations under the Purchase Contracts among other
47
things, (ii) retain the Senior Notes or (iii) 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.
(B) In the event of a Failed Final Remarketing, the
holders of Separate Senior Notes will have the right to put
(the "PUT RIGHT") their Separate Senior Notes to the Company
on the December 31, 2006 (the "EXERCISE DATE"), upon a notice
on or prior to the fifth Business Day prior to the Exercise
Date, at a price per Separate Senior Note equal to $50.00 (the
"PUT PRICE"), plus accrued and unpaid interest.
(f) (i) Unless a Holder of a Treasury Unit or a Corporate Unit (if 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
has occurred) effects an Early Settlement of the underlying Purchase Contract
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 underlying
Purchase Contract through the early delivery of cash to the Purchase Contract
Agent in the manner described in Section 5.04(b)(2), each such Holder of a
Treasury Unit or a Corporate Unit who intends to pay in cash shall notify the
Purchase Contract Agent by use of a notice in substantially the form of Exhibit
E hereto of its intention to pay in cash the Purchase Price for the shares of
Common Stock to be purchased pursuant to the related Purchase Contract. Such
notice shall be given 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. Corporate Unit
Holders and Treasury Units holders may make Cash Settlements only in integral
multiples of 20 Treasury Units.
(ii) A Holder of a Treasury Unit or a Corporate Unit (if a
Special Event Redemption prior to the Purchase Contract Settlement Date
or a Successful Remarketing of the Senior Notes prior to the Final
Remarketing has occurred) 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 Purchase Price to the
Securities Intermediary for deposit in the Collateral Account prior to
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 each
case in immediately available funds payable to or upon the order of the
Securities Intermediary. Any cash received by the Collateral Agent
shall be invested promptly by the Securities Intermediary in Permitted
Investments 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 Purchase
Price for the shares of Common Stock to be
48
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 Holder of a Corporate
Unit (if a Special Event Redemption prior to the Purchase Contract
Settlement Date or a Successful Remarketing of the Senior Notes prior
to the Final Remarketing has occurred) fails to notify the Purchase
Contract Agent of its intention to make a Cash Settlement in accordance
with paragraph 5.02(f)(i) above, or does notify the Purchase Contract
Agent as provided in paragraph 5.02(f)(i) above of its intention to pay
the Purchase Price in cash, but fails to make such payment as required
by paragraph 5.02(f)(ii) above, 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 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
Securities Intermediary shall be invested promptly in Permitted
Investments. On the Purchase Contract Settlement Date, an amount equal
to the Purchase Price shall be remitted to the Company as payment
thereof without receiving any instructions from the Holder. In the
event the sum of the proceeds from the related Pledged Treasury
Securities or the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio and the investment earnings earned from such investments is
in excess of the aggregate Purchase Price of the Purchase Contracts
being settled thereby, the Collateral Agent 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, underlying 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
49
book-entry transfer or other appropriate procedures, in accordance with
written instructions provided by the Holder thereof, transfer 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 (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 Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement, Cash Merger Early Settlement or Cash Settlement, are payable solely
out of the proceeds of any Collateral pledged to secure the obligations of the
Holders and in no event will Holders be liable for any deficiency between the
proceeds of the disposition of Collateral and the Purchase Price.
(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
for the Common Stock to be purchased thereunder in the manner herein set forth.
SECTION 5.03. Issuance of Shares of Common Stock.
Unless a Termination Event, an Early Settlement or a Cash Merger Early
Settlement shall have occurred, subject to Section 5.04(b), on the Purchase
Contract Settlement Date upon receipt of the aggregate Purchase Price payable on
all Outstanding Units, the Company shall issue and deposit with the Purchase
Contract Agent, for the benefit of the Holders of the Outstanding Units, one or
more certificates representing newly issued shares of Common Stock registered in
the name of the Purchase Contract Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions for which a record date and payment date for such
dividend or distribution has occurred after the Purchase Contract Settlement
Date, being hereinafter referred to as the "PURCHASE CONTRACT SETTLEMENT FUND")
to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date, Early
Settlement Date or Cash Merger Early Settlement Date, as the case may be,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith in exchange
therefor a certificate representing that number of newly issued whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Units then held by such
Holder), together with cash in lieu of
50
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 Stock issued in respect of a Purchase Contract are to be
registered to a Person other than the Person in whose name the Certificate
evidencing such Purchase Contract is registered, no such registration shall be
made unless the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name other than that of
the registered Holder of the Certificate evidencing such Purchase Contract or
has established to the satisfaction of the Company that such tax either has been
paid or is not payable.
SECTION 5.04. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in effect at
the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution shall be increased by dividing such Settlement Rate by a fraction
of which:
(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 after the opening of business on
the day following the date fixed for such determination. For the purposes of
this paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, warrants or options, other
than pursuant to any dividend reinvestment plans or share purchase plans, to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Units upon settlement of the Purchase Contracts underlying such
Units) entitling them, for a period expiring within 45 days after the record
date for the determination of shareholders entitled to receive such rights,
warrants or options, to subscribe for or purchase shares of Common Stock at a
price per share less than the Current Market Price per share of Common Stock on
the date of announcement of such issuance, the Settlement Rate in effect at the
opening of business on the Business Day following the date of
51
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 fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price; and
(ii) the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase,
such increase to become effective immediately after the opening of business on
the 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 opening of business on the day following the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including 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 shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on the date fixed for the determination of shareholders
entitled to receive such distribution by a fraction of which:
(i) the numerator shall be the Current Market Price per share
of Common Stock
52
on the date fixed for such determination less the then fair market
value (as reasonably determined by the Board of Directors, whose
determination shall be conclusive and the basis for which shall be
described in a Board Resolution) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of
Common Stock; and
(ii) the denominator shall be such Current Market Price per
share of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following the date fixed for the determination of shareholders
entitled to receive such distribution. In any case in which this paragraph (4)
is applicable, paragraph (2) of this Section 5.04(a) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate which would
then be in effect if such dividend or distribution had not been declared.
(5) In case the Company shall, (I) by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding any cash that is distributed
in a Reorganization Event to which Section 5.04(b) applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made and (III) the aggregate 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 12 months preceding the date of
payment of the distribution described in clause (I) above and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph (6) of this
Section has been made, exceeds 15% of the product of the Current Market Price
per share of the Common Stock on the date for the determination of holders of
shares of Common Stock entitled to receive such distribution multiplied by the
number of shares of Common Stock outstanding on such date, then, in such case,
the Settlement Rate shall be increased so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to the
close of business on such record date by a fraction of which:
(i) the numerator shall be the Current Market Price of Common
Stock on the 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 immediately prior to the opening of business on
the day following
53
the record date; provided, however, that in the event the portion of cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price per share of Common Stock on the record date, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
holder of a Unit shall have the right to receive upon settlement of the Units
the amount of cash such Holder would have received had such Holder settled each
Unit on the record date. In the event that such dividend or distribution is not
so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate which would then be in effect if such dividend or distribution
had not been declared.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of Common Stock shall expire
and such tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares (as
herein defined) of (I) an aggregate consideration having a 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)
that combined together with 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, and
(II) the aggregate amount of any distributions to all holders of Common Stock
made exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant to
paragraph (5) has been made, exceeds 15% of the product of the Current Market
Price per share of Common Stock as of the last time (the "EXPIRATION TIME")
tenders could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, immediately prior
to the opening of business on the day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close of
business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per share of 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) and
(II) 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
54
(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").
(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 for the five
consecutive Trading Days selected by the Company commencing not more than thirty
(30) Trading Days before and ending not later than the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex date," when used with respect to any issuance or distribution, shall
mean the first date on which Common Stock trades regular way on such exchange or
in such market without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2),
(3), (4), (5), (6), (7) or (10) of this Section 5.04(a), an adjustment shall
also be made to the Applicable Market Value solely to determine which of clauses
(i), (ii) or (iii) of the definition of Settlement Rate in Section 5.01
55
will apply on the Purchase Contract Settlement Date. Such adjustment shall be
made by multiplying the Applicable Market Value by a fraction of which the
numerator shall be the Settlement Rate immediately after such adjustment
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section
5.04(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 this
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.
(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.
(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 such event, a "REORGANIZATION EVENT"),
the Settlement Rate will be adjusted to provide that each Holder of Units will
receive on the Purchase Contract Settlement Date with respect to each Purchase
Contract forming a part thereof, the kind and amount of securities, cash and
other property receivable upon such Reorganization Event (without any interest
thereon, and without any right to dividends or distribution thereon which have a
record date that is prior to the Purchase Contract Settlement Date) by a Holder
of the number of shares of Common Stock issuable on account of each Purchase
Contract if the
56
Purchase Contract Settlement Date had occurred immediately prior to such
Reorganization Event, assuming such Holder of Common Stock is not a Person with
which the Company consolidated or into which the Company merged or which merged
into the Company or to which such sale or transfer was made, as the case may be
(any such Person, a "CONSTITUENT PERSON"), or an Affiliate of a Constituent
Person to the extent such Reorganization Event provides for different treatment
of Common Stock held by Affiliates of the Company and non-affiliates and such
Holder failed to exercise its rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
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 5.04(b)(1) the kind and amount of
securities, cash and other property receivable upon such Reorganization Event by
each non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares).
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Unit shall have
the rights provided by this Section 5.04(b). Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 5.04. The above provisions of
this Section 5.04 shall similarly apply to successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with or into
another Person, any merger of another Person into the Company (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock) in which 30% or more of the
total consideration paid to the Company's shareholders consists of cash or cash
equivalents (a "CASH MERGER"), then a Holder of a Unit may settle ("CASH MERGER
EARLY SETTLEMENT") its Purchase Contract for cash, on or after the date of such
Cash Merger, 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
its commercially reasonable efforts to (A) have in effect a Registration
Statement covering any
57
securities to be delivered in respect of the Purchase Contracts being settled
and (B) provide a Prospectus in connection therewith, in each case in a form
that may be used in connection with such Cash Merger Early Settlement.
Within five Business Days of the completion of a Cash Merger, the Company
shall provide written notice to Holders of Units of such completion of a Cash
Merger, which shall specify the deadline for submitting the notice to settle
early in cash pursuant to this Section 5.04(b)(2), the date on which such Cash
Merger Early Settlement shall occur (which date shall be 10 days after the date
of such written notice by the Company, but which shall in no event be later than
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date) (the "CASH MERGER EARLY SETTLEMENT DATE"), the applicable Settlement Rate
and the amount (per share of common stock) of cash, securities and other
consideration receivable by the Holder upon settlement.
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 20 Corporate Units or Treasury Units, as the case may be. If the
Treasury Portfolio has replaced the Senior Notes as a component of the Corporate
Units as a result of a Special Event Redemption or a Successful Remarketing of
the Senior Notes, Corporate Units Holders may only effect Cash Merger Early
Settlement pursuant to this Section 5.04(b)(2) in multiples of [____] 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:
(i) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Cash Merger Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts.
If a Holder properly effects an effective Cash Merger Early Settlement in
accordance with
58
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 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 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 5.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.04 (or if
the Company is not aware of such occurrence, as soon as practicable after
becoming so aware):
59
(i) compute the adjusted Settlement Rate in accordance with Section
5.04 and prepare and transmit to the Purchase Contract Agent an Officers'
Certificate setting forth the Settlement Rate, the method of calculation
thereof in reasonable detail, and the facts requiring such adjustment and
upon which such adjustment is based; and
(ii) provide a written notice to the Holders of the Units of the
occurrence of such event and a statement in reasonable detail setting
forth the method by which the adjustment to the Settlement Rate was
determined and setting forth the adjusted Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any duty or
responsibility to any Holder of Units to determine whether any facts exist which
may require any adjustment of the Settlement Rate, or with respect to the nature
or extent or calculation of any such adjustment when made, or with respect to
the method employed in making the same. The Purchase Contract Agent shall be
fully authorized and protected in relying on any Officers' Certificate delivered
pursuant to Section 5.04(a)(i) and any adjustment contained therein and the
Purchase Contract Agent shall not be deemed to have knowledge of any adjustment
unless and until it has received such certificate. The Purchase Contract Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property, which
may at the time be issued or delivered with respect to any Purchase Contract;
and the Purchase Contract Agent makes no representation with respect thereto.
The Purchase Contract Agent shall not be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties, responsibilities or
covenants of the Company contained in this Article.
SECTION 5.06. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments (including any accrued and unpaid Contract Adjustment Payments), if the
Company shall have such obligation, and the rights and obligations of Holders to
purchase Common Stock, shall immediately and automatically terminate, without
the necessity of any notice or action by any Holder, the Purchase Contract Agent
or the Company, if, prior to or on the Purchase Contract Settlement Date, a
Termination Event shall have occurred.
Upon and after the occurrence of a Termination Event, the Units shall
thereafter represent the right to receive the Senior Notes, the Treasury
Securities or the appropriate Applicable Ownership Interests in the Treasury
Portfolio, as the case may be, forming part of such Units, in accordance with
the provisions of Section 5.04 of the Pledge Agreement. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Purchase Contract Agent, the
Collateral
60
Agent and the Holders, at their addresses as they appear in the Security
Register.
SECTION 5.07. Early Settlement. (a) Subject to and upon compliance with
the provisions of this Section 5.07, at the option of the Holder thereof,
Purchase Contracts underlying Units may be settled early ("EARLY SETTLEMENT") at
any time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that no
Early Settlement will be permitted pursuant to this Section 5.07 unless, at the
time such Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration
Statement is so required, the Company covenants and agrees to use its
commercially reasonable efforts to (A) have in effect a Registration Statement
covering any securities to be delivered in respect of the Purchase Contracts
being settled and (B) provide a Prospectus in connection therewith, in each case
in a form that may be used in connection with such Early Settlement.
(b) In order to exercise the right to effect Early Settlement with respect
to any Purchase Contracts, the Holder of the Certificate evidencing Units shall
deliver, at any time prior to 5:00 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 product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts.
Except as provided in the immediately preceding sentence and subject to
the last paragraph of Section 5.02, no payment shall be made upon Early
Settlement of any Purchase Contract on account of any Contract Adjustment
Payments accrued on such Purchase Contract or on account of any dividends on the
Common Stock issued upon such Early Settlement. If the foregoing requirements
are first satisfied with respect to Purchase Contracts underlying any Units at
or prior to 5:00 p.m. (New York City time) on a Business Day, such day shall be
the "EARLY SETTLEMENT DATE" with respect to such Units and if such requirements
are first satisfied after 5:00 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.
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Upon the receipt of such Certificate and Early Settlement Amount from the
Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 5.06
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) the Purchase Contract Agent has received from such Holder, and
paid to the Company as confirmed in writing by the Company, the related Early
Settlement Amount and (C) all conditions to such Early Settlement have been
satisfied.
Corporate Units Holders and Treasury Units Holders may only effect Early
Settlement pursuant to this Section 5.07 in integral multiples of 20 Corporate
Units or Treasury Units, as the case may be. If the Treasury Portfolio has
replaced the Senior Notes as a component of the Corporate Units as a result of a
Special Event Redemption or a Successful Remarketing of the Senior Notes,
Corporate Units Holders may only effect Early Settlement pursuant to this
Section 5.07 in multiples of [________] 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 Contract Adjustment
Payments (including any accrued and unpaid Contract Adjustment Payments) with
respect to such Purchase Contracts shall immediately and automatically
terminate.
(c) Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Company shall issue, and the Holder shall be entitled to receive,
[_________] 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.
(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
62
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, forming a part of such Units,
(ii) deliver to the Holder a certificate or certificates for the
full number of shares of Common Stock issuable upon such Early Settlement,
together with payment in lieu of any fraction of a share, as provided in
Section 5.09, and
(iii) if so required under the Securities Act, deliver a Prospectus
for the shares of Common Stock issuable upon such Early Settlement as
contemplated by Section 5.07(a).
(f) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(g) A Holder of a Unit who effects Early Settlement may elect to have the
Senior Notes no longer a part of a Corporate Unit remarketed in accordance with
the provisions of Section 5.02.
SECTION 5.08. Intentionally Omitted.
SECTION 5.09. No Fractional Shares.
No fractional shares or scrip representing fractional shares of Common
Stock shall be issued or delivered upon settlement on the Purchase Contract
Settlement Date, or upon Early Settlement or Cash Merger Early Settlement of any
Purchase Contracts. If Certificates evidencing more than one Purchase Contract
shall be surrendered for settlement at one time by the same Holder, the number
of full shares of Common Stock which shall be delivered upon settlement shall be
computed on the basis of the aggregate number of Purchase Contracts evidenced by
the Certificates so surrendered. Instead of any fractional share of Common Stock
which would otherwise be deliverable upon settlement of any Purchase Contracts
on the Purchase Contract Settlement Date, or upon Early Settlement or Cash
Merger Early Settlement, the Company, through the Purchase Contract Agent, shall
make a cash payment in respect of such fractional interest in an amount equal to
the value of such fractional shares 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
63
with sufficient funds to permit the Purchase Contract Agent to make all cash
payments required by this Section 5.09 in a timely manner.
SECTION 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to
the initial issuance and delivery of the shares of Common Stock pursuant to the
Purchase Contracts; provided, however, that the Company shall not be required to
pay any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Unit or any issuance of a share of
Common Stock in a name other than that of the registered Holder of a Certificate
surrendered in respect of the Units evidenced thereby, other than in the name
of the Purchase Contract Agent, as custodian for such Holder, and the Company
shall not be required to issue or deliver such share certificates or
Certificates unless or until the Person or Persons requesting the transfer or
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
SECTION 5.11. Contract Adjustment Payments.
(a) 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
next preceding such Payment Date. The Contract Adjustment Payments will be
payable at the office of the Purchase Contract Agent in Borough of Manhattan,
New York City maintained for that purpose. If the book-entry system for the
Units has been terminated, the Contract Adjustment Payments will be payable, at
the option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Security Register, or by
wire transfer to the account designated by such Person by a prior written notice
to the Purchase Contract Agent. If any date on which Contract Adjustment
Payments are to be made is not a Business Day, then payment of the Contract
Adjustment Payments payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest in respect of any such delay);
provided that if such Business Day is in the next succeeding calendar year, then
payment of the Contract Adjustment Payments will be made on the Business Day
immediately preceding such Business Day. Contract Adjustment Payments payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months. The Contract Adjustment Payments will accrue from ________, 2002.
(b) Upon the occurrence of a Termination Event, the Company's obligation
to pay future Contract Adjustment Payments (including any accrued Contract
Adjustment Payments) shall cease.
(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
64
Adjustment Payments and the right to accrue Contract Adjustment Payments, which
rights were carried by the Purchase Contracts underlying such other
Certificates.
(d) In the case of any Unit with respect to which Early Settlement or Cash
Merger Early Settlement of the underlying Purchase Contract is effected on a
date that is after any Record Date and prior to or on the next succeeding
Payment Date, Contract Adjustment Payments otherwise payable on such Payment
Date shall be payable on such Payment Date notwithstanding such Early Settlement
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 Early Settlement or Cash Merger Early Settlement of
the underlying Purchase Contract is effected, Contract Adjustment Payments that
would otherwise be payable after the Early Settlement or Cash Merger Early
Settlement Date with respect to such Purchase Contract shall not be payable.
(e) The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to the
Company's obligations under any Senior Indebtedness.
(f) In the event (x) of any payment by, or distribution of assets of, the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution, winding-up, liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, or (y) subject to the provisions of Section
5.11(h) below, that (i) a default shall have occurred and be continuing with
respect to the payment of principal, interest or any other monetary amounts due
and payable on any Senior Indebtedness and such default shall have continued
beyond the period of grace, if any, specified in the instrument evidencing such
Senior Indebtedness (and the Purchase Contract Agent shall have received written
notice thereof from the Company or one or more holders of Senior Indebtedness or
their representative or representatives or the trustee or trustees under any
indenture pursuant to which any such Senior Indebtedness may have been issued),
or (ii) the maturity of any Senior Indebtedness shall have been accelerated
because of a default in respect of such Senior Indebtedness (and the Purchase
Contract Agent shall have received written notice thereof from the Company or
one or more holders of Senior Indebtedness or their representative or
representatives or the trustee or trustees under any indenture pursuant to which
any such Senior Indebtedness may have been issued), then:
(i) the holders of all Senior Indebtedness shall first be entitled
to receive, in the case of clause (x) above, payment of all amounts due or
to become due upon all Senior Indebtedness and, in the case of subclauses
(i) and (ii) of clause (y) above, payment of all amounts due thereon, or
provision shall be made for such payment in money or money's worth, before
the Holders of any of the Units are entitled to receive any Contract
Adjustment Payments on the Purchase Contracts underlying the Units;
65
(ii) any payment by, or distribution of assets of, the Company of
any kind or character, whether in cash, property or securities, to which
the Holders of any of the Units would be entitled except for the
provisions of Section 5.11(e) through (q), including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of such Contract Adjustment Payments on the Purchase Contracts underlying
the Units, shall be paid or delivered by the Person making such payment
or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the representative or
representatives of the holders of Senior Indebtedness or to the trustee or
trustees under any indenture under which any instruments evidencing any of
such Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of such Senior Indebtedness
held or represented by each, to the extent necessary to make payment in
full of all Senior Indebtedness remaining unpaid after giving effect to
any concurrent payment or distribution (or provision therefor) to the
holders of such Senior Indebtedness, before any payment or distribution is
made of such Contract Adjustment Payments to the Holders of such Units;
and
(iii) in the event that, notwithstanding the foregoing, any payment
by, or distribution of assets of, the Company of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of Contract Adjustment Payments on the Purchase Contracts underlying the
Units, shall be received by the Purchase Contract Agent or the Holders of
any of the Units when such payment or distribution is prohibited pursuant
to Section 5.11(e) through (q), such payment or distribution shall be paid
over to the representative or representatives of the holders of Senior
Indebtedness or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any such Senior Indebtedness may have
been issued, ratably as aforesaid, for application to the payment of all
Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent
payment or distribution (or provision therefor) to the holders of such
Senior Indebtedness.
(g) For purposes of Section 5.11(e) through (q), the words "cash, property
or securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other Person
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in Section 5.11(e) through (q)
with respect to such Contract Adjustment Payments on the Units to the payment
of all Senior Indebtedness which may at the time be outstanding; provided that
(i) the indebtedness or guarantee of indebtedness, as the case may be, that
constitutes Senior Indebtedness is assumed by the Person, if any, resulting from
any such reorganization or readjustment, and (ii) the rights of the holders of
the Senior Indebtedness are not, without the consent of each such holder
adversely affected thereby, altered by such reorganization or readjustment;
66
(h) Any failure by the Company to make any payment on or perform any other
obligation under Senior Indebtedness, other than any indebtedness incurred by
the Company or assumed or guaranteed, directly or indirectly, by the Company for
money borrowed (or any deferral, renewal, extension or refunding thereof) or any
indebtedness or obligation as to which the provisions of Section 5.11(e) through
(g) shall have been waived by the Company in the instrument or instruments by
which the Company incurred, assumed, guaranteed or otherwise created such
indebtedness or obligation, shall not be deemed a default or event of default if
(i) the Company shall be disputing its obligation to make such payment or
perform such obligation and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which is in full force and
effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, and (B) in the event a judgment that is subject
to further review or appeal has been issued, the Company shall in good faith be
prosecuting an appeal or other proceeding for review and a stay of execution
shall have been obtained pending such appeal or review.
(i) Subject to the irrevocable payment in full of all Senior Indebtedness,
the Holders of the Units shall be subrogated (equally and ratably with the
holders of all obligations of the Company which by their express terms are
subordinated to Senior Indebtedness of the Company to the same extent as payment
of the Contract Adjustment Payments in respect of the Purchase Contracts
underlying the Units is subordinated and which are entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until all such Contract Adjustment
Payments owing on the Units shall be paid in full, and as between the Company,
its creditors other than holders of such Senior Indebtedness and the Holders, no
such payment or distribution made to the holders of Senior Indebtedness by
virtue of Section 5.11(e) through (q) that otherwise would have been made to the
Holders shall be deemed to be a payment by the Company on account of such Senior
Indebtedness, it being understood that the provisions of Section 5.11(e) through
(q) are and are intended solely for the purpose of defining the relative rights
of the Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
(j) Nothing contained in Section 5.11(e) through (q) or elsewhere in this
Agreement or in the Units is intended to or shall impair, as among the Company,
its creditors other than the holders of Senior Indebtedness and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Holders such Contract Adjustment Payments on the Units as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or
therein prevent the Purchase Contract Agent or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Agreement, subject to the rights, if any, under Section 5.11(e) through (q), of
the holders of Senior Indebtedness in respect of cash, property or securities of
the
67
Company received upon the exercise of any such remedy.
(k) Upon payment or distribution of assets of the Company referred to in
Section 5.11(e) through (q), the Purchase Contract Agent and the Holders shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or Purchase Contract Agent or other
person making any payment or distribution, delivered to the Purchase Contract
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to these Section 5.11(e) through (q).
(l) The Purchase Contract Agent shall be entitled to rely on the delivery
to it of a written notice by a Person representing himself to be a holder of
Senior Indebtedness (or a trustee or representative on behalf of such holder) to
establish that such notice has been given by a holder of Senior Indebtedness or
a trustee or representative on behalf of any such holder or holders. In the
event that the Purchase Contract Agent determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
Section 5.11(e) through (q), the Purchase Contract Agent may request such Person
to furnish evidence to the reasonable satisfaction of the Purchase Contract
Agent as to the amount of Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under Section 5.11(e)
through (q), and, if such evidence is not furnished, the Purchase Contract Agent
may defer payment to such Person pending judicial determination as to the right
of such Person to receive such payment.
(m) Nothing contained in Section 5.11(e) through (q) shall affect the
obligations of the Company to make, or prevent the Company from making, payment
of the Contract Adjustment Payments, except as otherwise provided in these
Section 5.11(e) through (q).
(n) Each Holder of Units, by its acceptance thereof, authorizes and
directs the Purchase Contract Agent on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in Section
5.11 (e) through (q) and appoints the Purchase Contract Agent its
attorney-in-fact, as the case may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Purchase Contract
Agent of any fact known to the Company that would prohibit the making of any
payment of moneys to or 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
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Contract Agent, or the taking of any other action by the Purchase Contract
Agent, unless and until the Purchase Contract Agent shall have received written
notice thereof mailed or delivered to the Purchase Contract Agent at its
Institutional Trust Services department from the Company, any Holder, or the
holder or representative of any Senior Indebtedness; provided that if at least
two Business Days prior to the date upon which by the terms hereof any such
moneys may become payable for any purpose, the Purchase Contract Agent shall not
have received with respect to such moneys the notice provided for in this
Section, then, anything herein contained to the contrary notwithstanding, the
Purchase Contract Agent shall have full power and authority to receive such
moneys and to apply the same to the purpose for which they were received and
shall not be affected by any notice to the contrary that may be received by it
within two Business Days prior to or on or after such date.
(p) The Purchase Contract Agent in its individual capacity shall be
entitled to all the rights set forth in this Section with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness and nothing in this Agreement shall deprive the Purchase
Contract Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Senior Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Agreement, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
(r) Nothing in this Section 5.11 shall apply to claims of, or payments to,
the Purchase Contract Agent under or pursuant to Section 7.07.
(s) With respect to the holders of Senior Indebtedness, (i) the duties and
obligations of the Purchase Contract Agent shall be determined solely by the
express provisions of this Agreement; (ii) the Purchase Contract Agent shall not
be liable to any such holders if it shall, acting in good faith, mistakenly pay
over or distribute to the Holders or to the Company or any other Person cash,
property or securities to which any holders of Senior Indebtedness shall be
entitled by virtue of this Section 5.11 or otherwise; (iii) no implied covenants
or obligations shall be read into this Agreement against the Purchase Contract
Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a
fiduciary as to such holders.
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ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock.
Each Holder of a Unit shall have the right, which is absolute and
unconditional, (i) to receive each Contract Adjustment Payment with respect to
the Purchase Contract comprising part of such Unit on the respective Payment
Date for such Unit and (ii) except upon and following a Termination Event, to
purchase shares of Common Stock pursuant to such Purchase Contract and, in each
such case, to institute suit for the enforcement of any such right to receive
Contract Adjustment Payments and the right to purchase shares of Common Stock,
and such rights shall not be impaired without the consent of such Holder.
SECTION 6.02. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or remedy
under this Agreement and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to such Holder, then and in every
such case, subject to any determination in such proceeding, the Company and such
Holder shall be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of such Holder shall continue
as though no such proceeding had been instituted.
SECTION 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.04. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right upon a default or
remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.05. Undertaking for Costs.
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All parties to this Agreement agree, and each Holder of a Unit, by its
acceptance of such Unit shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Purchase Contract Agent for any
action taken, suffered or omitted by it as Purchase Contract Agent, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and costs against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section shall not apply to any suit instituted by the Purchase Contract Agent,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Units, or to any suit instituted by
any Holder for the enforcement of interest on any Senior Notes or Contract
Adjustment Payments on or after the respective Payment Date therefor in respect
of any Unit held by such Holder, or for enforcement of the right to purchase
shares of Common Stock under the Purchase Contracts constituting part of any
Unit held by such Holder.
SECTION 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Units, such duties and
only such duties as are specifically set forth in this Agreement, the Pledge
Agreement and the Remarketing Agreement and no implied covenants or obligations
shall be read into this Agreement, the Pledge Agreement or the Remarketing
Agreement against the Purchase Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part, may, with
respect to the Units, conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Purchase Contract Agent and
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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 proved
that the Purchase Contract Agent was negligent in ascertaining the pertinent
facts;
(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; and
(4) the Purchase Contract Agent shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Units.
(c) Whether or not therein expressly so provided, every provision of this
Agreement, the Pledge Agreement and the Remarketing Agreement relating to the
conduct or affecting the liability of or affording protection to the Purchase
Contract Agent shall be subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver the
Pledge Agreement and the Remarketing Agreement in its capacity as Purchase
Contract Agent.
SECTION 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract
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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 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may 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 paper or
document, but the Purchase Contract Agent, in its discretion, and at the expense
of the Company, 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 and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation;
(6) the Purchase Contract Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys or an Affiliate and the
73
Purchase Contract Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney or an Affiliate appointed with
due care by it hereunder;
(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 which 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 7.04. Not Responsible for Recitals or Issuance of Units.
The recitals contained herein, in the Pledge Agreement, the Remarketing
Agreement and in the Certificates shall be taken as the statements of the
Company, and the Purchase Contract Agent assumes no responsibility for their
accuracy or validity. The Purchase Contract Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Units, or of the
Pledge Agreement or the Pledge or the Collateral and shall have no
responsibility for 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
74
proceeds in respect of the Purchase Contracts.
SECTION 7.05. May Hold Units.
Any Security Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of Units and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it would
have if it were not Security Registrar or such other agent, or the Purchase
Contract Agent. The Company may become the owner or pledgee of Units.
SECTION 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not be
segregated from the other funds except to the extent required by law or provided
herein. The Purchase Contract Agent shall be under no obligation to invest or
pay interest on any money received by it hereunder except as otherwise provided
hereunder or agreed in writing with the Company.
SECTION 7.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all services
rendered by it hereunder, under the Pledge Agreement and under the Remarketing
Agreement as the Company and the Purchase Contract Agent shall from time to time
agree in writing;
(2) except as otherwise expressly provided for herein, to reimburse the
Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract Agent in
accordance with any provision of this Agreement, the Pledge Agreement and the
Remarketing Agreement (including the reasonable compensation and the expenses
and disbursements of its agents and counsel) in connection with the negotiation,
preparation, execution and delivery and performance of this Agreement, the
Pledge Agreement and the Remarketing Agreement and any modification, supplement
or waiver of any of the terms thereof, except any such expense, disbursement or
advance as may be attributable to its gross negligence, willful misconduct or
bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor Purchase
Contract Agent (and each of its directors, officers, agents and employees
(collectively, the "INDEMNITEES") for, and to hold 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' costs and
expenses of defending themselves against any claim (whether asserted by the
Company, a Holder or any other person) or liability in connection
75
with the exercise or performance of any of the Purchase Contract Agent's powers
or duties hereunder or thereunder.
The provisions of this Section shall survive the resignation and removal
of the Purchase Contract Agent and the termination of this Agreement.
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which
shall be a Person organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a Person in the Borough of Manhattan, New York City, qualified
and eligible under this Article and willing to act on reasonable terms. If such
Person publishes 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 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date of such
resignation. If the instrument of acceptance by a successor Purchase Contract
Agent required by Section 7.10 shall not have been delivered to the Purchase
Contract Agent within 30 days after the giving of such notice of resignation,
the resigning Purchase Contract Agent may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Units delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by 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, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Purchase
76
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, after written request therefor
by the Company or by any Holder who has been a bona fide Holder of a Unit
for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible under
Section 7.08 and shall fail to resign after written request therefor by
the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public officer
shall take charge or control of the Purchase Contract Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Unit for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Purchase Contract Agent and the appointment of a successor Purchase Contract
Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract Agent shall have
been so appointed by the Company and accepted appointment in the manner required
by Section 7.10, any Holder who has been a bona fide Holder of a Unit for at
least six months, on behalf of itself and all others similarly situated, or the
Purchase Contract Agent may petition at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Purchase Contract
Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Security Register. Each notice shall include the name of the successor Purchase
Contract Agent and the address of its Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
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(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 7.10(a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Purchase Contract Agent, shall be the successor of the
Purchase Contract Agent hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase Contract Agent
may adopt such authentication and execution and deliver the Certificates so
authenticated and executed with the same effect as if such successor Purchase
Contract Agent had itself authenticated and executed such Units.
SECTION 7.12. Preservation of Information; Communications to Holders.
(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.
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(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 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, 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 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.
(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)
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hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Purchase Contract Agent, at any time and from time to
time, may enter into one or more agreements supplemental hereto, in form
satisfactory to the Company and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.04(b); or
(5) except as provided for in Section 5.04, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent with
any other provisions herein, or make any other provisions with respect to
such matters or questions arising under this Agreement, provided that such
action shall not adversely affect the interests of the Holders in any
material respect.
SECTION 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Units voting together as one class, including without limitation the
consent of the Holders obtained in connection with a tender or an exchange
offer, by Act of said Holders delivered to the Company
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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 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.
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.
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SECTION 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.01) shall be fully authorized and protected
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
the execution of such supplemental agreement is authorized or permitted by this
Agreement and that any and all conditions precedent to the execution and
delivery of such supplemental agreement have been satisfied. The Purchase
Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article, this
Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.
SECTION 8.05. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions.
The Company covenants that it will not consolidate with, convert into, or
merge with and into, any other corporation or sell, assign, transfer, lease or
convey all or substantially all of its properties and assets to any Person,
unless:
(i) either the Company shall be the continuing corporation, or the
successor (if
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other than the Company) shall be a corporation organized and existing
under the laws of the United States of America or a State thereof or the
District of Columbia and such corporation shall expressly assume all the
obligations of the Company under the Purchase Contracts, this Agreement,
the Pledge Agreement, the Indenture (including any supplement thereto) and
the Remarketing Agreement by one or more supplemental agreements in form
reasonably satisfactory to the Purchase Contract Agent and the Collateral
Agent, executed and delivered to the Purchase Contract Agent and the
Collateral Agent by such corporation; and
(ii) the Company or such successor corporation, as the case may be,
shall not, immediately after such consolidation, conversion, merger, sale,
assignment, transfer, lease or conveyance, be in default of payment
obligations under the Purchase Contracts, this Agreement, the Pledge
Agreement, the Indenture (including any supplement thereto) or the
Remarketing Agreement or in material default in the performance of any
other covenants under any of the foregoing agreements.
SECTION 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of Hartford 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.
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent.
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The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such merger, consolidation, share exchange, sale, assignment,
transfer, lease or conveyance, and any such assumption, complies with the
provisions of this Article and that all conditions precedent to the consummation
of any such merger, consolidation, share exchange, sale, assignment, transfer,
lease or conveyance have been met.
ARTICLE 10
COVENANTS
SECTION 10.01. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Units that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.02. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or upon Early Settlement or Cash Merger
Early Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or recreation of 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 the Corporate Trust Office of
the Purchase Contract Agent as such office of the Company. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Purchase Contract Agent with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Company hereby appoints the Purchase Contract
Agent as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the
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place of payment for the Units the Corporate Trust Office and appoints the
Purchase Contract Agent at its Corporate Trust Office as paying agent in such
city.
SECTION 10.03. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out of
its authorized but unissued Common Stock the full number of shares of Common
Stock issuable against tender of payment in respect of all Purchase Contracts
constituting a part of the Units evidenced by Outstanding Certificates.
SECTION 10.04. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which may be
issued against tender of payment in respect of any Purchase Contract
constituting a part of the Outstanding Units will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable.
SECTION 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate
(one of the signers of which shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company), stating
whether or not to the knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions and conditions
hereof, and if the Company shall be in default, specifying all such defaults and
the nature and status thereof of which they may have knowledge.
SECTION 10.06. ERISA.
Each Holder from time to time of the Units that is a Plan or who used
assets of a Plan to purchase Units hereby represents that either (i) no portion
of the assets used by such Holder to acquire the Corporate Units constitutes
assets of the Plan or (ii) the purchase or holding of the Corporate Units by
such purchaser or transferee will not constitute a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4973 of the Code or similar
violation under any applicable laws.
SECTION 10.07. Tax Treatment. The Company covenants and agrees, 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 Contract constituting the Corporate Units and (ii)
treat 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.
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[SIGNATURES ON THE FOLLOWING PAGE]
86
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE HARTFORD FINANCIAL
SERVICES GROUP, INC.
By: __________________________
Name:
Title:
[_______________________],
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:______________
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
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
reflected in the Schedule of Increases or Decreases in Global Certificate
attached hereto]. Each Corporate Unit consists of (i) either (a) the beneficial
ownership by the Holder of $50.00 principal amount of Senior Notes due November
16, 2008 (the "SENIOR NOTES") of The Hartford Financial Services Group, Inc., a
Delaware 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, constituting part of
each Corporate Unit evidenced hereby have been pledged to the Collateral Agent,
for the benefit of the Company, to secure the obligations of the Holder under
the Purchase Contract comprising part of 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, constituting part of
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 of which 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, are a part under the Purchase
Contracts forming a part of 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, forming part of a Corporate Units evidenced
hereby, which are payable quarterly in arrears on February 16, May 16, August
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16, and November 16 of each year, commencing November 16, 2002 (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 November
16, 2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $50.00
(the "STATED AMOUNT"), a number of newly issued shares of common stock, par
value $0.01 per share ("COMMON STOCK"), of the Company, equal to the Settlement
Rate, unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to the Corporate Units of which such Purchase Contract
is a part, all as provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the "PURCHASE PRICE") for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of payment received in respect of the 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
Note and Purchase Contract constituting the Corporate Units and (ii) treat
itself as owner of the applicable interest on the Collateral Account, including
the Senior Notes and the Applicable Ownership Interests in the Treasury
Portfolio.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a Corporate Unit evidenced hereby, an amount
(the "CONTRACT ADJUSTMENT PAYMENTS") equal to [____]% per 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.
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.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which
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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 Hartford Financial Services
Group, Inc.
By: ________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [______________________],
not individually but solely as
Attorney-in-Fact of such Holder
By: ________________________________
Authorized Officer
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: [___________________________],
as Purchase Contract Agent
By: ______________________________
Authorized Officer
Dated:____________________
A-6
(FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of September 13, 2002 (as may be supplemented from
time to time, the "PURCHASE CONTRACT AGREEMENT"), between the Company and
[____________], 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.
Unless an Early Settlement or a Cash Merger Early Settlement has
occurred, each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"PURCHASE PRICE"), a number of shares of Common Stock equal to the Settlement
Rate, unless, prior to or on the Purchase Contract Settlement Date, there shall
have occurred a Termination Event with respect to the Units of which such
Purchase Contract is a part. The "SETTLEMENT RATE" is equal to:
(1) if the Applicable Market Value (as defined below) is
greater than or equal to $[_____] (the "THRESHOLD APPRECIATION PRICE"),
[_______] shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $[______] (the "REFERENCE PRICE"),
the number of shares of Common Stock per Purchase Contact having a
value equal to the Stated Amount divided by the Applicable Market
Value; and
(3) if the Applicable Market Value is less than or equal to
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 either
through Early Settlement or Cash Merger Early Settlement, shall obligate the
Holder of the related Corporate Units to purchase at the Purchase Price, and the
Company to sell, a number of newly issued shares of Common Stock equal to the
Early Settlement Rate (in the case of an Early Settlement) or applicable
Settlement Rate (in the case of a Cash Merger Early Settlement).
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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 "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 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 closing sale price per
share as reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid
price for Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the market value of
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company.
A "TRADING DAY" means a day on which Common Stock (1) is not suspended
from trading on any national or regional securities exchange or association or
over-the-counter market 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 Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or 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 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 has
occurred, 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
A-8
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 11:00 a.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 Purchase Price for the shares of Common Stock to
be delivered under the related Purchase Contract from the proceeds of the sale
of the related Pledged Senior Notes held by the Collateral Agent. Unless a
Special Event Redemption prior to the Purchase Contract Settlement Date or a
Successful Remarketing prior to the Final Remarketing Date has occurred, such
sale will be made by the Remarketing Agent pursuant to the terms of the
Remarketing Agreement on the Final Remarketing Date. If a Special Event
Redemption prior to the Purchase Contract Settlement Date, or a Successful
Remarketing prior to the Final Remarketing Date has occurred, 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 Purchase Price for the shares of Common Stock to be
delivered under the related Purchase Contract from the proceeds at maturity of
the Applicable Ownership Interests (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
Senior Notes related to this Corporate Units Certificate, any accrued and unpaid
interest on such Pledged 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 payment of the aggregate Purchase Price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
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 forming a part of
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 forming a part of
A-9
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 constituting a part of 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 prior to the earlier
of (i) a Successful Remarketing of the Senior Notes or (ii) the Purchase
Contract Settlement Date, an amount equal to the applicable Redemption Price
shall be deposited 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
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 constituting a part of 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.
A-10
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 underlying 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 respect of the
Senior Notes and Purchase Contract constituting such Corporate Units may be
transferred and exchanged only as a Corporate Unit.
Unless the Treasury Portfolio has replaced the Senior Notes as a
component of the Corporate Units as a result 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 (in which case no Collateral
Substitution shall be permitted) 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.
A-11
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 20 Corporate Units for 20 Treasury
Units.
If the Treasury Portfolio has replaced the Senior Notes as a component
of the Corporate Units as a result of the Successful Remarketing of the Senior
Notes prior to the Final Remarketing Date or a Special Event Redemption prior to
the Purchase Contract Settlement Date, 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 multiples of Corporate Units that will
enable the Treasury Securities comprising the Applicable Ownership Interests in
the Treasury Portfolio to be released in whole multiples. 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.
Unless the Treasury Portfolio has replaced the Senior Notes as a
component of the Corporate Units as a result 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 (in which case no Collateral
Substitution shall be permitted) 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 Contract Agreement and
the Pledge Agreement. A Holder may recreate Corporate Units only in integral
multiples of 20 Treasury Units for 20 Corporate Units.
If the Treasury Portfolio has replaced the Senior Notes as a component
of the Corporate Units as a result of the Successful Remarketing of the Senior
Notes prior to the Final Remarketing Date or a Special Event Redemption prior to
the Purchase Contract Settlement Date, 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 multiples of [_____] Treasury 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
A-12
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 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
underlying Units may be settled early ("EARLY SETTLEMENT") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contract evidenced by this Certificate,
the Holder of this 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:
(i) the product of (A) the Stated Amount times (B) the number
of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the Contract Adjustment Payments
payable on such Payment Date with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Senior Notes or Pledge Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) underlying such Units
shall be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of shares of Common Stock on
account of each Purchase Contract forming part of a Corporate Unit as to which
Early
A-13
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 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 underlying 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 underlying 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 forming part of 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, underlying 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 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
A-14
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 Hartford Financial
Services Group, Inc., with full power of substitution in the premises.
Dated:_________________________ Signature ________________________
NOTICE: The signature
to this assignment
must correspond with
the name as it appears
upon the face of the
within Corporate Units
Certificates in every
particular, without
alteration or
enlargement or any
change whatsoever.
Signature Guarantee: _______________________________
A-16
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of 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 REGISTERED HOLDER
Holder, please (i) print such Person's name
and address and (ii) provide a guarantee of Please print name and address of
your signature: Registered Holder:
______________________________ __________________________________
Name Name
______________________________ __________________________________
Address Address
______________________________ __________________________________
______________________________ __________________________________
______________________________ __________________________________
Social Security or other
Taxpayer Identification
Number, if any __________________________________
A-17
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this 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 underlying 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-18
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Corporate Units REGISTERED HOLDER
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-19
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-20
[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 in Amount of decrease in Units evidenced by this
Number of Corporate Number of Corporate Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
---- ------------------ ------------------ -------------------- --------------
A-21
EXHIBIT B
(FORM OF FACE OF TREASURY UNIT CERTIFICATE)
[For inclusion in Global Certificate only - THIS CERTIFICATE IS A GLOBAL
CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. CUSIP No.
-----
Number of Treasury Units:
----------
The Hartford Financial Services Group, Inc.
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 reflected
in the Schedule of Increases or Decreases in Global Certificate attached
hereto]. Each Treasury Unit consists of (i) a 1/20 undivided beneficial
ownership interest of a Treasury Security having a principal amount at maturity
equal to $1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one
Purchase Contract with The Hartford Financial Services Group, Inc., a Delaware
corporation (the "COMPANY"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement (as defined on the reverse hereof) have the
meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities constituting
part of each 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 comprising part of such Treasury Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Treasury Units
Certificate to purchase, and the Company, to sell, on November 16, 2006 (the
"PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $50.00 (the "STATED
AMOUNT"), a number of newly issued shares of common stock, par value $0.01 per
share ("COMMON STOCK"), of the Company, equal to the Settlement Rate, unless
prior to or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event, an Early Settlement or a Cash Merger Early Settlement with
respect to the Treasury Units of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully described on the
reverse hereof. The purchase price (the "PURCHASE PRICE") for the shares of
Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if
not paid earlier, shall be paid on the Purchase Contract Settlement Date by
application of the proceeds from the Treasury Securities at maturity pledged to
secure the obligations of the Holder under such Purchase Contract of the
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
Security and Purchase Contract constituting the Treasury Units and (ii) treat
itself as owner of the applicable interest on the Collateral Account, including
the Treasury Securities.
The Company shall pay, on each Payment Date, in respect of each Purchase
Contract forming part of a 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.
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.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
B-2
Unless the certificate of authentication hereon has been executed by the
Purchase Contract Agent by manual signature, this 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.
IN WITNESS WHEREOF, the Company and the Holder specified above have caused
this instrument to be duly executed.
The Hartford Financial Services Group, Inc.
By:
---------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: [ ],
not individually but solely as
Attorney-in-Fact of such Holder
By:
---------------------------------------
Authorized Officer
Dated:
--------------------
B-3
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: [ ],
as Purchase Contract Agent
By:
--------------------------------------
Authorized Officer
Dated:
--------------------
B-4
(REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract
Agreement, dated as of September 13, 2002 (as may be supplemented from time to
time, the "PURCHASE CONTRACT AGREEMENT") between the Company and [ ], 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.
Unless an Early Settlement or a Cash Merger Early Settlement has occurred,
each Purchase Contract evidenced hereby obligates the Holder of this Treasury
Units Certificate to purchase, and the Company to sell, on the Purchase Contract
Settlement Date at a price equal to the Stated Amount (the "PURCHASE PRICE") a
number of newly issued shares of Common Stock equal to the Settlement Rate,
unless prior to the Purchase Contract Settlement Date, there shall have occurred
a Termination Event with respect to the Units of which such Purchase Contract is
a part. The "SETTLEMENT RATE" is equal to:
(1) if the Applicable Market Value (as defined below) is greater
than or equal to $[ ] (the "THRESHOLD APPRECIATION PRICE"),
[ ] shares of Common Stock per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $[ ] (the "REFERENCE PRICE"),
the number of shares of Common Stock per Purchase Contact having a value
equal to the Stated Amount divided by the Applicable Market Value; and
(3) if the Applicable Market Value is less than or equal to 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 either through
Early Settlement or Cash Merger Early Settlement, shall obligate the Holder of
the related Treasury Units to purchase at the Purchase Price, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
B-5
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 "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 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 closing sale price per share as
reported by The Nasdaq Stock Market, Inc.;
(4) if the Common Stock is not so reported, the last quoted bid
price for the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally recognized
independent investment banking firm retained for this purpose by the
Company.
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 Purchase Price 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 a Cash Merger
Early Settlement of each such Purchase Contract or by applying a principal
amount of the Pledged Treasury Securities underlying such Holder's 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
B-6
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 11:00 a.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 Purchase Price for the
shares of Common Stock to be issued under the related Purchase Contract from the
proceeds of the Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Purchase Contracts and all obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the Holders
to receive and the obligation of the Company to pay any Contract Adjustment
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a Termination
Event shall have occurred. Upon the occurrence of a Termination Event, the
Company shall promptly but in no event later than two Business Days thereafter
give written notice to the Purchase Contract Agent, the Collateral Agent and the
Holders, at their addresses as they appear in the Security Register. Upon and
after the occurrence of a Termination Event, the Collateral Agent shall release
the Pledged Treasury Securities (as defined in the Pledge Agreement) forming a
part of each Treasury Unit. A Treasury Unit shall thereafter represent the right
to receive the Proceeds of the Treasury Security forming a part of 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 underlying a Treasury Unit remains in effect, such Treasury
Unit shall not be separable into its constituent parts, and the rights and
obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract constituting such Treasury Unit may be
transferred
B-7
and exchanged only as a Treasury Unit.
Unless the Treasury Portfolio has replaced the Senior Notes as a component
of the Corporate Units as a result 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 (in which case no Collateral
Substitution shall be permitted) 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 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 20 Treasury Units for 20 Corporate Units.
If the Treasury Portfolio has replaced the Senior Notes as a component of
the Corporate Units as a result of the Successful Remarketing of the Senior
Notes prior to the Final Remarketing Date or a Special Event Redemption prior to
the Purchase Contract Settlement Date, 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 multiples of [ ] Treasury 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 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
B-8
the Pledge Agreement. A Treasury Unit shall thereafter represent the right to
receive the interest in the Treasury Security forming a part of 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
underlying Units may be settled early ("EARLY SETTLEMENT") as provided in the
Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contract evidenced by this Certificate,
the Holder of this 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) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(ii) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date next
preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities underlying such Units shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive a number of shares of Common Stock on account of each
Purchase Contract forming part of a 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 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 underlying 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 underlying
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
B-9
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 forming part of 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 underlying 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.
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.
B-10
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 Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said
Treasury Units Certificates on the books of The Hartford Financial Services
Group, Inc., with full power of substitution in the premises.
Dated:
------------------ ------------------------------------------
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Treasury Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee:
-----------------------------------
B-11
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts underlying the number of 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 than the
Holder, please (i) print such REGISTERED HOLDER
Person's name and address and (ii) provide a
guarantee of your signature: Please print name and address of
Registered Holder:
------------------------- -------------------------
Name Name
------------------------- -------------------------
Address Address
------------------------- -------------------------
------------------------- -------------------------
------------------------- -------------------------
Social Security or other
Taxpayer Identification
Number, if any -------------------------
B-12
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this 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 underlying 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 underlying Treasury Units with
an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The
undersigned Holder directs that a certificate for shares of Common Stock 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-13
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or 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 -------------------------
B-14
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
B-15
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Treasury
Amount of increase in Amount of decrease in Units evidenced by this
Number of Treasury Number of Treasury Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
B-16
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
[Name]
The Purchase Contract Agent
[Address]
Attention: Institutional Trust Services
Re: [__________ Corporate Units] [________ Treasury Units] of The Hartford
Financial Services Group, Inc., a Delaware corporation (the "COMPANY").
The undersigned Holder hereby notifies you that it has delivered to
[___________], 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
September 13, 2002 (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].
Date: ---------------------------------
------------------- Signature
Signature Guarantee:
------------------------
Please print name and address of Registered Holder:
---------------------------------- ------------------------------------
Name Social Security or other Taxpayer
Identification Number, if any
Address
----------------------------------
----------------------------------
----------------------------------
----------------------------------
C-2
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_______________________________
_______________________________
Attention:
Telecopy: __________
Re: [__________ Corporate Units] [______ Treasury Units] of The
Hartford Financial Services Group, Inc., a Delaware corporation
(the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of September 13,
2002 (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 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:[ ]
___________________________
Name:
Title: Authorized Signatory
D-2
EXHIBIT E
NOTICE TO SETTLE BY CASH
[Name]
The Purchase Contract Agent
[Address]
Attention: Institutional Trust Services
Re: [_______ Corporate Units] [Treasury Units] of The Hartford
Financial Services Group, Inc., a Delaware corporation (the
"COMPANY")
The undersigned Holder hereby irrevocably notifies you in accordance with
Section 5.02 of the Purchase Contract Agreement, dated as of September 13, 2002
(the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers' check or wire transfer, in immediately
available funds), $______ as the Purchase Price for the shares of Common Stock
issuable to such Holder by the Company with respect to _____ Purchase Contracts
on the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holders' election to make such Cash Settlement with respect to the Purchase
Contracts related to such Holder's [Corporate Units] [Treasury Units].
Date: ______________________________ _______________________________________
Signature
Signature Guarantee: __________________
Please print name and address of Registered Holder:
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Purchase Contract through Remarketing)
[Name]
The Collateral Agent
[Address]
Attention: Corporate Trust Administration
Re: __________ Corporate Units of The Hartford Financial Services
Group, Inc., a Delaware corporation (the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of September 13,
2002 (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: [______________]
_______________________________
Name:
Title: Authorized Signatory
F-1
THE HARTFORD FINANCIAL SERVICES GROUP, INC.
and
[__________], as Collateral Agent, Custodial Agent and Securities Intermediary
and
[______________], as Purchase Contract Agent
PLEDGE AGREEMENT
Dated as of September 13, 2002
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions .......................................................... 3
ARTICLE 2
PLEDGE
SECTION 2.01. Pledge ............................................................... 7
SECTION 2.02. Control; Financing Statement ......................................... 8
SECTION 2.03. Termination .......................................................... 8
ARTICLE 3
DISTRIBUTIONS ON PLEDGED COLLATERAL
SECTION 3.01. Income and Distributions ............................................. 8
SECTION 3.02. Principal Payments Following Termination Event ....................... 9
SECTION 3.03. Principal Payments Prior to or on Purchase Contract Settlement
Date .......................................................................... 9
SECTION 3.04. Payments to Purchase Contract Agent .................................. 9
SECTION 3.05. Assets Not Properly Released ......................................... 10
ARTICLE 4
CONTROL
SECTION 4.01. Establishment of Collateral Account .................................. 10
SECTION 4.02. Treatment as Financial Assets ........................................ 11
SECTION 4.03. Sole Control by Collateral Agent ..................................... 11
SECTION 4.04. Securities Intermediary's Location ................................... 11
SECTION 4.05. No Other Claims ...................................................... 11
SECTION 4.06. Investment and Release ............................................... 11
SECTION 4.07. Statements and Confirmations ......................................... 12
SECTION 4.08. Tax Allocations ...................................................... 12
SECTION 4.09. No Other Agreements .................................................. 12
SECTION 4.10. Powers Coupled with an Interest ...................................... 12
PAGE
----
ARTICLE 5
INITIAL DEPOSIT; CREATION OF TREASURY UNITS AND RECREATION OF
CORPORATE UNITS
SECTION 5.01. Initial Deposit of Senior Notes ...................................... 12
SECTION 5.02. Creation of Treasury Units ........................................... 13
SECTION 5.03. Recreation of Corporate Units ........................................ 14
SECTION 5.04. Termination Event .................................................... 16
SECTION 5.05. Cash Settlement ...................................................... 17
SECTION 5.06. Early Settlement and Cash Merger Early Settlement .................... 19
SECTION 5.07. Application of Proceeds in Settlement of Purchase Contracts .......... 20
SECTION 5.08. Special Event Redemption ............................................. 22
ARTICLE 6
VOTING RIGHTS - PLEDGED SENIOR NOTES
SECTION 6.01. Voting Rights ........................................................ 22
ARTICLE 7
RIGHTS AND REMEDIES
SECTION 7.01. Rights and Remedies of the Collateral Agent .......................... 23
SECTION 7.02. Special Event Redemption ............................................. 24
SECTION 7.03. Initial Remarketing .................................................. 25
SECTION 7.04. Second Remarketing ................................................... 26
SECTION 7.05. Substitutions ........................................................ 26
SECTION 7.06. Separate Senior Notes ................................................ 27
ARTICLE 8
REPRESENTATIONS AND WARRANTIES; COVENANTS
SECTION 8.01. Representations and Warranties ....................................... 27
SECTION 8.02. Covenants ............................................................ 28
ARTICLE 9
THE COLLATERAL AGENT, THE CUSTODIAL AGENT AND THE SECURITIES
INTERMEDIARY
SECTION 9.01. Appointment, Powers and Immunities ................................... 28
SECTION 9.02. Instructions of the Company .......................................... 30
SECTION 9.03. Reliance by Collateral Agent and Securities Intermediary ............. 30
SECTION 9.04. Rights in Other Capacities ........................................... 30
ii
PAGE
----
SECTION 9.05. Non-Reliance on Collateral Agent, the Custodial Agent and
Securities Intermediary ....................................................... 31
SECTION 9.06. Compensation and Indemnity ........................................... 31
SECTION 9.07. Failure to Act ....................................................... 32
SECTION 9.08. Resignation of Collateral Agent, the Custodial Agent and
Securities Intermediary ....................................................... 32
SECTION 9.09. Right to Appoint Agent or Advisor .................................... 34
SECTION 9.10. Survival ............................................................. 34
SECTION 9.11. Exculpation .......................................................... 34
ARTICLE 10
AMENDMENT
SECTION 10.01. Amendment Without Consent of Holders ................................. 35
SECTION 10.02. Amendment with Consent of Holders .................................... 35
SECTION 10.03. Execution of Amendments .............................................. 36
SECTION 10.04. Effect of Amendments ................................................. 37
SECTION 10.05. Reference of Amendments .............................................. 37
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. No Waiver ............................................................ 37
SECTION 11.02. Governing Law; Submission to Jurisdiction ............................ 38
SECTION 11.03. Notices .............................................................. 38
SECTION 11.04. Successors and Assigns ............................................... 38
SECTION 11.05. Counterparts ......................................................... 38
SECTION 11.06. Severability ......................................................... 38
SECTION 11.07. Expenses, Etc. ....................................................... 39
SECTION 11.08. Security Interest Absolute ........................................... 39
SECTION 11.09. Notice of Special Event, Special Event Redemption and
Termination Event ............................................................. 40
Exhibit A - Instruction from Purchase Contract Agent to Collateral Agent
(Creation of Treasury Units)
Exhibit B - Instruction from Collateral Agent to Securities Intermediary
(Creation of Treasury Units)
Exhibit C - Instruction from Purchase Contract Agent to Collateral Agent
(Recreation of Corporate Units)
Exhibit D - Instruction from Collateral Agent to Securities Intermediary
(Recreation of Corporate Units)
iii
Exhibit E - Notice of Cash Settlement from Securities Intermediary to
Purchase Contract Agent (Cash Settlement Amounts)
Exhibit F - Instruction to Collateral Agent
(Regarding Remarketing)
Exhibit G - Instruction to Collateral Agent
(Withdrawal from Remarketing)
