EXHIBIT 4.3
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EQUITY CONTRACT
AGENCY AGREEMENT
BETWEEN FIRST SHARES BANCORP, INC.
AND FIRST BANK
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______________, 2002
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FIRST SHARES BANCORP, INC.
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TABLE OF CONTENTS
PAGE
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ARTICLE I
ISSUANCE, EXECUTION AND DELIVERY OF
EQUITY CONTRACTS
Section 1.01. Issuance........................................................................................1
Section 1.02. Execution and Delivery of Equity Contracts......................................................2
Section 1.03. Further Provisions Relating to Issuance of Equity Contracts.....................................3
ARTICLE II
PURCHASE OF SHARES
Section 2.01. Mandatory Purchase..............................................................................3
Section 2.02. Optional Purchase...............................................................................4
Section 2.03. Payment of Purchase Price.......................................................................4
Section 2.04. Issuance of Shares..............................................................................5
Section 2.05. Charges and Taxes...............................................................................6
Section 2.06. Termination of Obligation.......................................................................6
ARTICLE III
ADJUSTMENT OF SHARE PRICE
Section 3.01. Adjustments.....................................................................................7
Section 3.02. Notice of Certain Corporate Action.............................................................10
Section 3.03. Notice of Adjustments..........................................................................11
Section 3.04. No Invalidation................................................................................11
Section 3.05. No Changes in Form.............................................................................11
ARTICLE IV
CANCELLATION OF EQUITY CONTRACTS
UPON REDEMPTION OF DEBENTURES
Section 4.01. Cancellation of Equity Contracts...............................................................11
Section 4.02. Notice of Cancellation.........................................................................12
Section 4.03. Payment to Obligors on Cancellation............................................................12
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS OF OBLIGORS
Section 5.01. No Rights as Stockholder.......................................................................12
Section 5.02. No Fractional Shares...........................................................................13
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ARTICLE VI
TRANSFERS AND EXCHANGES
Section 6.01. Registration of Transfers......................................................................13
Section 6.02. Exchanges......................................................................................15
Section 6.03. Mutilated or Missing Equity Contracts..........................................................17
Section 6.04. Temporary Equity Contracts.....................................................................18
Section 6.05. Delivery of Commonly Registered Debentures.....................................................18
Section 6.06. Countersignature...............................................................................18
Section 6.07. Charges and Taxes..............................................................................18
Section 6.08. Registered Obligors............................................................................19
ARTICLE VII
COLLATERAL
Section 7.01. Collateral; Valuation Thereof..................................................................19
Section 7.02. Interest on Collateral.........................................................................20
Section 7.03. Principal Payments on Collateral...............................................................20
Section 7.04. No Obligation to Invest........................................................................21
Section 7.05. Substitution of Collateral.....................................................................21
Section 7.06. Release of Collateral Upon Exchange, Transfer, Payment, Cancellation...........................21
Section 7.07. Default by Obligor.............................................................................23
ARTICLE VIII
CONCERNING THE EQUITY CONTRACT AGENT
Section 8.01. The Equity Contract Agent......................................................................23
Section 8.02. Conditions of Obligations......................................................................24
Section 8.03. Resignation and Appointment of Successor.......................................................25
Section 8.04. Payment of Taxes...............................................................................26
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendment......................................................................................27
Section 9.02. Notices and Demands............................................................................27
Section 9.03. Addresses......................................................................................27
Section 9.04. Applicable Law.................................................................................27
Section 9.05. Obtaining of Governmental Approvals............................................................27
Section 9.06. Authorized Shares..............................................................................27
Section 9.07. Persons Having Rights Under Agreement..........................................................28
Section 9.08. Successor Corporation to be Substituted........................................................28
Section 9.09. Headings.......................................................................................28
Section 9.10. Counterparts...................................................................................28
Section 9.11. Inspection of Agreement........................................................................28
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EQUITY CONTRACT AGENCY AGREEMENT, dated as of ______________, 2002,
between FIRST SHARES BANCORP, INC., a corporation organized and existing under
the laws of the State of
Indiana (the "Corporation"), and FIRST BANK, a banking
institution organized and existing under the laws of the State of
Indiana, as
Equity Contract Agent (the "Equity Contract Agent").
WHEREAS, the Corporation intends to issue its 8% Redeemable
Subordinated Debentures Due July 1, 2011 (the "Debentures") pursuant to an
indenture dated as of the date hereof (the "Indenture") between the Corporation
and The Huntington National Bank, as trustee (the "Trustee"), and to issue with
the Debentures equity contracts (collectively the "Equity Contracts" and
individually an "Equity Contract") between the Corporation and the obligors
thereunder registered from time to time as provided herein (the "Obligors")
pursuant to which the Corporation will sell and the Obligors will purchase an
aggregate of not more than 500,000 shares of its Common Stock, par value $.01
per Share (the "Common Stock"), subject to adjustment as hereinafter provided,
for an aggregate purchase price of $5,000,000.
WHEREAS, the Equity Contracts shall be issued either (i) as Commonly
Registered Equity Contracts, substantially in the form of Exhibit A hereto
("Commonly Registered Equity Contracts"), which are required to be issued
together with Debentures which are Commonly Registered Debentures (as defined in
the Indenture) or (ii) as Collateralized Equity Contracts, substantially in the
form of Exhibit B hereto ("Collateralized Equity Contracts"), and which may be
transferred separately from Unrestricted Debentures (as defined in the
Indenture);
WHEREAS, the Corporation desires the Equity Contract Agent to act on
behalf of the Corporation in connection with the issuance, exchange, transfer
and replacement of the Equity Contracts and in connection with the purchase and
sale pursuant thereto of shares of Common Stock, and as agent of the Corporation
to hold collateral security under the Collateralized Equity Contracts, and in
this Agreement wishes to set forth, among other things, the forms and provisions
of the Equity Contracts and the terms and conditions on which they may be
issued, exchanged, transferred and replaced and on which shares of Common Stock
shall or may be purchased pursuant thereto, and the terms and conditions upon
which such collateral security shall be held, enforced and applied;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
ISSUANCE, EXECUTION AND DELIVERY OF
EQUITY CONTRACTS
Section 1.01. Issuance. Equity Contracts issued pursuant to this
Agreement shall be either (i) Commonly Registered Equity Contracts, which shall
be issued together with a Debenture as a unit, or (ii) Collateralized Equity
Contracts. Each Commonly Registered Equity Contract originally issued pursuant
to this Agreement shall represent an aggregate purchase obligation for shares of
Common Stock equal to the principal amount of the Debenture with
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which it shall be issued as a unit. Collateralized Equity Contracts shall be
issued in accordance with Article VII. A Commonly Registered Equity Contract
issued with a Commonly Registered Debenture as a unit shall be registered in the
name of the Obligor thereunder who shall be the registered owner of the Commonly
Registered Debenture with which it shall be issued. No such Commonly Registered
Equity Contract or the Commonly Registered Debenture included in the same unit
shall be delivered to the Obligor under such Commonly Registered Equity Contract
unless such Obligor or the duly authorized agent of such Obligor shall have
completed, executed and delivered to the Equity Contract Agent an acceptance
agreement substantially in the form of the Acceptance set forth in Exhibit A to
this Agreement (or other written acceptance agreement satisfactory to the
Corporation) in the manner contemplated thereby. The term "Corresponding
Commonly Registered Debenture," when used with respect to any Commonly
Registered Equity Contract, shall mean the Commonly Registered Debenture which
refers by letters and numbers to such Commonly Registered Equity Contract on the
face thereof. The term "Corresponding Commonly Registered Equity Contract," when
used with respect to any Commonly Registered Debenture, shall mean the Commonly
Registered Equity Contract referred to on the face of such Commonly Registered
Debenture. No Collateralized Equity Contract shall be delivered to the Obligor
under such Collateralized Equity Contract unless such Obligor or the duly
authorized agent of such Obligor shall have completed, executed and delivered to
the Equity Contract Agent a
collateral agreement substantially in the form of
the
Collateral Agreement set forth in Exhibit A to this Agreement (or other
written
collateral agreement satisfactory to the Corporation) and delivered to
the Contract Agent the collateral required to be delivered under such
collateral
agreement.
Section 1.02. Execution and Delivery of Equity Contracts. (a) Each
Equity Contract, whenever issued, shall be in registered form only and shall be
dated the date of countersignature thereof by the Equity Contract Agent. The
aggregate purchase obligation under any Equity Contract originally issued
hereunder shall be in an amount of $1,000 or any integral multiple of $1,000.
Each Equity Contract may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the officers of the Corporation executing
the same may approve (the execution thereof to be conclusive evidence of such
approval) and as are not inconsistent with the provisions of this Agreement, or
as may be required to comply with any law or with any rule or regulation made
pursuant thereto, or to conform to usage. The Equity Contract shall be signed on
behalf of the Corporation by its President or any Vice President, and attested
by its Secretary or any Assistant Secretary, under its corporate seal, if any.
Such signatures may be manual or facsimile signatures of the present or any
future such authorized officers and may be imprinted or otherwise reproduced on
the Equity Contracts. Any seal of the Corporation may be in the form of a
facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Equity Contracts.
(b) No Equity Contract shall be valid until it has been countersigned
by the manual signature of the Equity Contract Agent; provided that no Commonly
Registered Equity Contract shall be valid until such Commonly Registered Equity
Contract has been countersigned by the manual signature of the Equity Contract
Agent and the certificate of authentication on the Corresponding Commonly
Registered Debenture has been executed by the Trustee or its agent. Such
countersignature by the Equity Contract Agent upon any Equity Contract executed
by the
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Corporation shall be conclusive evidence that the Equity Contract so
countersigned has been duly delivered hereunder.
(c) In case any officer of the Corporation who shall have signed any of
the Equity Contracts either manually or by facsimile signature shall cease to be
such officer before the Equity Contracts so signed shall have been countersigned
and delivered by the Equity Contract Agent, such Equity Contracts nevertheless
may be countersigned and delivered as though the person who signed such Equity
Contracts had not ceased to be such officer of the Corporation; and any Equity
Contract may be signed on behalf of the Corporation by such persons as, at the
actual date of the execution thereof, shall be the proper officers of the
Corporation, although at the date of the execution of this Agreement any such
person was not such an officer.
Section 1.03. Further Provisions Relating to Issuance of Equity
Contracts. Equity Contracts relating to the purchase of an aggregate of not more
than 500,000 shares of Common Stock, as such number of shares may from time to
time be adjusted pursuant to Article III hereof (the "Shares"), at an aggregate
purchase price of $5,000,000, may be executed by the Corporation and delivered
to the Equity Contract Agent upon the execution of this Agreement or from time
to time thereafter. Prior to the original issuance of Equity Contracts, the
Equity Contract Agent shall have received a written request of the Corporation
authorizing the countersignature and delivery thereof to or upon the order of
the Corporation, such Equity Contracts to be registered in the name of the
persons and to provide for the respective aggregate purchase obligations set
forth in such request of the Corporation. Subsequent to such original issuance
of Equity Contracts, the Equity Contract Agent shall, subject to the conditions
set forth in this Article I and Articles VI and VII hereof, countersign Equity
Contracts issued in exchange or substitution for or upon transfer of one or more
previously countersigned Equity Contracts; provided that in the case of Commonly
Registered Equity Contracts which are to be issued in exchange or substitution
for or upon transfer of Commonly Registered Equity Contracts, or in exchange for
Collateralized Equity Contracts, such Commonly Registered Equity Contracts shall
be registered only in the same name in which the Corresponding Commonly
Registered Debenture is registered. Prior to issuance of a Collateralized Equity
Contract, whether in exchange for a Commonly Registered Equity Contract or upon
transfer of a Collateralized Equity Contract, the Equity Contract Agent shall
have received the Collateral referred to in the related
Collateral Agreement
which shall be of the kind and value required by Article VII hereof.
ARTICLE II
PURCHASE OF SHARES
Section 2.01. Mandatory Purchase. Each Equity Contract shall obligate
the Obligor thereunder to purchase, and the Corporation to sell, on January 1,
2011 (the "Purchase Date"), that number of Shares as shall have an aggregate
purchase price equal to the aggregate purchase obligation set forth therein at a
price of $10 per Share, as adjusted from time to time pursuant to Article III
hereof.
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Section 2.02. Optional Purchase. At any time prior to the Purchase
Date, the Obligator under an Equity Contract, upon surrender of such Equity
Contract, with the form of election to purchase on the reverse thereof duly
filled in and signed, at the office of the Equity Contract Agent specified in
Section 9.03, may purchase all or a portion of the Shares covered by such Equity
Contract at a purchase price of $10 per share, as adjusted from time to time
pursuant to Article III hereof. The aggregate purchase price of Shares purchased
must be $1,000 or any integral multiple of $1,000 (without regard to any cash
settlement for fractional shares).
Section 2.03. Payment of Purchase Price. (a) The purchase price for the
Shares purchased pursuant to an Equity Contract shall be payable at the office
of the Equity Contract Agent specified in Section 9.03, (i) in lawful money of
the United States of America, by bank wire transfer to the Equity Contract Agent
in immediately available funds or by certified or official bank check in New
York Clearing House funds payable to or upon the order of the Corporation, or
(ii) subject to Section 2.03(b) hereof, by surrender of an equal aggregate
unpaid principal amount of Debentures; provided, however, that after the
Corporation shall have mailed to the Obligors under Equity Contracts a
Cancellation Notice in compliance with Section 4.02 hereof, the purchase price
for the Shares purchased pursuant to a Commonly Registered Equity Contract shall
be payable only by surrender of an equal aggregate unpaid principal amount of
the Corresponding Commonly Registered Debenture. Payment of the purchase price
for Shares purchased under any Equity Contract shall be accepted and credited by
the Corporation only in amounts equal to $1,000 or any integral multiple of
$1,000. The Equity Contract Agent shall deliver to the Corporation all
Debentures and other consideration tendered to it as hereinabove provided. With
respect to any Commonly Registered Equity Contract, the Corporation is entitled
on or after the Purchase Date to offset the obligation of the Corporation to pay
the principal of the Corresponding Commonly Registered Debenture (whether or not
such Corresponding Commonly Registered Debenture has matured), in whole or in
part, against the obligation of the Obligor under such Commonly Registered
Equity Contract to pay the unpaid aggregate purchase price of the Shares covered
thereby, in full and complete satisfaction of the obligation of the Corporation
to pay all or such part of the principal of such Corresponding Commonly
Registered Debenture. Upon making such offset, the Corporation shall deliver
certificates for such Shares to the Equity Contract Agent, which shall hold such
certificates for the account of, and deliver the same to, the registered holder
of such Corresponding Commonly Registered Debenture upon the presentation
thereof. The Corporation shall not be obligated to sell any Shares or deliver
any certificates therefor unless it shall have received payment in full of the
aggregate purchase price for the Shares purchased in the manner herein set
forth.
(b) Debentures surrendered in payment or partial payment of the
aggregate purchase obligation for Shares will be accepted and credited in an
amount equal to the unpaid principal amount thereof; provided that (i)
Debentures will be credited only in amounts equal to $1,000 or any integral
multiple of $1,000, (ii) a Commonly Registered Debenture may be surrendered in
partial or complete satisfaction only of the aggregate purchase obligation under
the Corresponding Commonly Registered Equity Contract and may not be surrendered
in partial or complete satisfaction of the aggregate purchase obligation under
any other Equity Contract; and (iii) Unrestricted Debentures may not be
surrendered in partial or complete satisfaction of the aggregate purchase
obligation under any Commonly Registered Equity Contract. If less than the full
unpaid principal amount of a Debenture is to be applied to the payment of all or
any part
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of the aggregate purchase price of Shares purchased, then the Equity Contract
Agent shall obtain a new Debenture or Debentures in an aggregate principal
amount equal to the aggregate principal amount of the Debenture or Debentures so
surrendered less the amount of the principal thereof applied to the aggregate
purchase price for such Shares and shall deliver such new Debenture or
Debentures to the Obligor surrendering the same; provided, however, that in any
case in which a Commonly Registered Debenture is surrendered prior to the
Purchase Date in partial payment for Shares, any new Debenture so obtained shall
be a Commonly Registered Debenture, and shall be registered in the name of the
registered Obligor in whose name the Commonly Registered Equity Contract
representing the remaining aggregate purchase obligation of such Obligor shall
be registered; and provided further, that, in any case in which an Unrestricted
Debenture is surrendered at any time in full or partial payment for Shares, any
new Debenture or Debentures so obtained shall be an Unrestricted Debenture or
Unrestricted Debentures. In any case in which less than the full unpaid
principal amount of any Commonly Registered Debenture is to be applied on or
after the Purchase Date, whether upon surrender or upon exercise of the
Company's right of offset as provided in the Commonly Registered Debentures, to
the payment of all or any part of the aggregate purchase price of Shares
purchased under the Corresponding Commonly Registered Equity Contract, and upon
surrender of any such Commonly Registered Debenture in respect of which the
Company shall have exercised such right of offset, the Equity Contract Agent
shall obtain a new Unrestricted Debenture or Unrestricted Debentures in an
aggregate principal amount equal to the principal amount of the Commonly
Registered Debenture so surrendered less the amount of the principal thereof
applied to the aggregate purchase price for such Shares, and shall deliver such
new Unrestricted Debenture or Unrestricted Debentures to the Obligor
surrendering such Commonly Registered Debenture. In any case in which the
purchase price under a Commonly Registered Equity Contract shall have been paid,
in whole or in part, on or after the Purchase Date, in any manner other than by
surrender of the Corresponding Commonly Registered Debenture or by exercise of
the Company's right of offset as provided in the Commonly Registered Debentures,
the holder of such Corresponding Commonly Registered Debenture shall thereafter
be entitled to exchange such Corresponding Commonly Registered Debenture for an
Unrestricted Debenture or Unrestricted Debentures in an aggregate principal
amount equal to the amount so paid. In any case in which the aggregate purchase
obligation under a Commonly Registered Equity Contract shall have been paid
prior to the Purchase Date, in whole or in part, in any manner other than by
surrendered of the Corresponding Commonly Registered Debenture, the holder of
such Corresponding Commonly Registered Debenture shall thereafter been entitled
to exchange such Corresponding Commonly Registered Debenture for an Unrestricted
Debenture or Unrestricted Debentures in an aggregate principal amount equal to
the amount so paid, and, if such aggregate purchase obligation shall not be paid
in full, for a Commonly Registered Debenture in a principal amount equal to the
remaining aggregate purchase obligation under such Commonly Registered Equity
Contract.
Section 2.04. Issuance of Shares. Upon its receipt of payment in full
of the aggregate purchase price for the Shares purchased by any Obligor pursuant
to the foregoing provisions of this Article II, and subject to the provisions of
Section 2.05, the Equity Contract Agent shall tender the same to the Corporation
and shall obtain from the Corporation, and shall cause to be delivered to or
upon the written order of the Obligor under the related Equity Contract or
Equity Contracts and in such name or names as such Obligor may designate, a
certificate for the Shares
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so purchased. Such certificate shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become a holder
of record of such Shares as of the date of the payment in full for such Shares
shall have been made. In the event that less than all of the Shares covered by
an Equity Contract are purchased pursuant to the optional right to purchase set
forth in Section 2.02, a new Equity Contract will be issued for the remaining
aggregate purchase obligation under the Equity Contract so surrendered and will
be transmitted to such Obligor at its registered address, and the Equity
Contract Agent is hereby authorized to countersign the required new Equity
Contract; provided that if the Equity Contract surrendered is a Commonly
Registered Equity Contract, the new Equity Contract so issued shall be a
Commonly Registered Equity Contract and shall be issued in accordance with the
first proviso in the second sentence of Section 2.03(b), mutatis mutandis; and
provided further that, if the Equity Contract surrendered is a Collateralized
Equity Contract, the new Equity Contract so issued shall be a Collateralized
Equity Contract and shall be issued in accordance with the second proviso in the
second sentence of Section 2.03(b), mutatis mutandis. Subject to the provisions
of Section 6.02(a), all Equity Contracts surrendered upon purchase of Shares
shall be cancelled by the Equity Contract Agent and shall then be disposed of in
a manner satisfactory to the Corporation.
Section 2.05. Charges and Taxes. The Corporation will pay all
documentary stamp taxes attributable to the initial issuance and delivery of
Shares upon the purchase thereof. The Corporation shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Equity Contracts, any exchange of or substitution for an Equity
Contract or any issuance of certificates for Shares in a name other than that of
the registered Obligor under an Equity Contract surrendered upon the purchase of
Shares covered thereby, and the Corporation shall not be required to issue or
deliver such certificates or such Equity Contracts unless or until the person or
persons requesting the transfer or issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
Section 2.06. Termination of Obligation. The Equity Contracts and the
obligations and rights of the Corporation and the Obligors thereunder shall
terminate if on or prior to the Purchase Date either of the following events
shall have occurred:
(1) the Corporation or any of its subsidiaries
consolidated with the Corporation for financial
reporting purposes the assets of which, as shown on
such subsidiary's balance sheet as of the end of the
immediately preceding fiscal quarter equal or exceed
twenty percent (20%) of the consolidated assets of
the Corporation as shown on its consolidated balance
sheet as of the end of such quarter (a "Major
Subsidiary") or any group of subsidiaries that, taken
as a whole, would constitute a Major Subsidiary,
pursuant to or within the meaning of Title 11, U.S.
Code or any similar Federal or state law for the
relief of debtors (herein referred to as "Bankruptcy
Law"):
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
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(C) consents to the appointment of a custodian
of it or for all or substantially all of its
property,
(D) makes a general assignment for the benefit
of its creditors, or
(E) generally is not paying its debts as they
become due; or
(2) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Corporation or any
of its subsidiaries that is a Major
Subsidiary or any group of subsidiaries
that, taken as a whole, would constitute a
Major Subsidiary in an involuntary case;
(B) appoints a receiver, trustee, assignee,
liquidator, custodian or other similar
official under any Bankruptcy Law (i) of the
Corporation or any of its subsidiaries that
is a Major Subsidiary or any group of
subsidiaries that, taken as a whole, would
constitute a Major Subsidiary or (ii) for
all or substantially all of the property of
the Corporation or any of its subsidiaries
that is a Major Subsidiary or any group of
subsidiaries that, taken as a whole, would
constitute a Major Subsidiary; or
(C) orders the liquidation of the Corporation or
any of its subsidiaries which is a Major
Subsidiary or any group of subsidiaries
that, taken as a whole, would constitute a
Major Subsidiary;
and the order or decree remains unstayed and in
effect for 60 consecutive days.
ARTICLE III
ADJUSTMENT OF SHARE PRICE
Section 3.01. Adjustments. The purchase price per Share applicable to a
purchase pursuant to Sections 2.01, 2.02 or 4.02 hereof (the "Share Price") and
the number of Shares which an Obligor is obligated to purchase pursuant to each
Equity Contract shall be subject to adjustment as follows:
(a) In case the Corporation shall (i) declare a dividend or
make a distribution on shares of Common Stock in shares of its Common Stock,
(ii) subdivide its outstanding shares of Common Stock into a greater number of
shares, or (iii) combine its outstanding shares of Common Stock into a smaller
number of shares, the Share Price in effect at the time of the record date for
such dividend or distribution or the effective date of such subdivision or
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combination shall be proportionately adjusted so that the Obligor under any
Equity Contract shall thereafter be entitled to receive upon purchase (whether
mandatory or optional) the number of Shares which such Obligor would have owned
if the shares of Common Stock issuable pursuant to the Equity Contract prior to
such transaction had been purchased immediately prior to such time. Any shares
of Common Stock issuable in payment of a dividend shall be deemed to have been
issued immediately prior to the time of the record date for such dividend for
purposes of calculating the number of outstanding shares of Common Stock under
paragraphs (b) and (c) below. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Corporation shall fix a record date for the
issuance of rights or warrants to all holders of shares of its Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned above) to subscribe for or purchase shares of Common Stock at a price
per share less than the then current market price per share of Common Stock (as
defined in paragraph (d) below) at the record date mentioned above, the Share
price shall be adjusted immediately thereafter so that it shall equal the price
determined by multiplying the Share Price in effect immediately prior thereto by
a fraction, of which the numerator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock so
offered would purchase at such current market price and of which the denominator
shall be the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock so offered for subscription
or purchase. Shares of Common Stock owned by or held for the account of the
Corporation shall be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed.
To the extent that such rights or warrants are not so issued or such rights or
warrants are not exercised prior to the expiration thereof, the Share Price
shall be readjusted to the Share Price which would then be in effect if such
record dated had not been fixed, or to the Share Price which would then be in
effect based upon the number of shares of Common Stock actually delivered upon
the exercise of such rights or warrants, as the case may be.
(c) In case the Corporation shall fix a record date for the
making of a distribution to all holders of shares of its Common Stock (i) of
shares of any class of stock not included in the definition of Common Stock set
forth in the recitals to this Agreement or (ii) of evidences of its indebtedness
or (iii) of assets (excluding cash dividends or distributions, and dividends or
distributions referred to in paragraph (a) above) or (iv) of rights or warrants
(excluding those referred to in paragraph (b) above), then in each such case the
Share Price in effect thereafter shall be determined by multiplying the Share
Price in effect immediately prior thereto by a fraction, of which the numerator
shall be the total number of shares of Common Stock outstanding multiplied by
the current market price per share on such record date less the fair market
value (as determined in good faith by the Board of Directors of the Corporation,
whose determination shall be conclusive) of said shares, evidences of
indebtedness or assets or rights or warrants so distributed, and of which the
denominator shall be the total number of shares of Common Stock outstanding
multiplied by such current market price per share. Such adjustment shall be made
successively whenever such record date is fixed; and to the extent that such
distribution is not so made, the Share Price shall be readjusted to the Share
Price which would then be in effect if such record date had not been fixed.
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(d) For the purpose of any computation under paragraphs (b)
and (c) above, the "current market price" per share of Common Stock on any date
shall be deemed to be the (i) the last reported sales price of Common Stock on
the Nasdaq National Market or Nasdaq SmallCap Market, or any similar system of
automated dissemination of quotations of securities prices then in common use,
if so quoted, or (ii) if not quoted as described in clause (i), the mean between
the high bid and low asked quotations for Common Stock as reported by the
National Quotation Bureau Incorporated, or (iii) if the Common Stock is listed
or admitted for trading on any national securities exchange, the last sales
price, or the closing bid price if no sale occurred, of Common Stock on the
principal securities exchange on which the Common Stock is listed. If the Common
Stock is quoted on a national securities or central market system, in lieu of a
market or quotation system described above, the closing price shall be
determined in the manner set forth in clause (i) of the preceding sentence if
bid and asked quotations are reported but actual transactions are not, and in
the manner set forth in clause (iii) of the preceding sentence if actual
transactions are reported. If none of the conditions set forth above is met, the
current market price per share on any day shall be such market price as shall be
determined by such other reasonable method as the Board of Directors of the
Corporation shall, in its discretion, select and apply.
(e) No adjustment of the Share Price hereunder shall be
required unless such adjustment would require an increase or decrease in such
Share Price of at least 0.5% thereof; provided, however, that any adjustments
which by reason of this paragraph (e) are not required to be made shall be
carried forward cumulatively and taken into account in any subsequent
adjustment.
(f) Upon each adjustment of the Share Price as a result of the
calculations made in paragraphs (a), (b), or (c) of this Section 3.01, each
Equity Contract outstanding prior to the making of the adjustment in the Share
Price shall thereafter represent the obligation and the right to purchase, at
the adjusted Share Price, that number of Shares obtained by (i) multiplying the
number of Shares purchasable prior to adjustment of the number of Shares by the
Share Price in effect prior to adjustment of the Share Price and (ii) dividing
the product so obtained by the Share Price in effect after such adjustment of
the Share Price. All calculations under this paragraph (f) shall be made to the
nearest one-hundredth of a Share.
(g) In case of any capital reorganization of the Corporation
or any reclassification of the Common Stock (other than a subdivision or
combination of outstanding shares of Common Stock), or in the case of the
consolidation of the Corporation with or the merger of the Corporation with or
into any other corporation (other than a consolidation or a merger in which the
Corporation is the continuing corporation) or of the sale of the properties and
assets of the Corporation as, or substantially as, an entirety to any other
business organization, each Equity Contract shall, after such capital
reorganization, reclassification, consolidation, merger or sale and upon the
terms and conditions specified in this Agreement, represent the obligation and
the right to purchase the number of shares of stock or other securities or
property to which the Shares issuable (at the time of such capital
reorganization, reclassification, merger or sale) upon purchase thereof pursuant
to such Equity Contract would have been entitled (including the right to make
any election with respect to the receipt of such
9
shares of stock or other securities or property to which such Shares would have
been entitled) upon such capital reorganization, reclassification of Common
Stock, consolidation, merger or sale if such purchase had taken place
immediately prior thereto; and in any case, if necessary, the provisions set
forth in this Section 3.01 with respect to the rights and interests thereafter
of the holders of the Equity Contracts shall be appropriately adjusted so as to
be applicable, as nearly as may reasonably be, to any shares of stock or other
securities or property thereafter deliverable on the Purchase Date or on the
date of optional purchase under an Equity Contract.
(h) The Corporation may make such reductions in the Share
Price, in addition to those required by paragraphs (a), (b) or (c) of this
Section 3.01, as it considers to be advisable in order that any event treated
for federal income tax purposes as a dividend of stock or stock rights shall not
be taxable to the recipient.
Section 3.02. Notice of Certain Corporate Action.
In case:
(a) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash; or
(b) the Corporation shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding shares
of Common Stock), or of any consolidation or merger to which the Corporation is
a party and for which approval of any stockholders of the Corporation is
required, or of the sale or transfer of all or substantially all of the assets
of the Corporation; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
then the Corporation shall cause to be filed with the Equity Contract Agent and
shall cause to be mailed to all Obligors at their registered addresses, at least
20 days (or 10 days in any case specified in clause (a) or (b) above) prior to
the applicable record date hereinafter specified, a notice stating (i) the date
on which a record is to be taken for the purpose of such dividend, distribution,
rights or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, (ii) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and (iii) the date as
of which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
10
Section 3.03. Notice of Adjustments. Whenever the Share Price is
adjusted as provided in this Article III:
(a) The Corporation shall compute the adjusted Share Price and
the adjusted number of Shares issuable at such adjusted Share Price per $1,000
Equity Contract in accordance with Section 3.01 and shall prepare a certificate
signed by the President or any Vice President of the Corporation setting forth
the adjusted Share Price and the adjusted number of Shares issuable at such
adjusted Share Price per $1,000 Equity Contract and showing in reasonable detail
the facts upon which such adjustment is based, and such certificate shall
forthwith be filed with the Equity Contract Agent; provided, however, that the
Equity Contract Agent shall have no duty with respect to any such certificate
filed with it except to keep the same on file and available for inspection
during reasonable hours; and
(b) The Corporation shall cause to be mailed to each Obligor
at its then registered address by first-class mail, postage prepaid, a notice
stating that the Share Price and the number of Shares purchasable per $1,000
Equity Contract have been adjusted and setting forth the adjusted Share Price
and the adjusted number of Shares issuable at the adjusted Share Price.
Section 3.04. No Invalidation. Without limiting the obligation of the
Corporation hereunder to give the notices provided in Section 3.02, the failure
of the Corporation to give such notice shall not invalidate any corporate action
by the Corporation.
Section 3.05. No Changes in Form. The form of Equity Contract need not
be changed because of any change in the Share Price or in the number of Shares
purchasable pursuant thereto, and each Equity Contract issued after such change
may continue to express the same purchase price per Share as is stated in the
similar Equity Contracts initially issued pursuant to this Agreement, and such
purchase price per Share therein set forth shall be deemed to have been so
changed.
ARTICLE IV
CANCELLATION OF EQUITY CONTRACTS
UPON REDEMPTION OF DEBENTURES
Section 4.01. Cancellation of Equity Contracts. In the event that the
Corporation should exercise its right to redeem the Debentures pursuant to
Article Twelve of the Indenture, the Equity Contracts then outstanding, and the
obligations and rights of the Corporation and the Obligors thereunder and under
any
Collateral Agreements entered into with respect to Collateralized Equity
Contracts, shall be cancelled on the date on which the Debentures are redeemed
(the "Cancellation Date"). Upon such cancellation, the Obligor under such Equity
Contracts shall receive an amount (the "Cancellation Payment") equal to one
percent (1%) of the principal amount of the purchase obligation under each
Equity Contract; provided, however, that if the Debentures are redeemed on or
after July 1, 2010, or after the occurrence of an Adverse Tax Determination (as
defined in the Indenture), or an Adverse Capital Determination (as
11
defined in the Indenture), no Cancellation Payment will be made; and provided,
further, that if the Debentures are redeemed after an Adverse Tax Determination
or an Adverse Capital Determination, holders of Equity Contracts shall have the
right to purchase the Shares purchasable thereunder at a price equal to the
lower of: (i) ninety-four percent (94%) of the average current market price of
the Common Stock, as that term is defined in Section 3.01(d), for the 10
business days prior and 10 business days after the Adverse Tax Determination or
Adverse Capital Determination (but not less than $5.00 per share subject to
adjustment as provided in Section 3.01) or (ii) the designated Equity Contract
purchase price. In no event shall a Cancellation Payment be made to the extent
Common Stock is purchased prior to cancellation of the Equity Contract.
Section 4.02. Notice of Cancellation. Notice of cancellation of the
Equity Contracts pursuant to Section 4.01 ("Cancellation Notice") shall be given
to the Obligors thereunder by the Corporation, or at the Corporation's
direction, by the Equity Contract Agent. The Cancellation Notice shall be sent
to such Obligors by first class mail, postage prepaid, not less than thirty (30)
nor more than sixty (60) days prior to the Cancellation Date, at their last
addresses as they shall appear on the records of the Equity Contract Agent. Each
Cancellation Notice shall specify the Cancellation Date, the amount of the
Cancellation Payment, if any, and the place where Equity Contracts are to be
presented and surrendered. Any Cancellation Notice which is mailed in the manner
herein provided shall be conclusively presumed to have duly given, whether or
not received by the Obligor.
Section 4.03. Payment to Obligors on Cancellation. At least one (1)
business day before the Cancellation Date specified in the Cancellation Notice,
the Corporation shall deposit with the Equity Contract Agent an amount of money
sufficient to pay all Obligors under Equity Contracts their Cancellation
Payment, if any, without interest. Upon presentation and surrender of the Equity
Contracts at the place provided in the Cancellation Notice, the Obligors
thereunder shall be paid the Cancellation Payment payable with respect to such
Equity Contracts, if any, and the Collateral then held as collateral security
for any Collateralized Equity Contracts shall be returned to the Obligors
thereunder.
ARTICLE V
OTHER PROVISIONS RELATING TO RIGHTS OF OBLIGORS
Section 5.01. No Rights as Stockholder. No Obligor, as such, shall be
entitled to vote or receive dividends or be deemed the holder of shares of
Common Stock of the Corporation for any purpose, nor shall anything contained in
any Equity Contract be construed to confer upon an Obligor, as such, any of the
rights or privileges of a stockholder of the Corporation, including without
limitation any right to vote, give or withhold consent to any corporate action
(whether upon any recapitalization, issue of stock, reclassification of stock,
consolidation, merger, sale of assets or otherwise), receive notice of meetings
or other action affecting stockholders (except for notices provided for in
Section 3.02 hereof), receive dividends or subscription rights, or otherwise. No
Obligor shall, upon the purchase of Shares, be entitled to any dividends that
may have been paid with respect to such Shares prior to the date of purchase
thereof. No Equity
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Contract shall be deemed to be a subscription for the Shares covered thereby for
any purpose. Each Equity Contract shall be deemed to be a executory contract for
purposes of Title 11 of the United States Code.
Section 5.02. No Fractional Shares. Anything contained herein to the
contrary notwithstanding, the Corporation shall not be required to issue or sell
any fraction of a Share pursuant hereto or to any Equity Contract, but in any
case where the Obligor would, except for the provisions of this Section 5.02, be
entitled to receive a fraction of a Share, the Corporation shall, upon the
purchase by the Obligor of the largest number of full Shares covered by the
related Equity Contract or portion thereof with respect to which the purchase
right is exercised, pay in cash to such Obligor in lieu of such fractional share
a sum equal to the same fraction of the purchase price per Share then applicable
under the Equity Contract.
ARTICLE VI
TRANSFERS AND EXCHANGES
Section 6.01. Registration of Transfers. (a) The Corporation shall
keep, at the office of the Equity Contract Agent, a register in which, subject
to such reasonable regulations as it may prescribe, the Corporation shall
provide for registration of Equity Contracts and registration of transfers of
Equity Contracts as in this Section 6.01 provided. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.
(b) Subject to the restrictions set forth in the respective
Equity Contracts, in the Debentures and herein, and upon due presentment for
registration of transfer at the office of the Equity Contract Agent specified in
Section 9.03, the Equity Contract Agent shall from time to time prior to the
Purchase Date register the transfer of any outstanding Equity Contracts. All
Equity Contracts presented for registration of transfer shall (if so required by
the Corporation or the Equity Contract Agent) be dully endorsed by, or be
accompanied by a written instrument or instruments of transfer in form
satisfactory to the Corporation and the Equity Contract Agent duly executed by,
the Obligor or his attorney duly authorized in writing, and signatures thereon
or on such instruments, as the cases may be, guaranteed by any commercial bank
or trust company or member of a national securities exchange. Upon any such
registration of transfer, the Equity Contract Agent shall issue to the
transferee a new Commonly Registered Equity Contract or Collateralized Equity
Contract, as the case may be, in accordance with the provisions of this
Agreement.
(c) In order to effect registration of transfer to a single
transferee of a Commonly Registered Equity Contract and the Corresponding
Commonly Registered Debenture, the Obligor under such Commonly Registered Equity
Contract and the transferee shall complete and execute the form of Assignment II
and the form of Acceptance on the reverse of such Commonly Registered Equity
Contract (or separate written acceptance agreement satisfactory to the
Corporation), respectively, in the manner contemplated thereby, and shall
surrender such Commonly Registered Equity Contract to the Equity Contract Agent
together with the Corresponding Commonly Registered Debenture endorsed and
accompanied by such instruments
13
and notices as shall be required pursuant to the provisions of the Indenture.
Upon receipt of the foregoing items, the Equity Contract Agent shall present
such Commonly Registered Debenture and any accompanying instruments and notices
for the registration of transfer of such Commonly Registered Debenture in
accordance with the provisions of the Indenture. Upon receipt by the Equity
Contract Agent of the Commonly Registered Debenture issued upon such
registration of transfer, the Corporation shall execute, and the Equity Contract
Agent shall countersign, the Commonly Registered Equity Contract which the
transferee is entitled to receive, and the Equity Contract Agent shall deliver
to the transferee such Commonly Registered Equity Contract and Commonly
Registered Debenture.
(d) In order to effect registration of transfer of a Commonly
Registered Equity Contract which is to be transferred separately from the
Corresponding Commonly Registered Debenture, the Obligor under such Commonly
Registered Equity Contract and the transferee shall complete and execute the
form of Assignment I and the form of
Collateral Agreement on the reverse of such
Commonly Registered Equity Contract (or separate written
collateral agreement
satisfactory to the Corporation), respectively, in the manner contemplated
thereby, and shall surrender such Commonly Registered Equity Contract to the
Equity Contract Agent together with (i) the Corresponding Commonly Registered
Debenture endorsed and accompanied by such instruments and notices as shall be
required pursuant to the provisions of the Indenture and (ii) the Collateral
referred to in such
Collateral Agreement which shall be of the kind and value
required by Article VII hereof. Upon receipt of the foregoing items, the Equity
Contract Agent shall surrender such Commonly Registered Debenture and any
accompanying instruments and notices for exchange in accordance with the
provisions of the Indenture for an Unrestricted Debenture registered in the name
of the holder of the Commonly Registered Debenture so surrendered for exchange.
Upon receipt by the Equity Contract Agent of the Unrestricted Debenture issued
upon such exchange, the Corporation shall execute, and the Equity Contract Agent
shall countersign, the Collateralized Equity Contract which the transferee is
entitled to receive, and the Equity Contract Agent shall deliver to the
transferee such Collateralized Equity Contract and shall deliver to the
transferor such Unrestricted Debenture. No transfer of a Commonly Registered
Equity Contract separately from the Corresponding Commonly Registered Debenture
may be registered after the Corporation shall have mailed to the Obligors under
Equity Contracts a Cancellation Notice in compliance with Section 4.02 hereof.
(e) In order to effect registration of transfer of a
Collateralized Equity Contract, the Obligor under such Collateralized Equity
Contract and the transferee shall complete and execute the form of Assignment
and the form of
Collateral Agreement on the reverse of such Collateralized
Equity Contract (or separate written collateral agreement satisfactory to the
Corporation), respectively, in the manner contemplated thereby, and shall
surrender such Collateralized Equity Contract to the Equity Contract Agent
together with the Collateral referred to in such Collateral Agreement which
shall be of the kind and value required by Article VII hereof. Upon receipt by
the Equity Contract Agent of the foregoing items, the Corporation shall execute,
and the Equity Contract Agent shall countersign, the Collateralized Equity
Contract which the transferee is entitled to receive, and the Equity Contract
Agent shall deliver to the transferee such Collateralized Equity Contract.
14
Section 6.02. Exchanges. (a) Upon satisfaction of the requirements set
forth or referred to in this Section 6.02, Equity Contracts may be exchanged at
the option of the Obligor thereunder, prior to the Purchase Date, when
surrendered at the office of the Equity Contract Agent specified in Section
9.03. All Equity Contracts surrendered for exchange or presented for transfer
which have set forth therein the Obligor's or the transferee Obligor's
Collateral Agreement or acceptance of the purchase obligations of the Obligor
under the Equity Contract to be issued upon such exchange or transfer to such
Obligor or transferee Obligor shall be retained by the Equity Contract Agent
uncancelled but marked with a notation as to the identity of the Equity Contract
issued in exchange or upon transfer thereof as evidence of such Obligor's or
transferee Obligor's Collateral Agreement or acceptance of liability under the
Equity Contract so issued upon exchange or upon transfer.
(b) In order to exchange a Commonly Registered Equity Contract
for Commonly Registered Equity Contracts representing an equal aggregate
purchase obligation for Shares, the Obligor thereunder shall surrender such
Commonly Registered Equity Contract to the Equity Contract Agent together with
the Corresponding Commonly Registered Debenture endorsed and accompanied by such
instruments and notices as shall be required pursuant to the provisions of the
Indenture. Upon receipt of the foregoing items, the Equity Contract Agent shall
surrender such Corresponding Commonly Registered Debenture and any accompanying
instruments and notices for exchange in accordance with the provisions of the
Indenture for Commonly Registered Debentures in the same principal amounts as
the respective aggregate purchase obligations of the Corresponding Commonly
Registered Equity Contracts to be issued upon such exchange. Upon receipt by the
Equity Contract Agent of the Commonly Registered Debentures issued upon such
exchange, the Corporation shall execute, and the Equity Contract Agent shall
countersign, the Commonly Registered Equity Contracts which the Obligor is
entitled to receive, and the Equity Contract Agent shall deliver to the Obligor
such Commonly Registered Equity Contracts and such Commonly Registered
Debentures.
(c) In order to exchange a Commonly Registered Equity Contract
for a Collateralized Equity Contract representing an equal aggregate purchase
obligation for Shares, the Obligor thereunder shall complete and execute the
form of Collateral Agreement on the reverse of such Commonly Registered Equity
Contract (or separate written collateral agreement satisfactory to the
Corporation) in the manner contemplated thereby, and shall surrender such
Commonly Registered Equity Contract to the Equity Contract Agent together with
(i) the Corresponding Commonly Registered Debenture endorsed and accompanied by
such instruments and notices as shall be required pursuant to the provisions of
the Indenture and (ii) the Collateral referred to in such Collateral Agreement
which shall be of the kind and value required by Article VII hereof. Upon
receipt of the foregoing items, the Equity Contract Agent shall surrender such
Corresponding Commonly Registered Debenture and any accompanying instruments and
notices for exchange in accordance with the provisions of the Indenture for an
Unrestricted Debenture in a principal amount equal to the aggregate purchase
obligation of the Collateralized Equity Contract to be issued upon such
exchange, the Corporation shall execute, and the Equity Contract Agent shall
countersign, the Collateralized Equity Contract which the Obligor is entitled to
receive, and the Equity Contract Agent shall deliver to the Obligor such
Collateralized Equity Contract and such Unrestricted Debenture. No exchange of a
Commonly Registered Equity Contract for a Collateralized Equity Contract may be
made after the Corporation shall
15
have mailed to the Obligors under Equity Contracts a Cancellation Notice in
compliance with Section 4.02 hereof.
(d) In order to exchange a Commonly Registered Equity Contract
for a Commonly Registered Equity Contract and a Collateralized Equity Contract
representing an equal aggregate purchase obligation for Shares, the Obligor
thereunder shall complete and execute the form of Collateral Agreement on the
reverse of such Commonly Registered Equity Contract (or separate written
collateral agreement satisfactory to the Corporation) in the manner contemplated
thereby, and shall surrender such Commonly Registered Equity Contract to the
Equity Contract Agent together with (i) the Corresponding Commonly Registered
Debenture endorsed and accompanied by such instruments and notices as shall be
required pursuant to the provisions of the Indenture and (ii) the Collateral
referred to in such Collateral Agreement which shall be of the kind and value
required by Article VII hereof. Upon receipt of the foregoing items, the Equity
Contract Agent shall surrender such Corresponding Commonly Registered Debenture
and any accompanying instruments and notices for exchange in accordance with the
provisions of the Indenture for an Unrestricted Debenture in a principal amount
equal to the aggregate purchase obligation of the Collateralized Equity Contract
to be issued upon such exchange and a Commonly Registered Debenture in a
principal amount equal to the aggregate purchase obligation of the Corresponding
Commonly Registered Equity Contract to be issued upon such exchange. Upon
receipt by the Equity Contract Agent of the Unrestricted Debenture and the
Commonly Registered Debenture issued upon such exchange, the Corporation shall
execute, and the Equity Contract Agent shall countersign, the Collateralized
Equity Contract and the Commonly Registered Equity Contract which the Obligor is
entitled to receive, and the Equity Contract Agent shall deliver to the Obligor
such Collateralized Equity Contract, Commonly Registered Equity Contract,
Unrestricted Debenture and Commonly Registered Debenture. No exchange of a
Commonly Registered Equity Contract for a Commonly Registered Equity Contract
and a Collateralized Equity Contract representing an equal aggregate purchase
obligation for Shares may be made after the Corporation shall have mailed to the
Obligors under Equity Contracts a Cancellation Notice in compliance with Section
4.02 hereof.
(e) In order to exchange a Collateralized Equity Contract for
Collateralized Equity Contracts representing an equal aggregate purchase
obligation for Shares, the Obligor thereunder shall surrender such
Collateralized Equity Contract to the Equity Contract Agent. Upon receipt by the
Equity Contract Agent of such Collateralized Equity Contract, the Corporation
shall execute, and the Equity Contract Agent shall countersign, the
Collateralized Equity Contracts which the Obligor is entitled to receive, and
the Equity Contract Agent shall deliver to the Obligor such Collateralized
Equity Contracts.
(f) In order to exchange a Collateralized Equity Contract for
a Commonly Registered Equity Contract representing an equal aggregate purchase
obligation for Shares, the Obligor thereunder shall complete and execute the
form of Acceptance on the reverse of such Collateralized Equity Contract (or
separate written acceptance agreement satisfactory to the Corporation) in the
manner contemplated thereby, and shall surrender such Collateralized Equity
Contract to the Equity Contract Agent together with one or more Unrestricted
Debentures in an aggregate principal amount equal to the aggregate purchase
obligation for Shares under the Collateralized Equity Contract so surrendered,
endorsed and accompanied by such instruments
16
and notices as shall be required pursuant to the provisions of the Indenture.
Upon receipt of the foregoing items, the Equity Contract Agent shall surrender
such Unrestricted Debentures and any accompanying instruments and notices for
exchange in accordance with the provisions of the Indenture for a Commonly
Registered Debenture in a principal amount equal to the aggregate purchase
obligation of the Corresponding Commonly Registered Equity Contract to be issued
upon such exchange. Upon receipt by the Equity Contract Agent of the Commonly
Registered Debenture issued upon such exchange, the Corporation shall execute,
and the Equity Contract Agent shall countersign, the Commonly Registered Equity
Contract which the Obligor is entitled to receive, and the Equity Contract Agent
shall deliver to the Obligor such Commonly Registered Equity Contract and such
Commonly Registered Debenture and, in the manner and to the extent provided in
Section 7.06, the Collateral held as collateral security for the Collateralized
Equity Contract surrendered to the Equity Contract Agent for exchange
(g) In order to exchange a Collateralized Equity Contract for
a Commonly Registered Equity Contract and a Collateralized Equity Contract
representing an equal aggregate purchase obligation for Shares, the Obligor
thereunder shall complete and execute the form of Acceptance on the reverse of
such Collateralized Equity Contract (or separate written acceptance agreement
satisfactory to the Corporation) in the manner contemplated thereby, and shall
surrender such Collateralized Equity Contract to the Equity Contract Agent
together with one or more Unrestricted Debentures in an aggregate principal
amount equal to the aggregate purchase obligation for Shares in respect of which
the Collateralized Equity Contract so surrendered is to be exchanged for a
Commonly Registered Equity Contract, endorsed and accompanied by such
instruments and notices as shall be required pursuant to the provisions of the
Indenture. Upon receipt of the foregoing items, the Equity Contract Agent shall
surrender such Unrestricted Debentures and any accompanying instruments and
notices for exchange in accordance with the provisions of the Indenture for a
Commonly Registered Debenture in a principal amount equal to the aggregate
purchase obligation of the Corresponding Commonly Registered Equity Contract to
be issued upon such exchange and an Unrestricted Debenture in a principal amount
equal to the balance of the aggregate purchase obligation in respect of which
the Collateralized Equity Contract is not to be exchanged for a Commonly
Registered Equity Contract. Upon receipt by the Equity Contract Agent of the
Commonly Registered Debenture and the Unrestricted Debenture issued upon such
exchange, the Corporation shall execute, and the Equity Contract Agent shall
countersign, the Commonly Registered Equity Contract and the Collateralized
Equity Contract which the Obligor is entitled to receive, and the Equity
Contract Agent shall deliver to the Obligor such Commonly Registered Equity
Contract, Commonly Registered Debenture, Collateralized Equity Contract and
Unrestricted Debenture and, in the manner and to the extent provided in Section
7.06, a portion of the Collateral held as collateral security for the
Collateralized Equity Contract surrendered to the Equity Contract Agent for
exchange.
Section 6.03. Mutilated or Missing Equity Contracts. In case any of the
Equity Contracts shall be mutilated, lost, stolen or destroyed, the Corporation
may in its discretion issue, and the Equity Contract Agent may countersign, in
exchange and substitution for and upon cancellation of the mutilated Commonly
Registered Equity Contract or Collateralized Equity Contract or in lieu of and
substitution for the Commonly Registered Equity Contract or Collateralized
Equity Contract so mutilated, lost, stolen or destroyed, a new Commonly
Registered Equity Contract or Collateralized Equity Contract, as the case may
be, representing
17
the same aggregate purchase obligation. Such new Equity Contracts will be issued
only upon surrender of such mutilated Equity Contract to the Equity Contract
Agent or receipt of evidence satisfactory to the Corporation and the Equity
Contract Agent of such loss, theft or destruction of such Equity Contract and
provision for indemnity, if requested, also satisfactory to them. Applicants for
such substitute Equity Contracts shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Corporation or the
Equity Contract Agent may prescribe.
Section 6.04. Temporary Equity Contracts. Pending the preparation of
definitive Equity Contracts, the Corporation may execute, and the Equity
Contract Agent shall countersign and deliver, temporary Equity Contracts
(printed or lithographed). Temporary Equity Contracts shall represent any
authorized aggregate purchase obligation, and shall be substantially in the
respective forms of the definitive Equity Contracts but with such omissions,
insertions and variations as may be appropriate for temporary Equity Contracts,
all as may be determined by the Corporation. Every such temporary Equity
Contract shall be countersigned by the Equity Contract Agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive respective forms of Equity Contracts. Without unreasonable delay
the Corporation will execute and deliver to the Equity Contract Agent definitive
respective forms of Equity Contracts and thereupon any or all temporary Equity
Contracts may be surrendered in exchange therefor at the office of the Equity
Contract Agent specified in Section 9.03. The Equity Contract Agent shall
countersign and deliver in exchange for such temporary Commonly Registered
Equity Contracts or Collateralized Equity Contracts definitive Commonly
Registered Equity Contracts or Collateralized Equity Contracts, as the case may
be, representing the same aggregate purchase obligations. Such exchange shall be
made by the Corporation at its own expense and without any charge therefor.
Until so exchanged, the temporary Commonly Registered Equity Contract or
Collateralized Equity Contracts, as the case may be, shall in all respects be
entitled to the same benefits and be subject to the same obligations under this
Agreement as definitive Commonly Registered Equity Contracts or Collateralized
Equity Contracts, as the case may be, countersigned and delivered hereunder.
Section 6.05. Delivery of Commonly Registered Debentures. The Equity
Contract Agent shall deliver Commonly Registered Debentures in accordance with
the provisions of this Agreement and the Indenture. Upon receipt by the Equity
Contract Agent from the Trustee or its agent or the Corporation of a Commonly
Registered Debenture for delivery hereunder or in accordance with the provisions
of the Indenture, the Equity Contract Agent shall, prior to such delivery, place
on such Commonly Registered Debenture the letter and number of the Corresponding
Commonly Registered Equity Contract.
Section 6.06. Countersignature. The Equity Contract Agent is hereby
authorized to countersign new Equity Contracts required to be delivered pursuant
to the provisions of this Agreement, but not otherwise.
Section 6.07. Charges and Taxes. No service charge shall be made for
any registration of transfer or exchange of Equity Contracts, but the
Corporation may require payment of a sum sufficient to cover any stamp or other
tax or other government charge that may be imposed in connection with any such
registration of transfer or exchange.
18
Section 6.08. Registered Obligors. The Corporation and the Equity
Contract Agent may treat the Obligor under each Equity Contract as the absolute
owner thereof and Obligor thereunder for all purposes (notwithstanding any
notation of ownership or other writing thereon made by anyone), and neither the
Corporation nor the Equity Contract Agent shall be affected by any notice to the
contrary.
ARTICLE VII
COLLATERAL
Section 7.01. Collateral; Valuation Thereof. All collateral securing
the obligations of an Obligor under a Collateralized Equity Contract
("Collateral") pledged to the Equity Contract Agent shall be held by the Equity
Contract Agent separately from its general funds in accordance with the
applicable provisions of the Uniform Commercial Code of the State of
Indiana (or
any successor or similar statute at the time in effect). Collateral under a
Collateralized Equity Contract must consist of one or more of the following
items having an aggregate value, determined as set forth below, at least equal
to the aggregate purchase obligation for Shares covered by such Collateralized
Equity Contract: (i) cash in lawful money of the United States of America paid
to the Equity Contract Agent by bank wire transfer in immediately available
funds or certificates of deposit; (ii) standby letters of credit issued by an
insured bank that is not an affiliate of the Corporation; or (iii) debt
obligations issued or guaranteed by the United States of America or an agency
thereof, for the payment of which the full faith and credit of the United States
of America is pledged, maturing on or before the Purchase Date, and, if in book
entry form, registered in the name of the Equity Contract Agent, as custodian
for the Obligor and as pledgee under the related collateral agreement ("Eligible
Government Obligations"), which shall be valued at the unpaid principal amount
thereof. Any designation by the Corporation of obligations as acceptable
Collateral may also specify persons or classes of persons eligible to pledge
such Collateral. All Collateral (including any Collateral substituted for other
Collateral) delivered to the Equity Contract Agent shall be endorsed in blank or
accompanied by appropriate instruments of transfer, satisfactory to the
Corporation and the Equity Contract Agent, signed in blank with signatures
guaranteed, unless such Collateral consists of obligations in bearer form not
registered as to principal or interest. Any Obligor or transferee who shall
pledge any Collateral to the Equity Contract Agent as provided herein shall
execute and deliver such instruments and, if requested by the Corporation, take
all such other action as may be necessary to cause all payments of principal of
and interest on the Collateral to be paid to the Equity Contract Agent.
Collateral held hereunder may be registered in the name of the Equity Contract
Agent, the Corporation or the nominee of either. Unless otherwise expressly
provided herein, all Collateral shall be valued as provided in this Section 7.01
for all purposes of this Agreement. The Equity Contract Agent shall maintain a
register setting forth the name of each Obligor furnishing Collateral and the
Collateral so furnished or furnished in substitution therefor pursuant to
Section 7.05.
Section 7.02. Interest on Collateral. Except upon any default by an
Obligor of his obligation to furnish additional Collateral pursuant to Section
7.03 hereof or to purchase the
19
Shares covered by any of such Obligor's Collateralized Equity Contracts on the
Purchase Date, the Obligor shall be entitled to any interest paid on the
Collateral and any such interest received by the Equity Contract Agent shall be
paid over to such Obligor; provided, however, that, subject to the provisions of
Section 7.05, in the case of Collateral consisting of any obligation originally
issued at a price below the principal amount thereof at stated maturity and not
bearing stated interest except upon default in the payment of principal thereof
or after acceleration, any amounts received by the Equity Contract Agent in
excess of the discounted original issue price thereof or any amounts received by
the Equity Contract Agent in respect of interest on overdue principal accruing
only after default in the payment of principal thereof or after acceleration
shall not be paid over to such Obligor but shall be retained by the Equity
Contract Agent in cash subject to the security interest and pledge granted in
the Collateral Agreement to the Equity Contract Agent on behalf of the
Corporation; and provided further that, in the case of Collateral consisting of
any obligation, if the aggregate amount of payments of principal thereof upon
any acceleration or at stated maturity received by the Equity Contract Agent
shall be less than the value thereof (determined as provided in Section 7.01),
then any interest on such obligation received by the Equity Contract Agent after
such acceleration or after the stated maturity thereof shall not be paid over to
such Obligor but shall be retained by the Equity Contract Agent in cash subject
to the security interest and pledge granted in the Collateral Agreement to the
Equity Contract Agent on behalf of the Corporation.
Section 7.03. Principal Payments on Collateral. On the date of maturity
of any Collateral (whether at stated maturity, upon acceleration, redemption or
otherwise), the Equity Contract Agent shall retain all proceeds received thereon
in cash subject to the security interest and pledge granted in the Collateral
Agreement to the Equity Contract Agent on behalf of the Corporation (other than
payments of interest which the Equity Contract Agent is obligated to pay over to
an Obligor to the extent provided in Section 7.02). In the case of Collateral
consisting of any obligation, if the aggregate amount of payments of principal
thereof (whether upon maturity, acceleration, redemption or otherwise) received
by the Equity Contract Agent shall be less than the value thereof (determined as
provided in Section 7.01), the Equity Contract Agent shall notify the Obligor of
such deficiency and the Obligor shall furnish additional Collateral having a
value equal to such deficiency.
Section 7.04. No Obligation to Invest. Except as provided in Section
7.05, the Equity Contract Agent shall not be obligated to invest any cash
Collateral pledged to or held by it or any cash proceeds of any Collateral, and
shall have no liability or responsibility for any loss or diminution of value
whatsoever in connection with any Collateral or any such cash proceeds.
Section 7.05. Substitution of Collateral. So long as an Obligor is not
in default in respect of his obligation to furnish additional Collateral
pursuant to Section 7.03 hereof or to purchase the Shares covered by any of such
Obligor's Collateralized Equity Contracts on the Purchase Date, such Obligor may
obtain release of his Collateral (including the cash proceeds of such
Collateral) from the security interest and pledge granted in the Collateral
Agreement to the Equity Contract Agent on behalf of the Corporation by
delivering to the Equity Contract Agent in substitution therefor Collateral of
the kind and value required by Section 7.01 equal to the value (as so
determined) of the Collateral (including the amount of any cash proceeds
thereof) to be released. Upon receipt of such substitute Collateral, the Equity
Contract Agent shall make a
20
notation of each substitution on the Collateral Agreement pursuant to which the
collateral to be released was pledged and shall return the Collateral (including
any cash proceeds thereof) released as a result of such substitution. No service
charge will be made by the Equity Contract Agent for any substitution of
Collateral. So long as an Obligor is not in default in respect of his obligation
to furnish additional Collateral pursuant to Section 7.03 hereof or to purchase
the Shares covered by any such Obligor's Collateralized Equity Contracts on the
Purchase Date, the amount of any cash at any time included in this Collateral
resulting from payment at maturity of any Eligible Government Obligations,
shall, pursuant to written instructions received by the Equity Contract Agent
from such Obligor accompanied by reasonable transaction fees and other expenses
as determined by the Equity Contract Agent, be invested, to the extent
reasonably practicable, by the Equity Contract Agent in one or more other
Eligible Government Obligations, as specified by such Obligor in said
instructions. Notwithstanding the provisions of Section 7.02, in the event any
such cash shall be so invested, after the Equity Contract Agent shall have
purchased such obligations for such Obligor, the Equity Contract Agent promptly
shall remit to the Obligor any excess cash Collateral held by the Equity
Contract Agent as collateral security for such Obligor's Collateralized Equity
Contracts.
Section 7.06. Release of Collateral Upon Exchange, Transfer, Payment,
Cancellation.
(a) Upon the due exchange of a Collateralized Equity Contract,
in respect of all or any portion of the unpaid aggregate purchase obligation
thereunder, for a Commonly Registered Equity Contract, the Equity Contract Agent
shall promptly deliver to the Obligor under such Collateralized Equity Contract
all Collateral (including any cash proceeds thereof) then held by the Equity
Contract Agent as collateral security for such Collateralized Equity Contract;
provided that, notwithstanding the foregoing, the Equity Contract Agent shall
retain such Collateral (including any cash proceeds thereof) then so held as
shall have a value equal to the difference between any unpaid aggregate purchase
obligation under all Collateralized Equity Contracts registered in the name of
such Obligor and the value of Collateral held as collateral security for such
Collateralized Equity Contracts.
(b) Upon the due registration of transfer of a Collateralized
Equity Contract or any portion thereof, and upon pledge of Collateral in
compliance with Section 7.01 by the subsequent transferee thereof, the Equity
Contract Agent shall promptly deliver to the transferor Obligor under such
Collateralized Equity Contract all Collateral (including any cash proceeds
thereof) then held by the Equity Contract Agent as collateral security for such
Collateralized Equity Contract; provided that, notwithstanding the foregoing,
the Equity Contract Agent shall retain such Collateral (including any cash
proceeds thereof) then so held as shall have a value equal to the difference
between any unpaid aggregate purchase obligation under all Collateralized Equity
Contracts registered in the name of such Obligor and the value of Collateral
held as collateral security for such Collateralized Equity Contracts.
(c) In the event that an Obligor under a Collateralized Equity
Contract shall purchase all or a portion of the Shares covered thereby pursuant
to such Collateralized Equity Contract, the Equity Contract Agent shall promptly
deliver to the Obligor under such Collateralized Equity Contract all Collateral
(including any cash proceeds thereof) then held by the Equity Contract Agent as
collateral security for such Collateralized Equity Contract;
21
provided that, notwithstanding the foregoing, the Equity Contract Agent shall
retain such Collateral (including any cash proceeds thereof) then so held as
shall have a value equal to the difference between any remaining unpaid
aggregate purchase obligation under all Collateralized Equity Contracts
registered in the name of such Obligor and the value of Collateral held as
collateral security for such Collateralized Equity Contracts.
(d) In the event that the Collateralized Equity Contracts
shall cancel pursuant to Section 2.06, the Equity Contract Agent shall promptly
deliver to the respective Obligors under the Collateralized Equity Contracts all
Collateral (including any cash proceeds thereof) then held by the Equity
Contract Agent as collateral security for their respective Collateralized Equity
Contracts.
(e) Upon each delivery by the Equity Contract Agent to an
Obligor or transferor Obligor under a Collateralized Equity Contract of
Collateral (and any cash proceeds thereof) as provided in this Section 7.06, the
Collateral (including such cash proceeds) so delivered shall be released from
the pledge and security interest granted in the Collateral Agreement to the
Equity Contract Agent on behalf of the Corporation to secure such Collateralized
Equity Contract.
(f) In connection with the partial release of any Collateral
under Section 7.05 and this Section 7.06, the Equity Contract Agent shall be
obligated to deliver to the Obligor under a Collateralized Equity Contract only
such Collateral as shall be susceptible to such delivery under the terms of any
obligation held as Collateral, or law or regulation pertaining thereto. If any
Collateral is not susceptible to delivery, the Equity Contract Agent shall take
such action, consistent with the purposes of this Agreement, as shall be
requested in writing by such Obligor to cause the Collateral to be put in such
form or liquidated so as to permit delivery thereof to the Obligor.
Section 7.07. Default by Obligor. In the event of a default by any
Obligor in the performance of his obligation to purchase and pay for Shares on
the Purchase Date, the Equity Contract Agent on behalf of the Corporation shall
have, in addition to any other rights provided by law or contract, all the
rights of a secured creditor with respect to the Collateral provided in the
Uniform Commercial Code of the State of
Indiana (or in any successor or similar
statute at the time in effect) and may, subject to any requirements of
applicable bankruptcy or other laws, sell such Collateral in any way permitted
under applicable law. Any net proceeds realized by the Equity Contract Agent in
exercising any remedy hereunder and any amounts received by the Equity Contract
Agent upon the maturity of any Collateral following such default, after
deducting the reasonable expenses of such realization (including reasonable
attorneys' fees) and of the collection of such amount shall be applied to the
payment of the purchase price of the Shares which the defaulting Obligor shall
be obligated to purchase, and any excess shall be paid to or upon the order of
the Obligor. Promptly after receipt in full of such purchase price, the Equity
Contract Agent shall transmit a certificate for the number of such Shares for
which payment has been so made to such Obligor. The defaulting Obligor shall
remain liable to pay the Equity Contract Agent, upon demand, an amount equal to
the excess, if any, of his aggregate purchase obligation and the realization
expenses of the Equity Contract Agent over the net proceeds of such Collateral.
22
ARTICLE VIII
CONCERNING THE EQUITY CONTRACT AGENT
Section 8.01. The Equity Contract Agent. The Corporation hereby
appoints First Bank, Greenwood,
Indiana, as Equity Contract Agent of the
Corporation in respect to the Equity Contracts upon the terms and subject to the
conditions herein set forth; and First Bank, Greenwood,
Indiana, hereby accepts
such appointment and shall perform its duties hereunder in accordance with
instructions from the Corporation given in accordance herewith. The Equity
Contract Agent shall have the powers and authority granted to and conferred upon
it in the Equity Contracts and hereby and such further powers and authority to
act on behalf of the Corporation as the Corporation may hereafter grant to or
confer upon it. All of the terms and provisions with respect to such powers and
authority contained in the Equity Contracts are subject to and governed by the
terms and provisions hereof. The Equity Contract Agent may act as an
Authenticating Agent under the Indenture.
Section 8.02. Conditions of Obligations. The Equity Contract Agent
accepts its obligations herein set forth upon the terms and conditions hereof,
including the following, to all of which the Corporation agrees and to all of
which the rights hereunder of the Obligors from time to time under the Equity
Contracts shall be subject:
(a) The Corporation agrees promptly to pay to the Equity
Contract Agent the compensation to be agreed upon with the Corporation for all
services rendered by the Equity Contract Agent and to reimburse the Equity
Contract Agent for reasonable out-of-pocket expenses (including counsel fees)
incurred by the Equity Contract Agent in connection with the services rendered
hereunder by it. The Corporation also agrees to indemnify the Equity Contract
Agent for, and to hold it harmless against, any loss, liability or expense,
incurred without negligence or bad faith on the part of the Equity Contract
Agent, arising out of or in connection with its acting as Equity Contract Agent
hereunder, as well as the costs and expenses of defending against any claim of
liability in the premises.
(b) In acting under this Agreement and in connection with the
Equity Contracts, the Equity Contract Agent is acting solely as agent of the
Corporation and does not assume any obligation or relationship of agency or
trust for or with any of the Obligors under the Equity Contracts, except as
provided in Section 7.05 or 7.06 or to the extent that the Equity Contract Agent
shall hold certificates for Shares delivered to it for the account of any
Obligor.
(c) The Equity Contract Agent may consult with counsel
satisfactory to it (who may be counsel to the Corporation), and the opinion of
such 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
accordance with the opinion of such counsel.
(d) The Equity Contract Agent shall be protected and shall
incur no liability for or in respect of any action taken or thing suffered by it
in reliance upon any Equity Contract,
23
notice, direction, consent, certificate, affidavit, statement or other paper or
document reasonably believed by it to be genuine and to have been presented or
signed by the proper parties.
(e) The Equity Contract Agent, and its officers, directors and
employees, may become the owners of, or acquire any interest in, Equity
Contracts, with the same rights that it or they would have if it were not the
Equity Contract Agent hereunder, and, to the extent permitted by applicable law,
it or they may engage or be interested in any financial or other transaction
with the Corporation and may act on, or as depositary, trustee or agent for, any
committee or body of holders of any obligations of the Corporation as freely as
if it were not the Equity Contract Agent hereunder.
(f) The Equity Contract Agent shall not be under any liability
for interest on any monies at any time received or held by it pursuant to any of
the provisions of this Agreement or of the Equity Contracts.
(g) The Equity Contract Agent shall not incur any liability
with respect to the validity of this Agreement or any of the Equity Contracts.
(h) The Equity Contract Agent shall not be responsible for any
of the recitals or representations, herein or in the Equity Contracts contained
(except as to the Equity Contract Agent's countersignature thereon), all of
which are made solely by the Corporation.
(i) The Equity Contract Agent shall be obligated to perform
only such duties as are herein or in the Equity Contracts specifically set
forth, and no implied duties or obligations shall be read into this Agreement or
the Equity Contracts against the Equity Contract Agent. The Equity Contract
Agent shall not be under any obligation to take any action hereunder which may
tend to involve it in any expense or liability, the payment of which within a
reasonable time is not, in its reasonable opinion, assured to it. The Equity
Contract Agent shall not be accountable or under any duty or responsibility for
the use by the Corporation of any of the Equity Contracts countersigned by the
Equity Contract Agent and delivered by it pursuant to this Agreement. The Equity
Contract Agent shall have no duty or responsibility in case of any default by
the Corporation in the performance of its covenants or agreements contained in
the Equity Contracts or in the case of the receipt of any written demand from an
Obligor under any of the Equity Contracts with respect to such default,
including, without limiting the generality of the foregoing, any duty or
responsibility to initiate or attempt to initiate any proceedings at law or
otherwise or to make any demand upon the Corporation.
(j) The Equity Contract Agent may execute any of its powers
hereunder or perform any of its duties hereunder either directly or by or
through agents or attorneys, and the Equity Contract Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
24
Section 8.03. Resignation and Appointment of Successor.
(a) The Corporation agrees, for the benefit of the Obligors
from time to time under the Equity Contracts, that there shall at all times be
an Equity Contract Agent hereunder so long as the Obligors are obligated or
permitted to purchase the Shares.
(b) The Equity Contract Agent may at any time resign as such
agent by giving written notice to the Corporation of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided that such date shall not be less than three (3) months after the date
on which such notice is given unless the Corporation agrees to accept less
notice. The Equity Contract Agent hereunder may be removed at any time by the
filing with it of an instrument in writing signed by or on behalf of the
Corporation and specifying such removal and the date when it shall become
effective. Such resignation or removal shall take effect upon the appointment by
the Corporation, as hereinafter provided, of a successor Equity Contract Agent
(which shall be a bank or trust company authorized under the laws of the
jurisdiction of its organization to exercise corporate trust powers) and the
acceptance of such appointment by such successor Equity Contract Agent. The
obligation of the Corporation under Section 8.02(a) shall continue to the extent
set forth therein notwithstanding the resignation or removal of the Equity
Contract Agent.
(c) In case at any time the Equity Contract Agent shall
resign, or shall be removed, or shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or shall file a petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
under any other applicable Federal or state bankruptcy law or similar law or
make an assignment for the benefit of its creditors or consent to the
appointment of a receiver or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or of all or any substantial
part of its property shall be appointed, or if an order of any court shall be
entered for relief against it under the provisions of Title 11 of the United
States Code, as now constituted or hereafter amended, or under any other
applicable Federal or state bankruptcy or similar law, or if any public officer
shall have taken charge or control of the Equity Contract Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Equity Contract Agent, qualified as aforesaid, shall be
appointed by the Corporation by an instrument in writing, filed with both the
Equity Contract Agent to be replaced and the successor Equity Contract Agent.
Upon the appointment as aforesaid of a successor Equity Contract Agent and
acceptance by the latter of such appointment, the Equity Contract Agent so
superseded shall cease to be Equity Contract Agent hereunder.
(d) Any successor Equity Contract Agent appointed hereunder
shall execute, acknowledge and deliver to its predecessor and to the Corporation
an instrument accepting such appointment hereunder, and thereupon such successor
Equity Contract Agent, without any further act, deed or conveyance, shall become
vested with all the authority, rights, powers, trusts, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Equity Contract Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Equity Contract Agent shall
be entitled to receive, subject to the provisions of
25
this Agreement, all monies, securities and other property on deposit with or
held by such predecessor as Equity Contract Agent.
(e) Any corporation into which the Equity Contract Agent
hereunder may be merged or converted or any corporation with which the Equity
Contract Agent may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Equity Contract Agent shall be
a party, or any corporation to which the Equity Contract Agent shall sell or
otherwise transfer all or substantially all the assets and business of the
Equity Contract Agent shall be the successor Equity Contract Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
(f) The Equity Contract Agent and any successor Equity
Contract Agent shall at all times maintain an office in the City of Greenwood,
Indiana.
Section 8.04. Payment of Taxes. The Corporation will pay all stamp and
other duties, if any, to which, under the laws of the United States of America,
this Agreement or the original issuance of the Equity Contracts may be subject.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendment. This Agreement may be amended by the parties
hereto, without the consent of any Obligor under any Equity Contract, for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective provision contained herein, or in regard to matters or questions
arising under this Agreement as the Corporation and the Equity Contract Agent
may deem necessary or desirable, provided that such action shall not adversely
affect the interests of the Obligors under the Equity Contracts.
Section 9.02. Notices and Demands. If the Equity Contract Agent shall
receive any notice or demand addressed to the Corporation by any Obligor under
an Equity Contract pursuant to the provisions of the Equity Contracts, the
Equity Contract Agent shall promptly forward such notice or demand to the
Corporation.
Section 9.03. Addresses. Any communications from the Corporation to the
Equity Contract Agent with respect to this Agreement shall be addressed to First
Bank, 000 Xxxxx Xxxxx Xxxx 000, Xxxxxxxxx, Xxxxxxx 00000, and any communications
from the Equity Contract Agent to the Corporation with respect to this Agreement
shall be addressed to First Shares Bancorp, Inc., 000 Xxxxx Xxxxx Xxxx 000,
Xxxxxxxxx, Xxxxxxx 00000 (or such other address as shall be specified in writing
by the Equity Contract Agent or by the Corporation).
Section 9.04. Applicable Law. The validity, interpretation and
performance of this Agreement and each Equity Contract issued hereunder and of
the respective terms and provisions hereof and thereof shall be governed by the
substantive laws of the State of
Indiana.
26
Section 9.05. Obtaining of Governmental Approvals. The Corporation will
from time to time take all action which may be necessary to obtain and keep
effective any and all permits, consents and approvals of governmental agencies
and authorities and securities acts filings under United States Federal and
state laws, which may be or become requisite in connection with the issuance,
transfer and delivery of the Equity Contracts and the issuance, sale, transfer
and delivery of the Shares.
Section 9.06. Authorized Shares. The Corporation shall at all times
have authorized and reserved for issuance, free from preemptive rights, a number
of Shares sufficient to permit the purchase in full of all Shares covered by
outstanding Equity Contracts and will make available to the Equity Contract
Agent a sufficient number of certificates therefor. The Corporation covenants
that all Shares issued pursuant to and in accordance with the provisions of the
Equity Contracts and this Agreement will, when issued, be fully paid and
non-assessable by the Corporation.
Section 9.07. Persons Having Rights Under Agreement. Nothing in this
Agreement expressed or implied and nothing that may be inferred from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the Corporation, the Equity Contract
Agent and the Obligors under the Equity Contracts any right, remedy or claim
under or by reason of this Agreement or of any covenant, condition, stipulation,
promise or agreement hereof; and all covenants, conditions, stipulations,
promises and agreements in this Agreement shall be for the sole and exclusive
benefit of the Corporation and the Equity Contract Agent and their successors
and of the Obligors under the Equity Contracts.
Section 9.08. Successor Corporation to be Substituted. In case of any
consolidation, merger or conveyance pursuant to Section 3.01 hereof, any such
successor to the Corporation hereunder may cause to be signed, and may issue
either in its own name or in the name of First Shares Bancorp, Inc. any or all
of the Equity Contracts issuable hereunder which theretofore shall not have been
signed by the Corporation and delivered to the Equity Contract Agent; and, upon
the order of such successor corporation instead of the Corporation and subject
to all the terms, conditions and limitations in this Agreement prescribed, the
Equity Contract Agent shall countersign and shall deliver any Equity Contracts
which previously shall have been signed and delivered by the officers of the
Corporation to the Equity Contract Agent for countersignature, and any Equity
Contracts which such successor corporation thereafter shall cause to be signed
and delivered to the Equity Contract Agent for that purpose. All the Equity
Contracts so issued shall in all respects have the same obligations and rights
under this Agreement as the Equity Contracts theretofore or thereafter issued in
accordance with the terms of this Agreement as though all of such Equity
Contracts had been issued at the date of the execution hereof.
Section 9.09. Headings. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
27
Section 9.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original; but such counterparts shall together constitute but one and the same
instrument.
Section 9.11. Inspection of Agreement. A copy of this Agreement shall
be available at all reasonable times at the office of the Equity Contract Agent
specified in Section 9.03 for inspection by the Obligors under the Equity
Contracts. The Equity Contract Agent may require any such Obligor to submit its
Equity Contract for inspection by it.
28
IN WITNESS WHEREOF, FIRST SHARES BANCORP, INC. has caused this
Agreement to be signed by one of its duly authorized officers, and the same to
be attested by its Secretary or one of its Assistant Secretaries, and FIRST BANK
has caused this Agreement to be signed by one of its duly authorized officers,
and the same to attested by its Secretary or one of its Assistant Secretaries,
all as of the day and year first above written.
FIRST SHARES BANCORP, INC.
By:
--------------------------------------
Xxxxx X. Xxxxx
President and Chief Executive Officer
Attest:
-------------------------
Xxxxxxxx X. Xxxxx
Secretary
FIRST BANK
By:
--------------------------------------
Xxxx Xxxxxxx
Executive Vice President
Attest:
---------------------------
Xxxxxxxx X. Xxxxx
Secretary
29
[FACE SIDE] EXHIBIT A
[FORM OF COMMONLY REGISTERED EQUITY CONTRACT]
THIS COMMONLY REGISTERED EQUITY CONTRACT MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED EXCEPT UPON COMPLIANCE WITH THE
REQUIREMENTS FOR TRANSFER SET FORTH HEREIN AND ON THE REVERSE
HEREOF, IN THE CORRESPONDING COMMONLY REGISTERED DEBENTURE AND
INDENTURE DEFINED HEREIN AND IN AN EQUITY CONTRACT AGENCY
AGREEMENT DATED AS OF ________________, 2002 BETWEEN THE CORPORATION
AND FIRST BANK, GREENWOOD,
INDIANA.
VALID ONLY IF COUNTERSIGNED BY THE EQUITY
CONTRACT AGENT AS PROVIDED HEREIN
No. CREC- Aggregate Purchase Obligation
$
---------------------------
FIRST SHARES BANCORP, INC.
COMMONLY REGISTERED EQUITY CONTRACT
Commonly Registered Equity Contract between
First Shares Bancorp, Inc.,
an
Indiana corporation (the "Corporation"), and
or registered assigns, as obligor
hereunder (the "Obligor").
Subject to the conditions hereinafter set forth, the Obligor agrees to
purchase and pay for, and the Corporation agrees to sell, on January 1, 2011
(the "Purchase Date"), that number of shares (the "Shares") of common stock, par
value $0.01 per share, of the Corporation (the "Common Stock") determined by
dividing the aggregate purchase obligation set forth above (the "Aggregate
Purchase Obligation") by a purchase price per Share of $10.00, as adjusted from
time to time upon the occurrence of certain events set forth in the Equity
Contract Agency Agreement.
The Obligor is the registered holder of a Commonly Registered Debenture
(as defined in the Equity Contract Agency Agreement hereinafter referred to)
which refers by letters and numbers to this Commonly Registered Equity Contract
on the face thereof (the "Corresponding Commonly Registered Debenture") of a
duly authorized issue of the Corporation's 8% Redeemable Subordinated Debentures
Due July 1, 2011 (the "Debentures") issued under an
A-1
Indenture dated as of ___________, 2002 (the "Indenture") between the
Corporation and The Huntington National Bank, as Trustee, having an aggregate
principal amount equal to the Aggregate Purchase Obligation.
At any time prior to the Purchase Date, the Obligor, upon surrender of
this Commonly Registered Equity Contract with the form of election to purchase
on the reverse hereof duly completed and signed at the office of First Bank,
Greenwood, Indiana, or its successor as Equity Contract Agent (the "Equity
Contract Agent"), initially at the address specified in such form of election,
may purchase all or a portion of the Shares covered by this Commonly Registered
Equity Contract at a purchase price per Share of $10.00, as adjusted from time
to time upon the occurrence of certain events. The aggregate purchase price of
Shares purchased must be $1,000 or any integral multiple of $1,000 (without
regard to any cash settlement for fractional shares).
The purchase price for the Shares purchased pursuant hereto
shall be payable at the office of the Equity Contract Agent (i) in lawful money
of the United States of America, by bank wire transfer to the Equity Contract
Agent in immediately available funds or by certified or official bank check in
New York Clearing House funds payable to or upon the order of the Corporation,
or (ii) subject to Section 2.03(b) of the Equity Contract Agency Agreement, by
surrender of an equal aggregate unpaid principal amount of the Corresponding
Commonly Registered Debentures; provided however, that after the Corporation
shall have mailed to the Obligor hereunder a Cancellation Notice (as hereinafter
provided) the purchase price for the Shares purchased pursuant to this Commonly
Registered Equity Contract shall be payable only by surrender of an equal
aggregate unpaid principal amount of the Corresponding Commonly Registered
Debenture. The Corporation is entitled on or after the Purchase Date to offset
the obligation of the Corporation to pay the principal of the Corresponding
Commonly Registered Debenture (whether or not such Commonly Registered Debenture
has matured), in whole or in part, against the obligation of the Obligor under
this Commonly Registered Equity Contract to pay the unpaid aggregate purchase
price of the Shares covered hereby, in full and complete satisfaction of the
obligation of the Corporation to pay all or such part of the principal of such
Corresponding Commonly Registered Debenture. Upon making such offset, the
Corporation shall deliver certificates for such Shares to the Equity Contract
Agent, which shall hold such certificates for the account of, and deliver the
same to, the registered holder of such Corresponding Commonly Registered
Debenture upon the presentation thereof. The Corporation shall not be obligated
to sell the Shares or deliver any certificates therefor unless it shall have
received payment in full of the aggregate purchase price for the Shares
purchased in the manner herein set forth. Payment of the purchase price for
Shares purchased under this Commonly Registered Equity Contract shall be
accepted and credited by the Corporation only in amounts equal to $1,000 or any
integral multiple of $1,000.
Debentures surrendered in full or partial payment of the
aggregate purchase obligation for Shares will be accepted and credited in an
amount equal to the unpaid principal amount thereof; provided that (i)
Debentures will be credited only in amounts equal to $1,000 or any integral
multiple of $1,000, (ii) a Commonly Registered Debenture may be surrendered in
partial or complete satisfaction only of the aggregate purchase obligation under
the Corresponding Commonly Registered Equity Contract and may not be surrendered
in partial or complete satisfaction of the aggregate purchase obligation under
any other Equity Contract, and
A-2
(iii) Unrestricted Debentures (as defined in the Equity Contract Agency
Agreement) may not be surrendered in partial or complete satisfaction of the
aggregate purchase obligation under any Commonly Registered Equity Contract.
The Corporation has the right to redeem the Debentures as
provided in Article Twelve of the Indenture. In the event that the Corporation
should exercise such right, this Commonly Registered Equity Contract, and the
obligations and rights of the Corporation and the Obligor hereunder, shall be
cancelled on the date on which the Debentures are redeemed (the "Cancellation
Date"). Upon such cancellation, the Obligor hereunder shall receive an amount
(the "Cancellation Payment") equal to one percent (1%) of the principal amount
of the purchase obligation under this Commonly Registered Equity Contract;
provided, however, that if the Debentures are redeemed on or after July 1, 2010,
or after the occurrence of an Adverse Tax Determination (as defined in the
Indenture) or an Adverse Capital Determination (as defined in the Indenture), no
Cancellation Payment will be made; and provided, further, that if the Debentures
are redeemed after an Adverse Tax Determination or an Adverse Capital
Determination, holders of Equity Contracts shall have the right to purchase the
Shares purchasable hereunder at a price equal to the lower of (i) ninety-four
percent (94%) of the average "current market price" of the Common Stock, as that
term is defined in Section 3.01(d) of the Equity Contract Agency Agreement, for
the 10 business days prior and 10 business days after the Adverse Tax
Determination or Adverse Capital Determination (but not less than $5.00 per
share subject to adjustment as provided in Section 3.01 of the Equity Contract
Agency Agreement) or (ii) the designated Equity Contract purchase price. In no
event shall a Cancellation Payment be made to the extent Common Stock is
purchased prior to cancellation of this Equity Contract, regardless of the
reason for cancellation. Notice of any such cancellation of this Commonly
Registered Equity Contract (the "Cancellation Notice") shall be given to the
Obligor hereunder by first class mail, postage prepaid, not less than 30 nor
more than 60 days prior to the Cancellation Date. Such Cancellation Notice shall
specify the Cancellation Date, the amount of the Cancellation Payment, if any,
and the place where this Commonly Registered Equity Contract is to be presented
and surrendered. Upon presentation and surrender of this Commonly Registered
Equity Contract at the place provided in the Cancellation Notice, the Obligor
hereunder shall be paid the Cancellation Payment payable with respect hereto, if
any, without interest.
This Commonly Registered Equity Contract and the obligations
and rights of the Corporation and the Obligor hereunder shall terminate if, on
or prior to the Purchase Date, certain events of bankruptcy, insolvency or
reorganization with respect to the Corporation specified in the Equity Contract
Agency Agreement hereinafter referred to shall have occurred.
This Commonly Registered Equity Contract is issued under and
in accordance with the Equity Contract Agency Agreement dated as of ___________,
2002 (the "Equity Contract Agency Agreement"), between the Corporation and the
Equity Contract Agent and is subject to the terms and provisions contained in
the Equity Contract Agency Agreement, to all of which terms and provisions the
Obligor consents by becoming obligated hereon by the execution of Acceptance on
a Commonly Registered Equity Contract (or separate written acceptance agreement
satisfactory to the Corporation). Copies of the Equity Contract Agency Agreement
are on file at the Office of the Equity Contract Agent. All capitalized terms
used but not defined in
A-3
this Equity Contract which are defined in the Equity Contract Agency Agreement
have the meanings assigned to them in the Equity Contract Agency Agreement.
The Corporation and the Equity Contract Agent may deem and
treat the registered Obligor as the absolute obligor hereunder (notwithstanding
any notation or other writing herein) for all purposes, and neither the
Corporation nor the Equity Contract Agent shall be affected by any notice to the
contrary.
This Commonly Registered Equity Contract shall be the
obligation of the registered Obligor and this Commonly Registered Equity
Contract and such obligation cannot be sold, transferred or assigned except upon
compliance with the requirements for transfer set forth in this Commonly
Registered Equity Contract, including those on the reverse hereof, in the
Corresponding Commonly Registered Debenture, in the Indenture and in the Equity
Contract Agency Agreement. Until this Commonly Registered Equity Contract shall
be registered in a name other than the name of the registered holder of such
Corresponding Commonly Registered Debenture, this Commonly Registered Equity
Contract shall continue to be registered in the name of, and to be the
obligation of, the registered holder of such Corresponding Commonly Registered
Debenture.
After countersignature by the Equity Contract Agent and prior
to the Purchase Date, this Commonly Registered Equity Contract may, upon
compliance with the provisions of the Equity Contract Agency Agreement, be
exchanged at the office of the Equity Contract Agent for Commonly Registered
Equity Contracts and/or Collateralized Equity Contracts (as defined in the
Equity Contract Agency Agreement) representing the same Aggregate Purchase
Obligation.
This Commonly Registered Equity Contract shall not entitle the
Obligor hereunder to any of the rights or privileges of a stockholder of the
Corporation and shall not constitute a subscription for the Shares for any
purpose.
This Commonly Registered Equity Contract shall not be valid or
obligatory for any purpose until countersigned by the Equity Contract Agent.
Dated:
---------------------------------
FIRST SHARES BANCORP, INC.
By:
----------------------------
Attest:
-----------------------------------------
Countersigned:
FIRST BANK,
As Equity Contract Agent
By:
-----------------------------------------
Authorized Officer
A-4
[Reverse Side]
ELECTION TO PURCHASE
(To be executed by an Obligor who wishes to
purchase Shares prior to January 1, 2011)
To the Equity Contract Agent:
The undersigned Obligor (1) exercises the right to purchase that number
of shares of Common Stock, par value $.01 per share, of First Shares Bancorp,
Inc. which $_______ (must be $1,000 or any integral multiple of $1,000) will
purchase at the Share Price set forth in this Commonly Registered Equity
Contract, and (2) makes payment in full for the number of Shares so purchased by
payment of the amount set forth above:
(Please check appropriate box.)
[ ] in lawful money of the United States of America, by bank wire
transfer to the Equity Contract Agent in immediately available
funds or by certified or official bank check in New York
Clearing House funds payable to or upon the order of the
Corporation; or
[ ] by surrender herewith of Commonly Registered Debentures.
Please issue the certificate for Shares in the name of, and
pay any cash for any fractional share to:
------------------------------------------------------
Print or type name
------------------------------------------------------
Social Security or other identifying number
------------------------------------------------------
Street address
-------------------------------------------------------------------
City State Zip Code
Dated:
-------------------------- --------------------------------
Signature
A-5
Shares may be purchased in person or by mail at the following address:
First Bank
000 Xxxxx Xxxxx Xxxx 000
Xxxxxxxxx, Xxxxxxx 00000
A-6
ASSIGNMENT I
(To be executed if Obligor desires to transfer
Commonly Registered Equity Contract separately
from Corresponding Commonly Registered Debenture)
FOR VALUE RECEIVED, ____________________________ hereby sells, assigns
and transfers unto __________________ the obligation and right represented by
this Commonly Registered Equity Contract to purchase the shares of Common Stock,
par value $.01 per share, of First Shares Bancorp, Inc. to which this Commonly
Registered Equity Contract relates and appoints
_____________________________________________________________ attorney to
transfer such obligation and right on the books of the Equity Contract Agent
with full power of substitution in the premises. Such obligation and right shall
be evidenced by a Collateralized Equity Contract, registered in the name of the
transferee, in the form authorized by the Equity Contract Agency Agreement, to
which reference is hereby made for a statement of the respective rights
thereunder of the Corporation, the Equity Contract Agent and the holder of the
Collateralized Equity Contract. The undersigned hereby acknowledges that this
transfer shall not be registered by the Equity Contract Agent until the
transferee shall have collateralized its obligation under the Collateralized
Equity Contract in the manner provided in the Collateral Agreement below and in
the Equity Contract Agency Agreement referred to herein, and, until such
collateral requirements shall be satisfied, the undersigned shall remain the
registered Obligor under this Commonly Registered Equity Contract.
Dated:
----------------------- --------------------------------
Signature
Signature Guaranteed:
-----------------------------------------------------
A-7
COLLATERAL AGREEMENT
(To be executed by Obligor if the Corresponding Commonly Registered Debenture is
being transferred separately from this Commonly Registered Equity Contract or if
this Commonly Registered Equity Contract is being exchanged for a Collateralized
Equity Contract, or by the transferee if this Commonly Registered Equity
Contract is being transferred separately from the Corresponding Commonly
Registered Debenture)
As collateral security for the obligation of the undersigned under the
Collateralized Equity Contract to be issued to the undersigned as the Obligor
thereunder (and under any other Collateralized Equity Contract to be issued in
the name of the undersigned and evidencing all or any part of the same purchase
obligation), the undersigned does hereby pledge to First Bank, as Equity
Contract Agent, and does hereby grant to it a security interest in, all of the
undersigned's right, title and interest in and to the items of Collateral listed
below (and all proceeds thereof and all Collateral from time to time delivered
to the Equity Contract Agent in substitution therefor). The undersigned hereby
assumes and agrees to perform the obligations of the Obligor set forth in said
Collateralized Equity Contract.
The undersigned does hereby deliver to the Equity Contract Agent such
Collateral (other than book entry United States Treasury securities pledged
herewith which have been registered in the name of the Equity Contract Agent, as
custodian for the undersigned and as pledgee hereunder). Such Collateral shall
be held by such Equity Contract Agent pursuant to, and until released in
accordance with, the term of the Equity Contract Agency Agreement dated as of
___________, 2002 between the Corporation and the Equity Contract Agent. The
undersigned further agrees to be bound, or to continue to be bound, as the case
may be, by all of the terms and conditions set forth in said Collateralized
Equity Contract (and any other Collateralized Equity Contract to be issued in
the name of the undersigned and evidencing all or any part of the same purchase
obligation) and said Equity Contract Agency Agreement. The undersigned
represents and warrants that he owns the Collateral free and clear of all liens,
he has the authority and legal right to pledge such Collateral, and he has
executed and delivered all instruments and, if requested by the Corporation,
will take all such other action as may be necessary to cause all payments of
principal and interest on such Collateral to be paid to the Equity Contract
Agent. The undersigned agrees that upon a default by the undersigned of his
obligation under said Collateralized Equity Contract, (i) the Equity Contract
Agent shall have, in addition to all other rights provided by law or contract,
all the rights of a secured creditor with respect to the Collateral provided in
the Uniform Commercial Code of the State of Indiana, (ii) the Equity Contract
Agent may, subject to any requirements of applicable bankruptcy or other laws,
sell all or a portion of such Collateral, apply the net proceeds, after
deducting the reasonable expenses of such realization and the collection of such
amounts (including attorneys' fees), and any amounts received by it upon the
maturity of any Collateral following such default, to the payment of the
purchase price, for the account of the undersigned, of the Shares covered by
said Collateralized Equity contract and transmit the certificates for such
Shares for which full payment has been made to the undersigned and (iii) unless
otherwise required by applicable law, no notice of such
A-8
sale need be given to the undersigned. The undersigned shall be liable for any
deficiency in respect of such purchase price.
Dated:
----------------------- ------------------------------------
Signature of Obligor or Transferee
Name of Obligor or Transferee:
-----------------------------------
Address of Obligor or Transferee:
-----------------------------------
-----------------------------------
Collateral Delivered
----------------------------------------------------
----------------------------------------------------
A-9
ASSIGNMENT II
(To be executed if Obligor desires to transfer Commonly Registered Equity
Contract and Corresponding Commonly Registered Debenture to the same transferee)
For value received, ____________________________hereby sells, assigns
and transfers unto _____________________the obligation and right represented by
this Commonly Registered Equity Contract to purchase the shares of Common Stock,
par value $0.01 per share, of First Shares Bancorp, Inc. to which this Commonly
Registered Equity Contract relates and appoints
_______________________________________________ attorney to transfer such
obligation and right on the books of the Equity Contract Agent with full power
of substitution in the premises. The undersigned hereby acknowledges that this
transfer shall not be registered by the Equity Contract Agent until the
transferee shall have executed the form of Acceptance hereon, and until such
requirement shall be satisfied, the undersigned shall remain the registered
Obligor under this Commonly Registered Equity Contract.
Dated:
----------------------- --------------------------------
Signature
Signature Guaranteed:
-----------------------------------------------
A-10
ACCEPTANCE
(To be executed by transferee if Obligor desires to transfer Commonly Registered
Equity Contract and Corresponding Commonly Registered Debenture to the same
transferee)
The undersigned hereby agrees to be bound by all of the terms and
conditions set forth in the Commonly Registered Equity Contract to be issued in
the name of the undersigned as the Obligor thereunder (and any other Commonly
Registered Equity Contract to be issued in the name of the undersigned and
evidencing all or any part of the same purchase obligation), including without
limitation the obligation to pay the purchase price of Shares (as therein
defined) when due and the right of offset of the Corporation set forth therein.
---------------------------------------------
Signature of Transferee
Name of Transferee:
-----------------------------------------
Address of Transferee:
---------------------------------------------
---------------------------------------------
A-11
[Face side] EXHIBIT B
[FORM OF COLLATERALIZED EQUITY CONTRACT]
THIS COLLATERALIZED EQUITY CONTRACT MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED EXCEPT UPON COMPLIANCE WITH
THE REQUIREMENTS FOR TRANSFER SET FORTH HEREIN AND ON
THE REVERSE HEREOF AND IN AN EQUITY CONTRACT AGENCY
AGREEMENT DATED AS OF ___________, 2002, BETWEEN THE
CORPORATION AND FIRST BANK, GREENWOOD, INDIANA.
VALID ONLY IF COUNTERSIGNED BY THE EQUITY CONTRACT
AGENT AS PROVIDED HEREIN
No. CEC- Aggregate Purchase Obligation
$
----------------------------
FIRST SHARES BANCORP, INC.
Collateralized Equity Contract
Collateralized Equity Contract between
First Shares Bancorp, Inc.
an Indiana corporation (the "Corporation"), and
or registered assigns, as obligor hereunder (the "Obligor").
Subject to the conditions hereinafter set forth, the Obligor agrees to
purchase and pay for, and the Corporation agrees to sell, on January 1, 2011
(the "Purchase Date") that number of shares (the "Shares") of common stock, par
value $0.01 per share, of the Corporation (the "Common Stock") determined by
dividing the aggregate purchase obligation set forth above (the "Aggregate
Purchase Obligation") by a purchase price per Share of $10.00 as adjusted from
time to time upon the occurrence of certain events set forth in the Equity
Contract Agency Agreement.
At any time prior to the Purchase Date, the Obligor, upon surrender of
this Collateralized Equity Contract with the form of election to purchase on the
reverse hereof duly completed and signed at the office of First Bank, or its
successor as Equity Contract Agent (the "Equity Contract Agent"), initially at
the address specified in such form of election, may purchase all or a portion of
the Shares covered by this Collateralized Equity Contract at a purchase price
per Share of $10.00, as adjusted from time to time upon the occurrence of
certain events. The aggregate purchase price of Shares purchased must be $1,000
or any integral multiple of $1,000 (without regard to any cash settlement for
fractional shares).
B-1
The purchase price for the Shares purchased pursuant hereto shall be
payable at the office of the Equity Contract Agent (i) in lawful money of the
United States of America, by bank wire transfer to the Equity Contract Agent in
immediately available funds or by certified or official bank check in New York
Clearing House funds payable to or upon the order of the Corporation, or (ii)
subject to Section 2.03(b) of the Equity Contract Agency Agreement, by surrender
of an equal aggregate unpaid principal amount of Unrestricted Debentures (as
defined in the Equity Contract Agency Agreement) (Unrestricted Debentures being
herein called "Debentures"). The Corporation shall not be obligated to sell the
Shares or deliver any certificate therefor unless it shall receive payment in
full of the aggregate purchase price for the Shares purchased in the manner
herein set forth. Payment of the purchase price for Shares purchased under this
Collateralized Equity Contract shall be accepted and credited by the Corporation
only in amounts equal to $1,000 or any integral multiple of $1,000.
Debentures surrendered in payment or partial payment of the aggregate
purchase obligation for Shares will be accepted and credited in an amount equal
to the unpaid principal amount thereof; provided that (1) Debentures will be
credited only in amounts equal to $1,000 or any integral multiple of $1,000, and
(ii) a Commonly Registered Debenture (as defined in the Equity Contract Agency
Agreement) may not be surrendered in partial or complete satisfaction of the
purchase obligation under this Collateralized Equity Contract.
The Corporation has the right to redeem the Debentures as provided in
Article Twelve of the Indenture. In the event that the Corporation should
exercise such right, this Collateralized Equity Contract, and the obligations
and rights of the Corporation and the Obligor hereunder and under the Collateral
Agreement entered into with respect to this Collateralized Equity Contract,
shall be cancelled on the date on which the Debentures are redeemed (the
"Cancellation Date"). Upon such cancellation, the Obligor hereunder shall
receive an amount (the "Cancellation Payment") equal to one percent (1%) of the
principal amount of the purchase obligation under this Collateralized Equity
Contract; provided, however, that if the Debentures are redeemed on or after
July 1, 2010, or after the occurrence of an Adverse Tax Determination (as
defined in the Indenture) or an Adverse Capital Determination (as defined in the
Indenture), no Cancellation Payment will be made, and provided, further, that if
the Debentures are redeemed after an Adverse Tax Determination or Adverse
Capital Determination, holders of Collateralized Equity Contracts shall have the
right to purchase the Shares purchasable hereunder at a price equal to the lower
of (i) ninety-four percent (94%) of the average "current market price" of the
Common Stock, as that term is defined in Section 3.01(d) of the Equity Contract
Agency Agreement, for the 10 business days prior and 10 business days after the
Adverse Tax Determination or Adverse Capital Determination (but not less than
$5.00 per share subject to adjustment as provided in Section 3.01 of the Equity
Contract Agency Agreement) or (ii) the designated Equity Contract purchase
price. In no event shall a Cancellation Payment be made to the extent Common
Stock is purchased prior to cancellation of this Equity Contract regardless of
the reason for cancellation. Notice of any such cancellation of this
Collateralized Equity Contract (the "Cancellation Notice") shall be given to the
Obligor hereunder by first class mail, postage prepaid, not less than 30 nor
more than 60 days prior to the Cancellation Date. Such Cancellation Notice shall
specify the Cancellation Date, the amount of the Cancellation Payment, if any,
and the place where this Collateralized Equity Contract is to be presented and
surrendered. Upon presentation and
B-2
surrender of this Collateralized Equity Contract at the place provided in the
Cancellation Notice, the Obligor hereunder shall be paid the Cancellation
Payment payable with respect hereto, if any, without interest, and the
Collateral then held as collateral security for this Collateralized Equity
Contract shall be returned to such Obligor.
This Collateralized Equity Contract and the obligations and rights of
the Corporation and the Obligor hereunder shall terminate if, on or prior to the
Purchase Date, certain events of bankruptcy, insolvency or reorganization with
respect to the Corporation specified in the Equity Contract Agency Agreement
hereinafter referred to shall have occurred.
This Collateralized Equity Contract is issued under and in accordance
with the Equity Contract Agency Agreement dated as of ______________, 2002 (the
"Equity Contract Agency Agreement") between the Corporation and the Equity
Contract Agent and is subject to the terms and provisions contained in the
Equity Contract Agency Agreement, to all of which terms and provisions the
Obligor consents by becoming obligated hereon by the execution of a Collateral
Agreement (or separate written collateral agreement acceptable to the
Corporation). Copies of the Equity Contract Agency Agreement are on file at the
office of the Equity Contract Agent. All capitalized terms used but not defined
in this Equity Contract which are defined in the Equity Contract Agency
Agreement have the meanings assigned to them in the Equity Contract Agency
Agreement.
The Corporation and the Equity Contract Agent may deem and treat the
registered Obligor as the absolute obligor hereunder (notwithstanding any
notation or other writing herein) for all purposes, and neither the Corporation
nor the Equity Contract Agent shall be affected by any notice to the contrary.
This Collateralized Equity Contract shall be the obligation of the
registered Obligor and this Collateralized Equity Contract and such obligation
cannot be sold, transferred, or assigned except upon compliance with the
requirements for transfer set forth in this Collateralized Equity Contract,
including those on the reverse hereof, and in the Equity Contract Agency
Agreement.
All collateral securing the obligations of an Obligor under this
Collateralized Equity Contract ("Collateral") must consist of one or more of the
following items having an aggregate value, determined as set forth below, at
least equal to the Aggregate Purchase Obligation for Shares covered hereby: (i)
cash in lawful money of the United States of America paid to the Equity Contract
Agent by bank wire transfer in immediately available funds or certificates of
deposit; (ii) standby letters of credit issued by an insured bank that is not an
affiliate of the Corporation; or (iii) debt obligations issued or guaranteed by
the United States of America or an agency thereof, for the payment of which the
full faith and credit of the United States of America is pledged, maturing on or
before the Purchase Date, and, if in book entry form, registered in the name of
the Equity Contract Agent, as custodian for the Obligor and as pledgee under the
related collateral agreement ("Eligible Government Obligations"), which shall be
valued at the unpaid principal amount thereof. Any designation by the
Corporation of obligations as acceptable Collateral may also specify persons or
classes of persons eligible to pledge such Collateral. All Collateral (including
Collateral substituted for other Collateral) delivered to the Equity Contract
Agent shall be endorsed in blank or accompanied by appropriate instrument of
transfer,
B-3
satisfactory to the Corporation and the Equity Contract Agent, signed in blank,
in each case with signatures guaranteed, unless such Collateral consists of
obligations in bearer form not registered as to principal or interest. Any
Obligor or transferee who shall pledge any Collateral to the Equity Contract
Agent as provided herein shall execute and deliver such instruments and, if
requested by the Corporation, take all such other action as may be necessary to
cause all payments of principal of and interest on the Collateral to be paid to
the Equity Contract Agent. Collateral may be registered in the name of the
Equity Contract Agent, the Corporation or the nominee of either. In the case of
Collateral consisting of any obligation, if the aggregate amount of payments of
principal thereof (whether upon maturity, acceleration, redemption or otherwise)
received by the Equity Contract Agent shall be less than the value thereof
(determined as provided above), the Equity Contract Agent shall notify the
Obligor of such deficiency and the Obligor shall furnish additional Collateral
having a value equal to such deficiency.
After countersignature by the Equity Contract Agent and prior to the
Purchase Date, this Collateralized Equity Contract may, upon compliance with the
provisions of the Equity Contract Agency Agreement, be exchanged at the office
of the Equity Contract Agent for Collateralized Equity Contracts and/or Commonly
Registered Equity Contracts representing the same Aggregate Purchase Obligation.
This Collateralized Equity Contract shall not entitle the Obligor
hereunder to any of the rights or privileges of a stockholder of the Corporation
and shall not constitute a subscription for the Shares for any purpose.
This Collateralized Equity Contract shall not be valid or obligatory
for any purpose until countersigned by the Equity Contract Agent.
Dated:
---------------------------
FIRST SHARES BANCORP, INC.
By:
-------------------------------
Attest:
----------------------------------
Countersigned:
FIRST BANK,
As Equity Contract Agent
By:
-------------------------------
B-4
[Reverse Side]
ELECTION TO PURCHASE
(To be executed by an Obligor who wishes to
purchase Shares prior to the Purchase Date)
To the Equity Contract Agent:
The undersigned Obligor (1) exercises the right to purchase that number
of shares of Common Stock, par value $0.01 per share, of First Shares Bancorp,
Inc. which $______ (must be $1,000 or any integral multiple of $1,000) will
purchase at the Share Price set forth in this Collateralized Equity Contract,
and (2) makes payment in full for the number of shares so purchased by payment
of the amount set forth above:
(Please check appropriate box.)
[ ] in lawful money of the United States of America, by bank wire
transfer to the Equity Contract Agent in immediately available
funds or by certified or official bank check in New York
Clearing House funds payable to or upon the order of the
Corporation; or
[ ] by surrender herewith of Debentures.
Please issue the certificate for Shares in the name of, and pay any
cash for any fractional share to:
----------------------------------------------------------
(Print or type name)
----------------------------------------------------------
(Social Security or other identifying number)
----------------------------------------------------------
(Street address)
----------------------------------------------------------
(City) (State) (Zip code)
Dated:
---------------------------------
-----------------------------------------
Signature
B-5
Shares may be purchased in person or by mail at the following address:
First Bank
000 Xxxxx Xxxxx Xxxx 000
Xxxxxxxxx, Xxxxxxx 00000
B-6
ASSIGNMENT
FOR VALUE RECEIVED, ______________________ hereby sells, assigns and
transfers unto ________________________ the obligation and right represented by
this Collateralized Equity Contract to purchase the shares of Common Stock, par
value $.01 per share, of First Shares Bancorp, Inc. to which this Collateralized
Equity Contract relates and appoints _________________________________________
attorney to transfer such obligation and right on the books of the Equity
Contract Agent with full power of substitution in the premises. The undersigned
hereby acknowledges that this transfer shall not be registered by the Equity
Contract Agent until the transferee shall have collateralized its obligation
under the Collateralized Equity Contract to be issued to the transferee in the
manner provided herein and in the Equity Contract Agency Agreement referred to
herein, and, until such collateral requirements shall be satisfied, the
undersigned shall remain the registered Obligor under this Collateralized Equity
Contract.
Dated:
--------------------------------- --------------------------------
(Signature)
Signature Guaranteed:
------------------------------------------
B-7
ACCEPTANCE
(To be executed by Obligor if Collateralized Equity Contract is being exchanged
for a Commonly Registered Equity Contract)
The undersigned hereby agrees to be bound by all of the terms and
conditions set forth in the Commonly Registered Equity Contract to be issued in
the name of the undersigned as the Obligor thereunder (and any other Commonly
Registered Equity Contract to be issued in the name of the undersigned and
evidencing all or any part of the same purchase obligation) including without
limitation the obligation to pay the purchase price of Shares (as therein
defined) when due and the right of offset of the Corporation set forth therein.
----------------------------------------
(Signature of Obligor)
Name of Obligor:
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Address of Obligor:
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B-8
COLLATERAL AGREEMENT
(To be executed by transferee of this Collateralized Equity Contract)
As collateral security for the obligation of the undersigned under the
Collateralized Equity Contract to be issued to the undersigned as the Obligor
thereunder (and under any other Collateralized Equity Contract to be issued in
the name of the undersigned and evidencing all or any part of the same purchase
obligation), the undersigned does hereby pledge to First Bank, as Equity
Contract Agent, and does hereby grant to it a security interest in, all of the
undersigned's right, title and interest in and to the items of Collateral listed
below (and all proceeds thereof and all Collateral from time to time delivered
to the Equity Contract Agent in substitution therefor). The undersigned hereby
assumes and agrees to perform the obligations of the Obligor set forth in said
Collateralized Equity Contract.
The undersigned does hereby deliver to the Equity Contract Agent such
Collateral (other than book entry United States Treasury securities pledged
herewith which have been registered in the name of the Equity Contract Agent, as
custodian for the undersigned and as pledgee hereunder). Such Collateral shall
be held by such Equity Contract Agent pursuant to, and until released in
accordance with, the terms of the Equity Contract Agency Agreement dated as of
________________, 2002 between the Corporation and the Equity Contract Agent.
The undersigned further agrees to be bound, or to continue to be bound, as the
case may be, by all of the terms and conditions set forth in said Collateralized
Equity Contract (and any other Collateralized Equity Contract to be issued in
the name of the undersigned and evidencing all or any part of the same purchase
obligation) and said Equity Contract Agency Agreement. The undersigned
represents and warrants that he owns the Collateral free and clear of all liens,
he has the authority and legal right to pledge such Collateral, and he has
executed and delivered all instruments and, if requested by the Corporation,
will take all such other action as may be necessary to cause all payments of
principal and interest on such Collateral to be paid to the Equity Contract
Agent. The undersigned agrees that, upon a default by the undersigned of his
obligation under said Collateralized Equity Contract, (i) the Equity Contract
Agent shall have, in addition to all other rights provided by law or contract,
all the rights of a secured creditor with respect to the Collateral provided in
the Uniform Commercial Code of the State of Indiana, (ii) the Equity Contract
Agent may, subject to any requirements of applicable bankruptcy or other laws,
sell all or a portion of such Collateral, apply the net proceeds, after
deducting the reasonable expenses of such realization and the collection of such
amounts (including attorneys' fees) and any amounts received by it upon the
maturity of any Collateral following such default, to the payment of the
purchase price, for the account of the undersigned, of the Shares covered by
said Collateralized Equity Contract and transmit the certificates for such
Shares for which full payment has been made to the undersigned; and (iii) unless
otherwise required by applicable law, no notice of such sale need be given to
the undersigned. The undersigned shall be liable for any deficiency in respect
of such purchase price.
Dated:
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(Signature of Transferee)
B-9
Name of Transferee:
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Address of Transferee:
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Collateral Delivered:
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B-10
