EXHIBIT 4.12
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HOVNANIAN ENTERPRISES, INC.
and
____________________________,
as Purchase Contract Agent and Trustee
_______________________________
PURCHASE CONTRACT AGREEMENT
_______________________________
Dated as of
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Reconciliation and Tie
between Trust Indenture Act
of 1939 and Purchase Contract
Agreement dated as of ________, [2001]
Section of Section of
Trust Indenture Act Purchase Contract
of 1939, as amended Agreement
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310(a)..................................................7.8
310(b)..................................................7.9(g), 11.8
310(c)..................................................Inapplicable
311(a)..................................................11.2(b)
311(b)..................................................11.2(b)
311(c)..................................................Inapplicable
312(a)..................................................11.2(a)
312(b)..................................................11.2(b)
313.....................................................11.3
314(a)..................................................11.4
314(b)..................................................Inapplicable
314(c)..................................................11.5
314(d)..................................................Inapplicable
314(e)..................................................1.2, 1.3, 11.5
314(f)..................................................11.1
315(a)..................................................7.1(a)
315(b)..................................................7.2
315(c)..................................................7.1(e)
315(d)..................................................7.1(b)
316(a)..................................................11.6
316(b)..................................................6.1
316(c)..................................................11.2
317(a)..................................................Inapplicable
317(b)..................................................Inapplicable
318(a)..................................................11.1(b)
318(b)..................................................11.1
318(c)..................................................11.1(a)
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Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Purchase Contract Agreement.
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TABLE OF CONTENTS
PAGE
ARTICLE I Definitions and Other Provisions of General Application.............1
SECTION 1.1. Definitions................................................1
SECTION 1.2. Compliance Certificates and Opinions.......................7
SECTION 1.3. Form of Documents Delivered to Purchase Contract Agent.....8
SECTION 1.4. Acts of Holders; Record Dates..............................8
SECTION 1.5. Notices to Purchase Contract Agent, Company, Collateral
Agent or Guarantor.........................................9
SECTION 1.6. Notice to Holders; Waiver.................................10
SECTION 1.7. Effect of Headings and Table of Contents..................10
SECTION 1.8. Successors and Assigns....................................10
SECTION 1.9. Separability Clause.......................................10
SECTION 1.10. Benefits of Agreement.....................................10
SECTION 1.11. Governing Law.............................................11
SECTION 1.12. Legal Holidays............................................11
SECTION 1.13. Counterparts..............................................11
SECTION 1.14. Inspection of Agreement...................................11
SECTION 1.15. Appointment of Additional Agents..........................11
ARTICLE II Certificate Forms.................................................11
SECTION 2.1. Forms of Certificates Generally...........................11
SECTION 2.2. Form of Purchase Contract Agent's Certificate of
Authentication............................................12
ARTICLE III The Securities...................................................13
SECTION 3.1. Amount; Form and Denominations............................13
SECTION 3.2. Rights and Obligations Evidenced by the Certificates......13
SECTION 3.3. Execution, Authentication, Delivery and Dating............13
SECTION 3.4. Temporary Certificates....................................14
SECTION 3.5. Registration; Registration of Transfer and Exchange.......14
SECTION 3.6. Book-Entry Interests......................................15
SECTION 3.7. Notices to Holders........................................16
SECTION 3.8. Appointment of Successor Depositary.......................16
SECTION 3.9. Definitive Certificates...................................16
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates........16
SECTION 3.11. Persons Deemed Owners.....................................17
SECTION 3.12. Cancellation..............................................18
SECTION 3.13. Creation of Treasury SPC Units by Substitution of Treasury
Securities................................................18
SECTION 3.14. Reestablishment of SPC Units..............................19
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination
Event.....................................................20
SECTION 3.16. No Consent to Assumption..................................21
ARTICLE IV The Notes [and Applicable Ownership Interest in the Treasury
Portfolio]...........................................................21
SECTION 4.1. Interest Payments; Rights to Interest Payments Preserved..21
SECTION 4.2. [Deferral of Interest Payments............................21
SECTION 4.3. [Interest Rate Reset; Notice Relating to Cash Settlement..22
SECTION 4.4. Notice and Voting.........................................22
SECTION 4.5. [Distribution of Notes; Tax Event Redemption..............22
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ARTICLE V The Purchase Contracts.............................................23
SECTION 5.1. Purchase of Shares of Common Stock........................23
SECTION 5.2. [Purchase Contract Payments...............................24
SECTION 5.3. [Deferral of Purchase Contract Payments...................25
SECTION 5.4. Payment of Purchase Price.................................26
SECTION 5.5. Issuance of Shares of [Common Stock] [Preferred Stock]...29
SECTION 5.6. Adjustment of Settlement Rate.............................30
SECTION 5.7. Notice of Adjustments and Certain Other Events............34
SECTION 5.8. Termination Event; Notice.................................35
SECTION 5.9. Early Settlement..........................................35
SECTION 5.10. No Fractional Shares......................................37
SECTION 5.11. Charges and Taxes.........................................37
ARTICLE VI Remedies..........................................................37
SECTION 6.1. Unconditional Right of Holders to Receive Purchase Contract
Payments and to Purchase Shares of Common Stock...........37
SECTION 6.2. Restoration of Rights and Remedies........................37
SECTION 6.3. Rights and Remedies Cumulative............................38
SECTION 6.4. Delay or Omission Not Waiver..............................38
SECTION 6.5. Undertaking for Costs.....................................38
SECTION 6.6. Waiver of Stay or Extension Laws..........................38
ARTICLE VII The Purchase Contract Agent......................................38
SECTION 7.1. Certain Duties and Responsibilities.......................38
SECTION 7.2. Notice of Default.........................................39
SECTION 7.3. Certain Rights of Purchase Contract Agent.................39
SECTION 7.4. Not Responsible for Recitals or Issuance of Securities....40
SECTION 7.5. May Hold Securities.......................................40
SECTION 7.6. Money Held in Custody.....................................40
SECTION 7.7. Compensation and Reimbursement............................41
SECTION 7.8. Corporate Purchase Contract Agent Required; Eligibility...41
SECTION 7.9. Resignation and Removal; Appointment of Successor.........41
SECTION 7.10. Acceptance of Appointment by Successor....................42
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business..................................................42
SECTION 7.12. Preservation of Information; Communications to Holders....43
SECTION 7.13. No Obligations of Purchase Contract Agent.................43
SECTION 7.14. Tax Compliance............................................43
ARTICLE VIII Supplemental Agreements.........................................43
SECTION 8.1. Supplemental Agreements Without Consent of Holders.........43
SECTION 8.2. Supplemental Agreements With Consent of Holders............44
SECTION 8.3. Execution of Supplemental Agreements.......................45
SECTION 8.4. Effect of Supplemental Agreements..........................45
SECTION 8.5. Reference to Supplemental Agreements.......................45
ARTICLE IX Merger, Consolidation, Sale or Conveyance.........................45
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions..................45
SECTION 9.2. Rights and Duties of Successor Corporation................46
SECTION 9.3. Officer's Certificate and Opinion of Counsel Given to
Purchase Contract Agent...................................46
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ARTICLE X Covenants..........................................................46
SECTION 10.1. Performance Under Purchase Contracts......................46
SECTION 10.2. Maintenance of Office or Agency...........................46
SECTION 10.3. Company to Reserve Common Stock and Preferred Stock.......47
SECTION 10.4. Covenants as to Common Stock and Preferred Stock..........47
SECTION 10.5. ERISA.....................................................47
ARTICLE XI Trust Indenture Act...............................................47
SECTION 11.1. Trust Indenture Act; Application..........................47
SECTION 11.2. Lists of Holders of Securities............................47
SECTION 11.3. Reports by the Purchase Contract Agent....................48
SECTION 11.4. Periodic Reports to Purchase Contract Agent...............48
SECTION 11.5. Evidence of Compliance with Conditions Precedent..........48
SECTION 11.6. Defaults; Waiver..........................................48
SECTION 11.7. Purchase Contract Agent's Knowledge of Defaults...........48
SECTION 11.8. Conflicting Interests.....................................48
SECTION 11.9. Direction of Purchase Contract Agent......................48
EXHIBITS
EXHIBIT A Form of SPC Units Certificate...............................A-1
EXHIBIT B Form of Treasury SPC Units Certificate......................B-1
EXHIBIT C Instruction to Purchase Contract Agent......................C-1
EXHIBIT D Notice from Purchase Contract Agent to Holders
(Transfer of Collateral upon Occurrence of a
Termination Event)..........................................D-1
EXHIBIT E Notice to Settle by Cash....................................E-1
EXHIBIT F Notice from Purchase Contract Agent to Collateral Agent and
Indenture Trustee (Settlement of Purchase Contract
through Remarketing)........................................F-1
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PURCHASE CONTRACT AGREEMENT, dated as of ____________________ ,
_____ , between HOVNANIAN ENTERPRISES, INC., a Delaware corporation (the
"Company"), and ________________________, a _____________ banking corporation,
acting as purchase contract agent, attorney-in-fact and trustee for the
Holders of Securities from time to time (the "Purchase Contract Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on behalf
of the Holders and delivered by the Purchase Contract Agent, as provided in
this Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms, have
been done.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and
nouns and pronouns of the masculine gender include the feminine and
neuter genders;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular Article, Section, Exhibit or other subdivision;
[(d) the following terms have the meanings given to them in the
Trust Agreement: (i) Applicable Ownership Interest; (ii) Applicable
Principal Amount; (iii) Guarantee; (iv) Primary Treasury Dealer; (v) Pro
Rata; (vi) Quotation Agent; (vii) Redemption Amount; (viii) Redemption
Price; (ix) Remarketing; (x) Tax Event Redemption; (xi) Tax Event
Redemption Date; (xii) Two-Year Benchmark Treasury Rate; and (xiii)
Treasury Portfolio; and]
(e) the following terms have the meanings given to them in this
Section 1.1(e):
"Act" has the meaning, with respect to any Holder, set forth in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Applicable Market Value" has the meaning set forth in Section 5.1.
"applicants" has the meaning set forth in Section 7.12(b).
"Authorized Officer" means the Chairman of the Board, the President,
any Vice President, the Treasurer, any Assistant Treasurer or any other
officer or agent of the Company duly authorized by the Board of Directors to
act in respect of matters relating to this Agreement.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform
system of bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"Board of Directors" means the board of directors of the Company or
a duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company, to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such certification and
delivered to the Purchase Contract Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.6.
"Business Day" means any day other than a Saturday or Sunday or a
day on which banking institutions in New York, New York are authorized or
required by law or executive order to remain closed or a day on which the
Indenture Trustee is closed for business; provided that for purposes of the
second paragraph of Section 1.12 only, the term "Business Day" shall also be
deemed to exclude any day on which trading on the New York Stock Exchange,
Inc. is closed or suspended.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means a SPC Units Certificate or a Treasury SPC Units
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name, or in the name of a nominee
of that organization, shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Securities.
"Closing Price" has the meaning set forth in Section 5.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Collateral Account" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Collateral Agent" means ______________________, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"Collateral Substitution" has the meaning set forth in Section 3.13.
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"Common Stock" means the Class A Common Stock, par value $.01 per
share, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "Company" shall
mean such successor.
"Constituent Person" has the meaning set forth in Section 5.6(b)(1).
"Coupon Rate" means the percentage rate per annum at which each Note
will bear interest.
"Current Market Price" has the meaning set forth in Section
5.6(a)(8).
"Default" means a default by the Company in any of its obligations
under this Agreement and continuance of such default for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Purchase Contract Agent or to the Company and the Purchase Contract Agent
by the Holders of at least 25% of the Outstanding Purchase Contracts a written
notice specifying such default and requiring that it be remedied and stating
that such notice is a "Notice of Default" hereunder.
["Depositary" means DTC, as depository for the Securities, until
another Clearing Agency is designated to act as depositary for the Securities
as contemplated by Sections 3.6, 3.7, 3.8 and 3.9.]
"Depositary Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the
Depositary effects book entry transfers and pledges of securities deposited
with the Depositary.
"DTC" means The Depository Trust Company, the initial Depositary.
"Early Settlement" has the meaning set forth in Section 5.9(a).
"Early Settlement Amount" has the meaning set forth in Section
5.9(a).
"Early Settlement Date" has the meaning set forth in Section
5.9(a)(2).
"Early Settlement Rate" has the meaning set forth in Section 5.9(b).
"Early Settlement Week" has the meaning set forth in Section
5.6(b)(2).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"Expiration Date" has the meaning set forth in Section 1.4(e).
["Expiration Time" has the meaning set forth in Section 5.6(a)(6).]
["Extension Period" has the meaning set forth in Section 4.2.]
"Failed Remarketing" has the meaning set forth in Section 5.4(b).
"Global Certificate" means a Certificate that evidences all or part
of the Securities and is registered in the name of a Clearing Agency or a
nominee thereof.
"Holder" means, with respect to a Security, the Person in whose name
the Security evidenced by a SPC Units Certificate or a Treasury SPC Units
Certificate is registered in the related SPC Units Register or the Treasury
SPC Units Register, as the case may be.
"Indenture" means the Indenture, dated as of __________,
____________, among the Company as Issuer, [____________ as Guarantor,] and
_____________________, as Trustee, pursuant to which the Notes are to
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be issued, as originally executed and delivered and as it may from time to
time be supplemented and amended by one or more indentures supplemental
thereto entered into pursuant to the applicable provisions thereof and shall
include the terms of a particular series established as contemplated by
Section ____ thereof.
"Indenture Trustee" means _______________, as trustee under the
Indenture, or any successor thereto.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by an Authorized Officer, and delivered to
the Purchase Contract Agent.
"non-electing share" has the meaning set forth in Section 5.6(b).
"Notes" means the Notes due _____________ issued under the
Indenture, each bearing interest, payable on the Payment Dates, at the Coupon
Rate until the Purchase Contract Settlement Date, and at the Reset Rate
thereafter and substantially in the form of Exhibit __ hereto.
"NYSE" has the meaning set forth in Section 5.1.
"Officer's Certificate" means a certificate signed by an Authorized
Officer.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent.
"Outstanding" means, with respect to any SPC Units or Treasury SPC
Units and as of the date of determination, all SPC Units or Treasury SPC Units
evidenced by Certificates theretofore authenticated, executed and delivered
under this Agreement, except:
(1) If a Termination Event has occurred, (i) Treasury SPC Units and
(ii) SPC Units for which the underlying Notes have been theretofore
deposited with the Purchase Contract Agent in trust for the Holders of
such SPC Units;
(2) SPC Units and Treasury SPC Units evidenced by Certificates
theretofore cancelled by the Purchase Contract Agent or delivered to the
Purchase Contract Agent for cancellation or deemed cancelled pursuant to
the provisions of this Agreement; and
(3) SPC Units and Treasury SPC Units evidenced by Certificates in
exchange for or in lieu of which other Certificates have been
authenticated, executed on behalf of the Holder and delivered pursuant to
this Agreement, other than any such Certificate in respect of which there
shall have been presented to the Purchase Contract Agent proof
satisfactory to it that such Certificate is held by a bona fide purchaser
in whose hands the SPC Units or Treasury SPC Units evidenced by such
Certificate are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the SPC Units or Treasury SPC Units have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, SPC Units or
Treasury SPC Units owned by the Company or any Affiliate of the Company shall
be disregarded and deemed not to be Outstanding Securities, except that, in
determining whether the Purchase Contract Agent shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only SPC Units or Treasury SPC Units which a Responsible Officer of
the Purchase Contract Agent knows to be so owned shall be so disregarded. SPC
Units or Treasury SPC Units so owned that have been pledged in good faith may
be regarded as Outstanding Securities if the pledgee establishes to the
satisfaction of the Purchase Contract Agent the pledgee's right so to act with
respect to such SPC Units or Treasury SPC Units and that the pledgee is not
the Company or any Affiliate of the Company.
"Payment Date" means each February 16, May 16, August 16 and
November 16, commencing _______________________, [2001].
"Permitted Investments" has the meaning set forth in Section 1 of
the Pledge Agreement.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof or any other entity
of whatever nature.
["Plan" means an employee benefit plan that is subject to ERISA, a
plan or individual retirement account that is subject to Section 4975 of the
Code or any entity whose assets are considered assets of any such plan.]
"Pledge" means the pledge under the Pledge Agreement of the Notes,
[or] the Treasury Securities, [or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in the
Treasury Portfolio] in [each] case constituting a part of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, among the Company, the Collateral Agent, the Securities Intermediary
and the Purchase Contract Agent, on its own behalf and as attorney-in-fact for
the Holders from time to time of the Securities.
"Pledged Notes" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Predecessor Certificate" means a Predecessor SPC Units Certificate
or a Predecessor Treasury SPC Units Certificate.
"Predecessor SPC Units Certificate" of any particular SPC Units
Certificate means every previous SPC Units Certificate evidencing all or a
portion of the rights and obligations of the Company and the Holder under the
SPC Units evidenced thereby; and, for the purposes of this definition, any SPC
Units Certificate authenticated and delivered under Section 3.10 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen SPC Units Certificate
shall be deemed to evidence the same rights and obligations of the Company and
the Holder as the mutilated, destroyed, lost or stolen SPC Units Certificate.
"Predecessor Treasury SPC Units Certificate" of any particular
Treasury SPC Units Certificate means every previous Treasury SPC Units
Certificate evidencing all or a portion of the rights and obligations of the
Company and the Holder under the Treasury SPC Units evidenced thereby; and,
for the purposes of this definition, any Treasury SPC Units Certificate
authenticated and delivered under Section 3.10 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Treasury SPC Units Certificate shall be
deemed to evidence the same rights and obligations of the Company and the
Holder as the mutilated, destroyed, lost or stolen Treasury SPC Units
Certificate.
"Preferred Stock" means the Preferred Stock, par value $.01 per
share, of the Company.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract" means, with respect to any Security, the
contract forming a part of such Security and obligating the Company to
(i) sell, and the Holder of such Security to purchase, shares of [Common Stock]
[Preferred Stock] and (ii) pay the Holder Purchase Contract Payments on the
terms and subject to the conditions set forth in Article Five hereof.
"Purchase Contract Agent" means the Person named as the "Purchase
Contract Agent" in the first paragraph of this agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter "Purchase Contract Agent" shall
mean such Person.
"Purchase Contract Payments" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract, equal to
____% per annum of the Stated Amount.
"Purchase Contract Settlement Date" means ________________________.
"Purchase Contract Settlement Fund" has the meaning set forth in
Section 5.5.
"Purchase Price" has the meaning set forth in Section 5.1.
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["Purchased Shares" has the meaning set forth in Section 5.6(a)(6)].
"Record Date" for the Purchase Contract Payments payable on any
Payment Date means, as to any Global Certificate, the Business Day next
preceding such Payment Date, and as to any other Certificate, a day selected
by the Company which shall be at least one Business Day but less than thirty
(30) Business Days prior to such Payment Date and which shall correspond to
the related record date for the Notes.
"Reference Dealer" means a dealer engaged in trading of convertible
securities.
"Reference Price" has the meaning set forth in Section 5.1.
"Register" means the SPC Units Register and the Treasury SPC Units
Register.
"Registrar" means the SPC Units Registrar and the Treasury SPC Units
Registrar.
"Remarketing" has the meaning set forth in the Notes.
"Remarketing Agent" has the meaning set forth in Section 5.4(b).
"Remarketing Agreement" means the Remarketing Agreement, dated as of
________, between the Company and the Remarketing Agent, including any
supplements thereto.
"Remarketing Fee" has the meaning set forth in Section 5.4(b).
"Reorganization Event" has the meaning set forth in Section 5.6(b).
"Reset Rate" means the Coupon Rate to be in effect for the Notes on
and after the Purchase Contract Settlement Date, as determined in accordance
with Section 4.3 and the form of Note included in Exhibit __ hereto.
"Responsible Officer" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer its corporate trust matters.
"Securities Intermediary" means ___________________________, as
Securities Intermediary under the Pledge Agreement until a successor
Securities Intermediary shall have become such pursuant to the applicable
provisions of the Pledge Agreement, and thereafter "Securities Intermediary"
shall mean such successor.
"Security" means a SPC Unit or a Treasury SPC Unit, as the case may
be.
"Settlement Rate" has the meaning set forth in Section 5.1.
"SPC Unit" means a Security, initially issued in substantially the
form set forth as Exhibit A hereto in the Stated Amount of [$25], which
represents (i) beneficial ownership by the Holder of one Note having a
principal amount of [$25,] [or an appropriate Applicable Ownership Interest in
the Treasury Portfolio, as the case may be,] subject to the Pledge thereof
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder thereof and the Company under one Purchase Contract [; provided, that
the appropriate Applicable Ownership Interest (as specified in clause (A) of
the definition of such term) in the Treasury Portfolio shall not be subject to
the Pledge.]
"SPC Units Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of SPC Units specified on
such certificate.
"SPC Units Register" and "SPC Units Registrar" have the respective
meanings set forth in Section 3.5.
"Stated Amount" means [$25].
"Stated Maturity" means, with respect to the Notes, ________________.
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"Termination Date" means the date, if any, on which a Termination
Event occurs.
"Termination Event" means the occurrence of any of the following
events:
(1) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order shall have been entered granting
relief under the Bankruptcy Code (or any similar applicable Federal or
State law), adjudicating the Company to be insolvent, or approving as
properly filed a petition seeking reorganization or liquidation of the
Company, and, unless such judgment, decree or order shall have been
entered within 60 days prior to the Purchase Contract Settlement Date,
such decree or order shall have continued undischarged and unstayed for a
period of 60 days;
(2) at any time on or prior to the Purchase Contract Settlement
Date, a judgment, decree or court order for the appointment of a receiver
or liquidator or trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the termination or liquidation of its
affairs, shall have been entered, and, unless such judgment, decree or
order shall have been entered within 60 days prior to the Purchase
Contract Settlement Date, such judgment, decree or order shall have
continued undischarged and unstayed for a period of 60 days; or
(3) at any time on or prior to the Purchase Contract Settlement
Date, the Company shall file a petition for relief under the Bankruptcy
Code (or any similar applicable Federal or State law), or shall consent
to the filing of a bankruptcy proceeding against it, or shall file a
petition or answer or consent seeking reorganization or liquidation under
the Bankruptcy Code or any other similar applicable Federal or State law,
or shall consent to the filing of any such petition, or shall consent to
the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due.
"Threshold Appreciation Price" has the meaning set forth in Section
5.1.
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"Trading Day" has the meaning set forth in Section 5.1.
"Treasury SPC Unit" means a Security, in substantially the form set
forth as Exhibit B hereto, which represents (i) a [1/40] undivided beneficial
ownership interest in a Treasury Security having a principal amount at
maturity equal to $1,000, subject to the Pledge thereof pursuant to the Pledge
Agreement and (ii) the rights and obligations of the Holder thereof and the
Company under one Purchase Contract.
"Treasury SPC Units Certificate" means a certificate evidencing the
rights and obligations of a Holder in respect of the number of Treasury SPC
Units specified on such certificate.
"Treasury SPC Units Register" and "Treasury SPC Units Registrar"
have the respective meanings set forth in Section 3.5.
"Treasury Securities" means zero-coupon U.S. Treasury Securities
(Cusip No. ____________) which are the principal strip of the ____% U.S.
Treasury Securities which mature on _________________.
"Underwriting Agreement" means the Underwriting Agreement, dated
_______________________, between the Company and __________________________.
SECTION 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take
any action under any provision of this Agreement, the Company shall furnish to
the Purchase Contract Agent an Officer's Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and, if requested by the Purchase
Contract Agent, an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions
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precedent, if any, have been complied with, except that in the case of any
such application or request as to which the furnishing of such documents is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Agreement (other than compliance
certificates required by Section 11.4 to the extent permitted by the TIA)
shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he or
she has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an
agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Purchase Contract Agent
and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and (subject to Section 7.1) conclusive
in favor of the Purchase Contract Agent and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Purchase
Contract Agent deems sufficient.
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(c) The ownership of Securities shall be proved by the SPC Units
Register or the Treasury SPC Units Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Certificate
evidencing such Security issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Purchase Contract Agent or the
Company in reliance thereon, whether or not notation of such action is
made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make
or take any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Agreement to be
given, made or taken by Holders of Securities. If any record date is set
pursuant to this paragraph, the Holders of the Outstanding SPC Units and
the Outstanding Treasury SPC Units, as the case may be, on such record
date, and no other Holders, shall be entitled to take the relevant action
with respect to the SPC Units or the Treasury SPC Units, as the case may
be, whether or not such Holders remain Holders after such record date;
provided that no such action shall be effective hereunder unless taken
prior to or on the applicable Expiration Date by Holders of the requisite
number of Outstanding Securities on such record date. Nothing contained
in this paragraph shall be construed to prevent the Company from setting
a new record date for any action for which a record date has previously
been set pursuant to this paragraph (whereupon the record date previously
set shall automatically and with no action by any Person be cancelled and
be of no effect), and nothing contained in this paragraph shall be
construed to render ineffective any action taken by Holders of the
requisite number of Outstanding Securities on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph,
the Company, at its own expense, shall cause notice of such record date,
the proposed action by Holders and the applicable Expiration Date to be
given to the Purchase Contract Agent in writing and to each Holder of
Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the Purchase Contract Agent in writing, and to each Holder of
Securities in the manner set forth in Section 1.6, prior to or on the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date
as provided in this paragraph. Notwithstanding the foregoing, no Expiration
Date shall be later than the 180th day after the applicable record date.
SECTION 1.5. Notices to Purchase Contract Agent, Company or Collateral Agent.
Any notice or communication is duly given if in writing and
delivered in Person or mailed by first-class mail (registered or certified,
return receipt requested), telecopier (with receipt confirmed) or overnight
air courier guaranteeing next day delivery, to the other's address; provided
that notice shall be deemed given to the Purchase Contract Agent only upon
receipt thereof:
If to the Purchase Contract Agent:
[name]
[address]
Telecopier No.: [number]
Attention: [name]
If to the Company:
Hovnanian Enterprises, Inc.
00 Xxxxxxx 00
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X.X. Xxx 000
Xxx Xxxx, Xxx Xxxxxx 00000
Telecopier No.: [number]
Attention: [name]
If to the Collateral Agent:
[name]
[address]
Telecopier No.: [number]
Attention: [name]
If to the Indenture Trustee:
[name]
[address]
Telecopier No.: [number]
Attention: [name]
SECTION 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it appears in the applicable
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Agreement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Purchase Contract Agent, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the
Purchase Contract Agent shall constitute a sufficient notification for every
purpose hereunder.
SECTION 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and
the Purchase Contract Agent shall bind their respective successors and
assigns, whether so expressed or not.
SECTION 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof and thereof shall not in any
way be affected or impaired thereby.
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SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this
Agreement. The Holders from time to time shall be beneficiaries of this
Agreement and shall be bound by all of the terms and conditions hereof and of
the Securities evidenced by their Certificates by their acceptance of delivery
of such Certificates.
SECTION 1.11. Governing Law.
This Agreement and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day,
notwithstanding any other provision of this Agreement or the SPC Units
Certificates or the Treasury SPC Units Certificates, Purchase Contract
Payments shall not be made on such date, but shall be made on the next
succeeding Business Day with the same force and effect as if made on such
Payment Date, provided that no interest shall accrue or be payable by the
Company or any Holder for the period from and after any such Payment Date,
except that, if such next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day with the same force and effect as if made on such Payment Date.
In any case where any Purchase Contract Settlement Date shall not be
a Business Day, notwithstanding any other provision of this Agreement, the SPC
Units Certificates or the Treasury SPC Units Certificates, the Purchase
Contracts shall not be performed on such date, but the Purchase Contracts
shall be performed on the immediately following Business Day with the same
force and effect as if performed on the Purchase Contract Settlement Date.
SECTION 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
SECTION 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by
any Holder.
SECTION 1.15. Appointment of Additional Agents.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase
Contract Agent and the Holders, under this Agreement and the Purchase
Contracts. Any such appointment shall not relieve the Company in any way from
its obligations hereunder.
ARTICLE II
Certificate Forms
SECTION 2.1. Forms of Certificates Generally.
The SPC Units Certificates (including the form of Purchase Contract
forming part of each SPC Unit evidenced thereby) shall be in substantially the
form set forth in Exhibit A hereto, with such letters, numbers or other marks
of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the SPC Units are listed or any depositary
therefor, or as may, consistently herewith, be determined by the officers of
the Company executing such SPC Units Certificates, as evidenced by their
execution of the SPC Units Certificates.
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The definitive SPC Units Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the SPC Units
evidenced by such SPC Units Certificates, consistent with the provisions of
this Agreement, as evidenced by their execution thereof.
The Treasury SPC Units Certificates (including the form of Purchase
Contract forming part of each Treasury SPC Unit evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Treasury SPC Units may be
listed or any depositary therefor, or as may, consistently herewith, be
determined by the officers of the Company executing such Treasury SPC Units
Certificates, as evidenced by their execution of the Treasury SPC Units
Certificates.
The definitive Treasury SPC Units Certificates shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers of the Company executing the
Treasury SPC Units evidenced by such Treasury SPC Units Certificates,
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
"THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION (THE "DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS
CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT
AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS
CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REGISTERED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
SECTION 2.2. Form of Purchase Contract Agent's Certificate of Authentication.
The form of the Purchase Contract Agent's certificate of
authentication of the SPC Units shall be in substantially the form set forth
on the form of SPC Units Certificate set forth as Exhibit A hereto.
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The form of the Purchase Contract Agent's certificate of
authentication of the Treasury SPC Units shall be in substantially the form
set forth on the form of Treasury SPC Units Certificate set forth as Exhibit B
hereto.
ARTICLE III
The Securities
SECTION 3.1. Amount; Form and Denominations.
The aggregate number of Securities evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to __________ (including _______________ relating to the Underwriters'
over-allotment option), except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.12, 3.13, 3.14, 5.9
or 8.5.
The Certificates shall be issuable only in registered form and only
in denominations of a single SPC Unit or Treasury SPC Unit and any integral
multiple thereof.
SECTION 3.2. Rights and Obligations Evidenced by the Certificates.
Each SPC Units Certificate shall evidence the number of SPC Units
specified therein, with each such SPC Unit representing (1) the ownership by
the Holder thereof of a beneficial interest in one Note having a principal
amount of [$25] [or the Applicable Ownership Interest in the Treasury
Portfolio, as the case may be,] subject to the Pledge of such Note or
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be] by such Holder
pursuant to the Pledge Agreement, and (2) the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Purchase
Contract Agent as attorney-in-fact for, and on behalf of, the Holder of each
SPC Unit shall pledge, pursuant to the Pledge Agreement, the Note [or
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be,] forming a part of
such SPC Unit, to the Collateral Agent and grant to the Collateral Agent a
security interest in the right, title and interest of such Holder in such Note
[or Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, as the case may be] for
the benefit of the Company, to secure the obligation of the Holder under each
Purchase Contract to purchase shares of Common Stock. Prior to the purchase of
shares of Common Stock under each Purchase Contract, such Purchase Contracts
shall not entitle the Holder of a SPC Units Certificate to any of the rights
of a holder of shares of Common Stock, including, without limitation, the
right to vote or receive any dividends or other payments or to consent or to
receive notice as a shareholder in respect of the meetings of shareholders or
for the election of directors of the Company or for any other matter, or any
other rights whatsoever as a shareholder of the Company.
Upon the formation of a Treasury SPC Unit pursuant to Section 3.13,
each Treasury SPC Units Certificate shall evidence the number of Treasury SPC
Units specified therein, with each such Treasury SPC Unit representing (1) the
ownership by the Holder thereof of a [1/40] undivided beneficial ownership
interest in a Treasury Security with a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (2) the rights and obligations of the
Holder thereof and the Company under one Purchase Contract. The Purchase
Contract Agent as attorney-in-fact for, and on behalf of, the Holder of each
Treasury SPC Unit shall pledge, pursuant to the Pledge Agreement, each
Treasury Security or portion thereof forming a part of such Treasury SPC Unit,
to the Collateral Agent and grant to the Collateral Agent a security interest
in the right, title and interest of such Holder in such Treasury Security for
the benefit of the Company, to secure the obligation of the Holder under each
Purchase Contract to purchase shares of Common Stock. Prior to the purchase of
shares of Common Stock under each Purchase Contract, such Purchase Contracts
shall not entitle the Holder of a Treasury SPC Units Certificate to any of the
rights of a holder of shares of Common Stock, including, without limitation,
the right to vote or receive any dividends or other payments or to consent or
to receive notice as a shareholder in respect of the meetings of shareholders
or for the election of directors of the Company or for any other matter, or
any other rights whatsoever as a shareholder of the Company.
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SECTION 3.3. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to
time thereafter, the Company may deliver Certificates executed by the Company
to the Purchase Contract Agent for authentication, execution on behalf of the
Holders and delivery, together with its Issuer Order for authentication of
such Certificates, and the Purchase Contract Agent in accordance with such
Issuer Order shall authenticate, execute on behalf of the Holders and deliver
such Certificates.
The Certificates shall be executed on behalf of the Company by one
of its Authorized Officers. The signature of any Authorized Officer on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contracts evidenced by such
Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement
or be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by an authorized officer of the Purchase Contract Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.
SECTION 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company
shall execute and deliver to the Purchase Contract Agent, and the Purchase
Contract Agent shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary Certificates which
are in substantially the form set forth in Exhibit A or Exhibit B hereto, as
the case may be, with such letters, numbers or other marks of identification
or designation and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any securities exchange on
which the SPC Units or Treasury SPC Units, as the case may be, are listed, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable delay. After the
preparation of definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the Corporate Trust Office, at the expense of the Company and
without charge to the Holder. Upon surrender for cancellation of any one or
more temporary Certificates, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the Holder, and deliver in exchange therefor, one or more
definitive Certificates of like tenor and denominations and evidencing a like
number of SPC Units or Treasury SPC Units, as the case may be, as the
temporary Certificate or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same benefits and
the same obligations with respect to the SPC Units or Treasury SPC Units, as
the case may be, evidenced thereby as definitive Certificates.
SECTION 3.5. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office
a register (the "SPC Units Register") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of SPC Units Certificates and of transfers of SPC Units
Certificates (the Purchase Contract Agent, in such capacity, the "SPC Units
Registrar") and a register (the "Treasury SPC Units Register") in which,
subject to such reasonable regulations as it may prescribe, the Purchase
Contract Agent shall provide for the
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registration of the Treasury SPC Units Certificates and of transfers of
Treasury SPC Units Certificates (the Purchase Contract Agent, in such
capacity, the "Treasury SPC Units Registrar").
Upon surrender for registration of transfer of any Certificate at
the Corporate Trust Office, the Company shall execute and deliver to the
Purchase Contract Agent, and the Purchase Contract Agent shall authenticate,
execute on behalf of the designated transferee or transferees, and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of any authorized denominations, like tenor, and evidencing a
like number of SPC Units or Treasury SPC Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
SPC Units or Treasury SPC Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates
that the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the same number of
SPC Units or Treasury SPC Units, as the case may be, and be entitled to the
same benefits and subject to the same obligations, under this Agreement as the
SPC Units or Treasury SPC Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Purchase Contract Agent) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.6 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange during the period
commencing on the Business Day immediately preceding the Purchase Contract
Settlement Date and ending on such Purchase Contract Settlement Date, or on or
after the Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred, deliver
the shares of [Common Stock] [Preferred Stock] issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
other Certificate; or
(2) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Notes, Treasury Securities [or the
appropriate Applicable Ownership Interest in the Treasury Portfolio,] as
the case may be, evidenced thereby, in each case subject to the
applicable conditions and in accordance with the applicable provisions of
Article Five hereof.
SECTION 3.6. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form
of one or more fully registered Global Certificates, to be delivered to the
Depositary by, or on behalf of, the Company. Such Global Certificate shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the initial Depositary, DTC, and no Beneficial
Owner will receive a definitive Certificate representing such Beneficial
Owner's interest in such Global Certificate, except as provided in Section
3.9. The Purchase Contract Agent shall
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enter into an agreement with the Depositary if so requested by the Company.
Unless and until definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(1) the provisions of this Section 3.6 shall be in full force and
effect;
(2) the Company shall be entitled to deal with the Depositary for
all purposes of this Agreement (including making Purchase Contract
Payments and receiving approvals, votes or consents hereunder) as the
Holder of the Securities and the sole holder of the Global Certificates
and shall have no obligation to the Beneficial Owners;
(3) to the extent that the provisions of this Section 3.6 conflict
with any other provisions of this Agreement, the provisions of this
Section 3.6 shall control; and
(4) the rights of the Beneficial Owners shall be exercised only
through the Clearing Agency and shall be limited to those established by
law and agreements between such Beneficial Owners and the Depositary or
the Depositary Participants.
SECTION 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is required
to be given under this Agreement, the Company or the Company's agent shall
give such notices and communications to the Holders and, with respect to any
Securities registered in the name of the Depositary or the nominee of the
Depositary, the Company or the Company's agent shall, except as set forth
herein, have no obligations to the Beneficial Owners.
SECTION 3.8. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency to act as Depositary with
respect to the Securities.
SECTION 3.9. Definitive Certificates.
If:
(1) the Depositary elects to discontinue its services as securities
depositary with respect to the Securities or ceases to be a Clearing
Agency and a successor Depositary is not appointed within 90 days after
such discontinuance pursuant to Section 3.8 or such cessation; or
(2) the Company elects to terminate the book-entry system through
the Depositary with respect to the Securities,
then upon surrender of the Global Certificates representing the Securities by
the Depositary, accompanied by registration instructions, the Company shall
cause definitive Certificates to be delivered to Beneficial Owners in
accordance with the instructions of the Depositary. The Company and the
Purchase Contract Agent shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected in relying
on, such instructions.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent,
and the Purchase Contract Agent shall authenticate, execute on behalf of the
Holder, and deliver in exchange therefor, a new Certificate, evidencing the
same number of SPC Units or Treasury SPC Units, as the case may be, and
bearing a Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by
them to hold each of them and any agent of any of them harmless, then, in the
absence of notice to the Company
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or the Purchase Contract Agent that such Certificate has been acquired by a
bona fide purchaser, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, evidencing the same
number of SPC Units or Treasury SPC Units, as the case may be, and bearing a
Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate during the period commencing on the
Business Day immediately preceding the Purchase Contract Settlement Date and
ending on such Purchase Contract Settlement Date or on or after the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction
of the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the
Purchase Contract Agent shall:
(1) if the Purchase Contract Settlement Date has occurred, deliver
the shares of [Common Stock] [Preferred Stock] issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by such
Certificate; or
(2) if a Termination Event shall have occurred prior to the Purchase
Contract Settlement Date, transfer the Notes, the Treasury Securities [or
the appropriate Applicable Ownership Interest (as specified in clause (A)
of the definition of such term) in the Treasury Portfolio,] as the case
may be, evidenced thereby, in each case subject to the applicable
conditions and in accordance with the applicable provisions of Article
Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Purchase Contract Agent) connected therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the
Security evidenced thereby, whether or not the destroyed, lost or stolen
Certificate (and the Securities evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be
subject to all the obligations of this Agreement equally and proportionately
with any and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to
the extent lawful, all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of
transfer, the Company and the Purchase Contract Agent, and any agent of the
Company or the Purchase Contract Agent, may treat the Person in whose name
such Certificate is registered as the owner of the SPC Units or Treasury SPC
Units evidenced thereby, for the purpose of receiving interest payments on the
Notes, [Treasury Securities or on the maturing quarterly interest strips of
the Treasury Portfolio, as applicable,] receiving Purchase Contract Payments,
performance of the Purchase Contracts and for all other purposes whatsoever,
whether or not any interest payments on the Notes [, Treasury Securities or on
the maturing quarterly interest strips of the Treasury Portfolio, as
applicable] or Purchase Contract Payments payable in respect of the Purchase
Contracts constituting a part of the SPC Units or Treasury SPC Units evidenced
thereby shall be overdue and notwithstanding any notice to the contrary, and
neither the Company nor the Purchase Contract Agent, nor any agent of the
Company or the Purchase Contract Agent, shall be affected by notice to the
contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing contained herein shall prevent the Company, the Purchase
Contract Agent or any agent of the Company or the Purchase Contract Agent,
treating the Depositary as the sole Holder of such Global Certificate, from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary (or its nominee), as a Holder, with respect to
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such Global Certificate or impair, as between the Depositary and owners of
beneficial interests in such Global Certificate, the operation of customary
practices governing the exercise of rights of the Depositary (or its nominee)
as Holder of such Global Certificate.
SECTION 3.12. Cancellation.
All Certificates surrendered for delivery of shares of [Common
Stock] [Preferred Stock] on or after the Purchase Contract Settlement Date,
upon the transfer of Notes [, the appropriate Applicable Ownership Interest
(as specified in clause (A) of the definition of such term) in the Treasury
Portfolio] or Treasury Securities, as the case may be, after the occurrence of
a Termination Event or pursuant to an Early Settlement, or upon the
registration of transfer or exchange of a Security, or a Collateral
Substitution or the reestablishment of SPC Units shall, if surrendered to any
Person other than the Purchase Contract Agent, be delivered to the Purchase
Contract Agent and, if not already cancelled, shall be promptly cancelled by
it. The Company may at any time deliver to the Purchase Contract Agent for
cancellation any Certificates previously authenticated, executed and delivered
hereunder which the Company may have acquired in any manner whatsoever, and
all Certificates so delivered shall, upon Issuer Order, be promptly cancelled
by the Purchase Contract Agent. No Certificates shall be authenticated,
executed on behalf of the Holder and delivered in lieu of or in exchange for
any Certificates cancelled as provided in this Section, except as expressly
permitted by this Agreement. All cancelled Certificates held by the Purchase
Contract Agent shall be disposed by the Purchase Contract Agent in accordance
with its customary procedures unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
SECTION 3.13. Creation of Treasury SPC Units by Substitution of Treasury
Securities.
A Holder may separate the Notes from the related Purchase Contracts
in respect of such Holder's SPC Units by substituting for such Notes, Treasury
Securities in an aggregate principal amount equal to the aggregate principal
amount of such Notes (a "Collateral Substitution"), at any time from and after
the date of this Agreement and prior to or on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date by:
(1) depositing with the [Securities Intermediary, Collateral Agent]
Treasury Securities having an aggregate principal amount equal to the
aggregate principal amount of the Notes comprising part of such SPC
Units; and
(2) transferring the related SPC Units to the Purchase Contract
Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that the
Holder has transferred the relevant amount of Treasury Securities to the
Securities Intermediary and (ii) requesting that the Purchase Contract
Agent instruct the Collateral Agent to release the Notes underlying such
SPC Units, whereupon the Purchase Contract Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of Exhibit
A to the Pledge Agreement. [Insert any provisions for adjustment relating
to Purchase Contract Payments.]
Upon receipt of the Treasury Securities described in clause (1) above and the
instruction described in clause (2) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary
to effect the release of such Notes from the Pledge, free and clear of the
Company's security interest therein, and the transfer of such Notes to the
Purchase Contract Agent on behalf of the Holder. Upon receipt thereof, the
Purchase Contract Agent shall promptly:
(i) cancel the related SPC Units transferred and surrendered;
(ii) transfer the Notes that had been components of such SPC Unit to
the Holder; and
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(iii) authenticate, execute on behalf of such Holder and deliver a
Treasury SPC Units Certificate executed by the Company in accordance with
Section 3.3 evidencing the same number of Purchase Contracts as were
evidenced by the cancelled SPC Units.
Holders who elect to separate the Notes from the related Purchase
Contracts and to substitute Treasury Securities for such Notes shall be
responsible for any fees or expenses payable to the Collateral Agent for its
services as Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions only in integral multiples
of 40 SPC Units. [If a Tax Event Redemption has occurred, Holders may not
convert their SPC Units to Treasury SPC Units.]
In the event a Holder making a Collateral Substitution pursuant to
this Section 3.13 fails to effect a book-entry transfer of the SPC Units or
fails to deliver SPC Units Certificates to the Purchase Contract Agent after
depositing Treasury Securities with the Collateral Agent, the Notes,
constituting a part of such SPC Units, and any interest payments on such
Notes, shall be held in the name of the Purchase Contract Agent or its nominee
in trust for the benefit of such Holder, until such SPC Units are so
transferred or the SPC Units Certificate is so delivered, as the case may be,
or, with respect to a SPC Units Certificate, such Holder provides evidence
satisfactory to the Company and the Purchase Contract Agent that such SPC
Units Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Purchase Contract Agent and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract underlying a SPC Unit remains in effect, such SPC Unit shall
not be separable into its constituent parts, and the rights and obligations of
the Holder in respect of the Note and the Purchase Contract comprising such
SPC Unit may be acquired, and may be transferred and exchanged, only as a SPC
Unit.
SECTION 3.14. Reestablishment of SPC Units.
Subject to the conditions set forth herein, a Holder of Treasury SPC
Units may recreate SPC Units at any time prior to or on the seventh Business
Day immediately preceding the Purchase Contract Settlement Date by:
(1) depositing with the [Securities Intermediary, Collateral Agent]
Notes, having an aggregate principal amount equal to the aggregate
principal amount at maturity of the Treasury Securities comprising part
of the Treasury SPC Units; and
(2) transferring the related Treasury SPC Units to the Purchase
Contract Agent accompanied by a notice to the Purchase Contract Agent,
substantially in the form of Exhibit C hereto, (i) stating that the
Holder has transferred the relevant amount of Notes to the Securities
Intermediary and (ii) requesting that the Purchase Contract Agent
instruct the Collateral Agent to release the Treasury Securities
underlying such Treasury SPC Units, whereupon the Purchase Contract Agent
shall promptly give such instruction to the Collateral Agent,
substantially in the form of Exhibit C to the Pledge Agreement.
Upon receipt of the Notes described in clause (1) above and the instruction
described in clause (2) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer to the Purchase Contract Agent on
behalf of the Holder. Upon receipt thereof, the Purchase Contract Agent shall
promptly:
(i) cancel the related Treasury SPC Units transferred and
surrendered;
(ii) transfer the Treasury Securities that had been components of
such Treasury SPC Units to the Holder; and
(iii) authenticate, execute on behalf of such Holder and deliver a
SPC Units Certificate executed by the Company in accordance with Section
3.3 evidencing the same number of Purchase Contracts as were evidenced by
the cancelled Treasury SPC Units.
-19-
Holders who elect to recreate SPC Units shall be responsible for any
fees or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company shall not be
responsible for any such fees or expenses.
Holders of Treasury SPC Units may only recreate SPC Units in
integral multiples of 40 Treasury SPC Units for 40 SPC Units. [If a Tax Event
Redemption has occurred, Holders may no longer convert their Treasury SPC
Units into SPC Units.]
Except as provided in this Section 3.14, for so long as the Purchase
Contract underlying a Treasury SPC Unit remains in effect, such Treasury SPC
Unit shall not be separable into its constituent parts and the rights and
obligations of the Holder of such Treasury SPC Unit in respect of the 1/40 of
a Treasury Security and the Purchase Contract comprising such Treasury SPC
Unit may be acquired, and may be transferred and exchanged, only as a Treasury
SPC Unit.
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Notes [, appropriate Applicable Ownership
Interest in the Treasury Portfolio,] or the Treasury Securities, as the case
may be, underlying the SPC Units and the Treasury SPC Units, as the case may
be, pursuant to the terms of the Pledge Agreement, the Purchase Contract Agent
shall request transfer instructions with respect to such Notes [, appropriate
Applicable Ownership Interest in the Treasury Portfolio] or Treasury
Securities, as the case may be, from each Holder by written request,
substantially in the form of Exhibit D hereto, mailed to such Holder at its
address as it appears in the SPC Units Register or the Treasury SPC Units
Register, as the case may be.
Upon book-entry transfer of the SPC Units or the Treasury SPC Units
or delivery of a SPC Units Certificate or Treasury SPC Units Certificate to
the Purchase Contract Agent with such transfer instructions, the Purchase
Contract Agent shall transfer the Notes [, appropriate Applicable Ownership
Interest in the Treasury Portfolio] or Treasury Securities, as the case may
be, underlying such SPC Units or Treasury SPC Units, as the case may be, to
such Holder by book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of SPC Units or
Treasury SPC Units fails to effect such transfer or delivery, the Notes [,
appropriate Applicable Ownership Interest in the Treasury Portfolio] or
Treasury Securities, as the case may be, underlying such SPC Units or Treasury
SPC Units, as the case may be, and any distributions thereon, shall be held in
the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until the earlier to occur of:
(1) the transfer of such SPC Units or Treasury SPC Units or the
surrender of the SPC Units Certificate or Treasury SPC Units Certificate
or receipt by the Company and the Purchase Contract Agent of satisfactory
evidence that such SPC Units Certificate or Treasury SPC Units
Certificate has been destroyed, lost or stolen, together with any
indemnity that may be required by the Purchase Contract Agent and the
Company; and
(2) the expiration of the time period specified in the abandoned
property laws of the [relevant State.]
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SECTION 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be deemed
expressly to have withheld any consent to the assumption under Section 365 of
the Bankruptcy Code or otherwise, of the Purchase Contract by the Company or
its trustee, receiver, liquidator or a person or entity performing similar
functions in the event that the Company becomes the debtor under the
Bankruptcy Code or subject to other similar state or Federal law providing for
reorganization or liquidation.
ARTICLE IV
The Notes [and Applicable
Ownership Interest in the Treasury Portfolio]
SECTION 4.1. Interest Payments; Rights to Interest Payments Preserved.
Any interest payment on any Note [or on the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be,] which is
paid on any Payment Date shall, subject to receipt thereof by the Purchase
Contract Agent from the Collateral Agent as provided by the terms of the
Pledge Agreement, be paid to the Person in whose name the SPC Units
Certificate (or one or more Predecessor SPC Units Certificates) of which such
Note [or Applicable Ownership Interest in the Treasury Portfolio, as the case
may be,] is a part is registered at the close of business on the Record Date
for such Payment Date.
Each SPC Units Certificate evidencing the Notes [or the appropriate
Applicable Ownership Interest in the Treasury Portfolio] delivered under this
Agreement upon registration of transfer of or in exchange for or in lieu of
any other SPC Units Certificate shall carry the right to accrued and unpaid
and deferred interest and the right to accrue interest, which rights were
carried by the Notes [or the appropriate Applicable Ownership Interest in the
Treasury Portfolio] underlying such other SPC Units Certificate.
In the case of any SPC Units with respect to which Cash Settlement
of the underlying Purchase Contract is properly effected pursuant to Section
5.4 hereof, or with respect to which Early Settlement of the underlying
Purchase Contract is properly effected on an Early Settlement Date pursuant to
Section 5.9 hereof, or with respect to which a Collateral Substitution is
properly effected, in each case on a date that is after any Record Date and
prior to or on the next succeeding Payment Date, the interest payment on the
Notes [or the appropriate Applicable Ownership Interest in the Treasury
Portfolio] underlying such SPC Units otherwise payable on such Payment Date
shall be payable on such Payment Date notwithstanding such Cash Settlement or
Early Settlement or Collateral Substitution, and such interest payment shall,
subject to receipt thereof by the Purchase Contract Agent, be payable to the
Person in whose name the SPC Units Certificate (or one or more Predecessor SPC
Units Certificates) was registered at the close of business on the Record
Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any SPC Unit with respect to which Cash Settlement or
Early Settlement of the underlying Purchase Contract is properly effected, or
with respect to which a Collateral Substitution has been properly effected,
interest payments on the related Notes [or the appropriate Applicable
Ownership Interest in the Treasury Portfolio], as the case may be, that would
otherwise be payable after the Purchase Contract Settlement Date or Early
Settlement Date or date of Collateral Substitution, as the case may be, shall
not be payable hereunder to the Holder of such SPC Units; provided, however,
that to the extent that such Holder continues to hold the separated Notes that
formerly comprised a part of such Holder's SPC Units, such Holder shall be
entitled to receive the interest payments on such separated Notes, as provided
therein.
SECTION 4.2. [Deferral of Interest Payments.
So long as no event of default has occurred and is occurring under
the Indenture, the Company shall have the right at any time until the Stated
Maturity of the Notes to defer the payment of interest on the Notes as
provided therein for a period of time not extending beyond the Stated Maturity
(each such period of deferral, an "Extension Period"). If the Company so elect
to defer interest payments on the Notes, the Company shall be required to pay
at the end of the Extension Period all interest then accrued and unpaid,
together with accrued interest at the Coupon Rate or the Reset Rate, as
applicable, compounded on each succeeding Payment Date.]
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SECTION 4.3. [Interest Rate Reset; Notice Relating to Cash Settlement.
The Coupon Rate on the Notes to be in effect on and after the
Purchase Contract Settlement Date shall be reset on the third Business Day
immediately preceding the Purchase Contract Settlement Date to the Reset Rate
(such Reset Rate to be in effect on and after the Purchase Contract Settlement
Date). [The Reset Rate shall be equal to or greater than the Coupon Rate.]
Not later than 15 calendar days nor more than 30 calendar days prior
to the third Business Day immediately preceding the Purchase Contract
Settlement Date [Remarketing Date], the Company shall request that the
Depositary notify the Beneficial Owners or Depositary Participants holding SPC
Units of [the interest rate reset and] any procedures to be followed by
Holders of SPC Units who intend to effect a Cash Settlement [prior to or on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date].
SECTION 4.4. Notice and Voting.
Under and subject to the terms of the Pledge Agreement, the Purchase
Contract Agent will be entitled to exercise the voting and any other
consensual rights pertaining to the Pledged Notes, but only to the extent
instructed by the Holders as described below. Upon receipt of notice of any
meeting at which holders of Notes are entitled to vote or upon any
solicitation of consents, waivers or proxies of holders of Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail to the Holders
of SPC Units a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Holder on the record date set by the Purchase
Contract Agent therefor (which, to the extent possible, shall be the same
date as the record date for determining the holders of Notes entitled to
vote or consent) shall be entitled to instruct the Purchase Contract
Agent as to the exercise of the voting or consensual rights pertaining to
such Notes underlying their SPC Units; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Holders of SPC Units on such record
date, the Purchase Contract Agent shall endeavor insofar as practicable to
vote or consent or cause to be voted or consented, in accordance with the
instructions set forth in such requests, the maximum number of Notes as to
which any particular voting or consent instructions are received. In the
absence of specific instructions from the Holder of a SPC Unit, the Purchase
Contract Agent shall abstain from voting or consenting the Notes underlying
such SPC Unit. The Company hereby agrees, if applicable, to solicit Holders of
SPC Units to timely instruct the Purchase Contract Agent in order to enable
the Purchase Contract Agent to vote or consent such Notes.
SECTION 4.5. [Distribution of Notes; Tax Event Redemption.
Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount shall be
deposited in the Collateral Account in exchange for the Pledged Notes.
Thereafter, pursuant to the terms of the Pledge Agreement, the Collateral
Agent shall cause the Securities Intermediary to apply an amount equal to the
Redemption Amount of such Redemption Price to purchase on behalf of the
Holders of SPC Units the Treasury Portfolio and promptly remit the remaining
portion of such Redemption Price to the Purchase Contract Agent for payment to
the Holders of such SPC Units. The Applicable Ownership Interest (as specified
in clause (A) of the definition of such term) in the Treasury Portfolio will
be substituted as Collateral for the Pledged Notes and will be held by the
Collateral Agent in accordance with the terms of the Pledge Agreement to
secure the obligation of each Holder of a SPC Unit to purchase the Common
Stock of the Company under the Purchase Contract constituting a part of such
SPC Unit. Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of SPC Units and the Collateral
Agent shall have such security interest rights and obligations with respect to
the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio as the Holders of SPC Units
and the Collateral Agent had in respect of the Notes subject to the Pledge
thereof as provided in the Pledge Agreement, and any reference herein to the
Notes shall be deemed to be reference to such Treasury Portfolio. The Company
may cause to be made in any SPC Unit Certificates thereafter to be issued such
change in phraseology and form (but not in substance) as may be
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appropriate to reflect the liquidation of the Trust and the substitution of
the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio for Notes as Collateral.]
ARTICLE V
The Purchase Contracts
SECTION 5.1. Purchase of Shares of [Common Stock] [Preferred Stock].
Each Purchase Contract shall, unless a Termination Event or an Early
Settlement in accordance with Section 5.9 hereof has occurred with respect to
the Security of which such Purchase Contract is a part, obligate the Holder of
the related Security to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of [Common Stock] [Preferred Stock] equal to the
Settlement Rate. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) equals or
exceeds $___________ (the "Threshold Appreciation Price"), shares of
[Common Stock] [Preferred Stock] per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $____________ (the "Reference
Price"), the number of shares of [Common Stock] [Preferred Stock] having
a value, based on the Applicable Market Value, equal to the Stated
Amount; and
(3) if the Applicable Market Value is less than or equal to the
Reference Price, shares of [Common Stock] [Preferred Stock] -- per
Purchase Contract,
in each case subject to adjustment as provided in Section 5.6 (and in each
case rounded upward or downward to the nearest 1/10,000th of a share).
As provided in Section 5.10, no fractional shares of [Common Stock]
[Preferred Stock] will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" with respect to Common Stock means
[the average of the Closing Price per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day immediately preceding
the Purchase Contract Settlement Date].
The "Applicable Market Value" with respect to Preferred Stock means
[insert definition].
The "Closing Price" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the 4:15 p.m. close of trading (or,
if no closing price is reported, the last reported sale price) per share
on the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price per share as reported in the composite
transactions for the principal United States securities exchange on which
Common Stock is so listed;
(3) if Common Stock is not so listed on a United States national or
regional securities exchange, the closing sale price per share as
reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid price
for Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Common Stock on such date from at least
three nationally recognized independent investment banking firms retained
for this purpose by the Company.
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The "Closing Price" per share of Preferred Stock means [insert
definition].
A "Trading Day" for Common Stock means a day on which Common Stock
(1) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business
and (2) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary market
for the trading of Common Stock.
A "Trading Day" for Preferred Stock means [insert definition].
Each Holder of a SPC Unit or a Treasury SPC Unit, by its acceptance
thereof:
(1) irrevocably authorizes the Purchase Contract Agent to enter into
and perform the related Purchase Contract on its behalf as its
attorney-in-fact (including the execution of Certificates on behalf of
such Holder);
(2) agrees to be bound by the terms and provisions thereof;
(3) covenants and agrees to perform its obligations under such
Purchase Contracts;
(4) consents to the provisions hereof;
(5) irrevocably authorizes the Purchase Contract Agent to enter into
and perform this Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact; and
(6) consents to, and agrees to be bound by, the Pledge of the Notes
[Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio] or the Treasury
Securities pursuant to the Pledge Agreement.
Each Holder of a SPC Unit or a Treasury SPC Unit, by its acceptance thereof,
further covenants and agrees, that to the extent and in the manner provided in
Section 5.4 and the Pledge Agreement, but subject to the terms thereof,
payments in respect of the Notes or the proceeds from the Treasury Securities
[or the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio] at maturity on the
Purchase Contract Settlement Date, as the case may be, shall be paid by the
Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Upon registration of transfer of a Certificate, the transferee shall
be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts underlying
such Certificate and the Pledge Agreement and the transferor shall be released
from the obligations under this Agreement, the Purchase Contracts underlying
the Certificate so transferred and the Pledge Agreement. The Company covenants
and agrees, and each Holder of a Certificate, by its acceptance thereof,
likewise covenants and agrees, to be bound by the provisions of this
paragraph.
SECTION 5.2. [Purchase Contract Payments.
Subject to Section 5.3, the Company shall pay, on each Payment Date,
the Purchase Contract Payments payable in respect of each Purchase Contract to
the Person in whose name a Certificate (or one or more Predecessor
Certificates) is registered at the close of business on the Record Date next
preceding such Payment Date. The Purchase Contract Payments will be payable at
the office of the Purchase Contract Agent in The City of New York maintained
for that purpose or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address as it appears
on the SPC Units Register or Treasury SPC Units Register. If any date on which
Purchase Contract Payments are to be made is not a Business Day, then payment
of the Purchase Contract Payments payable on such date will be made on the
next day that is a Business Day (and without any interest in respect of any
such delay), [except that, if such Business Day is in the next calendar year,
such payment will be made on the preceding Business Day].
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Upon the occurrence of a Termination Event, the Company's obligation
to pay Purchase Contract Payments (including any accrued or deferred Purchase
Contract Payments) shall cease.
Each Certificate delivered under this Agreement upon registration of
transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the reestablishment of SPC Units) any other
Certificate shall carry the right to accrued and unpaid or deferred Purchase
Contract Payments and the right to accrue Purchase Contract Payments, which
rights were carried by the Purchase Contracts underlying such other
Certificates.
Subject to Section 5.9, in the case of any Security with respect to
which Early Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date that is after any Record Date and prior to or on the
next succeeding Payment Date, Purchase Contract Payments otherwise payable on
such Payment Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Purchase Contract Payments shall be paid to the
Person in whose name the Certificate evidencing such Security (or one or more
Predecessor Certificates) is registered at the close of business on such
Record Date. Except as otherwise expressly provided in the immediately
preceding sentence, in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an Early
Settlement Date, Purchase Contract Payments that would otherwise be payable
after the Early Settlement Date with respect to such Purchase Contract shall
not be payable.]
[Insert, if applicable: Provisions relating to ranking of Purchase
Contract Payments.]
SECTION 5.3. [Deferral of Purchase Contract Payments.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date, but only if the Company shall give
the Holders and the Purchase Contract Agent written notice of its election to
defer such payment (specifying the amount to be deferred) at least ten
Business Days prior to the earlier of (i) the next succeeding Payment Date or
(ii) the date the Company is required to give notice of the Record Date or
Payment Date with respect to payment of such Purchase Contract Payments to the
NYSE or other applicable self-regulatory organization or to Holders of the
Securities, but in any event not less than one Business Day prior to such
Record Date. If the Company so elects to defer Purchase Contract Payments, the
Company shall pay additional Purchase Contract Payments on such deferred
installments of Purchase Contract Payments at a rate equal to ____% per annum,
compounding quarterly, until such deferred installments are paid in full (such
deferred installments of Purchase Contract Payments together with the accrued
additional Purchase Contract Payments thereon, being referred to herein as the
"Deferred Purchase Contract Payments"). Deferred Purchase Contract Payments
shall be due on the Payment Date except to the extent that payment is deferred
pursuant to this Section. No Purchase Contract Payments may be deferred to a
date that is after the Purchase Contract Settlement Date. If the Purchase
Contracts are terminated upon the occurrence of a Termination Event, the
Holder's right to receive Purchase Contract Payments and Deferred Purchase
Contract Payments will terminate.
In the event that the Company elects to defer the payment of
Purchase Contract Payments on the Purchase Contracts until the Purchase
Contract Settlement Date, each Holder will receive on the Purchase Contract
Settlement Date, in lieu of a cash payment, a number of shares of [Common
Stock] [Preferred Stock] (in addition to a number of shares of [Common Stock]
[Preferred Stock] equal to the applicable Settlement Rate) equal to (x) the
aggregate amount of Deferred Purchase Contract Payments payable to such Holder
divided by (y) the Applicable Market Value.
No fractional shares of [Common Stock] [Preferred Stock] will be
issued by the Company with respect to the payment of Deferred Purchase
Contract Payments on the Purchase Contract Settlement Date. In lieu of
fractional shares otherwise issuable with respect to such payment of Deferred
Purchase Contract Payments, the Holder will be entitled to receive an amount
in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the payment
of Purchase Contract Payments, then, until the Deferred Purchase Contract
Payments have been paid, the Company shall not declare or pay dividends on,
make distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock or make
guarantee payments with respect to the foregoing (other than (i) purchases or
acquisitions of capital stock of the Company in connection with the
satisfaction by the Company of
-25-
its obligations under any employee or agent benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or security
outstanding on the date of such event requiring the Company to purchase its
capital stock, (ii) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock,
(iii) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company (or rights to acquire capital
stock) or repurchases or redemptions of capital stock solely from the issuance
or exchange of capital stock or (v) redemptions or repurchases of any rights
outstanding under a shareholder rights plan).
If a Holder effects an Early Settlement or if a Termination Event
shall occur, such Holder will have no right to receive any accrued deferred
Purchase Contract Payments.]
SECTION 5.4. Payment of Purchase Price.
(a) (i) Unless [a Tax Event Redemption has occurred or] a Holder of
a SPC Unit effects an Early Settlement of the underlying Purchase
Contract in the manner described in Section 5.9, each Holder who intends
to pay in cash to satisfy such Holder's obligations under the Purchase
Contract shall notify the Purchase Contract Agent by use of a notice in
substantially the form of Exhibit E hereto of his intention to pay in
cash ("Cash Settlement") the Purchase Price for the shares of [Common
Stock] [Preferred Stock] to be purchased pursuant to the related Purchase
Contract. Such notice shall be given prior to 5:00 p.m. (New York City
time) on the seventh Business Day immediately preceding the Purchase
Contract Settlement Date. Prior to 11:00 a.m. (New York City time) on the
next succeeding Business Day, the Purchase Contract Agent shall notify
the Collateral Agent and the Indenture Trustee of the receipt of such
notices from Holders intending to make a Cash Settlement.
(ii) A Holder of a SPC Unit who has so notified the Purchase
Contract Agent of his intention to effect a Cash Settlement in accordance
with paragraph (a)(i) above shall pay the Purchase Price to the
Securities Intermediary for deposit in the Collateral Account prior to
11:00 a.m. (New York City time) on the [fifth] Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order of the
[Securities Intermediary]. Any cash received by the Collateral Agent
shall be invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement
Date in settlement of the Purchase Contract in accordance with the terms
of this Agreement and the Pledge Agreement. Any funds received by the
Securities Intermediary in respect of the investment earnings from such
Permitted Investments in excess of the Purchase Price for the shares of
[Common Stock] [Preferred Stock] to be purchased by such Holder, shall be
distributed to the Purchase Contract Agent when received for payment to
the Holder of the related SPC Unit.
(iii) If a Holder of a SPC Unit fails to notify the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph (a)(i) above, or does notify the Purchase Contract Agent
as provided in paragraph (a)(i) above of his intention to pay the
Purchase Price in cash, but fails to make such payment as required by
paragraph (a)(ii) above, such failure shall constitute a default under
the related Purchase Contract, and the Collateral Agent, for the benefit
of the Company, will exercise its rights as a secured party with respect
to the Notes, including those rights to dispose of Notes, as described in
paragraph (b) below and such defaulting Holder shall be deemed to have
consented to any such disposition.
(iv) Promptly after 11:00 a.m. (New York City time) on the
[fifth] Business Day preceding the Purchase Contract Settlement Date, the
Purchase Contract Agent, based on notices received by the Purchase
Contract Agent pursuant to Section 5.4(a) hereof and notice from the
Securities Intermediary regarding cash received by it prior to such time,
shall notify the Collateral Agent and the Indenture Trustee of the
aggregate number of Notes to be tendered for purchase in the Remarketing
in a notice substantially in the form of Exhibit F hereto.
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(b) In order to dispose of the Notes relating to SPC Units, the
Holders of which have not notified the Purchase Contract Agent of their
intention to effect a Cash Settlement as provided in paragraph (a)(i)
above, or who have so notified the Purchase Contract Agent but failed to
make such payment as required by paragraph (a)(ii) above, the Company
shall engage _______________________ (the "Remarketing Agent") pursuant
to the Remarketing Agreement to sell such Notes. In order to facilitate
the Remarketing, the Purchase Contract Agent, based on the notices
specified in Section 5.4(a)(iv), shall notify the Remarketing Agent,
promptly after 11:00 a.m. (New York City time) on the [fifth] Business
Day immediately preceding the Purchase Contract Settlement Date, of the
aggregate number of Notes that are part of SPC Units to be remarketed.
Concurrently, the Collateral Agent, pursuant to the terms of the Pledge
Agreement, shall cause such Notes to be presented to the Remarketing
Agent for Remarketing.
Upon receipt of such notice from the Purchase Contract Agent and
such Notes, the Remarketing Agent shall, on the third Business Day
immediately preceding the Purchase Contract Settlement Date, use
reasonable efforts to remarket such Notes on such date at a price equal
to at least [100.25%] of the Stated Amount [($25.0625)] per Note, as
provided in the Remarketing Agreement. The proceeds from the Remarketing
shall be invested by the Collateral Agent in Permitted Investments, in
accordance with the Pledge Agreement, and then applied by the Collateral
Agent, in accordance with the Pledge Agreement, to satisfy in full such
SPC Units Holders' obligations to pay the Purchase Price for the shares
of [Common Stock] [Preferred Stock] under the related Purchase Contracts
on the Purchase Contract Settlement Date. In addition, $[.0625] per Note
of the proceeds shall be automatically remitted to the Remarketing Agent
for services rendered in connection with the Remarketing (the
"Remarketing Fee"). Any proceeds remaining after satisfaction of the
Purchase Contract and payment of the Remarketing Fee shall be payable to
the Holder of such SPC Unit.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the related Notes of such Holders of SPC Units at a price
equal to 100.25% of the Stated Amount ($25.0625), then the Remarketing
Agent shall increase the interest rate on the Notes, as the case may be,
so that the market value of such Notes will equal $25.0625. If the
Remarketing Agent determines that it will be able to remarket the related
Notes of such Holders of SPC Units at a price in excess of 100.25% of the
Stated Amount ($25.0625), then the Remarketing Agent shall decrease the
distribution rate on the Notes, so that the market value of such Notes
will be equal to $25.0625. If, in spite of using reasonable efforts, the
Remarketing Agent cannot Remarket the Notes after such increase or
decrease, the Remarketing shall be deemed to have failed (a "Failed
Remarketing"), [an event of default shall be deemed to have occurred
under this Agreement and the Pledge Agreement] and in accordance with the
terms of the Pledge Agreement, the Collateral Agent, for the benefit of
the Company, shall exercise its rights as a secured party with respect to
such Notes, including those actions specified in paragraph (c) below;
provided, that if upon a Failed Remarketing the Collateral Agent
exercises such rights for the benefit of the Company with respect to such
Notes, any accrued and unpaid distributions or interest on such Notes
shall become payable by the Company to the Purchase Contract Agent for
payment to the Beneficial Owner of the SPC Units to which such Notes
relate. The Company shall cause a notice of such Failed Remarketing to be
published on the second Business Day immediately preceding the Purchase
Contract Settlement Date in a daily newspaper in the English language of
general circulation in the City of New York, which is expected to be The
Wall Street Journal, and on Bloomberg News.
(c) With respect to any Notes that are subject to a Failed
Remarketing, the Collateral Agent for the benefit of the Company reserves
all of its rights as a secured party with respect thereto and, subject to
applicable law and paragraph (g) below, may, among other things, (i)
retain the Notes in full satisfaction of the Holders' obligations under
the Purchase Contracts or (ii) sell the Notes in one or more public or
private sales.
(d) (i) Unless a Holder of a Treasury SPC Units, [or, if a Tax Event
Redemption has occurred, SPC Units,] effects an Early Settlement of the
underlying Purchase Contract through the early delivery of cash to the
Purchase Contract Agent in the manner described in Section 5.9, each such
Holder who intends to pay in cash shall notify the Purchase Contract
Agent by use of a notice in substantially the form of Exhibit E hereto of
his intention to pay in cash the Purchase Price for the shares of Common
Stock to be purchased pursuant to the related Purchase Contract. Such
notice shall be given prior to 5:00 p.m. (New
-27-
York City time) on the [seventh] Business Day immediately preceding the
Purchase Contract Settlement Date. Prior to 11:00 a.m. (New York City
time) on the next succeeding Business Day, the Purchase Contract Agent
shall notify the Collateral Agent of the receipt of such notices from
such Holders intending to make a Cash Settlement. Treasury SPC Unit
Holders may make Cash Settlements only in integral multiples of 40
Treasury SPC Units.
(ii) A Holder of a Treasury SPC Unit, [or, if a Tax Event
Redemption has occurred, SPC Units,] who has so notified the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph (d)(i) above shall pay the Purchase Price to the
Securities Intermediary for deposit in the Collateral Account prior to
11:00 a.m. (New York City time) on the [fifth] Business Day immediately
preceding the Purchase Contract Settlement Date in lawful money of the
United States by certified or cashiers' check or wire transfer, in each
case in immediately available funds payable to or upon the order of the
[Securities Intermediary]. Any cash received by the Collateral Agent
shall be invested promptly by the Securities Intermediary in Permitted
Investments and paid to the Company on the Purchase Contract Settlement
Date in settlement of the Purchase Contract in accordance with the terms
of this Agreement and the Pledge Agreement. Any funds received by the
Securities Intermediary in respect of the investment earnings from the
investment in such Permitted Investments [in excess of the Purchase Price
for shares of common stock to be purchased by such Holder] shall be
distributed to the Purchase Contract Agent when received for payment to
the Holder of the related Treasury SPC Unit.
(iii) If a Holder of a Treasury SPC Unit, [or, if a Tax Event
Redemption has occurred, SPC Units,] fails to notify the Purchase
Contract Agent of his intention to make a Cash Settlement in accordance
with paragraph (d)(i) above, or does notify the Purchase Contract Agent
as provided in paragraph (d)(i) above of his intention to pay the
Purchase Price in cash, but fails to make such payment as required by
paragraph (d)(ii) above, then such failure shall constitute a default
under the related Purchase Contract, and upon the maturity of the Pledged
Treasury Securities, or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio, held by the Securities Intermediary on the Business Day
immediately preceding the Purchase Contract Settlement Date, the
principal amount of the Treasury Securities, or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio, received by the
Collateral Agent shall be invested promptly in Permitted Investments.
On the Purchase Contract Settlement Date, an amount equal to the
Purchase Price shall be remitted to the Company as payment thereof
without receiving any instructions from the Holder of the related
Treasury SPC Unit or SPC Unit. In the event the sum of the proceeds from
the related Pledged Treasury Securities, [or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio,] and the investment earnings earned from
such investments is in excess of the aggregate Purchase Price of the
Purchase Contracts being settled thereby, the Collateral Agent shall
cause the Securities Intermediary to distribute such excess to the
Purchase Contract Agent for the benefit of the Holder of the related
Treasury SPC Unit or SPC Units when received.
(iv) A holder of a Note that is no longer part of a SPC Unit
may elect to have such Note, remarketed. A Holder making such an election
must notify the Indenture Trustee prior to 11:00 a.m. (New York City
time) on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date, of the aggregate number of Notes that are not
part of SPC Units to be remarketed. Any such notice will be irrevocable
and may not be conditioned upon the level at which the Reset Rate is
established in the Remarketing. Concurrently, the Indenture Trustee shall
cause such Notes to be presented to the Remarketing Agent for
Remarketing.
(e) Any distribution to Holders of excess funds [and interest]
described above shall be payable at the office of the Purchase Contract
Agent in New York City maintained for that purpose or, at the option of
the Holder, by check mailed to the address of the Person entitled thereto
at such address as it appears on the Register.
(f) Upon Cash Settlement of any Purchase Contract:
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(1) the Collateral Agent will, in accordance with the terms of the
Pledge Agreement, cause the Pledged Note [, appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio,] or Pledged Treasury Securities, as the
case may be, underlying the relevant Security to be released from the
Pledge, free and clear of any security interest of the Company, and
transferred to the Purchase Contract Agent for delivery to the Holder
thereof or its designee as soon as practicable; and
(2) subject to the receipt thereof, the Purchase Contract Agent
shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Note [, appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio,] or Treasury Securities, as the case may be (or, if no such
instructions are given to the Purchase Contract Agent by the Holder, the
Purchase Contract Agent shall hold such Note [, appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio,] or Treasury Securities, as the case may
be, and any interest payment thereon, in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder
until the expiration of the time period specified in the abandoned
property laws of the relevant State).
(g) The obligations of the Holders to pay the Purchase Price are
non-recourse obligations and, except to the extent satisfied by Early
Settlement or Cash Settlement, are payable solely out of the proceeds of
any Collateral pledged to secure the obligations of the Holders and in no
event will Holders be liable for any deficiency between the proceeds of
the disposition of Collateral and the Purchase Price.
(h) The Company shall not be obligated to issue any shares of
[Common Stock] [Preferred Stock] in respect of a Purchase Contract or
deliver any certificates thereof to the Holder of the related SPC Unit or
Treasury SPC Unit unless the Company shall have received payment in full
for the aggregate purchase price for the [Common Stock] [Preferred Stock]
to be purchased thereunder in the manner herein set forth.
SECTION 5.5. Issuance of Shares of [Common Stock] [Preferred Stock].
Unless a Termination Event or an Early Settlement shall have
occurred, on the Purchase Contract Settlement Date, upon its receipt of
payment in full of the applicable Purchase Price for shares of [Common Stock]
[Preferred Stock] purchased by Holders pursuant to the foregoing provisions of
this Article and subject to Section 5.6(b), the Company shall issue and
deposit with the Purchase Contract Agent, for the benefit of the Holders of
the Outstanding Securities, one or more certificates representing the shares
of [Common Stock] [Preferred Stock] registered in the name of the Purchase
Contract Agent (or its nominee) as custodian for the Holders (such
certificates for shares of [Common Stock] [Preferred Stock], together with any
dividends or distributions for which both a record date and payment date for
such dividend or distribution has occurred after the Purchase Contract
Settlement Date, being hereinafter referred to as the "Purchase Contract
Settlement Fund") to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Purchase Contract Agent on or after the Purchase Contract Settlement Date,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive in exchange therefor a
certificate representing that number of whole shares of [Common Stock]
[Preferred Stock] that such Holder is entitled to receive pursuant to the
provisions of this Article Five (after taking into account all Securities then
held by such Holder), together with cash in lieu of fractional shares as
provided in Section 5.10 and any dividends or distributions with respect to
such shares constituting part of the Purchase Contract Settlement Fund, but
without any interest thereon, and the Certificate so surrendered shall
forthwith be cancelled. Such shares shall be registered in the name of the
Holder or the Holder's designee as specified in the settlement instructions
provided by the Holder to the Purchase Contract Agent. If any shares of
[Common Stock] [Preferred Stock] issued in respect of a Purchase Contract are
to be registered to a Person other than the Person in whose name the
Certificate evidencing such Purchase Contract is registered, no such
registration shall be made unless the Person requesting such registration has
paid any transfer and other taxes required by reason of such registration in a
name other than that of the registered Holder of the Certificate evidencing
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
-29-
SECTION 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on [Common Stock in Common Stock] [Preferred Stock in
Preferred Stock], the Settlement Rate, as in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution
shall be increased by dividing such Settlement Rate by a fraction of
which:
(i) the numerator shall be the number of shares of [Common
Stock] [Preferred Stock] outstanding at the close of business on the date
fixed for such determination; and
(ii) the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For
the purposes of this paragraph (1), the number of shares of [Common
Stock] [Preferred Stock] at any time outstanding shall not include shares
held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of
shares of [Common Stock] [Preferred Stock]. The Company shall not pay any
dividend or make any distribution on shares of [Common Stock] [Preferred
Stock] held in the treasury of the Company.
(2) In case the Company shall issue rights, warrants or options to
all holders of its [Common Stock] [Preferred Stock] that are not
available on an equivalent basis to Holders of the Securities upon
settlement of the Purchase Contracts underlying such Securities entitling
such holders of the [Common Stock] [Preferred Stock], for a period
expiring within 45 days after the record date for the determination of
shareholders entitled to receive such rights, warrants or options, to
subscribe for or purchase shares of [Common Stock] [Preferred Stock] at a
price per share less than the Current Market Price per share of [Common
Stock] [Preferred Stock] on the date fixed for the determination of
shareholders entitled to receive such rights, warrants or options (other
than pursuant to a dividend reinvestment plan), the Settlement Rate in
effect at the opening of business on the day following the date fixed for
such determination shall be increased by dividing such Settlement Rate by
a fraction of which:
(i) the numerator shall be the number of shares of [Common
Stock] [Preferred Stock] outstanding at the close of business on the date
fixed for such determination plus the number of shares of [Common Stock]
[Preferred Stock] which the aggregate of the offering price of the total
number of shares of [Common Stock] [Preferred Stock] so offered for
subscription or purchase would purchase at such Current Market Price; and
(ii) the denominator shall be the number of shares of [Common
Stock] [Preferred Stock] outstanding at the close of business on the date
fixed for such determination plus the number of shares of [Common Stock]
[Preferred Stock] so offered for subscription or purchase,
such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For
the purposes of this paragraph (2), the number of shares of [Common
Stock] [Preferred Stock] at any time outstanding shall not include shares
held in the treasury of the Company but shall include any shares issuable
in respect of any scrip certificates issued in lieu of fractions of
shares of [Common Stock] [Preferred Stock]. The Company shall not issue
any such rights, warrants or options in respect of shares of [Common
Stock] [Preferred Stock] held in the treasury of the Company.
(3) In case outstanding shares of [Common Stock] [Preferred Stock]
shall be subdivided or split into a greater number of shares of [Common
Stock] [Preferred Stock], the Settlement Rate in effect at the opening of
business on the day following the day upon which such subdivision or
split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of [Common Stock] [Preferred
Stock] shall each be combined into a smaller number of shares of [Common
Stock] [Preferred Stock], the Settlement Rate in effect at the opening of
business on the day following the day upon which
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such combination becomes effective shall be proportionately reduced, such
increase or reduction, as the case may be, to become effective
immediately after the opening of business on the day following the day
upon which such subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute
to all holders of its [Common Stock] [Preferred Stock] evidences of its
indebtedness or assets (including securities, but excluding any rights,
warrants or options referred to in paragraph (2) of this Section 5.6(a),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in paragraph (1) of this Section 5.6(a)), the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately prior to
the close of business on the date fixed for the determination of
shareholders entitled to receive such distribution by a fraction of
which:
(i) the numerator shall be the Current Market Price per share
of [Common Stock] [Preferred Stock] on the date fixed for such
determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a
Board Resolution) of the portion of the assets or evidences of
indebtedness so distributed applicable to one share of [Common Stock]
[Preferred Stock]; and
(ii) the denominator shall be such Current Market Price per
share of [Common Stock] [Preferred Stock],
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such distribution. In any case in which
this paragraph (4) is applicable, paragraph (2) of this Section 5.6(a)
shall not be applicable. In the event that such dividend or distribution
is not so paid or made, the Settlement Rate shall again be adjusted to be
the Settlement Rate that would then be in effect if such dividend or
distribution had not been declared.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its [Common Stock] [Preferred Stock] cash
(excluding any cash that is distributed in a Reorganization Event to
which Section 5.6(b) applies or as part of a distribution referred to in
paragraph (4) of this Section 5.6(a)) in an aggregate amount that,
combined together with (II) the aggregate amount of any other
distributions to all holders of its [Common Stock] [Preferred Stock] made
exclusively in cash within the 12 months preceding the date of payment of
such distribution and in respect of which no adjustment pursuant to this
paragraph (5) or paragraph (6) of this Section 5.6(a) has been made and
(III) the aggregate of any cash plus the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect of
any tender or exchange offer by the Company or any of its subsidiaries
for all or any portion of the [Common Stock] [Preferred Stock] concluded
within the 12 months preceding the date of payment of the distribution
described in clause (I) above and in respect of which no adjustment
pursuant to this paragraph (5) or paragraph (6) of this Section 5.6(a)
has been made, exceeds 15% of the product of the Current Market Price per
share of the [Common Stock] [Preferred Stock] on the date for the
determination of holders of shares of [Common Stock] [Preferred Stock]
entitled to receive such distribution times the number of shares of
[Common Stock] [Preferred Stock] outstanding on such date, then, and in
each such case, immediately after the close of business on such date for
determination, the Settlement Rate, shall be increased so that the same
shall equal the rate determined by dividing the Settlement Rate in effect
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution
by a fraction (i) the numerator of which shall be equal to the Current
Market Price per share of the [Common Stock] [Preferred Stock] on the
date fixed for such determination less an amount equal to the quotient of
(x) the combined amount distributed or payable in the transactions
described in clauses (I), (II) and (III) above and (y) the number of
shares of [Common Stock] [Preferred Stock] outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the [Common Stock] [Preferred Stock] on
such date for determination.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of [Common Stock]
[Preferred Stock] shall expire and such tender or exchange offer (as
amended upon the expiration thereof) shall require the payment to
shareholders (based on the
-31-
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares) of (I) an aggregate consideration
having a fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a Board
Resolution) that combined together with the aggregate of the cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution),
as of the expiration of such tender or exchange offer, of consideration
payable in respect of any other tender or exchange offer, by the Company
or any subsidiary of the Company for all or any portion of [Common Stock]
[Preferred Stock] expiring within the 12 months preceding the expiration
of such tender or exchange offer and in respect of which no adjustment
pursuant to paragraph (5) of this Section 5.6(a) or this paragraph (6)
has been made, and (II) the aggregate amount of any distributions to all
holders of the Company's [Common Stock] [Preferred Stock] made
exclusively in cash within the 12 months preceding the expiration of such
tender or exchange offer and in respect of which no adjustment pursuant
to paragraph (5) of this Section 5.6(a) or this paragraph (6) has been
made, exceeds 15% of the product of the Current Market Price per share of
[Common Stock] [Preferred Stock] as of the last time (the "Expiration
Time") tenders could have been made pursuant to such tender or exchange
offer (as it may be amended) times the number of shares of [Common Stock]
[Preferred Stock] outstanding (including any tendered shares) on the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Settlement Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate immediately prior to the close
of business on the date of the Expiration Time by a fraction:
(i) the numerator of which shall be equal to (A) the product of
(I) the Current Market Price per share of [Common Stock] [Preferred
Stock] on the date of the Expiration Time and (II) the number of shares
of [Common Stock] [Preferred Stock] outstanding (including any tendered
shares) on the Expiration Time less (B) the amount of cash plus the fair
market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the transactions described in clauses
(I) and (II) above (assuming in the case of clause (I) the acceptance, up
to any maximum specified in the terms of the tender or exchange offer, of
Purchased Shares); and
(ii) the denominator of which shall be equal to the product of
(A) the Current Market Price per share of [Common Stock] [Preferred
Stock] as of the Expiration Time and (B) the number of shares of [Common
Stock] [Preferred Stock] outstanding (including any tendered shares) as
of the Expiration Time less the number of all shares validly tendered and
not withdrawn as of the Expiration Time (the shares deemed so accepted,
up to any such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of [Common Stock] [Preferred Stock] into
securities including securities other than [Common Stock] [Preferred
Stock] (other than any reclassification upon a Reorganization Event to
which Section 5.6(b) applies) shall be deemed to involve:
(i) a distribution of such securities other than [Common Stock]
[Preferred Stock] to all holders of [Common Stock] [Preferred Stock] (and
the effective date of such reclassification shall be deemed to be "the
date fixed for the determination of shareholders entitled to receive such
distribution" and the "date fixed for such determination" within the
meaning of paragraph (4) of this Section); and
(ii) a subdivision, split or combination, as the case may be,
of the number of shares of [Common Stock] [Preferred Stock] outstanding
immediately prior to such reclassification into the number of shares of
[Common Stock] [Preferred Stock] outstanding immediately thereafter (and
the effective date of such reclassification shall be deemed to be "the
day upon which such subdivision or split becomes effective" or "the day
upon which such combination becomes effective", as the case may be, and
"the day upon which such subdivision, split or combination becomes
effective" within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on any day
means the average of the daily Closing Prices for the five consecutive
Trading Days selected by the Company commencing not more than 30 Trading
Days before, and ending not later than, the earlier of the day in
question and the day before the "ex date" with respect to the issuance or
distribution requiring such computation. For purposes of this
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paragraph, the term "ex date", when used with respect to any issuance or
distribution, shall mean the first date on which Common Stock trades
regular way on such exchange or in such market without the right to
receive such issuance or distribution.
(9) The "Current Market Price" per share of Preferred Stock on any
day means [insert definition].
(10) All adjustments to the Settlement Rate shall be calculated to
the nearest 1/10,000th of a share of [Common Stock] [Preferred Stock] (or
if there is not a nearest 1/10,000th of a share, to the next lower
1/10,000th of a share). No adjustment in the Settlement Rate shall be
required unless such adjustment would require an increase or decrease of
at least one percent thereof; provided, however, that any adjustments
which by reason of this subparagraph are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. If
an adjustment is made to the Settlement Rate pursuant to paragraph (1),
(2), (3), (4), (5), (6), (7) or (11) of this Section 5.6(a), an
adjustment shall also be made to the Applicable Market Value solely to
determine which of clauses (1), (2) or (3) of the definition of
Settlement Rate in Section 5.1 will apply on the Purchase Contract
Settlement Date. Such adjustment shall be made by multiplying the
Applicable Market Value by a fraction of which the numerator shall be the
Settlement Rate immediately after such adjustment pursuant to paragraph
(1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the
denominator shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement
Rate is required to be made pursuant to the occurrence of any of the
events contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or
(10) of this Section 5.6(a) during the period taken into consideration
for determining the Applicable Market Value, appropriate and customary
adjustments shall be made to the Settlement Rate.
(11) The Company may, but shall not be required to, make such
increases in the Settlement Rate, in addition to those required by this
Section, as it considers to be advisable in order to avoid or diminish
any income tax to any holders of shares of [Common Stock] [Preferred
Stock] resulting from any dividend or distribution of stock or issuance
of rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other reason.
(b) Adjustment for Consolidation, Merger or Other Reorganization
Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the Company
is the continuing corporation and in which the shares of Common Stock
outstanding immediately prior to the merger or consolidation are not
exchanged for cash, securities or other property of the Company or
another corporation);
(ii) any sale, transfer, lease or conveyance to another Person
of the property of the Company as an entirety or substantially as an
entirety;
(iii) any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition);
(iv) any liquidation, dissolution or termination of the Company
other than as a result of or after the occurrence of a Termination Event
(any such event, a "Reorganization Event"),
the Settlement Rate will be adjusted to provide that each Holder of
Securities will receive on the Purchase Contract Settlement Date with
respect to each Purchase Contract forming a part thereof, the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event (without any interest thereon, and without any right
to dividends or distribution thereon that have a record date that is
prior to the Purchase Contract Settlement Date) by a Holder of the number
of shares of [Common Stock] [Preferred Stock] issuable on account of each
Purchase Contract if the Purchase Contract Settlement Date had occurred
immediately prior to such Reorganization Event, assuming such Holder of
[Common Stock] [Preferred Stock] is not a Person with which the Company
consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
(any
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such Person, a "Constituent Person"), or an Affiliate of a Constituent
Person to the extent such Reorganization Event provides for different
treatment of [Common Stock] [Preferred Stock] held by Affiliates of the
Company and non-affiliates and such Holder failed to exercise his rights
of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable
upon such Reorganization Event is not the same for each share of [Common
Stock] [Preferred Stock] held immediately prior to such Reorganization
Event by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and
amount of securities, cash and other property receivable upon such
Reorganization Event by each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the
non-electing shares).
In the event of such a Reorganization Event, the Person formed by
such consolidation, merger or exchange or the Person that acquires the
assets of the Company or, in the event of a liquidation, dissolution or
termination of the Company, the Company or a liquidating trust created in
connection therewith, shall execute and deliver to the Purchase Contract
Agent an agreement supplemental hereto providing that each Holder of an
Outstanding Security shall have the rights provided by this Section
5.6(b). Such supplemental agreement shall provide for adjustments that,
for events subsequent to the effective date of such supplemental
agreement, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section. The above provisions of this
Section shall similarly apply to successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with
or into another Person, any merger of another Person into the Company
(other than a merger that does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of [Common
Stock] [Preferred Stock]) in which 30% or more of the total consideration
paid to the Company's shareholders consists of cash or cash equivalents,
then a Holder of a Security may settle his Purchase Contract for cash as
described in Section 5.4(a)(i) or 5.4(d)(i) hereof, as applicable, during
the one week period beginning on the twenty-third Trading Day following
the closing date of such merger (the "Early Settlement Week"), at the
applicable Settlement Rate. For the purposes of this Section, the
twenty-third Trading Day after the closing of the merger or consolidation
shall be deemed to be the Purchase Contract Settlement Date for the
purpose of determining the Applicable Market Value and the deadline for
submitting the notice to settle early and the related cash payment shall
be 5:00 p.m. (New York City time) of the last Business Day of the Early
Settlement Week.]
All calculations and determinations pursuant to this Section 5.6
shall be made by the Company or its agent and the Purchase Contract Agent
shall have no responsibility with respect thereto.
SECTION 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is calculated or adjusted as herein
provided, the Company shall:
(1) forthwith compute the Settlement Rate adjusted as necessary in
accordance with Section 5.6 in accordance with Section 5.6 and prepare
and transmit to the Purchase Contract Agent an Officer's Certificate
setting forth the Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment and upon which
such adjustment is based; and
(2) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Settlement Rate pursuant to Section
5.6 (or if the Company is not aware of such occurrence, as soon as
practicable after becoming so aware), provide a written notice to the
Holders of the Securities of the occurrence of such event and a statement
in reasonable detail setting forth the method by which the adjustment to
the Settlement Rate was determined and setting forth the adjusted
Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any
duty or responsibility to any Holder of Securities to determine whether
any facts exist which may require any adjustment of the
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Settlement Rate or the Applicable Market Value, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same or with respect to any
matters, adjustments or calculations contained in any supplemental
agreement entered into in accordance with Section 5.6(b). The Purchase
Contract Agent shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of [Common Stock] [Preferred
Stock], or of any securities or property, which may at the time be issued
or delivered with respect to any Purchase Contract; and the Purchase
Contract Agent makes no representation with respect thereto. The Purchase
Contract Agent shall not be responsible for any failure of the Company to
issue, transfer or deliver any shares of [Common Stock] [Preferred Stock]
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
SECTION 5.8. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Purchase
Contract Payments (including any deferred or accrued and unpaid Purchase
Contract Payments), if the Company shall have such obligation, and the rights
and obligations of Holders to purchase [Common Stock] [Preferred Stock], shall
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Purchase Contract Agent or the Company, if, prior
to or on the Purchase Contract Settlement Date, a Termination Event shall have
occurred.
Upon and after the occurrence of a Termination Event, the Securities
shall thereafter represent the right to receive the Notes [or appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,]
forming part of such Securities in the case of SPC Units, or Treasury
Securities in the case of Treasury SPC Units, in accordance with the
provisions of Section 5.4 of the Pledge Agreement. Upon the occurrence of a
Termination Event, the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Purchase Contract Agent,
the Collateral Agent and the Holders, at their addresses as they appear in the
Register.
SECTION 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of this
Section 5.9, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("Early Settlement") on or
prior to 5:00 p.m. (New York City time) on the seventh Business Day
immediately preceding the Purchase Contract Settlement Date, as provided
herein. Holders of Treasury SPC Units may only settle the related
Purchase Contracts in integral multiples of 40 Purchase Contracts. In
order to exercise the right to effect Early Settlement with respect to
any Purchase Contracts, the Holder of the Certificate evidencing
Securities shall deliver such Certificates to the Purchase Contract Agent
at the Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early on the reverse
thereof duly completed and accompanied by payment (payable to the Company
in immediately available funds) in an amount (the "Early Settlement
Amount") equal to:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(2) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date
next preceding any Payment Date to the opening of business on such
Payment Date, an amount equal to the sum of (x) the Purchase Contract
Payments payable on such Payment Date with respect to such Purchase
Contracts plus (y) in the case of a SPC Units Certificate, the interest
on the related Notes payable on such Payment Date.]
Except as provided in the immediately preceding sentence and subject to
the second to last paragraph of Section 5.2, no payment shall be made
upon Early Settlement of any Purchase Contract on account of any Purchase
Contract Payments accrued on such Purchase Contract or on account of any
dividends on the [Common Stock] [Preferred Stock] issued upon such Early
Settlement. If the foregoing requirements are first satisfied with
respect to Purchase Contracts underlying any Securities prior to or at
5:00 p.m. (New York City time) on a Business Day, such day shall be the
"Early Settlement Date" with respect to such Securities and if such
requirements are first satisfied after 5:00 p.m. (New York City time) on
a Business Day or on a day that is not a Business Day, the "Early
Settlement Date" with respect to such
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Securities shall be the next succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Company shall issue, and the Holder shall be
entitled to receive, [________] shares of [Common Stock] [Preferred
Stock] on account of each Purchase Contract as to which Early Settlement
is effected (the "Early Settlement Rate"). The Early Settlement Rate
shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted.
(c) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(1) the shares of [Common Stock] [Preferred Stock] issuable upon
Early Settlement of Purchase Contracts to be issued and delivered,
together with payment in lieu of any fraction of a share, as provided in
Section 5.10; and
(2) the related Notes [or the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in
the Treasury Portfolio], in the case of SPC Units, or the related
Treasury Securities, in the case of Treasury SPC Units, to be released
from the Pledge by the Collateral Agent and transferred, in each case, to
the Purchase Contract Agent for delivery to the Holder thereof or its
designee.
(d) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of [Common Stock] [Preferred Stock] from the Company
and the Notes [or the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio] or Treasury Securities, as the case may be, from the
Securities Intermediary, as applicable, the Purchase Contract Agent
shall, in accordance with the instructions provided by the Holder thereof
on the applicable form of Election to Settle Early on the reverse of the
Certificate evidencing the related Securities:
(1) transfer to the Holder the Notes [or the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such
term) in the Treasury Portfolio] or Treasury Securities, as the case may
be, forming a part of such Securities; and
(2) deliver to the Holder a certificate or certificates for the
full number of shares of [Common Stock] [Preferred Stock] issuable upon
such Early Settlement, together with payment in lieu of any fraction of a
share, as provided in Section 5.10.
(e) In the event that Early Settlement is effected with respect to
Purchase Contracts underlying less than all the Securities evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall authenticate, countersign and deliver to
the Holder thereof, at the expense of the Company, a Certificate
evidencing the Securities as to which Early Settlement was not effected.
(f) A Holder of a Security who effects Early Settlement may elect to
have the Note no longer a part of a SPC Unit or Treasury SPC Unit
remarketed. A Holder making such an election must notify the Indenture
Trustee prior to 11:00 a.m. (New York City time) on the fifth Business
Day immediately preceding the Purchase Contract Settlement Date, of the
aggregate number of Notes that are not part of SPC Units or Treasury SPC
Units, as the case may be, to be remarketed. Any such notice will be
irrevocable and may not be conditioned upon the level at which the Reset
Rate is established in the Remarketing. Concurrently, the Indenture
Trustee shall cause such Notes to be presented to the Remarketing Agent
for Remarketing.
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SECTION 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares of
[Common Stock] [Preferred Stock] shall be issued or delivered upon settlement
on the Purchase Contract Settlement Date or upon Early Settlement of any
Purchase Contracts. If Certificates evidencing more than one Purchase Contract
shall be surrendered for settlement at one time by the same Holder, the number
of full shares of [Common Stock] [Preferred Stock] that shall be delivered
upon settlement shall be computed on the basis of the aggregate number of
Purchase Contracts evidenced by the Certificates so surrendered. Instead of
any fractional share of [Common Stock] [Preferred Stock] that would otherwise
be deliverable upon settlement of any Purchase Contracts on the Purchase
Contract Settlement Date or upon Early Settlement, the Company, through the
Purchase Contract Agent, shall make a cash payment in respect of such
fractional interest in an amount equal to the product of the total fractional
share interest times the Applicable Market Value per share, determined as
provided in Section 5.1. The Company shall provide the Purchase Contract Agent
from time to time with sufficient funds to permit the Purchase Contract Agent
to make all cash payments required by this Section 5.10 in a timely manner.
SECTION 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares of [Common
Stock] [Preferred Stock] pursuant to the Purchase Contracts; provided,
however, that the Company shall not be required to pay any such tax or taxes
which may be payable in respect of any exchange of or substitution for a
Certificate evidencing a Security or any issuance of a share of [Common Stock]
[Preferred Stock] in a name other than that of the registered Holder of a
Certificate surrendered in respect of the Securities evidenced thereby, other
than in the name of the Purchase Contract Agent, as custodian for such Holder,
and the Company shall not be required to issue or deliver such share
certificates or Certificates unless or until the Person or Persons requesting
the transfer or issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
ARTICLE VI
Remedies
SECTION 6.1. Unconditional Right of Holders to Receive Purchase Contract
Payments and to Purchase Shares of [Common Stock] [Preferred
Stock].
Each Holder of a SPC Unit or Treasury SPC Unit shall have the right,
which is absolute and unconditional, [(1) subject to the right of the Company
to defer Purchase Contract Payments in accordance with Section 5.3 and to the
obligation of a Holder to make certain Purchase Contract Payments pursuant to
Section 5.9(a), to receive each Purchase Contract Payment with respect to the
Purchase Contract constituting a part of such Security on the respective
Payment Date for such Security (provided, however, that a Holder will have no
right to receive any accrued deferred Purchase Contract Payments if such
Holder effects an Early Settlement or if a Termination Event shall occur), and
(2)] to purchase shares of [Common Stock] [Preferred Stock] pursuant to such
Purchase Contract and, in each such case, to institute suit for the
enforcement of [any such Purchase Contract Payment and] right to purchase
shares of [Common Stock] [Preferred Stock], and such rights shall not be
impaired without the consent of such Holder.
SECTION 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company and such Holder shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of
such Holder shall continue as though no such proceeding had been instituted.
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SECTION 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates in the last
paragraph of Section 3.10, no right or remedy herein conferred upon or
reserved to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or remedy
upon a default shall impair any such right or remedy or constitute a waiver of
any such right. Every right and remedy given by this Article or by law to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a SPC Unit
or a Treasury SPC Unit, by its acceptance of such SPC Unit or Treasury SPC
Unit shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Purchase Contract Agent for any action
taken, suffered or omitted by it as Purchase Contract Agent, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and costs, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; provided that the provisions of this Section shall not
apply to any suit instituted by the Company, to any suit instituted by the
Purchase Contract Agent, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of [distributions
or payments] on any Notes or Purchase Contract Payments on any Purchase
Contract on or after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to purchase
shares of [Common Stock] [Preferred Stock] under the Purchase Contracts
constituting part of any Security held by such Holder.
SECTION 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Agreement; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Purchase Contract
Agent or the Holders, but will suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE VII
The Purchase Contract Agent
SECTION 7.1. Certain Duties and Responsibilities.
(a) Prior to a Default and after the curing or waiving of all such
Defaults that may have occurred, the Purchase Contract Agent:
(1) undertakes to perform, with respect to the Securities, such
duties and only such duties as are specifically set forth in this
Agreement and the Pledge Agreement, and no implied covenants or
obligations shall be read into this Agreement or the Pledge Agreement
against the Purchase Contract Agent; and
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(2) in the absence of bad faith or negligence on its part, may, with
respect to the Securities, conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Purchase Contract Agent and
conforming to the requirements of this Agreement or the Pledge Agreement,
as applicable, but in the case of any certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Purchase Contract Agent, the Purchase Contract Agent shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Agreement or the Pledge Agreement, as applicable.
(b) No provision of this Agreement or the Pledge Agreement shall be
construed to relieve the Purchase Contract Agent from liability for its
own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Purchase Contract Agent was negligent in ascertaining the
pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement shall
require the Purchase Contract Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, if
adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement and the Pledge Agreement relating to the conduct or
affecting the liability of or affording protection to the Purchase
Contract Agent shall be subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement in its capacity as Purchase Contract Agent.
(e) In case a Default has occurred (that has not been cured or
waived), and is actually known by a Responsible Officer of the Purchase
Contract Agent, the Purchase Contract Agent shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree
of care and skill in its exercise thereof, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(f) At the request of the Company, the Purchase Contract Agent is
authorized to execute and deliver one or more Remarketing Agreements to,
among other things, effectuate Section 5.4.
SECTION 7.2. Notice of Default.
Within 90 days after the occurrence of any Default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and addresses appear in
the Register, notice of such Default hereunder, unless such Default shall have
been cured or waived; provided that, except for a default in any payment
obligation hereunder, the Purchase Contract Agent shall be protected in
withholding such notice if and so long as the Responsible Officer of the
Purchase Contract Agent in good faith determines that the withholding of such
notice is in the interests of the Holders of the Securities.
SECTION 7.3. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.1:
(1) the Purchase Contract Agent may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
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(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by an Officer's Certificate, Issuer Order or
Issuer Request, and any resolution of the Board of Directors of the
Company may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement the Purchase Contract Agent shall deem it desirable that a
matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Purchase Contract Agent (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officer's Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel and the
written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Purchase Contract Agent,
in its discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if the
Purchase Contract Agent shall determine to make such further inquiry or
investigation, it shall be given a reasonable opportunity to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(6) the Purchase Contract Agent may execute any of the powers
hereunder or under the Pledge Agreement or perform any duties hereunder
or under the Pledge Agreement either directly or by or through agents or
attorneys or an Affiliate and the Purchase Contract Agent shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney or an Affiliate appointed with due care by it hereunder.
SECTION 7.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Certificates shall be taken
as the statements of the Company, and the Purchase Contract Agent assumes no
responsibility for their accuracy. The Purchase Contract Agent makes no
representations as to the validity or sufficiency of either this Agreement or
of the Securities, or of the Pledge Agreement or the Pledge. The Purchase
Contract Agent shall not be accountable for the use or application by the
Company of the proceeds in respect of the Purchase Contracts.
SECTION 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the Purchase
Contract Agent and its Affiliates, in their individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with the
Company, the Collateral Agent or any other Person with the same rights it
would have if it were not Registrar or such other agent, or the Purchase
Contract Agent. The Company may also become the owner or pledgee of
Securities.
SECTION 7.6. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need
not be segregated from the other funds except to the extent required by law or
provided herein. The Purchase Contract Agent shall be under no obligation to
invest or pay interest on any money received by it hereunder except as
provided herein or otherwise agreed in writing with the Company.
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SECTION 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all
services rendered by it hereunder and under the Pledge Agreement as the
Company and the Purchase Contract Agent shall from time to time agree in
writing;
(2) except as otherwise expressly provided for herein, to reimburse
the Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Purchase Contract
Agent in accordance with any provision of this Agreement and the Pledge
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder or under the Pledge Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder or under the Pledge Agreement.
SECTION 7.8. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder
which shall be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having (or
being a member of a bank holding company having) a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority and having a corporate trust office, in the Borough
of Manhattan in The City of New York, if there be such a corporation in the
Borough of Manhattan in The City of New York, qualified and eligible under
this Article and willing to act on reasonable terms. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Purchase Contract Agent
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereinafter
specified in this Article.
SECTION 7.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Purchase Contract Agent in accordance with the applicable
requirements of Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date
of such resignation. If the instrument of acceptance by a successor
Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after the giving
of such notice of resignation, the resigning Purchase Contract Agent may
petition any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Securities
delivered to the Purchase Contract Agent and the Company.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section 310(b)
of the TIA, as if the Purchase Contract Agent were an indenture trustee
under an indenture qualified under the TIA, after written request
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therefor by the Company or by any Holder who has been a bona fide Holder
of a Security for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible under
Section 7.8 and shall fail to resign after written request therefor by
the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Purchase
Contract Agent or of its property shall be appointed or any public
officer shall take charge or control of the Purchase Contract Agent or of
its property or affairs for the purpose of rehabilitation, conservation
or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Purchase Contract Agent, or (ii) any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Purchase Contract Agent and the
appointment of a successor Purchase Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in the office of
Purchase Contract Agent for any cause, the Company, by a Board
Resolution, shall promptly appoint a successor Purchase Contract Agent
and shall comply with the applicable requirements of Section 7.10. If no
successor Purchase Contract Agent shall have been so appointed by the
Company and accepted appointment in the manner required by Section 7.10,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of itself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of
the Purchase Contract Agent and each appointment of a successor Purchase
Contract Agent by mailing written notice of such event by first-class
mail, postage prepaid, to all Holders as their names and addresses appear
in the applicable Register. Each notice shall include the name of the
successor Purchase Contract Agent and the address of its Corporate Trust
Office.
(g) If the Purchase Contract Agent has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Purchase Contract Agent and the Company shall in all
respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Purchase Contract Agent an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Purchase Contract
Agent shall become effective and such successor Purchase Contract Agent,
without any further act, deed or conveyance, shall become vested with all
the rights, powers, agencies and duties of the retiring Purchase Contract
Agent; but, on the request of the Company or the successor Purchase
Contract Agent, such retiring Purchase Contract Agent shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Purchase Contract Agent all the rights, powers and trusts of
the retiring Purchase Contract Agent and shall duly assign, transfer and
deliver to such successor Purchase Contract Agent all property and money
held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Purchase Contract
Agent all such rights, powers and agencies referred to in paragraph (a)
of this Section.
(c) No successor Purchase Contract Agent shall accept its
appointment unless at the time of such acceptance such successor Purchase
Contract Agent shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business.
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Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Purchase Contract Agent
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of the Purchase Contract Agent, shall be the
successor of the Purchase Contract Agent hereunder, provided such Person shall
be otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been authenticated and executed on
behalf of the Holders, but not delivered, by the Purchase Contract Agent then
in office, any successor by merger, conversion or consolidation to such
Purchase Contract Agent may adopt such authentication and execution and
deliver the Certificates so authenticated and executed with the same effect as
if such successor Purchase Contract Agent had itself authenticated and
executed such Securities.
SECTION 7.12. Preservation of Information; Communications to Holders.
The Purchase Contract Agent shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders received by the
Purchase Contract Agent in its capacity as Registrar and comply with Section
312 of the Trust Indenture Act.
SECTION 7.13. No Obligations of Purchase Contract Agent.
Except to the extent otherwise provided in this Agreement, the
Purchase Contract Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any Purchase Contract
in respect of the obligations of the Holder of any Security thereunder. The
Company agrees, and each Holder of a Certificate, by his acceptance thereof,
shall be deemed to have agreed, that the Purchase Contract Agent's execution
of the Certificates on behalf of the Holders shall be solely as agent and
attorney-in-fact for the Holders, and that the Purchase Contract Agent shall
have no obligation to perform such Purchase Contracts on behalf of the
Holders, except to the extent expressly provided in Article Five hereof.
Anything contained in this Agreement to the contrary notwithstanding, in no
event shall the Purchase Contract Agent or its officers, employees or agents
be liable under this Agreement to any third party for indirect, special,
punitive, or consequential loss or damage of any kind whatsoever, including
lost profits, whether or not the likelihood of such loss or damage was known
to the Purchase Contract Agent.
SECTION 7.14. Tax Compliance.
(a) The Company and the Purchase Contract Agent will comply with all
applicable certification, information reporting and withholding
(including "backup" withholding) requirements imposed by applicable tax
laws, regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the issuance,
delivery, holding, transfer, redemption or exercise of rights under the
Securities. Such compliance shall include, without limitation, the
preparation and timely filing of required returns and the timely payment
of all amounts required to be withheld to the appropriate taxing
authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any reasonable written direction received from the
Company with respect to the execution or certification of any required
documentation and the application of such requirements to particular
payments or Holders or in other particular circumstances, and may for
purposes of this Agreement rely on any such direction in accordance with
the provisions of Section 7.1(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate
records documenting compliance with such requirements, and shall make
such records available, on written request, to the Company or its
authorized representative within a reasonable period of time after
receipt of such request.
ARTICLE VIII
Supplemental Agreements
SECTION 8.1. Supplemental Agreements Without Consent of Holders.
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Without the consent of any Holders, the Company and the Purchase
Contract Agent, at any time and from time to time, may enter into one or more
agreements supplemental hereto, in form satisfactory to the Company and the
Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company
herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment hereunder
by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders pursuant to
the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, cure any ambiguity,
correct or supplement any provisions herein which may be inconsistent
with any other provisions herein, or make any other provisions with
respect to such matters or questions arising under this Agreement,
provided such action shall not adversely affect the interests of the
Holders.
SECTION 8.2. Supplemental Agreements With Consent of Holders.
With the consent of the Holders of not less than a majority of the
outstanding Purchase Contracts voting together as one class, by Act of said
Holders delivered to the Company and the Purchase Contract Agent, the Company,
when authorized by a Board Resolution, and the Purchase Contract Agent may
enter into an agreement or agreements supplemental hereto for the purpose of
modifying in any manner the terms of the Purchase Contracts, or the provisions
of this Agreement or the rights of the Holders in respect of the Securities;
provided, however, that, except as contemplated herein, no such supplemental
agreement shall, without the unanimous consent of the Holders of each
Outstanding Purchase Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
impair the right of the Holder of any Purchase Contract to receive
distributions on the related Collateral (except for the rights of Holders
of SPC Units to substitute Treasury Securities for the Pledged Preferred
Securities or Pledged Notes or the Applicable Ownership Interest in the
Treasury Portfolio or the rights of Holders or Treasury SPC Units to
substitute Preferred Securities, Notes or the Applicable Ownership
Interest in the Treasury Portfolio for the Pledged Treasury Securities)
or otherwise adversely affect the Holder's rights in or to such
Collateral or adversely alter the rights in or to such Collateral;
(3) reduce any Purchase Contract Payments or change the coin or
currency in which any Purchase Contract Payment is payable;
(4) impair the right to institute suit for the enforcement of any
Purchase Contract;
(5) reduce the number of shares of [Common Stock] [Preferred Stock]
to be purchased pursuant to any Purchase Contract, increase the price to
purchase shares of [Common Stock] [Preferred Stock] upon settlement of
any Purchase Contract, change the Purchase Contract Settlement Date; or
(6) reduce the percentage of the outstanding Purchase Contracts the
consent of whose Holders is required for any such supplemental agreement;
provided that if any amendment or proposal referred to above would
adversely affect only the SPC Units or the Treasury SPC Units, then only
the affected class of Holders as of the record date (if any) for the
Holders entitled to vote thereon will be entitled to vote on such
amendment or proposal, and such amendment or proposal shall not be
effective except with the consent of Holders of not less than a majority
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of such class; and provided, further, that the unanimous consent of the
Holders of each outstanding Purchase Contract of such class affected
thereby shall be required to approve any amendment or proposal specified
in clauses (1) through (6) above.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental agreement,
but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby
of the agencies created by this Agreement, the Purchase Contract Agent shall
be entitled to receive, and (subject to Section 7.1) shall be fully protected
in relying upon, an Officer's Certificate and an Opinion of Counsel stating
that the execution of such supplemental agreement is authorized or permitted
by this Agreement. The Purchase Contract Agent may, but shall not be obligated
to, enter into any such supplemental agreement which affects the Purchase
Contract Agent's own rights, duties or immunities under this Agreement or
otherwise.
SECTION 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such
supplemental agreement shall form a part of this Agreement for all purposes;
and every Holder of Certificates theretofore or thereafter authenticated,
executed on behalf of the Holders and delivered hereunder, shall be bound
thereby.
SECTION 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall, if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so
determine, new Certificates so modified as to conform, in the opinion of the
Purchase Contract Agent and the Company, to any such supplemental agreement
may be prepared and executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Purchase Contract Agent in exchange
for Outstanding Certificates.
ARTICLE IX
Merger, Consolidation, Sale or Conveyance
SECTION 9.1. Covenant Not to Merge, Consolidate, Sell or Convey Property
Except Under Certain Conditions.
The Company covenants that it will not merge, consolidate or sell,
assign, transfer, lease or convey its properties and assets as an entirety or
substantially as an entirety to any Person or group of affiliated Persons in
one transaction or a series of related transactions, unless:
(1) either the Company shall be the continuing corporation, or the
successor (if other than the Company) shall be a corporation organized
and existing under the laws of the United States of America or a State
thereof or the District of Columbia and such corporation shall expressly
assume all the obligations of the Company under the Purchase Contracts,
the Notes, this Agreement, the Indenture and the Pledge Agreement by one
or more supplemental agreements in form reasonably satisfactory to the
Purchase Contract Agent, the Collateral Agent and the Indenture Trustee
executed and delivered to the Purchase Contract Agent and the Collateral
Agent by such corporation; and
(2) the Company or such successor corporation, as the case may be,
shall not, immediately after such merger, consolidation, or sale,
assignment, transfer, lease or conveyance, be in default in the
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performance of any covenant or condition hereunder, under any of the
Securities or under the Pledge Agreement.
SECTION 9.2. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, sale, assignment,
transfer, lease or conveyance and upon any such assumption by a successor
corporation in accordance with Section 9.1, such successor corporation shall
succeed to and be substituted for the Company with the same effect as if it
had been named herein as the Company and, except in the case of a lease, the
Company shall be relieved of all of its covenants and obligations under this
Agreement and the Securities. Such successor corporation thereupon may cause
to be signed, and may issue either in its own name or in the name of Hovnanian
Enterprises, Inc., any or all of the Certificates evidencing Securities
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Purchase Contract Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing Securities which such successor
corporation thereafter shall cause to be signed and delivered to the Purchase
Contract Agent for that purpose. All the Certificates issued shall in all
respects have the same legal rank and benefit under this Agreement as the
Certificates theretofore or thereafter issued in accordance with the terms of
this Agreement as though all of such Certificates had been issued at the date
of the execution hereof.
In case of any such merger, consolidation, sale, assignment,
transfer, lease or conveyance such change in phraseology and form (but not in
substance) may be made in the Certificates evidencing Securities thereafter to
be issued as may be appropriate.
SECTION 9.3. Officer's Certificate and Opinion of Counsel Given to Purchase
Contract Agent.
The Purchase Contract Agent, subject to Sections 7.1 and 7.3, shall
receive an Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such merger, consolidation, sale, assignment, transfer,
lease or conveyance, and any such assumption, complies with the provisions of
this Article and that all conditions precedent to the consummation of any such
merger, consolidation, sale, assignment, transfer, lease or conveyance have
been met.
ARTICLE X
Covenants
SECTION 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Securities that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan in The City of
New York, an office or agency where payments made on Securities may be made,
where Certificates may be presented or surrendered for acquisition of shares
of [Common Stock] [Preferred Stock] upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or Early Settlement and for transfer
of Collateral upon occurrence of a Termination Event, where Certificates may
be surrendered for registration of transfer or exchange, for a Collateral
Substitution or reestablishment of SPC Units and where notices and demands to
or upon the Company in respect of the Securities and this Agreement may be
served. The Company will give prompt written notice to the Purchase Contract
Agent of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Purchase Contract Agent with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust
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Office, and the Company hereby appoints the Purchase Contract Agent as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The Company will
give prompt written notice to the Purchase Contract Agent of any such
designation or rescission and of any change in the location of any such other
office or agency. The Company hereby designates as the place of payment for
the Securities the Corporate Trust Office and appoints the Purchase Contract
Agent at its Corporate Trust Office as paying agent in such city.
SECTION 10.3. Company to Reserve [Common Stock] [Preferred Stock].
The Company shall at all times prior to the Purchase Contract
Settlement Date reserve and keep available, free from preemptive rights, out
of its authorized but unissued [Common Stock] [Preferred Stock] the full
number of shares of [Common Stock] [Preferred Stock] issuable against tender
of payment in respect of all Purchase Contracts constituting a part of the
Securities evidenced by Outstanding Certificates.
SECTION 10.4. Covenants as to [Common Stock] [Preferred Stock].
The Company covenants that all shares of [Common Stock] [Preferred
Stock] that may be issued against tender of payment in respect of any Purchase
Contract constituting a part of the Outstanding Securities will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable.
SECTION 10.5. ERISA.
Each Holder from time to time of the SPC Units that is a Plan hereby
represents that its acquisition of the SPC Units and the holding of the same
satisfies the applicable fiduciary requirements of ERISA and that it is
entitled to exemption relief from the prohibited transaction provisions of
ERISA and the Code in accordance with one or more prohibited transaction
exemptions or otherwise will not result in a nonexempt prohibited transaction.
ARTICLE XI
Trust Indenture Act
SECTION 11.1. Trust Indenture Act; Application.
(a) This Agreement is subject to the provisions of the TIA that are
required or deemed to be part of this Agreement and shall, to the extent
applicable, be governed by such provisions; and
(b) If and to the extent that any provision of this Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the TIA, such imposed duties shall control.
SECTION 11.2. Lists of Holders of Securities.
(a) The Company shall furnish or cause to be furnished to the
Purchase Contract Agent (a) semiannually, not later than June 1 and
December 1 in each year, commencing December 1, [2001], a list, in such
form as the Purchase Contract Agent may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times
as the Purchase Contract Agent may request in writing, within 30 days
after the receipt by the Company of any such request, a List of Holders
as of a date not more than 15 days prior to the time such list is
furnished; provided that, the Company shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ from
the most recent List of Holders given to the Purchase Contract Agent by
the Company. The Purchase Contract Agent may destroy any List of Holders
previously given to it on receipt of a new List of Holders
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(b) The Purchase Contract Agent shall comply with its obligations
under Section 311(a) of the TIA, subject to the provisions of Section
311(b) and Section 312(b) of the TIA.
SECTION 11.3. Reports by the Purchase Contract Agent.
Not later than November 15 of each year, commencing November 15,
[2001], the Purchase Contract Agent shall provide to the Holders such reports,
if any, as are required by Section 313(a) of the TIA in the form and in the
manner provided by Section 313(a) of the TIA. Such reports shall be as of the
preceding September 15. The Purchase Contract Agent shall also comply with the
requirements of Sections 313(b), (c) and (d) of the TIA.
SECTION 11.4. Periodic Reports to Purchase Contract Agent.
The Company shall provide to the Purchase Contract Agent such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314(a)(4) of the TIA in the form,
in the manner and at the times required by Section 314 of the TIA, provided,
that such compliance certificate shall be delivered annually on or before
________ in each year, commencing _____________.
SECTION 11.5. Evidence of Compliance with Conditions Precedent.
The Company shall provide to the Purchase Contract Agent such
evidence of compliance with any conditions precedent provided for in this
Agreement as and to the extent required by Section 314(c) of the TIA. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the TIA may be given in the form of an Officer's Certificate. Any
opinion required to be given pursuant to Section 314(c)(2) of the TIA may be
given in the form of an Opinion of Counsel.
SECTION 11.6. Defaults; Waiver.
The Holders of a majority of the Outstanding Purchase Contracts
voting together as one class may, by vote, on behalf of all of the Holders,
waive any past Default and its consequences, except a default
(a) in the payment on any Security, or
(b) in respect of a provision hereof which under Section 8.2 cannot
be modified or amended without the consent of the Holder of each
Outstanding Security affected.
Upon such waiver, any such Default shall cease to exist, and any Default
arising therefrom shall be deemed to have been cured, for every purpose of
this Agreement, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 11.7. Purchase Contract Agent's Knowledge of Defaults.
The Purchase Contract Agent shall not be deemed to have knowledge of
any Default unless a Responsible Officer charged with the administration of
this Agreement shall have obtained written notice of such Default from the
Company or any Holder.
SECTION 11.8. Conflicting Interests.
The Indenture [others] shall be deemed to be specifically described
in this Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the TIA.
SECTION 11.9. Direction of Purchase Contract Agent.
Section 316(a)(1)(A) of the TIA is hereby expressly excluded from
this Agreement, as permitted by the TIA.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
HOVNANIAN ENTERPRISES, INC.
By:
-------------------------------------
Name:
Title:
---------------------------------------
as Purchase Contract Agent and Trustee
By:
-------------------------------------
Name:
Title:
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EXHIBIT A
FORM OF SPC UNITS CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER
THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _______ Cusip No. ________________
Number of SPC Units ________
HOVNANIAN ENTERPRISES, INC.
SPC UNITS
This SPC Units Certificate certifies that __________________ is the
registered Holder of the number of SPC Units set forth above. Each SPC Unit
consists of (i) [either (a)] the beneficial ownership by the Holder of one
[Note (the "Note") of Hovnanian Enterprises, Inc., a Delaware corporation (the
"Company"), having a principal amount of $25], subject to the Pledge of such
Note by such Holder pursuant to the Pledge Agreement or (b) upon the
occurrence of a Tax Event Redemption prior to the Purchase Contract Settlement
Date, the appropriate Applicable Ownership Interest (as specified in clause
(A) of the definition of such term) in the Treasury Portfolio by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder and the Company under one Purchase Contract with the Company. All
capitalized terms used herein that are defined in the Purchase Contract
Agreement (as defined below) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the appropriate Applicable
Ownership Interest (as specified in clause (A) of the definition of such term)
in the Treasury Portfolio [Note] constituting part of each SPC Unit evidenced
hereby has been pledged to the Collateral Agent, for the benefit of the
Company, to secure the obligations of the Holder under the Purchase Contract
comprising part of such SPC Unit.
Payments of interest on any Note forming part of a SPC Unit evidenced
hereby, shall, subject to receipt thereof by the Purchase Contract Agent from
the Securities Intermediary, be paid to the Person in whose name this SPC
Units Certificate (or a Predecessor SPC Units Certificate) is registered at
the close of business on the Record Date for such Payment Date. Interest is
payable quarterly in arrears on February 16, May 16, August 16 and November 16
of each year, commencing __________________ (each, a "Payment Date"). Payments
of interest on the Note forming a part of the SPC Unit evidenced hereby may be
deferred at the option of the Company under the circumstances described in
such Note.
A-1
Each Purchase Contract evidenced hereby obligates the Holder of this
SPC Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date, at a price equal to [$25] (the "Stated Amount"), a
number of shares of Hovnanian Enterprises, Inc. [Class A Common Stock, par
value $.01 per share ("Common Stock")] [Preferred Stock, par value $.01 per
share ("Preferred Stock")], equal to the Settlement Rate, unless on or prior
to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the SPC Unit of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
(the "Purchase Price") for the shares of [Common Stock] [Preferred Stock]
purchased pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date by cash or by
application of payment received in respect of the principal amount with
respect to each Pledged Note pursuant to the Remarketing [or the appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be,] pledged to secure
the obligations under such Purchase Contract of the Holder of the SPC Unit of
which such Purchase Contract is a part.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract forming part of a SPC Unit evidenced hereby, an amount (the
"Purchase Contract Payments") equal to ____% per annum of the Stated Amount.
Such Purchase Contract Payments shall be payable to the Person in whose name
this SPC Units Certificate (or a Predecessor SPC Units Certificate) is
registered at the close of business on the Record Date for such Payment Date.
The Company may, at its option, defer Purchase Contract Payments.
[Distributions on the Applicable Ownership Interest (as specified in
clause (B) of the definition of such term),] [Interest payments on the Notes]
and [Purchase Contract Payments] will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears
on the SPC Units Register.
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _____________________ (as may be supplemented
from time to time, the "Purchase Contract Agreement"), between the Company and
________________________, as Purchase Contract Agent (including its successors
hereunder, the "Purchase Contract Agent"), to which Purchase Contract
Agreement and supplemental agreements thereto reference is hereby made for a
description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company,
and the Holders and of the terms upon which the SPC Units Certificates are,
and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
SPC Units Certificate to purchase, and the Company to sell, on the Purchase
Contract Settlement Date at a price equal to the Stated Amount (the "Purchase
Price"), a number of shares of [Common Stock] [Preferred Stock] equal to the
Settlement Rate, unless, prior to or on the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) equals or
exceeds $ (the "Threshold Appreciation Price"), ________________ shares
of [Common Stock] [Preferred Stock] per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $______________ (the "Reference
Price"), the number of shares of [Common Stock] [Preferred Stock] per
Purchase Contract having a value, based on the Applicable Market Value,
equal to the Stated Amount; and
(3) if the Applicable Market Amount is less than or equal to the
Reference Price, __________________ shares of [Common Stock] [Preferred
Stock] per Purchase Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
No fractional shares of [Common Stock] [Preferred Stock] will be
issued upon settlement of Purchase Contracts, as provided in Section 5.10 of
the Purchase Contract Agreement.
A-2
Each Purchase Contract evidenced hereby, that is settled either
through Early Settlement or on the Purchase Contract Settlement Date shall
obligate the Holder of the related SPC Unit to purchase at the Purchase Price
in cash, and the Company to sell, a number of shares of [Common Stock]
[Preferred Stock] equal to the Early Settlement Rate or the Settlement Rate,
as applicable.
The "Applicable Market Value" with respect to Common Stock means the
average of the Closing Price per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day immediately preceding
the Purchase Contract Settlement Date.
The "Applicable Market Value" with respect to Preferred Stock means
[insert definition].
The "Closing Price" per share of Common Stock on any date of
determination means:
(1) the closing sale price at the 4:15 p.m. close of trading (or, if
no closing price is reported, the last reported sale price) per share on
the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price per share as reported in the composite
transactions for the principal United States securities exchange on which
Common Stock is so listed;
(3) if Common Stock is not so listed on a United States national or
regional securities exchange, the closing sale price per share as
reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid price
for Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Common Stock on such date from at least
three nationally recognized independent investment banking firms retained
for this purpose by the Company.
[The "Closing Price" per share of Preferred Stock on any date of
determination means: [insert definition].
A "Trading Day" with respect to Common Stock means a day on which
Common Stock (1) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (2) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of Common Stock.
A "Trading Day" with respect to Preferred Stock means: [insert
definition].
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this SPC Units Certificate may pay the Purchase Price for the shares
of [Common Stock] [Preferred Stock] purchased pursuant to each Purchase
Contract evidenced hereby by effecting a Cash Settlement or an Early
Settlement [or from the proceeds of the Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio] or a Remarketing of the related Pledged Notes. A Holder of SPC
Units who does not effect, on or prior to 11:00 a.m. (New York City time) on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date [(or in the event a Tax Event Redemption has occurred, the Business Day
prior to the Purchase Contract Settlement Date)], an effective Cash Settlement
or, who does not effect on or prior to 5:00 p.m. (New York City time) on the
seventh Business Day prior to the Purchase Contract Settlement Date, an
effective Early Settlement, shall pay the Purchase Price for the shares of
[Common Stock] [Preferred Stock] to be delivered under the related Purchase
Contract from the proceeds of the sale of the related Pledged Notes held by
the Collateral Agent. Such sale will be made by the Remarketing Agent pursuant
to the terms of the Remarketing Agreement on the third Business Day prior to
the Purchase Contract Settlement Date. If, as provided in the Purchase
Contract Agreement, upon the occurrence of a Failed Remarketing, the
Collateral Agent, for the benefit of the Company, exercises its rights as a
secured creditor with respect to the Pledged Notes related to this SPC Units
certificate, any accrued and unpaid or deferred interest payments on such
Pledged Notes will become payable by the Company to the holder of this SPC
Units Certificate in the manner provided for in the Purchase Contract
Agreement.
A-3
The Company shall not be obligated to issue any shares of [Common
Stock] [Preferred Stock] in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received payment of
the aggregate purchase price for the shares of [Common Stock] [Preferred
Stock] to be purchased thereunder in the manner herein set forth.
Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Notes. Upon receipt of notice of any meeting at
which holders of Notes are entitled to vote or upon the solicitation of
consents, waivers or proxies of holders of Notes, the Purchase Contract Agent
shall, as soon as practicable thereafter, mail to the SPC Units Holders a
notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each SPC Unit Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Notes
entitled to vote or consent) shall be entitled to instruct the Purchase
Contract Agent as to the exercise of the voting or consensual rights
pertaining to the Notes constituting a part of such Holder's SPC Unit;
and
(3) stating the manner in which such instructions may be given.
Upon the written request of the SPC Unit Holders on such record date, the
Purchase Contract Agent shall endeavor insofar as practicable to vote or
consent or cause to be voted or consented, in accordance with the instructions
set forth in such requests, the maximum number of Notes as to which any
particular voting or consent instructions are received. In the absence of
specific instructions from the Holder of a SPC Unit, the Purchase Contract
Agent shall abstain from voting or consenting the Notes evidenced by such SPC
Unit.
[Upon the occurrence of a Tax Event Redemption prior to the Purchase
Contract Settlement Date, the Redemption Price payable on the Tax Event
Redemption Date with respect to the Applicable Principal Amount of Notes shall
be delivered to the Securities Intermediary in exchange for the Pledged
Preferred Securities. Thereafter, pursuant to the terms of the Pledge
Agreement, the Securities Intermediary will apply an amount equal to the
Redemption Amount of such Redemption Price to purchase on behalf of the
Holders of SPC Units, the Treasury Portfolio and promptly (a) transfer the
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio to the Collateral Account to secure the
obligations of each Holder of SPC Units to purchase shares of [Common Stock]
[Preferred Stock] under the Purchase Contracts constituting a part of such SPC
Units, (b) transfer the Applicable Ownership Interest (as specified in clause
(B) of the definition of such term) in the Treasury Portfolio to the Purchase
Contract Agent for the benefit of the Holders of such SPC Units and (c) remit
the remaining portion of such Redemption Price to the Purchase Contract Agent
for payment to the Holders of such SPC Units.]
[Following the occurrence of a Tax Event Redemption prior to the
Purchase Contract Settlement Date, the Holders of SPC Units and the Collateral
Agent shall have such security interest rights and obligations with respect to
the Applicable Ownership Interest (as specified in clause (A) of the
definition of such term) in the Treasury Portfolio as the Holder of SPC Units
and the Collateral Agent had in respect of the Notes subject to the Pledge
thereof as provided in the Pledge Agreement and any reference herein to the
Notes shall be deemed to be a reference to such Treasury Portfolio.]
The SPC Certificates are issuable only in registered form and only
in denominations of a single SPC Unit and any integral multiple thereof. The
transfer of any SPC Units Certificate will be registered and SPC Units
Certificates may be exchanged as provided in the Purchase Contract Agreement.
The SPC Units Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents permitted by the Purchase
Contract Agreement. No service charge shall be required for any such
registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. A holder who elects
to substitute a Treasury Security for Notes, thereby creating Treasury SPC
Units, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long
as the Purchase Contract underlying a SPC Unit remains in effect, such SPC
Unit shall not be separable into its constituent parts, and the rights and
A-4
obligations of the Holder of such SPC Unit in respect of the Note and Purchase
Contract constituting such SPC Unit may be transferred and exchanged only as a
SPC Unit.
The Holder of SPC Units may substitute for the Pledged Notes
securing such Holder's obligations under the related Purchase Contracts
Treasury Securities in an aggregate principal amount equal to the aggregate
principal amount of the Pledged Notes in accordance with the terms of the
Purchase Contract Agreement and the Pledge Agreement. From and after such
Collateral Substitution, each Security for which such Pledged Treasury
Securities secures the Holder's obligation under the Purchase Contract shall
be referred to as a "Treasury SPC Unit". A Holder may make such Collateral
Substitution only in integral multiples of 40 SPC Units for 40 Treasury SPC
Units. [Such Collateral Substitution may cause the equivalent aggregate
principal amount of this Certificate to be increased or decreased; provided,
however, this SPC Units Certificate shall not represent more than [x,000,000]
SPC Units. All such adjustments to the equivalent aggregate principal amount
of this SPC Units Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.]
A Holder of Treasury SPC Units may recreate SPC Units by delivering
to the Securities Intermediary Notes with an aggregate principal amount equal
to the aggregate principal amount of the Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement. A
Holder may recreate SPC Units in integral multiples of 40 Treasury SPC Units
for 40 SPC Units.
[If a Tax Event Redemption has occurred, a SPC Unit Holder may not
create Treasury SPC Units, and a Treasury SPC Unit Holder may not recreate a
SPC Unit.]
[The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the SPC Units Certificate evidencing such Purchase Contract is registered
at the close of business on the Record Date for such Payment Date. Purchase
Contract Payments will be payable at the office of the Purchase Contract Agent
in New York City or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such address as it appears on the
SPC Units Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to ____% per annum, compounding quarterly, until such deferred
installments are paid. If a Holder effects an Early Settlement or if a
Termination Event shall occur, such Holder will have no right to receive any
accrued and unpaid or deferred Purchase Contract Payments.]
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Purchase
Contract Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent
or the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the SPC Units
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio] [Notes] forming a part of each SPC Unit from the Pledge in
accordance with the provisions of the Pledge Agreement. A SPC Unit shall
thereafter represent the right to receive the appropriate Applicable Ownership
Interest (as specified in clause (A) of the definition of such term) in the
Treasury Portfolio] [Note] forming a part of such SPC Unit in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("Early Settlement") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this SPC
Units Certificate, the Holder of this SPC Units Certificate shall deliver this
SPC Units Certificate to the Purchase Contract Agent at the Corporate Trust
Office duly endorsed for transfer to the Company or in blank with the form of
Election to Settle Early set forth below duly completed and
A-5
accompanied by payment in the form of immediately available funds payable to
the order of the Company in an amount (the "Early Settlement Amount") equal
to:
(1) the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected to effect
Early Settlement, plus
(2) if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date for any
Payment Date to the opening of business on such Payment Date, an amount
equal to [the sum of (x)] the Purchase Contract Payments payable on such
Payment Date with respect to such Purchase Contracts [plus (y) in the
case of a SPC Units Certificate, the interest on the related Notes
payable on such Payment Date.
Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged [appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio, as the case may be,] [Notes] underlying such Securities shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of [Common Stock] [Preferred
Stock] on account of each Purchase Contract forming part of a SPC Unit as to
which Early Settlement is effected equal to the Early Settlement Rate. The
Early Settlement Rate shall initially be equal to ___________ shares of
[Common Stock] [Preferred Stock] and shall be adjusted in the same manner and
at the same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Upon registration of transfer of this SPC Units Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this SPC Units Certificate. The Company covenants and
agrees, and the Holder, by its acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this SPC Units Certificate, by its acceptance hereof,
authorizes the Purchase Contract Agent to enter into and perform the related
Purchase Contracts forming part of the SPC Units evidenced hereby on its
behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform his obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the [appropriate Applicable Ownership Interest (as
specified in clause (A) of the definition of such term) in the Treasury
Portfolio, as the case may be,] [Notes] underlying this SPC Units Certificate
pursuant to the Pledge Agreement. The Holder further covenants and agrees
that, to the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms thereof, payments
in respect to the aggregate principal amount of the Pledged [appropriate
Applicable Ownership Interest (as specified in clause (A) of the definition of
such term) in the Treasury Portfolio, as the case may be,] [Notes], on the
Purchase Contract Settlement Date shall be paid by the Collateral Agent to the
Company in satisfaction of such Holder's obligations under such Purchase
Contract and such Holder shall acquire no right, title or interest in such
payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York.
The Company, the Purchase Contract Agent and their Affiliates and
any agent of the Company or the Purchase Contract Agent or their Affiliates
may treat the Person in whose name this SPC Units Certificate is registered as
the owner of the SPC Units evidenced hereby for the purpose of receiving
payments of interest payable quarterly on the Notes, receiving payments of
Purchase Contract Payments, performance of the Purchase Contracts and for all
other purposes whatsoever, whether or not any payments in respect thereof be
overdue and
A-6
notwithstanding any notice to the contrary, and neither the Company, the
Purchase Contract Agent nor any such Affiliates or agent shall be affected by
notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of [Common
Stock] [Preferred Stock].
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent.
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this SPC Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the
Purchase Contract Agreement or be valid or obligatory for any purpose.
A-7
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
HOVNANIAN ENTERPRISES, INC.
By:
---------------------------------------------
Name:
Title:
By:
---------------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such
Holder under the Purchase Contracts evidenced hereby)
By: , not
-------------------------------------
individually but solely as Attorney-in-Fact
of such Holder
By:
---------------------------------------------
Name:
Title:
Dated:
A-8
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the SPC Units Certificates referred to in the within
mentioned Purchase Contract Agreement.
By: , as
-----------------------------------------
Purchase Contract Agent
By:
---------------------------------------------
Authorized Officer
Dated:
A-9
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: Custodian
(cust) (minor)
Under Uniform Gifts to Minors Act of ______
-------------------------------------
(State)
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
----------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within SPC Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing
-------------------------------------------------------------------------------
attorney to transfer said SPC Units Certificates on the books of Hovnanian
Enterprises, Inc. with full power of substitution in the premises.
Dated: _____________________________ _______________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within SPC Units Certificates in
every particular, without alteration
or enlargement or any change
whatsoever.
Signature Guarantee: _____________________
A-10
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of
[Common Stock] [Preferred Stock] deliverable upon settlement on or after the
Purchase Contract Settlement Date of the Purchase Contracts underlying the
number of SPC Units evidenced by this SPC Units Certificate be registered in
the name of, and delivered, together with a check in payment for any
fractional share, to the undersigned at the address indicated below unless a
different name and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated: _______________________ ____________________________
Signature
Signature Guarantee: ___________________
(if assigned to another person)
[STAMP LEGEND]
If shares are to be registered in REGISTERED HOLDER
the name of and to a Person other
than the Holder, please (i) print
such Person's name and address and
(ii) provide a guarantee of your Please print name and address of Registered
signature: Holder:
----------------------------------- ------------------------------------------
Name Name
----------------------------------- ------------------------------------------
Address Address
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
Social Security or other
Taxpayer Identification Number,
if any ------------------------------------------
A-11
ELECTION TO SETTLE EARLY
The undersigned Holder of this SPC Units Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of SPC Units evidenced by this SPC Units
Certificate specified below. The undersigned Holder directs that a certificate
for shares of [Common Stock] [Preferred Stock] deliverable upon such Early
Settlement be registered in the name of, and delivered, together with a check
in payment for any fractional share and any SPC Units Certificate representing
any SPC Units evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
Pledged [appropriate Applicable Ownership Interest in the Treasury Portfolio]
[Notes] deliverable upon such Early Settlement will be transferred in
accordance with the transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the undersigned
will pay any transfer tax payable incident thereto.
Dated: ______________________________ _______________________________
Signature
Signature Guarantee: ___________________________
[Stamp Legend]
A-12
Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:
If shares of [Common Stock] REGISTERED HOLDER
[Preferred Stock] or SPC Units
Certificates are to be
registered in the name of and
delivered to and Pledged [the
Applicable Ownership Interest
in the Treasury Portfolio]
[Notes] are to be transferred
to a Person other than the
Holder, please print such Please print name and address of
Person's name and address: Registered Holder:
----------------------------------- ------------------------------------------
Name Name
----------------------------------- ------------------------------------------
Address Address
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
Social Security or other
Taxpayer Identification Number,
if any ------------------------------------------
Transfer Instructions for Pledged [the Applicable Ownership Interest in the
Treasury Portfolio] [Notes] Transferable Upon Early Settlement or a
Termination Event:
-------------------------------------------------------------
-------------------------------------------------------------------------------
A-13
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
Number of SPC Units
Amount of increase in Amount of decrease in evidenced by this Signature of
Number of SPC Units Number of SPC Units Global Certificate authorized officer of
evidenced by the evidenced by the Global following such Trustee or Securities
Date Global Certificate Certificate decrease or increase Custodian
A-14
EXHIBIT B
FORM OF TREASURY SPC CERTIFICATE
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), OR A NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN
THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER
THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE
OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. _____ Cusip No. ________________
Number of Treasury SPC Units _________
HOVNANIAN ENTERPRISES, INC.
TREASURY SPC UNITS
This Treasury SPC Units Certificate certifies that _____________ is
the registered Holder of the number of Treasury SPC Units set forth above.
Each Treasury SPC Unit consists of (i) a 1/40 undivided beneficial ownership
interest of a Treasury Security having a principal amount at maturity equal to
$1,000, subject to the Pledge of such Treasury Security by such Holder
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with Hovnanian Enterprises, Inc., a
Delaware corporation (the "Company"). All capitalized terms used herein which
are defined in the Purchase Contract Agreement (as defined below) have the
meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities
constituting part of each Treasury SPC Unit evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to secure the
obligations of the Holder under the Purchase Contract comprising part of such
Treasury SPC Unit.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury SPC Units Certificate to purchase, and the Company, to sell, on the
Purchase Contract Settlement Date, at a price equal to [$25] (the "Stated
Amount"), a number of shares of Hovnanian Enterprises, Inc. [Class A Common
Stock, par value $.01 per share ("Common Stock")] [Preferred Stock, par value
$.01 per share ("Preferred Stock"), equal to the Settlement Rate, unless prior
to or on the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement with respect to the Treasury SPC Unit
of which such Purchase Contract is a part, all as provided in the Purchase
Contract Agreement and more fully described on the reverse hereof. The
purchase price (the "Purchase Price") for the shares of [Common Stock]
[Preferred Stock] purchased pursuant to each Purchase Contract evidenced
hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement
Date by application of the proceeds from the Treasury Securities at maturity
pledged to secure the obligations of the Holder under such Purchase Contract
of the Treasury SPC Unit of which such Purchase Contract is a part.
B-1
[The Company shall pay, quarterly in arrears on February 16, May 16,
August 16 and November 16, commencing ________________ (each, a "Payment
Date"), in respect of each Purchase Contract evidenced hereby an amount (the
"Purchase Contract Payments") equal to ____% per annum of the Stated Amount.
Such Purchase Contract Payments shall be payable to the Person in whose name
this Treasury SPC Units Certificate (or a Predecessor Treasury SPC Units
Certificate) is registered at the close of business on the Record Date for
such Payment Date. The Company may, at its option, defer Purchase Contract
Payments.]
[Purchase Contract Payments will be payable at the office of the
Purchase Contract Agent in New York City or, at the option of the Company, by
check mailed to the address of the Person entitled thereto as such address
appears on the Treasury SPC Units Register.]
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of _________________ (as may be supplemented from
time to time, the "Purchase Contract Agreement") between the Company and
____________________, as Purchase Contract Agent (including its successors
thereunder, herein called the "Purchase Contract Agent"), to which the
Purchase Contract Agreement and supplemental agreements thereto reference is
hereby made for a description of the respective rights, limitations of rights,
obligations, duties and immunities thereunder of the Purchase Contract Agent,
the Company and the Holders and of the terms upon which the Treasury SPC Units
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury SPC Units Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price") a number of shares of [Common Stock] [Preferred Stock] equal
to the Settlement Rate, unless prior to the Purchase Contract Settlement Date,
there shall have occurred a Termination Event with respect to the Security of
which such Purchase Contract is a part or an Early Settlement shall have
occurred. The "Settlement Rate" is equal to:
(1) if the Applicable Market Value (as defined below) is equals or
exceeds $ (the "Threshold Appreciation Price"), _____ shares of [Common
Stock] [Preferred Stock] per Purchase Contract;
(2) if the Applicable Market Value is less than the Threshold
Appreciation Price but greater than $___ (the "Reference Price"), the
number of shares of [Common Stock] [Preferred Stock] per Purchase
Contract having a value, based on the Applicable Market Value, equal to
the Stated Amount; and
(3) if the Applicable Market Value is less than or equal to the
Reference Price, _____ shares of [Common Stock] [Preferred Stock] per
Purchase Contract,
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest
1/10,000th of a share).
No fractional shares of [Common Stock] [Preferred Stock] will be
issued upon settlement of Purchase Contracts, as provided in Section 5.10 of
the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby that is settled either
through Early Settlement or on the Purchase Contract Settlement Date shall
obligate the Holder of the related Treasury SPC Unit to purchase at the
Purchase Price in cash, and the Company to sell, a number of shares of [Common
Stock] [Preferred Stock] equal to the Early Settlement Rate or the Settlement
Rate, as applicable.
The "Applicable Market Value" with respect to Common Stock means the
average of the Closing Prices per share of Common Stock on each of the 20
consecutive Trading Days ending on the third Trading Day immediately preceding
the Purchase Contract Settlement Date.
The "Applicable Market Value" with respect to Preferred Stock means
[insert definition].
The "Closing Price" per share of Common Stock on any date of
determination means the:
(1) closing sale price at the 4:15 p.m. close of trading (or, if no
closing price is reported, the last reported sale price) per share on the
New York Stock Exchange, Inc. (the "NYSE") on such date;
B-2
(2) if Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price per share as reported in the composite
transactions for the principal United States securities exchange on which
Common Stock is so listed;
(3) if Common Stock is not so listed on a United States national or
regional securities exchange, the closing sale price per share as
reported by The Nasdaq Stock Market, Inc.;
(4) if Common Stock is not so reported, the last quoted bid price
for Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization; or
(5) if such bid price is not available, the average of the mid-point
of the last bid and ask prices of Common Stock on such date from at least
three nationally recognized independent investment banking firms retained
for this purpose by the Company.
The "Closing Price" per share of Preferred Stock on any date of
determination means: [insert definition].
A "Trading Day" with respect to Common Stock means a day on which
Common Stock (1) is not suspended from trading on any national or regional
securities exchange or association or over-the-counter market at the close of
business and (2) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
primary market for the trading of Common Stock.
A "Trading Day" with respect to Preferred Stock means [insert
definition].
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury SPC Unit shall pay the Purchase Price for the shares
of [Common Stock] [Preferred Stock] purchased pursuant to each Purchase
Contract evidenced hereby either by effecting a Cash Settlement or an Early
Settlement of each such Purchase Contract or by applying a principal amount of
the Pledged Treasury Securities underlying such Holder's Treasury SPC Unit
equal to the Stated Amount of such Purchase Contract to the purchase of the
Common Stock. A Holder of Treasury SPC Unit who does not effect, prior to or
on 11:00 a.m. (New York City time) on the [fifth] Business Day immediately
preceding the Purchase Contract Settlement Date, an effective Cash Settlement
or who does not effect on or prior to 5:00 p.m. (New York City time) on the
seventh Business Day prior to the Purchase Contract Settlement Date an
effective Early Settlement, shall pay the Purchase Price for the shares of
[Common Stock] [Preferred Stock] to be issued under the related Purchase
Contract from the proceeds of the Pledged Treasury Securities.
The Company shall not be obligated to issue any shares of [Common
Stock] [Preferred Stock] in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have received payment of
the aggregate purchase price for the shares of [Common Stock] [Preferred
Stock] to be purchased thereunder in the manner herein set forth.
The Treasury SPC Units Certificates are issuable only in registered
form and only in denominations of a single Treasury SPC and any integral
multiple thereof. The transfer of any Treasury SPC Certificate will be
registered and Treasury SPC Certificates may be exchanged as provided in the
Purchase Contract Agreement. The Treasury SPC Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company
and the Purchase Contract Agent may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. A
Holder who elects to substitute Notes for Treasury Securities, thereby
recreating SPC Units, shall be responsible for any fees or expenses associated
therewith. Except as provided in the Purchase Contract Agreement, for so long
as the Purchase Contract underlying a Treasury SPC Unit remains in effect,
such Treasury SPC Unit shall not be separable into its constituent parts, and
the rights and obligations of the Holder of such Treasury SPC Unit in respect
of the Treasury Security and the Purchase Contract constituting such Treasury
SPC Unit may be transferred and exchanged only as a Treasury SPC Unit.
B-3
A Holder of Treasury SPC Units may recreate SPC Units by delivering
to the Collateral Agent Notes with a principal amount equal to the aggregate
principal amount at maturity of the Pledged Treasury Securities, in exchange
for the release of such Pledged Treasury Securities in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such substitution, the Holder's Security shall be referred to as a "SPC
Unit". [Such substitution may cause the equivalent aggregate principal amount
of this Certificate to be increased or decreased; provided, however, this
Treasury SPC Units Certificate shall not represent more than [x,000,000]
Treasury SPC Units. All such adjustments to the equivalent aggregate principal
amount of this Treasury SPC Units Certificate shall be duly recorded by
placing an appropriate notation on the Schedule attached hereto.] Any such
creation of SPC Units may be effected only in multiples of 40 Treasury SPC
Units for 40 SPC Units.
A Holder of SPC Units may recreate Treasury SPC Units by delivering
to the Collateral Agent Treasury Securities in an aggregate principal amount
equal to the aggregate principal amount at maturity of the Pledged Notes in
exchange for the release of such Pledged Notes in accordance with the terms of
the Purchase Contract Agreement and the Pledge Agreement. Any such recreation
of Treasury SPC Units may be effected only in multiples of 40 SPC Units for 40
Treasury SPC Units.
[If a Tax Event Redemption has occurred, a Treasury SPC Unit Holder
may not recreate an SPC Unit and a SPC Unit Holder may not create a Treasury
SPC Unit.]
[The Company shall pay, on each Payment Date, the Purchase Contract
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury SPC Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Purchase Contract Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Company, by check
mailed to the address of the Person entitled thereto at such address as it
appears on the Treasury SPC Units Register.
The Company has the right to defer payment of all or part of the
Purchase Contract Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date. If the Company so elects to defer
Purchase Contract Payments, the Company shall pay additional Purchase Contract
Payments on such deferred installments of Purchase Contract Payments at a rate
equal to ____% per annum, compounding quarterly, until such deferred
installments are paid. If a Holder effects an Early Settlement or if a
Termination Event shall occur, such Holder will have no right to receive any
accrued and unpaid or deferred Purchase Contract Payments.]
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay Purchase Contract
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Treasury SPC
Units Register. Upon the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Treasury SPC Unit shall thereafter
represent the right to receive the interest in the Treasury Security forming a
part of such Treasury SPC Unit, in accordance with the terms of the Purchase
Contract Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
underlying Securities may be settled early ("Early Settlement") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect
Early Settlement with respect to any Purchase Contracts evidenced by this
Treasury SPC Unit, the Holder of this Treasury SPC Units Certificate shall
deliver this Treasury SPC Units Certificate to the Purchase Contract Agent at
the Corporate Trust Office duly endorsed for transfer to the Company or in
blank with the form of Election to Settle Early set forth below duly completed
and accompanied by payment in the form of immediately available funds payable
to the order of the Company in an amount (the "Early Settlement Amount") equal
to:
(1) the product of (A) $25 times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement, plus
B-4
(2) [if such delivery is made with respect to any Purchase Contracts
during the period from the close of business on any Record Date for any
Payment Date to the opening of business on such Payment Date, an amount
equal to the Purchase Contract Payments payable, if any, on such Payment
Date with respect to such Purchase Contracts.]
Upon Early Settlement of Purchase Contracts by a Holder of the
related Securities, the Pledged Treasury Securities underlying such Securities
shall be released from the Pledge as provided in the Pledge Agreement and the
Holder shall be entitled to receive a number of shares of [Common Stock]
[Preferred Stock] on account of each Purchase Contract forming part of a
Treasury SPC Unit as to which Early Settlement is effected equal to shares of
[Common Stock] [Preferred Stock] per Purchase Contract (the "Early Settlement
Rate"). The Early Settlement Rate shall be adjusted in the same manner and at
the same time as the Settlement Rate is adjusted as provided in the Purchase
Contract Agreement.
Upon registration of transfer of this Treasury SPC Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee, except as may be required by the Purchase Contract
Agent pursuant to the Purchase Contract Agreement), under the terms of the
Purchase Contract Agreement and the Purchase Contracts evidenced hereby and
the transferor shall be released from the obligations under the Purchase
Contracts evidenced by this Treasury SPC Units Certificate. The Company
covenants and agrees, and the Holder, by its acceptance hereof, likewise
covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Treasury SPC Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts forming part of the Treasury SPC Units evidenced
hereby on its behalf as its attorney-in-fact, expressly withholds any consent
to the assumption (i.e., affirmance) of the Purchase Contracts by the Company
or its trustee in the event that the Company becomes the subject of a case
under the Bankruptcy Code, agrees to be bound by the terms and provisions
thereof, covenants and agrees to perform its obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract Agreement,
authorizes the Purchase Contract Agent to enter into and perform the Purchase
Contract Agreement and the Pledge Agreement on its behalf as its
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Treasury SPC Units Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to the extent and in
the manner provided in the Purchase Contract Agreement and the Pledge
Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount of the Pledged Treasury Securities on the Purchase
Contract Settlement Date shall be paid by the Collateral Agent to the Company
in satisfaction of such Holder's obligations under such Purchase Contract and
such Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase
Contract Agreement may be amended with the consent of the Holders of a
majority of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
The Company, the Purchase Contract Agent and their Affiliates and
any agent of the Company or the Purchase Contract Agent or their Affiliates
may treat the Person in whose name this Treasury SPC Units Certificate is
registered as the owner of the Treasury SPC Units evidenced hereby for the
purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Purchase Contract Payments, performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments
in respect thereof be overdue and notwithstanding any notice to the contrary,
and neither the Company, the Purchase Contract Agent nor any such Affiliate or
agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of [Common
Stock] [Preferred Stock].
A copy of the Purchase Contract Agreement is available for
inspection at the offices of the Purchase Contract Agent.
B-5
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Treasury SPC Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed.
HOVNANIAN ENTERPRISES, INC.
By:
----------------------------------------------------
Name:
Title:
By:
----------------------------------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of such Holder
under the Purchase Contracts)
By: , not
-------------------------------------
individually but solely as Attorney-in-Fact of
such Holder
By:
----------------------------------------------------
Name:
Title:
Dated:
B-6
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury SPC Units referred to in the
within-mentioned Purchase Contract Agreement.
By: , as Purchase
-------------------------------------
Contract Agent
By:
----------------------------------------------------
Authorized Officer
Dated:
B-7
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: Custodian
(cust) (minor)
Under Uniform Gifts to Minors Act of ______
-------------------------------------
(State)
TEN ENT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and
not as tenants in common
Additional abbreviations may also be used though not in the above list.
----------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
-------------------------------------------------------------------------------
(Please insert Social Security or Taxpayer I.D. or other Identifying Number
of Assignee)
-------------------------------------------------------------------------------
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury SPC Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney to transfer said Treasury SPC
Units Certificates on the books of Hovnanian Enterprises, Inc. with full power
of substitution in the premises.
Dated: _____________________________ ________________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Treasury SPC Units
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: _____________________
B-8
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of
[Common Stock] [Preferred Stock] deliverable upon settlement on or after the
Purchase Contract Settlement Date of the Purchase Contracts underlying the
number of Treasury SPC Units evidenced by this Treasury SPC Units Certificate
be registered in the name of, and delivered, together with a check in payment
for any fractional share, to the undersigned at the address indicated below
unless a different name and address have been indicated below. If shares are
to be registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer tax payable incident thereto.
Dated: _____________________________ _________________________________________
Signature
Signature Guarantee:
(if assigned to another person)
If shares of [Common Stock] REGISTERED HOLDER
[Preferred Stock] or Treasury SPC
Units Certificates are to be
registered in the name of and
delivered to a Person other than
the Holder, please print such Please print name and address of
Person's name and address: Registered Holder:
----------------------------------- ------------------------------------------
Name Name
----------------------------------- ------------------------------------------
Address Address
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
Social Security or other
Taxpayer Identification Number,
if any ------------------------------------------
B-9
ELECTION TO SETTLE EARLY
The undersigned Holder of this Treasury SPC Units Certificate
irrevocably exercises the option to effect Early Settlement in accordance with
the terms of the Purchase Contract Agreement with respect to the Purchase
Contracts underlying the number of Treasury SPC Units evidenced by this
Treasury SPC Units Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts underlying
Treasury SPC with an aggregate Stated Amount equal to $1,000 or an integral
multiple thereof. The undersigned Holder directs that a certificate for shares
of [Common Stock] [Preferred Stock] deliverable upon such Early Settlement be
registered in the name of, and delivered, together with a check in payment for
any fractional share and any Treasury SPC Units Certificate representing any
Treasury SPC Units evidenced hereby as to which Early Settlement of the
related Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated below.
Pledged Treasury Securities deliverable upon such Early Settlement will be
transferred in accordance with the transfer instructions set forth below. If
shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: _____________________________ ________________________________________
Signature
Signature Guarantee: ____________________________
[Stamp Legend?]
B-10
Number of Securities evidenced hereby as to which Early Settlement
of the related Purchase Contracts is being elected:
If shares of [Common Stock] REGISTERED HOLDER
[Preferred Stock] or Treasury SPC
Units Certificates are to be
registered in the name of and
delivered to and Pledged Treasury
Securities are to be transferred
to a Person other than the Holder,
please print such Person's name Please print name and address of
and address: Registered Holder:
----------------------------------- ------------------------------------------
Name Name
----------------------------------- ------------------------------------------
Address Address
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
----------------------------------- ------------------------------------------
Social Security or other
Taxpayer Identification Number,
if any ------------------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable Upon Early
Settlement or a Termination Event:
B-11
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this
Global Certificate have been made:
Number of SPC Units
Amount of increase in Amount of decrease in evidenced by this Signature of
Number of Treasury SPC Number of Treasury SPC Global Certificate authorized officer of
Units evidenced by the Units evidenced by the following such Trustee or Securities
Date Global Certificate Global Certificate decrease or increase Custodian
B-12
EXHIBIT C
INSTRUCTION TO PURCHASE CONTRACT AGENT
---------------------------
---------------------------
---------------------------
---------------------------
Attention:
-------------------------
Re: [_______ SPC Units] [_______ Treasury SPC Units] of Hovnanian
Enterprises, Inc., a Delaware corporation (the "Company")
The undersigned Holder hereby notifies you that it has delivered to
_____________, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate principal amount of [Notes] [Treasury Securities]
in exchange for the [Pledged Notes] [Pledged Treasury Securities] held in the
Collateral Account, in accordance with the Pledge Agreement, dated as of
_________________ (the "Pledge Agreement"; unless otherwise defined herein,
terms defined in the Pledge Agreement are used herein as defined therein),
between you, the Company, the Collateral Agent and the Securities
Intermediary. The undersigned Holder has paid all applicable fees relating to
such exchange. The undersigned Holder hereby instructs you to instruct the
Collateral Agent to release to you on behalf of the undersigned Holder the
[Pledged Notes] [Pledged Treasury Securities] related to such [SPC Units]
[Treasury SPC Units].
Date: ___________________________ __________________________________________
Signature
Signature Guarantee: ____________________
(if assigned to another person)
Please print name and address of Registered Holder:
----------------------------------- -----------------------------------------
Name Social Security or other
Taxpayer Identification Number, if any
Address
-----------------------------------
-----------------------------------
-----------------------------------
C-1
EXHIBIT D
NOTICE FROM PURCHASE CONTRACT AGENT TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
-----------------------------
-----------------------------
Attention:
Telecopy:
-------------
Re: [__________ SPC Units] [______ Treasury SPC Units] of Hovnanian
Enterprises, Inc., a Delaware corporation (the "Company")
Please refer to the Purchase Contract Agreement, dated as of
_________________ (the "Purchase Contract Agreement"; unless otherwise defined
herein, terms defined in the Purchase Contract Agreement are used herein as
defined therein), between the Company and the undersigned, as Purchase
Contract Agent and as attorney-in-fact for the holders of SPC Units and
Treasury SPC Units from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Notes][the Treasury Securities] underlying your ownership interest in
_____ [SPC Units] [Treasury SPC Units] have been released and are being held
by us for your account pending receipt of transfer instructions with respect
to such [Notes] [Treasury Securities] (the "Released Securities").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we
hereby request written transfer instructions with respect to the Released
Securities. Upon receipt of your instructions and upon transfer to us of your
[SPC Units][Treasury SPC Units] effected through book-entry or by delivery to
us of your [SPC Units Certificate][Treasury SPC Units Certificate], we shall
transfer the Released Securities by book-entry transfer or other appropriate
procedures, in accordance with your instructions. In the event you fail to
effect such transfer or delivery, the Released Securities and any
distributions thereon, shall be held in our name, or a nominee in trust for
your benefit, until such time as such [SPC Units][Treasury SPC Units] are
transferred or your [SPC Units Certificate] [Treasury SPC Units Certificate]
is surrendered or satisfactory evidence is provided that such your [SPC Units
Certificate][Treasury SPC Units Certificate] has been destroyed, lost or
stolen, together with any indemnification that we or the Company may require.
Date: By:
------------------------------------
---------------------------------
Name:
Title: Authorized Officer
D-1
EXHIBIT E
NOTICE TO SETTLE BY CASH
---------------------------
---------------------------
---------------------------
Attention:
-------------------------
Re: [_______ SPC Units] [Treasury SPC Units] of Hovnanian
Enterprises, Inc., a Delaware corporation (the "Company")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.4 of the Purchase Contract Agreement, dated as of (the
"Purchase Contract Agreement"; unless otherwise defined herein, terms defined
in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as
Attorney-in-Fact for the Holders of the Purchase Contracts, that such Holder
has elected to pay to the Securities Intermediary for deposit in the
Collateral Account, prior to or on 11:00 a.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date
(in lawful money of the United States by certified or cashiers' check or wire
transfer, in immediately available funds), $______ as the Purchase Price for
the shares of [Common Stock] [Preferred Stock] issuable to such Holder by the
Company under the related Purchase Contracts on the Purchase Contract
Settlement Date. The undersigned Holder hereby instructs you to notify
promptly the Collateral Agent of the undersigned Holders' election to make
such cash settlement with respect to the Purchase Contracts related to such
Holder's [SPC Units] [Treasury SPC Units].
Date: ___________________________ _________________________________________
Signature
Signature Guarantee: ____________________
Please print name and address of Registered Holder:
E-1
EXHIBIT F
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT AND INDENTURE TRUSTEE
(Settlement of Purchase Contract through Remarketing)
---------------------------
---------------------------
---------------------------
Attention:
-------------------------
Telecopy:
--------------------------
------------------------------------, as Indenture Trustee
------------------------------------
------------------------------------
Attention:
Telecopy:
Re: __________ SPC Units of Hovnanian Enterprises, Inc., a Delaware
corporation (the "Company")
Please refer to the Purchase Contract Agreement, dated as of (the
"Purchase Contract Agreement"; unless otherwise defined herein, terms defined
in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the Holders of SPC Units from time to time.
In accordance with Section 5.4 of the Purchase Contract Agreement
and, based on instructions and Cash Settlements received from Holders of SPC
Units as of 11:00 a.m. (New York City time), the fifth Business Day preceding
the Purchase Contract Settlement Date, we hereby notify you that ______ Notes
are to be tendered for purchase in the Remarketing.
Date: By:
--------------------------------------
---------------------------------
Name:
Title: Authorized Officer
F-1
