(e) The Purchase Contract Agent is authorized to execute and deliver the Remarketing Agreement in its capacity as Purchase Contract Agent.
(f) In case a default by the Company under this Agreement has occurred (that has not been cured or waived), and a Responsible Officer of the Purchase Contract Agent have received written notice thereof, the Purchase Contract Agent shall exercise such of the rights and powers, if any, with respect to such default, vested in it by this Agreement, and use the same degree of care and skill in the exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
Section 7.02. 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 received written notice thereof, the Purchase Contract Agent shall transmit by mail to the Holders, as their names and addresses appear in the Security 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 a Responsible Officer of the Purchase Contract Agent in good faith determines that the withholding of such notice is in the interests of Holders of the Units.
Section 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(a) the Purchase Contract Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, 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;
(b) 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;
(c) whenever in the administration of this Agreement or the Remarketing Agreement the Purchase Contract Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting to take any action hereunder or thereunder, the Purchase Contract Agent (unless other evidence be herein specifically prescribed in this Agreement) may, in the absence of bad faith on its part, conclusively rely upon an Officer’s Certificate of the Company;
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(d) the Purchase Contract Agent may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) 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 relevant books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;
(f) the Purchase Contract Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees or an Affiliate of the Purchase Contract Agent and the Purchase Contract Agent shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee or an Affiliate appointed with due care by it hereunder;
(g) the Purchase Contract Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Holders pursuant to this Agreement, unless such Holders shall have offered to the Purchase Contract Agent security or indemnity satisfactory to the Purchase Contract Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(h) the Purchase Contract Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement;
(i) the rights, privileges, protections, immunities and benefits given to the Purchase Contract Agent, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Purchase Contract Agent in each of its capacities hereunder, and to each officer, director, employee of the Purchase Contract Agent and each agent, custodian and other Person employed, in any capacity whatsoever, by the Purchase Contract Agent to act
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hereunder and shall survive the resignation or removal of the Purchase Contract Agent and the termination of this Agreement;
(j) the Purchase Contract Agent shall not be deemed to have notice or be charged with knowledge of any default unless a Responsible Officer of the Purchase Contract Agent has received written notice from the Company or any Holder of such default at the Corporate Trust Office of the Purchase Contract Agent, and such notice references the Units and this Agreement and identifies such default; and
(k) the Purchase Contract Agent may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Agreement.
(l) anything in this Agreement notwithstanding, in no event shall the Purchase Contract Agent be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of profit), even if the Purchase Contract Agent has been advised as to the likelihood of such loss or damage and regardless of the form of action;
(m) the Purchase Contract Agent shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; interruptions; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authority and governmental action; and
(n) the permissive right of the Purchase Contract Agent to take or refrain from taking action hereunder shall not be construed as a duty.
Section 7.04. Not Responsible for Recitals or Issuance of Units.The recitals contained herein, in the Remarketing Agreement and in the Certificates shall be taken as the statements of the Company, and the Purchase Contract Agent assumes no responsibility for their accuracy or validity. The Purchase Contract Agent makes no representations as to the validity or sufficiency of either this Agreement or of the Units or the Pledge or the Collateral or the Remarketing Agreement. The Purchase Contract Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Purchase Contracts.
Section 7.05. May Hold Units.Any Security Registrar or any other agent of the Company, or the Purchase Contract Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Units and may otherwise deal with the Company, the Collateral Agent or any other Person
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with the same rights it would have if it were not Security Registrar or such other agent, or the Purchase Contract Agent. The Company may become the owner or pledgee of Units.
Section 7.06. Money Held in Custody.Money held by the Purchase Contract Agent in custody hereunder need not be segregated from the Purchase Contract Agent’s other funds except to the extent required by law. The Purchase Contract Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise expressly provided hereunder or agreed in writing with the Company.
Section 7.07. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Purchase Contract Agent compensation for all services rendered by it hereunder and under the Remarketing Agreement as the Company and the Purchase Contract Agent shall from time to time agree in writing;
(b) 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 Remarketing 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 gross negligence, bad faith or willful misconduct;
(c) to indemnify the Purchase Contract Agent and any predecessor Purchase Contract Agent (collectively, with the Purchase Contract Agent, the “Indemnitees”) for, and to hold each Indemnitee harmless against, any loss, liability or expense (including reasonable fees and expenses of counsel) including taxes (other than taxes based upon, measured by or determined by the income of the Purchase Contract Agent) incurred without gross negligence, bad faith or willful misconduct on its part, arising out of or in connection with this Agreement or the Remarketing Agreement, including the acceptance or administration of its duties hereunder and the Remarketing Agreement and the Indemnitees’ reasonable costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other Person) or liability in connection with the exercise or performance of any of the Purchase Contract Agent’s powers or duties hereunder or thereunder; and
(d) to pay or reimburse the Purchase Contract Agent for transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein.
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Purchase Contract Agent for purposes of this Section shall include any predecessor Purchase Contract Agent; provided, however, that the negligence, willful misconduct or bad faith of any Purchase Contract Agent hereunder shall not affect the rights of any other Purchase Contract Agent hereunder.
The provisions of this Section shall survive the resignation and removal of the Purchase Contract Agent and the termination of this Agreement.
Section 7.08. Corporate Purchase Contract Agent Required; Eligibility.There shall at all times be a Purchase Contract Agent hereunder which shall be a Person organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having a corporate trust office in the Borough of Manhattan, New York City, if there be such a Person in the Borough of Manhattan, New York City, qualified and eligible under this Article and willing to act on reasonable terms. If such Person publishes or files reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published or filed. If at any time the Purchase Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.
Section 7.09. Resignation and Removal; Appointment of Successor.(a) No resignation or removal of the Purchase Contract Agent and no appointment of a successor Purchase Contract Agent pursuant to this Article shall become effective until the acceptance of appointment by the successor Purchase Contract Agent in accordance with the applicable requirements of Section 7.10.
(b) The Purchase Contract Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Purchase Contract Agent required by Section 7.10 shall not have been delivered to the Purchase Contract Agent within 30 days after the giving of such notice of resignation, the resigning Purchase Contract Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Units delivered to the Purchase Contract Agent and the Company. If the instrument of acceptance by a
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successor Purchase Contract Agent required by Section 7.10 shall not have been delivered to the Purchase Contract Agent within 30 days after such Act, the Purchase Contract Agent being removed may petition any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent.
(d) If at any time:
| | (i) the Purchase Contract Agent fails to comply with Section 310(b) of the TIA, and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Unit for at least six months; |
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| | (ii) the Purchase Contract Agent shall cease to be eligible under Section 7.08 and shall fail to resign after written request therefor by the Company or by any such Holder; or |
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| | (iii) the Purchase Contract Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Purchase Contract Agent or of its property shall be appointed or any public officer shall take charge or control of the Purchase Contract Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, |
then, in any such case, (i) the Company by a Board Resolution may remove the Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a Unit for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Purchase Contract Agent and the appointment of a successor Purchase Contract Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Purchase Contract Agent and shall comply with the applicable requirements of Section 7.10. If no successor Purchase Contract Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of a Unit for at least six months, on behalf of itself and all others similarly situated, or the Purchase Contract Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase Contract Agent to give, notice of each resignation and each removal of the Purchase Contract Agent and each appointment of a successor Purchase Contract
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Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the applicable Security Register. Each notice shall include the name of the successor Purchase Contract Agent and the address of its Corporate Trust Office.
(g) If the Purchase Contract Agent has or shall acquire any “conflicting interest” within the meaning of Section 310(b) of the TIA, the Purchase Contract Agent and the Company shall in all respects comply with the provisions of Section 310(b) of the TIA.
Section 7.10. Acceptance of Appointment by Successor.(a) In case of the appointment hereunder of a successor Purchase Contract Agent, every such successor Purchase Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Purchase Contract Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Purchase Contract Agent shall become effective and such successor Purchase Contract Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Purchase Contract Agent; but, on the request of the Company or the successor Purchase Contract Agent, such retiring Purchase Contract Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Purchase Contract Agent all the rights, powers and trusts of the retiring Purchase Contract Agent and duly assign, transfer and deliver to such successor Purchase Contract Agent all property and money held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Purchase Contract Agent all such rights, powers and agencies referred to in clause (a) of this Section 7.10.
(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 7.
Section 7.11. Merger, Conversion, Consolidation or Succession to Business.Any Person into which the Purchase Contract Agent may be merged or converted or with which it maybe consolidated, or any Person resulting from any merger, conversion or consolidation to which the Purchase Contract Agent shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Purchase Contract Agent, shall be the successor of the Purchase Contract Agent hereunder,provided that such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered,
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by the Purchase Contract Agent then in office, any successor by merger, conversion or consolidation to such Purchase Contract Agent may adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Purchase Contract Agent had itself authenticated and executed such Units.
Section 7.12. Preservation of Information; Communications to Holders.(a) The Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Purchase Contract Agent in its capacity as Security Registrar.
(b) If three or more Holders (herein referred to as “Applicants”) apply in writing to the Purchase Contract Agent, and furnish to the Purchase Contract Agent reasonable proof that each such Applicant has owned a Unit for a period of at least six months preceding the date of such application, and such application states that the Applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the Units and is accompanied by a copy of the form of proxy or other communication which such Applicants propose to transmit, then the Purchase Contract Agent shall mail to all the Holders copies of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Purchase Contract Agent of the materials to be mailed and of payment, or provision for the payment, of the reasonable expenses of such mailing.
Section 7.13. No Obligations of Purchase Contract Agent.Except to the extent otherwise expressly provided in this Agreement, the Purchase Contract Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Remarketing Agreement or any Purchase Contract in respect of the obligations of the Holder of any Unit thereunder. The Company agrees, and each Holder of a Certificate, by its acceptance thereof, shall be deemed to have agreed, that the Purchase Contract Agent’s execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Purchase Contract Agent shall have no obligation to perform such Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article 5 hereof.
Section 7.14. Tax Compliance.(a) The Company, will comply with all applicable certification, information reporting and withholding (including “backup” withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Units or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Units. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent.
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(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 conclusively rely on any such direction in accordance with the provisions of Section 7.01(a) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
Section 8.01. Supplemental Agreements without Consent of Holders.Without the consent of any Holders, the Company, when authorized by a Board Resolution, the Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the Securities Intermediary 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, the Collateral Agent, the Custodial Agent and the Securities Intermediary to:
(a) 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;
(b) evidence and provide for the acceptance of appointment hereunder by a successor Purchase Contract Agent, Collateral Agent, Securities Intermediary or Custodial Agent;
(c) add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company;
(d) make provision with respect to the rights of Holders pursuant to the requirements of Section 5.04(b); or
(e) except as provided for in Section 5.04, cure any ambiguity, to correct or supplement any provisions herein that may be inconsistent with any other provision herein, or to make such other provisions in regard to matters or questions arising under this Agreement that do not adversely affect the interests of any Holders,provided that any amendment made solely to conform the provisions of this Agreement to the description of the Units and the Purchase Contracts
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contained in the Units Prospectus will not be deemed to adversely affect the interests of the Holders.
Section 8.02. 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, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the Units. However, that, except as contemplated herein, no supplemental agreement shall, without the consent of the Holder of each outstanding Purchase Contract affected thereby,
(a) change any Payment Date;
(b) change the amount or the type of Collateral required to be Pledged to secure a Holder’s obligations under the Purchase Contract (except for the rights of holders of Corporate Units to substitute Treasury Securities for the Pledged Convertible Notes or the rights of Holders of Treasury Units to substitute Convertible Notes for the Pledged Treasury Securities, impair the right of the Holder of any Purchase Contract to receive distributions on the related Collateral or otherwise adversely affect the Holder’s rights in or to such Collateral;
(c) impair the Holders’ right to institute suit for the enforcement of any Purchase Contract or any Contract Adjustment Payments;
(d) except as set forth in Section 5.04, reduce the number of shares of Common Stock or the amount of any other property to be purchased pursuant to any Purchase Contract, increase the price to purchase shares of Common Stock or any other property upon settlement of any Purchase Contract or change the Purchase Contract Settlement Date or the right to Early Settlement or Cash Merger Early Settlement or otherwise adversely affect the Holder’s rights under the Purchase Contract in any material respect;
(e) reduce any Contract Adjustment Payments or change any place where, or the coin or currency in which, any Contract Adjustment Payment is payable; or
(f) reduce the percentage of the outstanding Purchase Contracts whose Holder’s consent is required for any modification or amendment to the provisions of this Agreement or the Purchase Contracts;
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provided that if any amendment or proposal referred to above would adversely affect only the Corporate Units or the Treasury Units, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of each such Holder affected thereby; andprovided, 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 (a) through (f) of this Section 8.02.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof.
Section 8.03. Execution of Supplemental Agreements.In executing, or accepting the additional agencies created by any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Purchase Contract Agent, the Collateral Agent, the Securities Intermediary and the Custodial Agent shall be provided, and (subject to Section 7.01 with respect to the Purchase Contract Agent) shall be fully authorized and 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 and that any and all conditions precedent to the execution and delivery of such supplemental agreement have been satisfied. The Purchase Contract Agent, the Collateral Agent, the Securities Intermediary and the Custodial Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects their own rights, duties or immunities under this Agreement or otherwise.
Section 8.04. Effect of Supplemental Agreements.Upon the execution of any supplemental agreement under this Article, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder, shall be bound thereby.
Section 8.05. Reference to Supplemental Agreements.Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Purchase Contract Agent, bear a notation in form approved by the Purchase Contract Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Purchase Contract Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and
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authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in exchange for outstanding Certificates.
ARTICLE 9
CONSOLIDATION, MERGER, SALE, CONVEYANCE, TRANSFER OR DISPOSITION
Section 9.01. Covenant Not To Consolidate, Merge, Sell, Convey, Transfer or Dispose Property except under Certain Conditions.The Company covenants that it will not merge or consolidate with any other Person or sell, convey, transfer or otherwise dispose of all or substantially all of its assets, unless:
(a) either the Company shall be the surviving Person, or the successor (if other than the Company) shall not be a Person, other than an individual organized and existing under the laws of the United States of America or any State thereof or the District of Columbia and such corporation or limited liability company, as the case may be, shall expressly assume all the obligations of the Company under the Purchase Contracts, this Agreement (including the Pledge provided for herein), the Indenture (including any supplement thereto) and the Remarketing Agreement by one or more supplemental agreements in form reasonably satisfactory to the Purchase Contract Agent and the Collateral Agent, executed and delivered to the Purchase Contract Agent and the Collateral Agent by such Person; and
(b) the Company or such successor Person shall not, immediately after such merger, consolidation, sale, conveyance, transfer or other disposition, be in default of payment obligations under the Purchase Contracts, this Agreement, the Indenture (including any supplement thereto) or the Remarketing Agreement or in material default in the performance of any other covenants under any of the foregoing agreements.
Section 9.02. Rights and Duties of Successor Corporation.In case of any such merger, consolidation, sale, conveyance (other than by way of lease), transfer or other disposition and upon any such assumption by a successor Person in accordance with Section 9.01, such surviving Person shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company and the Company shall be relieved of any further obligation hereunder and under the Corporate Units or Treasury Units. Such surviving Person thereupon may cause to be signed, and may issue either in its own name or in the name of The Stanley Works any or all of the Certificates evidencing Units issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Purchase Contract Agent; and, upon the order of such surviving Person, 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
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which previously shall have been signed and delivered by the officers of the Company to the Purchase Contract Agent for authentication and execution, and any Certificate evidencing Units which such surviving Person 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, or disposition such change in phraseology and form (but not in substance) may be made in the Certificates evidencing Units thereafter to be issued as may be appropriate.
Section 9.03. Opinion of Counsel Given to Purchase Contract Agent.The Purchase Contract Agent, subject to Section 7.01 and Section 7.03, shall receive an Opinion of Counsel as conclusive evidence that any such merger, consolidation, sale, assignment, transfer, or disposition, 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, conveyance, transfer or other disposition have been met.
ARTICLE 10
COVENANTS
Section 10.01. Performance under Purchase Contracts.The Company covenants and agrees for the benefit of the Holders from time to time of the Units that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement.
Section 10.02. Maintenance of Office or Agency.The Company will maintain in the Borough of Manhattan, City of New York, New York an office or agency where Certificates may be presented or surrendered for acquisition of shares of Common Stock upon settlement of the Purchase Contracts on the Purchase Contract Settlement Date or upon Early Settlement or Cash Merger Early Settlement and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, or for a Collateral Substitution and where notices and demands to or upon the Company in respect of the Units and this Agreement may be served. The Company will give prompt written notice to the Purchase Contract Agent of the location, and any change in the location, of such office or agency. The Company initially designates the Corporate Trust Office of the Purchase Contract Agent as such office of the Company. If at any time the Company shall fail to maintain any
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such required office or agency or shall fail to furnish the Purchase Contract Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Purchase Contract Agent as its agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations;provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, City of New York, 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 Units the Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate Trust Office as paying agent in such city.
Section 10.03. Company to Reserve Common Stock.The Company shall at all times prior to the Purchase Contract Settlement Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Stock the full number of shares of Common Stock issuable against tender of payment in respect of all Purchase Contracts constituting a part of the Units evidenced by Outstanding Certificates.
Section 10.04. Covenants as to Common Stock; Listing.(a) The Company covenants that all shares of Common Stock which may be issued against tender of payment in respect of any Purchase Contract constituting a part of the Outstanding Units will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. The Company shall comply, in all material respects, with all applicable securities laws regulating the offer, issuance and delivery of shares of Common Stock upon settlement of Purchase Contracts and will issue such shares of Common Stock as freely-tradable shares, except to the extent holders thereof are underwriters (within the meaning of the Securities Act) or Affiliates of the Company.
(b) The Company further covenants that, if at any time the Common Stock shall be listed on the NYSE or any other national securities exchange or automated quotation system, the Company will, if permitted by the rules of such exchange or automated quotation system, list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, all Common Stock issuable upon Settlement of Purchase Contracts;provided, however, that, if the rules of such exchange or automated quotation system permit the Company to defer the listing of such Common Stock until the date on which any Purchase Contract is first settled in accordance with the
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provisions of this Agreement, the Company covenants to list such Common Stock issuable upon settlement of the Purchase Contracts in accordance with the requirements of such exchange or automated quotation system no later than at such time.
Section 10.05. ERISA.Each Holder from time to time of the Units that is a Plan or who used assets of a Plan to purchase Units hereby represents that either (a) no portion of the assets used by such Holder to acquire the Corporate Units constitutes assets of the Plan or (b) the purchase or holding of the Corporate Units by such purchaser or transferee will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4973 of the Code or similar violation under any applicable laws.
Section 10.06. Tax Treatment.The Company covenants and agrees, for United States federal, state and local income and franchise tax purposes, to (a) treat a Holder’s acquisition of the Corporate Units as the acquisition of the Convertible Notes and Purchase Contract constituting the Corporate Units and (b) treat each Holder as the owner of the Collateral, including the Convertible Notes or the Treasury Securities.
ARTICLE 11
PLEDGE
Section 11.01. Pledge.Each Holder, acting through the Purchase Contract Agent as such Holder’s attorney-in-fact, and the Purchase Contract Agent, acting solely as such attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of and for the benefit of the Company, a continuing first priority security interest in and to, and a lien upon and right of set-off against, all of such Person’s right, title and interest in and to the Collateral to secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations. The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement.
Section 11.02. Termination.As to each Holder, the Pledge created hereby shall terminate upon the satisfaction of such Holder’s Obligations. Upon a Termination Event (and subject to the Collateral Agent’s notification thereof by the Purchase Contract Agent), the Collateral Agent shall instruct the Securities Intermediary to Transfer such portion of the Collateral attributable to such Holder to the Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.
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ARTICLE 12
ADMINISTRATION OF COLLATERAL
Section 12.01. Initial Deposit of Convertible Notes.(a) Prior to or concurrently with the execution and delivery of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the Corporate Units, shall Transfer without recourse or representation to the Securities Intermediary, for credit to the Collateral Account, the Convertible Notes or security entitlements relating thereto and the Securities Intermediary shall indicate by book-entry that a securities entitlement with respect to such Convertible Notes has been credited to the Collateral Account.
(b) The Collateral Agent may, but shall not be obligated to, at any time or from time to time, in its sole discretion, cause any or all securities or other property underlying any financial assets credited to the Collateral Account to be registered in the name of the Securities Intermediary, the Collateral Agent or their respective nominees;provided, however, that unless any Event of Default (as defined in the Indenture) shall have occurred and be continuing, the Collateral Agent agrees not to cause any Convertible Notes to be so re-registered.
Section 12.02. Establishment of Collateral Account.The Securities Intermediary hereby confirms that:
(a) the Securities Intermediary has established the Collateral Account;
(b) the Collateral Account is a securities account;
(c) subject to the terms of this Agreement, the Securities Intermediary shall identify in its records the Collateral Agent as the entitlement holder entitled to exercise the rights that comprise any financial asset credited to the Collateral Account;
(d) all property delivered to the Securities Intermediary pursuant to this Agreement, including Treasury Securities and the Permitted Investments, will be credited promptly to the Collateral Account; and
(e) all securities or other property underlying any financial assets credited to the Collateral Account shall be (i) registered in the name of the Purchase Contract Agent and indorsed, without recourse or representation, to the Securities Intermediary or in blank, (ii) registered in the name of the Securities Intermediary or (iii) credited to another securities account maintained in the name of the Securities Intermediary. In no case will any financial asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent (in its capacity as such) or any Holder or specially indorsed to the Purchase Contract
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Agent (in its capacity as such) or any Holder, unless such financial asset has been further indorsed to the Securities Intermediary or in blank.
Section 12.03. Treatment as Financial Assets.Each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a financial asset.
Section 12.04. Sole Control by Collateral Agent.Except as provided in Section 15.01, at all times prior to the termination of the Pledge, the Collateral Agent shall have sole control of the Collateral Account, and the Securities Intermediary shall take instructions and directions, and comply with entitlement orders, with respect to the Collateral Account or any financial asset credited thereto solely from the Collateral Agent as set forth in this Agreement. If at any time the Securities Intermediary shall receive an entitlement order issued by the Collateral Agent and relating to the Collateral Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Purchase Contract Agent or any Holder or any other Person. Except as otherwise permitted under this Agreement, until termination of the Pledge, the Securities Intermediary will not comply with any entitlement orders issued by the Purchase Contract Agent or any Holder.
Section 12.05. Jurisdiction.The Collateral Account, and the rights and obligations of the Securities Intermediary, the Collateral Agent, the Purchase Contract Agent and the Holders with respect thereto, shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for the purposes of the UCC the Securities Intermediary’s jurisdiction is the State of New York.
Section 12.06. No Other Claims.Except for the claims and interest of the Collateral Agent and of the Purchase Contract Agent and the Holders in the Collateral Account, the Securities Intermediary (without having conducted any investigation) does not know of any claim to, or interest in, the Collateral Account or in any financial asset credited thereto. If any Person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Collateral Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Collateral Agent and the Purchase Contract Agent.
Section 12.07. Investment and Release.All proceeds of financial assets from time to time credited to the Collateral Account shall be invested and reinvested as provided in this Agreement. At all times prior to termination of the Pledge, no property shall be released from the Collateral Account except in accordance with this Agreement or upon written instructions of the Collateral Agent.
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Section 12.08. Statements and Confirmations.The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Collateral Account and any financial assets credited thereto simultaneously to each of the Purchase Contract Agent and the Collateral Agent at their addresses for notices under this Agreement.
Section 12.09. Tax Allocations.The Purchase Contract Agent shall report all items of income, gain, expense and loss recognized in the Collateral Account, to the extent such reporting is required by law, to the Internal Revenue Service authorities in the manner required by law. Neither the Securities Intermediary, the Collateral Agent nor the Custodial Agent shall have any tax reporting duties hereunder.
Section 12.10. No Other Agreements.The Securities Intermediary, acting solely in its capacity as Securities Intermediary, has not entered into, and prior to the termination of the Pledge will not enter into, any agreement with any other Person relating to the Collateral Account or any financial assets credited thereto, including, without limitation, any agreement to comply with entitlement orders of any Person other than the Collateral Agent.
Section 12.11. Powers Coupled with an Interest.The rights and powers granted in this Purchase Contract and Pledge Agreement to the Collateral Agent have been granted in order to perfect its security interests in the Collateral Account, are powers coupled with an interest and will be affected neither by the bankruptcy of the Purchase Contract Agent or any Holder nor by the lapse of time. The obligations of the Securities Intermediary under this Purchase Contract and Pledge Agreement shall continue in effect until the termination of the Pledge.
Section 12.12. Waiver of Lien Waiver of Set-off.The Securities Intermediary waives any security interest, lien or right to make deductions or set-offs that it may now have or hereafter acquire in or with respect to the Collateral Account, any financial asset credited thereto or any security entitlement in respect thereof. Neither the financial assets credited to the Collateral Account nor the security entitlements in respect thereof will be subject to deduction, set-off, banker’s lien, or any other right in favor of any person other than the Company.
ARTICLE 13
RIGHTS AND REMEDIES OF THE COLLATERAL AGENT
Section 13.01. Rights and Remedies of the Collateral Agent.(a) In addition to the rights and remedies set forth herein or otherwise available at law or in equity, after a collateral event of default (as specified in Section 13.01(b) below) hereunder, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the UCC (whether or not the
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UCC is in effect in the jurisdiction where the rights and remedies are asserted) and the TRADES Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (1) retention of the Pledged Convertible Notes or the Pledged Treasury Securities in full satisfaction of the Holders’ obligations under the Purchase Contracts and this Agreement or (2) sale of the Pledged Convertible Notes or the Pledged Treasury Securities in one or more public or private sales.
(b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of Proceeds of (i) the Pledged Convertible Notes (other than any interest payments thereon) or (ii) the Pledged Treasury Securities as provided in this Agreement in satisfaction of the Obligations of the Holder of the Units of which such applicable Pledged Convertible Notes or such Pledged Treasury Securities are a part under the related Purchase Contracts, the inability to make such payments shall constitute a “collateral event of default” hereunder and the Collateral Agent shall have and may exercise, with reference to such Pledged Convertible Notes or Pledged Treasury Securities, as applicable, any and all of the rights and remedies available to a secured party under the UCC and the TRADES Regulations after default by a debtor, and as otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive, collect and apply to the satisfaction of the Obligations all payments with respect to (i) the Pledged Convertible Notes (other than any interest payments thereon) and (ii) the Pledged Treasury Securities, subject, in each case, to the provisions of this Agreement, and as otherwise provided herein.
(d) Subject to Section 7.04, the Purchase Contract Agent and each Holder agrees that, from time to time, upon the written request of the Collateral Agent, the Purchase Contract Agent, on behalf of such Holder, shall execute and deliver such further documents and do such other acts and things as the Company may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Purchase Contract Agent shall have no liability to any Holder for the maintenance of the Pledge or the perfection or priority hereof or for executing any documents or taking any such acts requested by the Collateral Agent hereunder, except for liability for its own grossly negligent acts, its own grossly negligent failure to act or its own willful misconduct.
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ARTICLE 14
REPRESENTATIONS AND WARRANTIES TO
COLLATERAL AGENT; HOLDER COVENANTS
Section 14.01. Representations and Warranties.Each Holder from time to time, acting through the Purchase Contract Agent as attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a Holder), hereby represents and warrants to the Collateral Agent (with respect to such Holder’s interest in the Collateral), which representations and warranties shall be deemed repeated on each day a Holder effects a Transfer of Collateral, that:
(a) such Holder has the power to grant a security interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Collateral Agent for credit to the Collateral Account, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Article 11;
(c) upon the Transfer of the Collateral to the Securities Intermediary for credit to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any securities intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Collateral Agent and the Securities Intermediary, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Article 12 hereof); and
(d) the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral (other than the security interest and lien granted under Article 11 hereof) or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets.
Section 14.02. Covenants.The Purchase Contract Agent and the Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge:
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(a) neither the Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the Pledge hereunder, transferred in connection with a Transfer of the Units.
ARTICLE 15
THE COLLATERAL AGENT, THE CUSTODIAL AGENT
AND THE SECURITIES INTERMEDIARY
It is hereby agreed as follows:
Section 15.01. Appointment, Powers and Immunities.The Collateral Agent, the Custodial Agent and the Securities Intermediary shall act as agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent, the Custodial Agent and the Securities Intermediary, as the case may be, by the terms of this Agreement. The Collateral Agent, the Custodial Agent and Securities Intermediary shall:
(a) have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants, functions, responsibilities, duties, liabilities or obligations shall be inferred from this Agreement against the Collateral Agent, the Custodial Agent or the Securities Intermediary, nor shall the Collateral Agent, the Custodial Agent or the Securities Intermediary be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof and none of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall have any fiduciary duty to the Holders or any other Person;
(b) not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement or the Units, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be), the Units, any Collateral or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent, the Custodial Agent or Securities Intermediary, as the case may be) to perform any of its obligations hereunder or thereunder or, for the perfection, priority or maintenance of any security interest created hereunder;
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(c) not be required to initiate or conduct any litigation or collection proceedings hereunder (except pursuant to directions furnished under Section 15.02 hereof, subject to Section 15.08 hereof);
(d) not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own gross negligence or willful misconduct as finally determined by a court of competent jurisdiction; and
(e) not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder.
Subject to the foregoing, during the term of this Agreement, the Collateral Agent, the Custodial Agent and the Securities Intermediary shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder as determined by industry standards.
The Collateral Agent, the Custodial Agent and the Securities Intermediary shall only be responsible for transferring money, securities or other property in accordance with the terms herein to the extent that such money, securities or other property is credited to the Collateral Account.
No provision of this Agreement shall require the Collateral Agent, the Custodial Agent or the Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or the exercise of any of its rights or powers hereunder. In no event shall the Collateral Agent, the Custodial Agent or the Securities Intermediary be liable for any amount in excess of the Value of the Collateral.
Section 15.02. Instructions of the Company.The Company shall have the right, by one or more written instruments executed and delivered to the Collateral Agent, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy available to the Collateral Agent, or of exercising any power conferred on the Collateral Agent, or to direct the taking or refraining from taking of any action authorized by this Agreement;provided, however, that (a) such direction shall not conflict with the provisions of any law or of this Agreement or involve the Collateral Agent in personal liability and (b) the Collateral Agent shall be indemnified to its satisfaction as provided herein. Nothing contained in this Section 15.02 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. None of the Collateral Agent, the Custodial Agent or the Securities Intermediary has any obligation or
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responsibility to file UCC financing or continuation statements or to take any other actions to create, preserve or maintain the security interest in the Collateral.
Section 15.03. Reliance by Collateral Agent, Custodial Agent and Securities Intermediary.Each of the Securities Intermediary, the Custodial Agent and the Collateral Agent shall be entitled to rely conclusively upon any certification, order, judgment, opinion, notice or other written communication (including, without limitation, any thereof by e-mail or similar electronic means, telecopy, telex or facsimile) believed by it in good faith to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein) and consult with and conclusively rely upon advice, opinions and statements of legal counsel and other experts selected by the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be. As to any matters not expressly provided for by this Agreement, the Collateral Agent, the Custodial Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement.
In each case that the Collateral Agent, the Custodial Agent or the Securities Intermediary may or is required hereunder to take any action, including without limitation to make any determination or judgment, to give consents, to exercise rights, powers or remedies, to release or sell Collateral or otherwise to act hereunder, the Collateral Agent, the Custodial Agent or Securities Intermediary may seek direction from the Company. The Collateral Agent, the Custodial Agent or Securities Intermediary shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction from the Company. Unless direction or otherwise is expressly provided herein, if the Collateral Agent, the Custodial Agent or the Securities Intermediary shall request direction from the Company with respect to any action, the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be entitled to refrain from such action unless and until such agent shall have received direction from the Company, and the agent shall not incur liability to any Person by reason of so refraining.
Section 15.04. Certain Rights.(a) Whenever in the administration of the provisions of this Agreement the Collateral Agent, the Custodial Agent or the Securities Intermediary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on the part of the Collateral Agent, the Custodial Agent or the Securities Intermediary, be deemed to be conclusively proved and established by a certificate signed by one of the Company’s officers, and delivered to the Collateral Agent, the Custodial Agent or the Securities Intermediary and such certificate, in the absence
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of gross negligence or willful misconduct on the part of the Collateral Agent, the Custodial Agent or the Securities Intermediary, shall be full warrant to the Collateral Agent, the Custodial Agent or the Securities Intermediary for any action taken, suffered or omitted by it under the provisions of this Agreement upon the faith thereof.
(b) The Collateral Agent, the Custodial Agent or the Securities Intermediary shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement order, approval or other paper or document.
Section 15.05. Merger, Conversion, Consolidation or Succession to Business.Any Person into which the Collateral Agent, the Custodial Agent or the Securities Intermediary 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 Collateral Agent, the Custodial Agent or the Securities Intermediary shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be the successor of the Collateral Agent, the Custodial Agent or the Securities Intermediary, provided such Person shall be otherwise qualified and eligible under this Article hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
Section 15.06. Rights in Other Capacities.The Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of banking, trust or other business with the Purchase Contract Agent, any other Person interested herein and any Holder (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent, the Securities Intermediary and their affiliates may accept fees and other consideration from the Purchase Contract Agent and any Holder without having to account for the same to the Company;provided that each of the Collateral Agent, the Custodial Agent and the Securities Intermediary covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral other than the lien created by the Pledge.
Section 15.07. Non-reliance on the Collateral Agent, Custodial Agent and Securities Intermediary.None of the Collateral Agent, the Custodial Agent and
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the Securities Intermediary shall be required to keep itself informed as to the performance or observance by the Purchase Contract Agent or any Holder of this Agreement, the Units or any other document referred to or provided for herein or therein or to inspect the properties or books of the Purchase Contract Agent or any Holder. None of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall have any duty or responsibility to provide the Company with any credit or other information concerning the affairs, financial condition or business of the Purchase Contract Agent or any Holder (or any of their respective affiliates) that may come into the possession of the Collateral Agent, the Custodial Agent or the Securities Intermediary or any of their respective affiliates.
Section 15.08. Compensation and Indemnity.The Company agrees to:
(a) pay the Collateral Agent, the Custodial Agent and the Securities Intermediary from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, for all services rendered by them hereunder;
(b) indemnify and hold harmless the Collateral Agent, the Custodial Agent, the Securities Intermediary and each of their respective directors, officers, agents and employees (collectively, the “Pledge Indemnitees”), from and against any and all claims, liabilities, losses, and reasonable expenses (including reasonable fees and expenses of counsel) (collectively, “Losses” and individually, a “Loss”) that may be imposed on, incurred by, or asserted against, the Pledge Indemnitees or any of them for following any instructions, acting upon any notices or other directions (which shall include an instruction, notice or direction not to act) upon which any of the Collateral Agent, the Custodial Agent or the Securities Intermediary is entitled to rely pursuant to the terms of this Agreement,provided that the Collateral Agent, the Custodial Agent or the Securities Intermediary has not acted with negligence or engaged in willful misconduct or bad faith with respect to the specific Loss against which indemnification is sought; and
(c) in addition to and not in limitation of paragraph (b) of this Section 15.08, indemnify and hold the Pledge Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by or asserted against, the Pledge Indemnitees or any of them in connection with or arising out of the Collateral Agent’s, the Custodial Agent’s or the Securities Intermediary’s acceptance or performance of its rights, powers and duties under this Agreement, including but not limited to the rights and powers set forth in Section 15.09,provided the Collateral Agent, the Custodial Agent or the Securities Intermediary has not acted with negligence or engaged in willful misconduct or bad faith with respect to the specific Loss against which indemnification is sought.
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The provisions of this Section and Section 15.14 shall survive the resignation or removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary and the termination of this Agreement.
Section 15.09. Failure to Act.In the event that, in the good faith belief of the Collateral Agent, the Custodial Agent or the Securities Intermediary, an ambiguity in the provisions of this Agreement arises or any actual dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder has been asserted in writing, then at its sole option, each of the Collateral Agent, the Custodial Agent and the Securities Intermediary shall be entitled, after prompt notice to the Company and the Purchase Contract Agent, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent, the Custodial Agent and the Securities Intermediary, as the case may be, shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall be entitled to refuse to act until either:
(a) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Collateral Agent, the Custodial Agent or the Securities Intermediary; or
(b) the Collateral Agent, the Custodial Agent or the Securities Intermediary shall have received security or an indemnity satisfactory to it sufficient to hold it harmless from and against any and all loss, liability or reasonable out-of-pocket expense which it may without gross negligence, willful misconduct, or bad faith incur by reason of its acting.
The Collateral Agent, the Custodial Agent and the Securities Intermediary may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent, the Custodial Agent or the Securities Intermediary may deem necessary. Notwithstanding anything contained herein to the contrary, none of the Collateral Agent, the Custodial Agent or the Securities Intermediary shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability.
Section 15.10. Resignation of Collateral Agent, the Custodial Agent and the Securities Intermediary.(a) Subject to the appointment and acceptance of a successor Collateral Agent, Custodial Agent or Securities Intermediary as provided below:
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| | (i) the Collateral Agent, the Custodial Agent or the Securities Intermediary may resign at any time by giving notice thereof to the Company and the Purchase Contract Agent as attorney-in-fact for the Holders; |
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| | (ii) the Collateral Agent, the Custodial Agent or the Securities Intermediary may be removed at any time by the Company; and |
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| | (iii) if the Collateral Agent, the Custodial Agent or the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Collateral Agent, the Custodial Agent and the Securities Intermediary may be removed by the Purchase Contract Agent, acting at the direction of the Holders of a majority in number of the Outstanding Units. |
The Purchase Contract Agent shall promptly notify the Company upon the transmission of notice as contemplated by clause (iii) of this Section 15.10(a) and any removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to clause (iii) of this Section 15.10. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be. If no successor Collateral Agent, Custodial Agent or Securities Intermediary shall have been so appointed and shall have accepted such appointment within 45 days after the retiring Collateral Agent’s, Custodial Agent’s or Securities Intermediary’s giving of notice of resignation or the Company’s or the Purchase Contract Agent’s giving notice of such removal, then the retiring or removed Collateral Agent, Custodial Agent or Securities Intermediary may petition any court of competent jurisdiction, at the expense of the Company, for the appointment of a successor Collateral Agent, Custodial Agent or Securities Intermediary. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall each be a bank or a national banking association which has an office (or an agency office) in New York City with a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent, Custodial Agent or Securities Intermediary hereunder by a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, such successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, and the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall take all appropriate action, subject to payment of any amounts then due and payable to it hereunder, to transfer any money and property held by it hereunder (including the Collateral) to such successor. The retiring Collateral Agent,
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Custodial Agent or Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Collateral Agent, Custodial Agent or Securities Intermediary hereunder. After any retiring Collateral Agent’s, Custodial Agent’s or Securities Intermediary’s resignation hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of this Article 15 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent, the Custodial Agent or the Securities Intermediary. Any resignation or removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary hereunder, at a time when such Person is also acting as the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, shall be deemed for all purposes of this Agreement as the simultaneous resignation or removal of the Collateral Agent, the Securities Intermediary or the Custodial Agent, as the case may be.
Section 15.11. Right to Appoint Agent or Advisor.The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents pursuant to this Section 15.11 shall be subject to prior written consent of the Company, which consent shall not be unreasonably withheld.
Section 15.12. Survival.The provisions of this Article 15 shall survive termination of this Agreement and the resignation or removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary.
Section 15.13. Exculpation.Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent, the Custodial Agent or the Securities Intermediary or their officers, directors, employees or agents be liable under this Agreement for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent, the Custodial Agent or the Securities Intermediary, or any of them and regardless of the form of action, incurred without any act or deed that is found to be attributable to gross negligence or willful misconduct on the parts of the Collateral Agent, the Custodial Agent or the Securities Intermediary.
Section 15.14. Expenses, Etc.The Company agrees to reimburse the Collateral Agent, the Custodial Agent and the Securities Intermediary for:
(a) all out-of-pocket costs and expenses of the Collateral Agent, the Custodial Agent and the Securities Intermediary (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent, the Custodial Agent and the Securities Intermediary), in connection with (i) the negotiation,
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preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement;
(b) all costs and expenses of the Collateral Agent, the Custodial Agent and the Securities Intermediary (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder to satisfy its obligations under the Purchase Contracts forming a part of the Units and (ii) the enforcement of this Section 15.14 and Section 15.08;
(c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby; and
(d) all reasonable fees and expenses of any agent or advisor appointed by the Collateral Agent and consented to by the Company under Section 15.11 of this Agreement.
ARTICLE 16
TRUST INDENTURE ACT
Section 16.01. Trust Indenture Act; Application.(a) This Agreement is subject to the provisions of the TIA that are required or deemed to be a 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 Section 310 to 317, inclusive, of the TIA, such imposed duties shall control.
Section 16.02. Company to Furnish Purchase Contract Agent Names and Addresses of Holders.(a) The Company shall furnish or cause to be furnished to the Purchase Contract Agent (i) semiannually, not later than December 1 and June 1 in each year, commencing June 1, 2007, a list, in such form as the Purchase Contract Agent may reasonably require, of the names and addresses of the Holders of Units as of a date not more than 15 days prior to the delivery thereof, and (ii) 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 similar form and content as of a date not more than 15 days prior to the time such list is furnished, excluding from any such list names and addresses previously received by the Purchase Contract Agent.
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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 16.03. 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 contained in the most recent list furnished to the Purchase Contract Agent as provided in Section 16.02 and the names and addresses of Holders received by the Purchase Contract Agent. The Purchase Contract Agent may dispose of any list furnished to it as provided in Section 16.02 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to their rights under this Agreement or under the Units, and the corresponding rights and privileges of the Purchase Contract Agent, shall be as provided by the TIA.
Every Holder of Units, by receiving and holding the same, agrees with the Company and the Purchase Contract Agent that neither the Company nor the Purchase Contract Agent nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the TIA.
Section 16.04. Reports by Purchase Contract Agent.The Purchase Contract Agent shall transmit to Holders such reports concerning the Purchase Contract Agent and its actions under this Agreement as may be required pursuant to the TIA at the times and in the manner provided pursuant thereto. If required by Section 313(a) of the TIA, the Purchase Contract Agent shall, within sixty days after each December 15 following the date of this Agreement, deliver to Holders a brief report, dated as of such December 15, which complies with the provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to Holders, be filed by the Purchase Contract Agent with each stock exchange upon which any Units are listed, with the Securities and Exchange Commission and with the Company. The Company will promptly notify the Purchase Contract Agent when any Units are listed on any stock exchange.
Section 16.05. Reports by Company.The Company shall provide to the Purchase Contract Agent such documents, reports information as required by Section 314(a) (if any) and the compliance certificate required by Section 314(a) of the TIA in the form, in the manner and at the times required by Section 314(a) of the TIA;provided that any such information, documents or reports required to be filed with the Securities and Exchange Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Purchase Contract Agent within
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15 days after the same is so required to be filed with the Securities and Exchange Commission.
Delivery of such information, documents and reports to the Purchase Contract Agent is for informational purposes only and the Purchase Contract Agent’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Purchase Contract Agent is entitled to rely exclusively on Officer’s Certificates).
Section 16.06. 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 16.07. Defaults, Waiver.The Holders of a majority of the Outstanding Purchase Contracts voting together as one class may, by vote or consent, on behalf of all of the Holders, waive any past default by the Company and its consequences, except a default:
(a) In the payment on any Purchase Contract, or
(b) In respect of a provision hereof which under Section 8.02 cannot be modified or amended without the consent of the Holder of each Outstanding Purchase Contract affected.
Upon such waiver, any such default shall cease to exist, and any default by the Company 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 16.08. 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 shall have obtained written notice of such default.
Section 16.09. Direction of Purchase Contract Agent.Sections 315(d)(3) and 316(a)(1)(A) of the TIA are hereby expressly excluded from this Agreement, as permitted by the TIA.
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ARTICLE 17
MISCELLANEOUS
Section 17.01. Security Interest Absolute.All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder pursuant to the Pledge, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of the Purchase Contracts or the Units or any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of the Units under the related Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, this Agreement or any Purchase Contract or any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor.
Section 17.02. Notice of Termination Event.Upon the occurrence of a Termination Event, the Company shall deliver written notice to the Purchase Contract Agent, the Collateral Agent and the Securities Intermediary.
[SIGNATURES ON THE FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
| THE STANLEY WORKS | |
| | | |
| By: | ____________________________ | |
| | Name: | |
| | Title: | |
| | |
| Address for Notices: | |
| | |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
The Bank of New York Trust
Company, N.A., as Purchase Contract
Agent and as attorney-in-fact of the
Holders from time to time of the Units |
| | | |
| By: | __________________________ | |
| | Name: | |
| | Title: | |
| | | |
| | |
| Address for Notices: | |
| | |
| | |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.
HSBC Bank USA, National
Association, as Collateral Agent,
Custodial Agent and Securities
Intermediary |
| | | |
| By: | __________________________ | |
| | Name: | |
| | Title: | |
| | | |
| Address for Notices: | |
| | |
| | |
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EXHIBIT A
(FORM OF FACE OF CORPORATE UNITS CERTIFICATE)
[For inclusion in Global Certificates only - THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AND PLEDGE AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AND PLEDGE 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. R- | CUSIP No. 854616 208 |
| Number of Corporate Units: | ISIN No. US8546162087 |
THE STANLEY WORKS
Corporate Units
This Corporate Units Certificate certifies that is the registered Holder of the number of Corporate Units set forth above [For inclusion in Global Certificates only - or such other number of Corporate Units reflected in the Schedule of Increases or Decreases in Global Certificate attached hereto]. Each Corporate Unit consists of (i) a Convertible Note, subject to the Pledge thereof by
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such Holder pursuant to the Purchase Contract and Pledge Agreement and (ii) the rights and obligations of the Holder under one Purchase Contract with the Company.
All capitalized terms used herein without definition herein and which are defined in the Purchase Contract and Pledge Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Purchase Contract and Pledge Agreement, a Convertible Note constituting part of each Corporate 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 Corporate Unit.
All payments of the principal amount with respect to the Pledged Convertible Notes or payments of interest on the Pledged Convertible Notes constituting part of the Corporate Units shall be paid on the dates and in the manner set forth in the Purchase Contract and Pledge Agreement. Interest on the Convertible Notes forming part of the Corporate Units evidenced hereby, which is payable on each Payment Date, shall, subject to receipt thereof by the Purchase Contract Agent, be paid to the Person in whose name this Corporate Units Certificate (or a Predecessor Corporate Units Certificate) is registered at the close of business on the Record Date for such Payment Date.
The Company shall pay, on each Payment Date, in respect of each Purchase Contract forming part of a Corporate Unit evidenced hereby, an amount (the “Contract Adjustment Payments”) equal to 5.125% per year of the Stated Amount for the period from and including the immediately preceding Payment Date on which Contract Adjustment Payments were paid (or if none, March 20, 2007) to but excluding such Payment Date. Such Contract Adjustment Payments shall be payable to the Person in whose name this Corporate Units Certificate is registered at the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this Corporate Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date, at a Purchase Price equal to the Stated Amount, a number of newly issued shares of Common Stock of the Company, equal to the Settlement Rate, unless on or prior to the Purchase Contract Settlement Date there shall have occurred a Termination Event, an Early Settlement or a Cash Merger Early Settlement with respect to such Purchase Contract, all as provided in the Purchase Contract and Pledge Agreement. The Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of payment received in the Remarketing of the Pledged Convertible Notes equal to the principal amount thereof pledged to secure the obligations
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under such Purchase Contract of the Holder of the Corporate Units of which such Purchase Contract is a part.
The Contract Adjustment Payments will be payable at the office of the Purchase Contract Agent in New York City, except that all payments with respect to Global Certificates will be made by wire transfer of immediately available funds to the Depositary. If the book-entry system for the Corporate Units has been terminated, the Contract Adjustment Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by prior written notice to the Purchase Contract Agent, given at least ten calendar days prior to the Payment Date.
Each Purchase Contract evidenced hereby obligates the holder to agree, for United States federal, state and local income and franchise tax purposes, to (i) treat its acquisition of the Corporate Units as an acquisition of the Convertible Note and Purchase Contract constituting each Corporate Unit, (ii) treat the Convertible Notes as indebtedness of the Company and (iii) treat itself as the owner of the applicable interests in the Collateral Account, including the Convertible Notes.
Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Purchase Contract Agent by manual signature, this Corporate Units Certificate shall not be entitled to any benefit under the Purchase Contract and Pledge Agreement or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Company and the Holder specified above have caused this instrument to be duly executed.
| | THE STANLEY WORKS |
| | | |
| | By: | ________________________________ |
| | | Name: |
| | | Title: |
| | | |
| | HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts) |
| | | |
| | By: | THE BANK OF NEW YORK
TRUST COMPANY, N.A., not
individually but solely as attorney-in-fact
of such Holder |
| | | |
| | By: | _____________________________ |
| | | Name: |
| | | Title: |
| | | |
| DATED: ____________________ | | |
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CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Corporate Units Certificates referred to in the within mentioned Purchase Contract and Pledge Agreement.
| | THE BANK OF NEW YORK TRUST |
| | | COMPANY, N.A., asPurchase |
| | | Contract Agent |
| | | |
| | By: | ________________________________ |
| | | Authorized Signatory |
| | | |
| DATED: ____________________ | | |
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(REVERSE OF CORPORATE UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (as may be supplemented from time to time, the “Purchase Contract and Pledge Agreement”), between the Company and The Bank of New York Trust Company, N.A., as Purchase Contract Agent (including its successors thereunder, the “Purchase Contract Agent”), and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary (including its successors thereunder, the “Collateral Agent”), to which Purchase Contract and Pledge 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 Collateral Agent, the Company, and the Holders and of the terms upon which the Corporate Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this Corporate Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount, a number of shares of Common Stock equal to the Settlement Rate, unless an Early Settlement, a Cash Merger Early Settlement or a Termination Event with respect to the Units of which such Purchase Contract is a part shall have occurred. The Settlement Rate is subject to adjustment as described in the Purchase Contract and Pledge Agreement.
No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in Section 5.08 of the Purchase Contract and Pledge Agreement.
Each Purchase Contract evidenced hereby that is settled through Early Settlement or Cash Merger Early Settlement shall obligate the Holder of the related Corporate Units to purchase at the Purchase Price, and the Company to sell, a number of newly issued shares of Common Stock equal to Early Settlement Rate (in the case of an Early Settlement) or applicable Settlement Rate (in the case of a Cash Merger Early Settlement).
In accordance with the terms of the Purchase Contract and Pledge Agreement, unless a Termination Event shall have occurred, the Holder of this Corporate Units Certificate shall pay the Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby by effecting a Cash Settlement, an Early Settlement or, if applicable, a Cash Merger Early Settlement or from the proceeds of a Remarketing of the Pledged Convertible Notes. A Holder of Corporate Units who, (1) does not, on or prior to 5:00 p.m. (New York City time) on the Business Day immediately preceding the
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first Remarketing Date, make an effective Cash Settlement in the manner provided in the Purchase Contract and Pledge Agreement or (2) on or prior to 5:00 p.m. (New York City time) on the Business Day immediately preceding the first scheduled Trading Day of the Observation Period does not make an effective Early Settlement, shall pay the Purchase Price for the shares of Common Stock to be delivered under the related Purchase Contract from the proceeds of the sale of the Pledged Convertible Notes held by the Collateral Agent in the Remarketing unless the Holder has previously made a Cash Merger Early Settlement.
As provided in the Purchase Contract and Pledge Agreement, upon the occurrence of a Failed Remarketing, as of the Purchase Contract Settlement Date, each Holder of any Pledged Convertible Notes, unless such Holder has elected settlement with separate cash and delivered such separate cash in accordance with Section 5.02(b)(iii) of the Purchase Contract and Pledge Agreement, shall be deemed to have exercised such Holder’s Put Right with respect to the Convertible Notes and to have elected to apply the Proceeds of the Put Right equal to the aggregate Purchase Price against such Holder’s obligation to pay the aggregate Purchase Price for the shares of Common Stock to be issued under the related Purchase Contracts in full satisfaction of such Holders’ obligations under such Purchase Contracts.
The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate Purchase Price for the shares of Common Stock to be purchased thereunder in the manner set forth in the Purchase Contract and Pledge Agreement.
Each Purchase Contract evidenced hereby and all obligations and rights of the Company and the Holder thereunder shall terminate if a Termination Event shall occur. Upon the occurrence of a Termination Event, the Company shall give written notice to the Purchase Contract Agent and to the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Convertible Notes forming a part of each Corporate Unit from the Pledge. A Corporate Unit shall thereafter represent the right to receive the Convertible Note in accordance with the terms of the Purchase Contract and Pledge Agreement.
Under the terms of the Purchase Contract and Pledge Agreement, the Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Convertible Notes, but only to the extent instructed in writing by the Holders. Upon receipt of notice of any meeting at which holders of Convertible Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Convertible Notes, the Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage
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pre-paid, to the Holders of Corporate Units the notice required by the Purchase Contract and Pledge Agreement.
The Corporate Units Certificates are issuable only in registered form and only in denominations of a single Corporate Unit and any integral multiple thereof. The transfer of any Corporate Units Certificate will be registered and Corporate Units Certificates may be exchanged as provided in the Purchase Contract and Pledge Agreement. A Holder who elects to substitute a Treasury Security for the Convertible Note thereby creating Treasury Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract and Pledge Agreement, such Corporate Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Corporate Unit in respect of the Convertible Note and Purchase Contract constituting such Corporate Unit may be transferred and exchanged only as a Corporate Unit.
Subject to, and in compliance with, the conditions and terms set forth in the Purchase Contract and Pledge Agreement, the Holder of Corporate Units may effect a Collateral Substitution. From and after such Collateral Substitution, each Unit for which Pledged Treasury Securities secure the Holder’s obligation under the Purchase Contract shall be referred to as a “Treasury Unit”.
Subject to and upon compliance with the provisions of the Purchase Contract and Pledge Agreement, at the option of the Holder thereof, Purchase Contracts underlying Units may be settled early by effecting an Early Settlement as provided in the Purchase Contract and Pledge Agreement.
Upon Early Settlement of Purchase Contracts by a Holder of the related Units, the Pledged Convertible Notes underlying such Units shall be released from the Pledge as provided in the Purchase Contract and Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Corporate Unit as to which Early Settlement is effected equal to, the Early Settlement Rate.
Upon the occurrence of a Cash Merger, a Holder of Corporate Units may effect Cash Merger Early Settlement of the Purchase Contracts underlying such Corporate Units pursuant to the terms of the Purchase Contract and Pledge Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a Holder of the related Corporate Units, the Pledged Convertible Notes shall be released from the Pledge as provided in the Purchase Contract and Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Corporate Unit as to which Cash Merger Early Settlement is effected equal to the applicable Settlement Rate.
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Upon registration of transfer of this Corporate Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Purchase Contract Agent pursuant to the Purchase Contract and Pledge Agreement), under the terms of the Purchase Contract and Pledge Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this Corporate Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Corporate Units Certificate, by its acceptance hereof, authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contracts forming part of the Corporate Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract and Pledge Agreement, authorizes the Purchase Contract Agent to enter into and perform the Purchase Contract and Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Convertible Notes underlying this Corporate Units Certificate pursuant to the Purchase Contract and Pledge Agreement. The Holder further covenants and agrees that, to the extent and in the manner provided in the Purchase Contract and Pledge Agreement, but subject to the terms thereof, any payments with respect the Pledged Convertible Notes (other than interest payments thereon) on the Purchase Contract Settlement Date equal to the aggregate Purchase Price for the related Purchase Contracts shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under the related Purchase Contracts and such Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract and Pledge Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of law provisions thereof to the extent a different law would govern as a result.
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.
Prior to due presentment of this Certificate for registration of transfer, the Company, the Purchase Contract Agent and its Affiliates and any agent of the Company or the Purchase Contract Agent may treat the Person in whose name
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this Corporate Units Certificate is registered as the owner of the Corporate Units evidenced hereby for the purpose of receiving payments of interest payable on the Convertible Notes and payments of Contract Adjustment Payments (subject to any applicable record date), performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Purchase Contract Agent nor any such agent shall be affected by notice to the contrary.
A copy of the Purchase Contract and Pledge Agreement is available for inspection at the offices of the Purchase Contract Agent during regular business hours.
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 MN ACT: ___________________ Custodian_______________
(cust) (minor)
Under Uniform Gifts to Minors Act of
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
| ____________________________________________________________ |
| (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) |
| |
| ____________________________________________________________ |
| (Please Print or Type Name and Address Including Postal Zip Code of Assignee) |
| |
| the within Corporate Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney , to transfer said Corporate Units Certificates on the books of The Stanley Works, with full power of substitution in the premises |
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| Dated: _____________________________ | Signature _________________________________ |
| | |
| | NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Corporate Units Certificates in every particular, without alteration or enlargement or any change whatsoever. |
| | |
| Signature Guarantee: _____________________________ |
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SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of Corporate Units evidenced by this Corporate Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.
| Dated: _________________________ | | (if assigned to another person) |
| | | |
| If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person’s name and address and (ii) provide a guarantee of your signature: | | REGISTERED HOLDER
Please print name and address of Registered Holder: |
| | | |
| _________________________________ | | ____________________________________ |
| Name | | Name |
| _________________________________ | | ____________________________________ |
| Address | | Address |
| | | |
| _________________________________ | | ____________________________________ |
| _________________________________ | | ____________________________________ |
| _________________________________ | | ____________________________________ |
| | |
| | |
| | |
| | |
| | |
| | | |
| Social Security or other Taxpayer Identification Number, if any | | |
| | | |
| ___________________________________ | | |
| Signature | | |
| Signature Guarantee:_______________ | | |
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ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Corporate Units Certificate hereby irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early Settlement] in accordance with the terms of the Purchase Contract and Pledge Agreement with respect to the Purchase Contracts underlying the number of Corporate Units evidenced by this Corporate Units Certificate specified below. The undersigned Holder directs that a certificate for shares of Common Stock or other securities deliverable upon such [Early Settlement] [Cash Merger Early Settlement] be registered in the name of, and delivered, together with a check in payment for any fractional share and any Corporate Units Certificate representing any Corporate Units evidenced hereby as to which [Early Settlement] [Cash Merger Early Settlement] of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Convertible Notes deliverable upon such [Early Settlement] [Cash Merger Early Settlement] will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.
| Dated: _____________________________ | Signature _________________________________ |
| | |
| Signature Guarantee: _____________________________ |
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Number of Units evidenced hereby as to which [Early Settlement] [Cash Merger Early Settlement] of the related Purchase Contracts is being elected:
| If shares of Common Stock or Corporate Units Certificates are to be registered in the name of and delivered to and Pledged Convertible Notes are to be transferred to a Person other than the Holder, please print such Person’s name and address: | | REGISTERED HOLDER
|
| | | |
| | | Please print name and address of Registered Holder: |
| | | |
| _________________________________ | | ____________________________________ |
| Name | | Name |
| _________________________________ | | ____________________________________ |
| Address | | Address |
| | | |
| _________________________________ | | ____________________________________ |
| _________________________________ | | ____________________________________ |
| _________________________________ | | ____________________________________ |
| | |
| | |
| | |
| | |
| | |
| | | |
| Social Security or other Taxpayer Identification Number, if any | | |
| | | |
| ___________________________________ | | |
Transfer Instructions for Pledged Convertible Notes transferable upon [Early Settlement] [Cash Merger Early Settlement]:
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[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Corporate Units evidenced by this Global Certificate is _______ The following increases or decreases in this Global Certificate have been made:
| Date | | Amount of increase
in number of
Corporate Units
evidenced by the
Global Certificate | | Amount of decrease
in number of
Corporate Units
evidenced by the
Global Certificate | | Number of
Corporate Units
evidenced by this
Global Certificate
following such
decrease or increase | | Signature of
authorized signatory
of Purchase Contract
Agent |
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A-11
EXHIBIT B
(FORM OF FACE OF TREASURY UNITS CERTIFICATE)
[For inclusion in Global Certificate only - THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AND PLEDGE AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AND PLEDGE 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. TR- | CUSIP No. 854616 307 |
| Number of Treasury Units: 0 | ISIN No. US8546163077 |
THE STANLEY WORKS
Treasury Units
This Treasury Units Certificate certifies that is the registered Holder of the number of Treasury Units set forth above [For inclusion in Global Certificates only - or such other number of Treasury Units reflected in the Schedule of Increases or Decreases in Global Certificate attached hereto]. Each Treasury Unit consists of (i) a Treasury Security having a principal amount at
B-1
maturity equal to $1,000, subject to the Pledge of such Treasury Security by such Holder pursuant to the Purchase Contract and Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with the Company.
All capitalized terms used herein that are defined in the Purchase Contract and Pledge Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Purchase Contract and Pledge Agreement, the Treasury Securities underlying each Treasury Unit evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising part of such Treasury Unit.
The Company shall pay, on each Payment Date, in respect of each Purchase Contract forming part of a Treasury Unit evidenced hereby, an amount (the “Contract Adjustment Payments”) equal to 5.125% per year of the Stated Amount. Such Contract Adjustment Payments shall be payable to the Person in whose name this Treasury Units Certificate is registered at the close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this Treasury Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date, at a Purchase Price equal to the Stated Amount, a number of newly issued shares of Common Stock of the Company, equal to the Settlement Rate, unless prior to or on the Purchase Contract Settlement Date there shall have occurred a Termination Event, an Early Settlement or a Cash Merger Early Settlement with respect to such Purchase Contract, all as provided in the Purchase Contract and Pledge Agreement. The Purchase Price for the shares of Common Stock purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract Settlement Date by application of the proceeds from the Treasury Securities at maturity pledged to secure the obligations under such Purchase Contract of the Holder of the Treasury Units of which such Purchase Contract is a part.
Contract Adjustment Payments will be payable at the office of the Purchase Contract Agent in New York City, except that Contract Adjustment Payments with respect to Global Certificates will be made by wire transfer of immediately available funds to the Depositary. If the book-entry system for the Corporate Units has been terminated, the Contract Adjustment Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by prior written notice to the Purchase Contract Agent, given at least ten calendar days prior to the Payment Date.
B-2
Each Purchase Contract evidenced hereby obligates the holder to agree, for United States federal, state and local income and franchise tax purposes, to (i) treat its acquisition of the Treasury Units as an acquisition of the Treasury Security and Purchase Contracts constituting the Treasury Units and (ii) treat itself as the owner of the applicable interest in the Treasury Securities.
Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Purchase Contract Agent by manual signature, this Treasury Units Certificate shall not be entitled to any benefit under Purchase Contract and Pledge Agreement or be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company and the Holder specified above have caused this instrument to be duly executed.
| | THE STANLEY WORKS |
| | | |
| | | |
| | By: | |
| | | Name: |
| | | Title: |
| | | |
| | HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts) |
| | | |
| | By: | THE BANK OF NEW YORK TRUST COMPANY, N.A., not individually but solely as attorney-in-fact or such Holder |
| | | |
| | | |
| | By: | |
| | | Name: |
| | | Title: |
DATED:____________________
B-4
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within mentioned Purchase Contract and Pledge Agreement.
| | THE BANK OF NEW YORK TRUST COMPANY, N.A., |
| | | as Purchase Contract Agent |
| | | |
| | | |
| | By: | |
| | | Name: |
| | | Title: |
B-1
(REVERSE OF TREASURY UNITS CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (as may be supplemented from time to time, the “Purchase Contract and Pledge Agreement”) between the Company and The Bank of New York Trust Company, N.A., as Purchase Contract Agent (including its successors thereunder, herein called the “Purchase Contract Agent”), and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary (including its successors thereunder, the “Collateral Agent”), to which Purchase Contract and Pledge 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 Collateral Agent, the Company and the Holders and of the terms upon which the Treasury Units Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this Treasury Units Certificate to purchase, and the Company to sell, on the Purchase Contract Settlement Date at a price equal to the Stated Amount, a number of newly issued shares of Common Stock equal to the Settlement Rate, unless an Early Settlement, a Cash Merger Early Settlement or a Termination Event with respect to the Unit of which such Purchase Contract is a part shall have occurred. The Settlement Rate is subject to adjustment as described in the Purchase Contract and Pledge Agreement.
No fractional shares of Common Stock will be issued upon settlement of Purchase Contracts, as provided in Section 5.08 of the Purchase Contract and Pledge Agreement.
Each Purchase Contract evidenced hereby that is settled through Early Settlement or Cash Merger Early Settlement shall obligate the Holder of the related Treasury Units to purchase at the Purchase Price and the Company to sell, a number of newly issued shares of Common Stock equal to the Early Settlement Rate (in the case of an Early Settlement) or applicable Settlement Rate (in the case of a Cash Merger Early Settlement).
In accordance with the terms of the Purchase Contract and Pledge Agreement, the Holder of this Treasury Unit shall pay the Purchase Price for the shares of the Common Stock to be purchased pursuant to each Purchase Contract evidenced hereby either by effecting an Early Settlement or, if applicable, a Cash Merger Early Settlement of each such Purchase Contract or by applying the proceeds of the Pledged Treasury Securities underlying such Holder’s Treasury Unit equal to the Purchase Price for such Purchase Contract to the purchase of the Common Stock.
B-2
The Company shall not be obligated to issue any shares of Common Stock in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate Purchase Price for the shares of Common Stock to be purchased thereunder in the manner set forth in the Purchase Contract and Pledge Agreement.
Each Purchase Contract evidenced hereby and all obligations and rights of the Company and the Holder thereunder, shall terminate if a Termination Event shall occur. Upon the occurrence of a Termination Event, the Company shall give written notice to the Purchase Contract Agent and the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Treasury Securities underlying each Treasury Unit from the Pledge. A Treasury Unit shall thereafter represent the right to receive the Treasury Security underlying such Treasury Unit, in accordance with the terms of the Purchase Contract and Pledge Agreement.
The Treasury Units Certificates are issuable only in registered form and only in denominations of a single Treasury Unit and any integral multiple thereof. The transfer of any Treasury Units Certificate will be registered and Treasury Units Certificates may be exchanged as provided in the Purchase Contract and Pledge Agreement. A Holder who elects to substitute Convertible Notes for Treasury Securities, thereby recreating Corporate Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract and Pledge Agreement, such Treasury Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Treasury Unit in respect of the Treasury Security and the Purchase Contract constituting such Treasury Unit may be transferred and exchanged only as a Treasury Unit.
Subject to, and in compliance with, the conditions and terms set forth in the Purchase Contract and Pledge Agreement, the Holder of Treasury Units may effect a Collateral Substitution. From and after such substitution, each Unit for which Pledged Convertible Notes secure the Holder’s obligation under the Purchase Contract shall be referred to as a “Corporate Unit”.
Subject to and upon compliance with the provisions of the Purchase Contract and Pledge Agreement, at the option of the Holder thereof, Purchase Contracts underlying Units may be settled early by effecting an Early Settlement as provided in the Purchase Contract and Pledge Agreement
Upon Early Settlement of Purchase Contracts by a Holder of the related Units, the Pledged Treasury Securities underlying such Units shall be released from the Pledge as provided in the Purchase Contract and Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on
B-3
account of each Purchase Contract forming part of a Treasury Unit as to which Early Settlement is effected equal to the Early Settlement Rate.
Upon the occurrence of a Cash Merger, a Holder of Treasury Units may effect Cash Merger Early Settlement of the Purchase Contracts underlying such Treasury Units pursuant to the terms of the Purchase Contract and Pledge Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a Holder of the related Treasury Units, the Pledged Treasury Securities underlying such Treasury Units shall be released from the Pledge as provided in the Purchase Contract and Pledge Agreement and the Holder shall be entitled to receive a number of shares of Common Stock on account of each Purchase Contract forming part of a Treasury Unit as to which Cash Merger Early Settlement is effected equal to the applicable Settlement Rate.
Upon registration of transfer of this Treasury Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Purchase Contract Agent pursuant to the Purchase Contract and Pledge Agreement), under the terms of the Purchase Contract and Pledge Agreement and the Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Purchase Contracts evidenced by this Treasury Units Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance hereof, authorizes the Purchase Contract Agent to enter into and perform the related Purchase Contracts forming part of the Treasury Units evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract and Pledge Agreement, authorizes the Purchase Contract Agent to enter into and perform the Purchase Contract and Pledge Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Treasury Securities underlying this Treasury Units Certificate pursuant to the Purchase Contract and Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract and Pledge Agreement, but subject to the terms thereof, payments in respect to the aggregate principal amount at maturity of the Pledged Treasury Securities on the Purchase Contract Settlement Date equal to the aggregate Purchase Price for the related Purchase Contracts shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Purchase Contracts and such Holder shall acquire no right, title or interest in such payments.
B-4
Subject to certain exceptions, the provisions of the Purchase Contract and Pledge Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts.
The Purchase Contracts shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of law provisions thereof to the extent a different law would govern as a result.
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.
Prior to due presentment of this Certificate for registration of transfer, the Company, the Purchase Contract Agent and its Affiliates and any agent of the Company or the Purchase Contract Agent may treat the Person in whose name this Treasury Units Certificate is registered as the owner of the Treasury Units evidenced hereby for the purpose of receiving payments of Contract Adjustment Payments (subject to any applicable record date), performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Purchase Contract Agent nor any such agent shall be affected by notice to the contrary.
A copy of the Purchase Contract and Pledge Agreement is available for inspection at the offices of the Purchase Contract Agent during regular business hours.
B-5
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 MN ACT: ___________________ Custodian________________
(cust) (minor)
Under Uniform Gifts to Minors Act of
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not as tenants in common
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto
| |
| (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) |
| |
| |
| (Please Print or Type Name and Address Including Postal Zip Code of Assignee) |
the within Treasury Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney , to transfer said Treasury Units Certificates on the books of The Stanley Works, with full power of substitution in the premises.
| Dated: | | | Signature | |
| | | | | |
| | | | NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Treasury Units Certificates in every particular, without alteration or enlargement or any change whatsoever. |
| | | | |
| | Signature Guarantee: | | |
B-6
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common Stock deliverable upon settlement on or after the Purchase Contract Settlement Date of the Purchase Contracts underlying the number of Treasury Units evidenced by this Treasury Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.
| Dated: | | | (if assigned to another person) |
| | | |
| If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person’s name and address and (ii) provide a guarantee of your signature: | | REGISTERED HOLDER
Please print name and address of Registered Holder: |
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| | | |
| | | |
| Name | | Name |
| | | |
| | | |
| | | |
| Address | | Address |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Social Security or other Taxpayer
Identification Number, if any | | |
| | | |
| | | |
| Signature | | |
B-7
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury Units Certificate hereby irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early Settlement] in accordance with the terms of the Purchase Contract and Pledge Agreement with respect to the Purchase Contracts underlying the number of Treasury Units evidenced by this Treasury Units Certificate specified below. The undersigned Holder directs that a certificate for shares of Common Stock or other securities deliverable upon such [Early Settlement] [Cash Merger Early Settlement] be registered in the name of, and delivered, together with a check in payment for any fractional share and any Treasury Units Certificate representing any Treasury Units evidenced hereby as to which [Early Settlement] [Cash Merger Early Settlement] of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Treasury Securities deliverable upon such [Early Settlement] [Cash Merger Early Settlement] will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.
B-8
Number of Units evidenced hereby as to which [Early Settlement] [Cash Merger Early Settlement] of the related Purchase Contracts is being elected:
| | | |
| If shares of Common Stock or Treasury Units Certificates are to be registered in the name of and delivered to and Pledged Treasury Securities, as the case may be, are to be transferred to a Person other than the Holder, please print such Person’s name and address: | | Please print name and address of Registered Holder: |
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| | | |
| | | |
| Name | | Name |
| | | |
| | | |
| | | |
| Address | | Address |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
Social Security or other Taxpayer
Identification Number, if any | | |
| | | |
| | | |
| | | |
REGISTERED HOLDER
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early Settlement] [Cash Merger Early Settlement]:
B-9
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The initial number of Treasury Units evidenced by this Global Certificate is 0. The following increases or decreases in this Global Certificate have been made:
| Date | | Amount of increase
in number of
Treasury Units
evidenced by the
Global Certificate | | Amount of decrease
in number of
Treasury Units
evidenced by the
Global Certificate | | Number of
Treasury Units
evidenced by this
Global Certificate
following such
decrease or increase | | Signature of
authorized
signatory of
Purchase Contract
Agent | |
| | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
B-10
INSTRUCTION TO PURCHASE CONTRACT AGENT FROM HOLDER
(To Create Treasury Units or Corporate Units)
The Bank of New York Trust Company, N.A.,
as Purchase Contract Agent
[Address]
| Re: | [ Corporate Units] [ Treasury Units] of The Stanley Works, a Connecticut corporation (the “Company”). |
The undersigned Holder hereby notifies you that it has delivered to HSBC Bank USA, N.A., as Securities Intermediary, for credit to the Collateral Account, $ Value of [Convertible Notes] [Treasury Securities] in exchange for an equal Value of [Pledged Treasury Securities] [Convertible Notes] held in the Collateral Account, in accordance with the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”; unless otherwise defined herein, terms defined in the Agreement are used herein as defined therein), among you, the Company, the Collateral Agent, the Custodial Agent and the Securities Intermediary. The undersigned Holder has paid all applicable fees and expenses relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Convertible Notes] [Pledged Treasury Securities] related to such [Corporate Units] [Treasury Units].
Please print name and address of Registered Holder:
| |
| | | |
| Name | | Social Security or other Taxpayer
Identification Number, if any |
| Address | | |
| | | |
| | | |
| | | |
| | | |
C-1
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS UPON TERMINATION EVENT
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
Attention:
Telecopy:
| Re: | [ Corporate Units] [ Treasury Units] of The Stanley Works, a Connecticut corporation (the “Company”) |
Please refer to the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Purchase Contract and Pledge Agreement”; unless otherwise defined herein, terms defined in the Purchase Contract and Pledge Agreement are used herein as defined therein), among the Company, the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of Corporate Units and Treasury Units from time to time, and HSBC Bank USA, N.A., as the Collateral Agent, the Custodial Agent and the Securities Intermediary.
We hereby notify you that a Termination Event has occurred and that [the Pledged Convertible Notes] [Pledged Treasury Securities] compromising a portion of your ownership interest in [Corporate Units] [Treasury Units] have been released and are being held by us for your account pending receipt of transfer instructions with respect to such [Pledged Convertible Notes] [Pledged Treasury Securities] (the “Released Securities”).
Pursuant to Section 3.15 of the Purchase Contract and Pledge Agreement, we hereby request written transfer instructions with respect to the Released Securities. Upon receipt of your instructions and upon transfer to us of your [Corporate Units] [Treasury Units] effected through book-entry or by delivery to us of your [Corporate Units Certificate] [Treasury Units Certificate], we shall transfer the Released Securities by book-entry transfer or other appropriate procedures, in accordance with your instructions. In the event you fail to effect such transfer or delivery, the Released Securities and any distributions thereon, shall be held in our name, or a nominee in trust for your benefit, until such time as such [Corporate Units] [Treasury Units] are transferred or your [Corporate Units Certificate] [Treasury Units Certificate] is surrendered or satisfactory evidence isprovided that such [Corporate Units Certificate] [Treasury Units Certificate] has been destroyed, lost or stolen, together with any indemnification that we or the Company may require.
D-1
| Date: | | | By: The Bank of New York Trust Company, N.A., |
| | | | as the Purchase Contract Agent |
| | | | |
| | | | |
| | | | Name: |
| | | | Title: Authorized Signatory |
| | | |
D-2
NOTICE OF CASH SETTLEMENT
The Bank of New York Trust Company, N.A.,
as Purchase Contract Agent
[Address]
Re: Corporate Units of The Stanley Works, a Connecticut corporation (the “Company”)
The undersigned Holder hereby irrevocably notifies you in accordance with Section 5.02(a) of the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Purchase Contract and Pledge Agreement”; unless otherwise defined herein, terms defined in the Purchase Contract and Pledge Agreement are used herein as defined therein), among the Company and you, as Purchase Contract Agent and as attorney-in-fact for the Holders of the Corporate Units, and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary, that such Holder has elected to pay to the Securities Intermediary for deposit in the Collateral Account, prior to 5:00 p.m. (New York City time) on the Business Day immediately preceding the first Remarketing Date (in lawful money of the United States by certified or cashiers’ check or wire transfer, in immediately available funds payable to or upon the order of the Securities Intermediary), $ as the Purchase Price for the shares of Common Stock issuable to such Holder by the Company with respect to Purchase Contracts on the Purchase Contract Settlement Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders’ election to make such Cash Settlement with respect to the Purchase Contracts related to such Holder’s Corporate Units.
| Date: | | | | |
| | | Signature | |
| | | | |
| | | Signature Guarantee: | |
| | | |
| Please print name and address of Registered Holder: |
| | | |
| | | |
| | | |
E-1
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Creation of Treasury Units)
HSBC Bank USA, N.A.,
as Collateral Agent
Attention: [ ]
Fax: [ ]
Re: Corporate Units of The Stanley Works (the “Company”)
Please refer to the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of Corporate Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
We hereby notify you in accordance with Section 3.13 of the Agreement that the holder of securities named below (the “Holder”) has elected to substitute $ Value of Treasury Securities or security entitlements with respect thereto in exchange for an equal Value of Pledged Convertible Notes relating to Corporate Units and has delivered to the undersigned a notice stating that the Holder has Transferred such Treasury Securities or security entitlements with respect thereto to the Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon confirmation that such Treasury Securities or security entitlements thereto have been credited to the Collateral Account, to release to the undersigned an equal Value of Pledged Convertible Notes or security entitlements with respect thereto related to Corporate Units of such Holder in accordance with Section 3.13 of the Agreement.
F-1
| Date: | | | The Bank of New York Trust Company, N.A., as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Units |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
Please print name and address of Holder electing to substitute Treasury Securities or security entitlements with respect thereto for the Pledged Convertible Notes:
| | | |
| Name: | | Social Security or other Taxpayer Identification Number, if any |
| | | |
| Address | | |
| | | |
| | | |
| | | |
F-2
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Creation of Treasury Units)
HSBC Bank USA, N.A.,
as Securities Intermediary
Attention: [ ]
Fax: [ ]
Re: Corporate Units of The Stanley Works (the “Company”)
This notice relates to the securities account of HSBC Bank USA, N.A., as Collateral Agent, maintained by the Securities Intermediary and designated “HSBC Bank USA, N.A., as Collateral Agent of The Stanley Works, as pledgee of The Bank of New York Trust Company, N.A., as the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “Collateral Account”).
Please refer to the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, and The Bank of New York Trust Company, N.A., as Purchase Contract Agent and as attorney-in-fact for the holders of Corporate Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
When you have confirmed that $ Value of Treasury Securities or security entitlements with respect thereto has been credited to the Collateral Account by or for the benefit of , as Holder of Corporate Units (the “Holder”), you are hereby instructed to release from the Collateral Account an equal Value of Pledged Convertible Notes or security entitlements with respect thereto relating to Corporate Units of the Holder by Transfer to the Purchase Contract Agent.
| Date: | | | HSBC Bank USA, N.A., as Collateral Agent |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
G-1
INSTRUCTION
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Recreation of Corporate Units)
HSBC Bank USA, N.A.,
as Collateral Agent
Attention: [ ]
Fax: [ ]
Re: Treasury Units of The Stanley Works (the “Company”)
Please refer to the Purchase Contract and Pledge Agreement dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the holders of Treasury Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
We hereby notify you in accordance with Section 3.14 of the Agreement that the holder of securities named below (the “Holder”) has elected to substitute $ Value of Convertible Notes or security entitlements with respect thereto in exchange for $ Value of Pledged Treasury Securities relating to Treasury Units and has delivered to the undersigned a notice stating that the holder has Transferred such Convertible Notes or security entitlements with respect thereto to the Securities Intermediary, for credit to the Collateral Account.
We hereby request that you instruct the Securities Intermediary, upon confirmation that such Convertible Notes or security entitlements with respect thereto have been credited to the Collateral Account, to release to the undersigned $ Value of Treasury Securities or security entitlements with respect thereto related to Treasury Units of such Holder in accordance with Section 3.14 of the Agreement.
H-1
| Date: | | | The Bank of New York Trust Company, N.A., |
| | | as Purchase Contract Agent |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
Please print name and address of Holder electing to substitute Convertible Notes or security entitlements with respect thereto for Pledged Treasury Securities:
| | | |
| Name: | | Social Security or other Taxpayer Identification Number, if any |
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| Address | | |
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H-2
INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Recreation of Corporate Units)
HSBC Bank USA, N.A.,
as Securities Intermediary
Attention: [ ]
Fax: [ ]
Re: Treasury Units of The Stanley Works (the “Company”)
This notice relates to the securities account of HSBC Bank USA, N.A., as Collateral Agent, maintained by the Securities Intermediary and designated “HSBC Bank USA, N.A., as Collateral Agent of The Stanley Works, as pledgee of The Bank of New York Trust Company, N.A., as the Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “Collateral Account”).
Please refer to the Purchase Contract and Pledge Agreement dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Securities Intermediary, Custodial Agent and Collateral Agent, and The Bank of New York Trust Company, N.A., as Purchase Contract Agent and as attorney-in-fact for the holders of Treasury Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
When you have confirmed that $ Value of Convertible Notes or security entitlements with respect thereto has been credited to the Collateral Account by or for the benefit of , as Holder of Treasury Units (the “Holder”), you are hereby instructed to release from the Collateral Account $ Value of Treasury Securities or security entitlements thereto by Transfer to the Purchase Contract Agent.
| Date: | | | HSBC Bank USA, N.A., as Collateral Agent |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
I-1
NOTICE OF CASH SETTLEMENT FROM SECURITIES
INTERMEDIARY TO PURCHASE CONTRACT AGENT
(Cash Settlement Amounts)
The Bank of New York Trust Company, N.A.
as Purchase Contract Agent
[Address]
Re: Corporate Units of The Stanley Works (the “Company”)
Please refer to the Purchase Contract and Pledge Agreement dated as of March 20, 2007 (the “Agreement”), by and among you, the Company, and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary. Unless otherwise defined herein, terms defined in the Agreement are used herein as defined therein.
In accordance with Section 5.02(a)(iv) of the Agreement, we hereby notify you that as of 5:00 p.m. (New York City time) on the Business Day immediately preceding the first Remarketing Date, we have received (i) $ in immediately available funds paid in an aggregate amount equal to the Purchase Price due to the Company on the Purchase Contract Settlement Date with respect to Corporate Units and (ii) based on the funds received set forth in clause (i) above, an aggregate principal amount of $ of Pledged Convertible Notes are to be offered for purchase in the Remarketing on a Remarketing Date.
| Date: | | | HSBC Bank USA, N.A., as Securities Intermediary |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
J-1
INSTRUCTION FROM HOLDER OF SEPARATE CONVERTIBLE NOTES TO CUSTODIAL AGENT REGARDING REMARKETING
HSBC Bank USA, N.A.,
as Custodial Agent
Attention: [ ]
Fax: [ ]
Re: Convertible Notes, of The Stanley Works (the “Company”)
The undersigned Holder hereby notifies you in accordance with Section 5.02(c)(ii) of the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary, and The Bank of New York Trust Company, N.A., as the Purchase Contract Agent and as attorney-in-fact for the holders of Corporate Units and Treasury Units from time to time, that the undersigned elects to deliver $ aggregate principal amount of Separate Convertible Notes for delivery to a Remarketing Agent prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the first Remarketing Date for remarketing pursuant to Section 5.02(c)(ii) of the Agreement. The undersigned will, upon request of a Remarketing Agent, execute and deliver any additional documents deemed by such Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Separate Convertible Notes tendered hereby. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
The undersigned hereby instructs you, upon receipt of the Proceeds of a Successful Remarketing from the Remarketing Agents, to deliver such Proceeds to the undersigned in accordance with the instructions indicated herein under “A. Payment Instructions.” The undersigned hereby instructs you, in the event of a Failed Remarketing, upon receipt of the Separate Convertible Notes tendered herewith from the Remarketing Agents, to deliver such Separate Convertible Notes to the person(s) and the address(es) indicated herein under “B. Delivery Instructions.”
With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Separate Convertible Notes tendered hereby and that the undersigned is the record owner of any Separate Convertible Notes tendered herewith in physical form or a participant in The Depository Trust Company (“DTC”) and the beneficial owner of any Separate Convertible Notes tendered herewith by book-
K-1
entry transfer to your account at DTC, (ii) agrees to be bound by the terms and conditions of Section 5.02 of the Agreement and (iii) acknowledges and agrees that after 5:00 p.m. (New York City time) on the second Business Day immediately preceding the first Remarketing Date, such election shall become an irrevocable election to have such Separate Convertible Notes remarketed in the Remarketing, and that the Separate Convertible Notes tendered herewith will only be returned in the event of a Failed Remarketing.
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| Name: | | Social Security or other Taxpayer Identification Number, if any |
| | | |
| Address | | |
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K-2
A. PAYMENT INSTRUCTIONS
Proceeds of a Successful Remarketing should be paid by check in the name of the person(s) set forth below and mailed to the address set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
B. DELIVERY INSTRUCTIONS
In the event of a Failed Remarketing, Convertible Notes which are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below.
Name(s)
(Please Print)
Address
(Please Print)
(Zip Code)
(Tax Identification or Social Security Number)
In the event of a Failed Remarketing, Convertible Notes which are in book-entry form should be credited to the account at The Depository Trust Company set forth below.
DTC Account Number
Name of Account Party:
K-3
EXHIBIT L
INSTRUCTION FROM HOLDER OF SEPARATE CONVERTIBLE NOTES TO
CUSTODIAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING
HSBC Bank USA, N.A.,
as Custodial Agent
Attention: [ ]
Fax: [ ]
Re: Convertible Notes, of The Stanley Works (the “Company”)
The undersigned Holder hereby notifies you in accordance with Section 5.02(c)(ii) of the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”), among the Company and you, as Collateral Agent, Custodial Agent and Securities Intermediary, and The Bank of New York Trust Company, N.A., as Purchase Contract Agent and as attorney-in-fact for the holders of Corporate Units and Treasury Units from time to time, that the undersigned elects to withdraw the $ aggregate principal amount of Separate Convertible Notes delivered to you for Remarketing pursuant to Section 5.02 of the Agreement. The undersigned hereby instructs you to return such Separate Convertible Notes to the undersigned in accordance with the undersigned’s instructions. With this notice, the Undersigned hereby agrees to be bound by the terms and conditions of Section 5.02 of the Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
| | | |
| Name: | | Social Security or other Taxpayer Identification Number, if any |
L-1
L-2
EXHIBIT M
NOTICE TO SETTLE WITH SEPARATE CASH
The Bank of New York Trust Company, N.A.,
as Purchase Contract Agent
[Address]
Re: Corporate Units of The Stanley Works, a Connecticut corporation (the “Company”)
The undersigned Holder hereby irrevocably notifies you in accordance with Section 5.02(b)(iii) of the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Purchase Contract and Pledge Agreement”; unless otherwise defined herein, terms defined in the Purchase Contract and Pledge Agreement are used herein as defined therein), among the Company and you, as Purchase Contract Agent and as attorney-in-fact for the Holders of the Corporate Units, and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary, that such Holder has elected to pay to the Securities Intermediary for deposit in the Collateral Account, on or prior to 5:00 p.m. (New York City time) on the 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 payable to or upon the order of the Securities Intermediary), $ as the Purchase Price for the shares of Common Stock issuable to such Holder by the Company with respect to Purchase Contracts on the Purchase Contract Settlement Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders’ election to settle the Purchase Contracts related to such Holder’s Corporate Units with separate cash.
| Date: | | | | |
| | | Signature | |
| | | | |
| | | Signature Guarantee: | |
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| Please print name and address of Registered Holder: |
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M-1
EXHIBIT N
NOTICE
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement with Separate Cash)
HSBC Bank USA, N.A.,
as Collateral Agent
Attention: [ ]
Fax: [ ]
Re: Corporate Units of The Stanley Works, a Connecticut corporation (the “Company”)
Please refer to the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
We hereby notify you in accordance with Section 5.02(b)(iii) of the Agreement that the Holder of Corporate Units named below (the “Holder”) has elected to settle the Purchase Contracts related to its Pledged Convertible Notes with $ of separate cash prior to 5:00 p.m. (New York City time) on the 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 payable to or upon the order of the Securities Intermediary) and has delivered to the undersigned a notice to that effect.
We hereby request that you, upon confirmation that the Purchase Price has been paid by the Holder to the Securities Intermediary in accordance with Section 5.02(b)(iii) of the Agreement in lieu of exercise of such Holder’s Put Right, give us notice of the receipt of such payment and (A) promptly invest the separate cash received in Permitted Investments consistent with the instructions of the Company as provided in Section 5.02(b)(iii) of the Agreement with respect to Cash Settlement, (B) promptly release from the Pledge the Pledged Convertible Notes related to the Corporate Units as to which such Holder has paid such separate cash; and (C) promptly Transfer all such Convertible Notes to us for distribution to such Holder, in each case free and clear of the Pledge created by the Agreement.
N-1
| Date: | | | The Bank of New York Trust Company, N.A., |
| | | as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Units |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
| | | | |
| Please print name and address of Holder electing to settle with separate cash: |
| | | | |
| | | |
| Name: | | Social Security or other Taxpayer Identification Number, if any |
| | | |
| Address | | |
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N-2
EXHIBIT O
NOTICE OF SETTLEMENT WITH SEPARATE CASH FROM
SECURITIES INTERMEDIARY TO PURCHASE CONTRACT AGENT
(Settlement with Separate Cash)
The Bank of New York Trust Company, N.A.,
as Purchase Contract Agent
[Address]
Re: Corporate Units of The Stanley Works (the “Company”)
Please refer to the Purchase Contract and Pledge Agreement dated as of March 20, 2007 (the “Agreement”), by and among you, the Company, and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary. Unless otherwise defined herein, terms defined in the Agreement are used herein as defined therein.
In accordance with Section 5.02(a)(v) of the Agreement, we hereby notify you that as of 5:00 p.m. (New York City time) on the Business Day immediately preceding May 17, 2010 (the “Purchase Contract Settlement Date”), (i) we have received from $ in immediately available funds paid in an aggregate amount equal to the Purchase Price due to the Company on the Purchase Contract Settlement Date with respect to Corporate Units and (ii) based on the funds received set forth in clause (i) above, an aggregate principal amount of $ of Pledged Convertible Notes are to be released from the Pledge and Transferred to you.
| Date: | | | HSBC Bank USA, N.A., as Securities Intermediary |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
O-1
EXHIBIT P
NOTICE
FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Cash Settlement)
HSBC Bank USA, N.A.,
as Collateral Agent
Attention: [ ]
Fax: [ ]
Re: Corporate Units of The Stanley Works, a Connecticut corporation (the “Company”)
Please refer to the Purchase Contract and Pledge Agreement, dated as of March 20, 2007 (the “Agreement”), among the Company, you, as Collateral Agent, as Securities Intermediary and as Custodial Agent, and the undersigned, as Purchase Contract Agent and as attorney-in-fact for the Holders of Corporate Units from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.
We hereby notify you in accordance with Section 5.02(a) of the Agreement that the Holder of Corporate Units named below (the “Holder”) has elected to pay to the Securities Intermediary for deposit in the Collateral Account, prior to 5:00 p.m. (New York City time) on the Business Day immediately preceding the first Remarketing Date (in lawful money of the United States by certified or cashiers check or wire transfer, in immediately available funds payable to or upon the order of the Securities Intermediary), $ as the Purchase Price for the shares of Common Stock issuable to such Holder by the Company with respect to Purchase Contracts on the Purchase Contract Settlement Date and has delivered to the undersigned a notice to that effect.
We hereby request that you, upon confirmation that the Purchase Price has been paid by the Holder in accordance with Section 5.02(a)(ii) of the Agreement, (A) instruct the Securities Intermediary promptly to invest any such Cash in Permitted Investments consistent with the instructions of the Company as provided for in Section 5.02(a)(v) of the Agreement, (B) release from the Pledge the Convertible Notes related to the Corporate Units as to which such Holder has effected a Cash Settlement; and (C) instruct the Securities Intermediary to Transfer all such Convertible Notes to us for distribution to such Holder, in each case free and clear of the Pledge created by the Agreement.
O-2
| Date: | | | The Bank of New York Trust Company, N.A., |
| | | as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Units |
| | | |
| | | By: | |
| | | | Name: |
| | | | Title: |
| | | | Authorized Signatory |
| | | | |
| Please print name and address of Holder electing a Cash Settlement: |
| | | | |
| | | |
| Name: | | Social Security or other Taxpayer Identification Number, if any |
| | | |
| Address | | |
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3
EXHIBIT Q
THE STANLEY WORKS
REMARKETING AGREEMENT
Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
This Remarketing Agreement is dated as of [__________, 2010] (this “Agreement”) by and among The Stanley Works, a Connecticut corporation (the “Company”), Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as the reset agents and the remarketing agents (each a “Remarketing Agent” and collectively, the “Remarketing Agents”), and The Bank of New York Trust Company, N.A., not individually but solely as Purchase Contract Agent (the “Purchase Contract Agent” or the “Trustee”) and as attorney-in-fact of the holders of Purchase Contracts (as defined in the Purchase Contract and Pledge Agreement referred to below).
SECTION 1. Definitions.(a) Capitalized terms used and not defined in this Agreement shall have the meanings set forth in (i) the Purchase Contract and Pledge Agreement, dated as of March 20, 2007, among the Company, the Purchase Contract Agent and HSBC Bank USA, N.A., as Collateral Agent, Custodial Agent and Securities Intermediary, as amended from time to time (the “Purchase Contract and Pledge Agreement”) and (ii) the Supplemental Indenture No. 1 dated as of March 20, 2007 between the Company and the Trustee (the “Supplemental Indenture No. 1”), as the context requires.
(b) As used in this Agreement, the following terms have the following meanings:
“Agreement” has the meaning specified in the first paragraph of this Remarketing Agreement.
| “Affiliate” has the meaning specified in Rule 501(b) of Regulation D under the Securities Act. |
“Commencement Date” has the meaning specified in Section 3.
“Commission” means the Securities and Exchange Commission.
“Company” has the meaning specified in the first paragraph of this Remarketing Agreement.
“Convertible Notes” means the series of notes designated the Convertible Notes of the Company issued pursuant to the Supplemental Indenture No. 1.
“Disclosure Package” means (x) the Statutory Prospectus, (y) the Issuer Free Writing Prospectuses, if any, agreed to, in writing, by the Company and the Remarketing Agents, and (z) any other Free Writing Prospectus, if any, agreed to, in writing, by the Company and the Remarketing Agents.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Free Writing Prospectus” means a free writing prospectus, as defined in Rule 405 under the Securities Act.
“Issuer Free Writing Prospectus” means an issuer free writing prospectus, as defined in Rule 433 under the Securities Act.
“Preliminary Prospectus” means any preliminary prospectus included as part of the Registration Statement prior to the time the Registration Statement became effective or any preliminary prospectus or preliminary prospectus supplement provided by the Company for use by the Remarketing Agents in connection with the Remarketing of the Remarketed Convertible Notes on or prior to a Remarketing Date, including the documents incorporated or deemed to be incorporated by reference therein as of the date of such preliminary prospectus or preliminary prospectus supplement; and any reference to any amendment or supplement to such preliminary prospectus or preliminary prospectus supplement, if permitted by the rules and regulations under the Securities Act, shall be deemed to refer to and include any documents filed after the date of such preliminary prospectus or preliminary prospectus supplement under the Exchange Act and incorporated or deemed to be incorporated by reference in such preliminary prospectus or preliminary prospectus supplement.
“Prospectus” means the prospectus or prospectus supplement constituting a part of the Registration Statement relating to the Remarketed Convertible Notes, including the documents incorporated or deemed to be incorporated by reference therein as of the date of such prospectus or prospectus supplement in the form transmitted for filing to the Commission after the effective date of the
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Registration Statement pursuant to Rule 424 under the Securities Act; and any reference to any amendment or supplement to such prospectus or prospectus supplement, if permitted by the rules and regulations under the Securities Act, shall be deemed to refer to and include any documents filed after the date of such prospectus or prospectus supplement, under the Exchange Act, and incorporated or deemed to be incorporated by reference in such prospectus or prospectus supplement. |
“Purchase Contract and Pledge Agreement” has the meaning specified in Section 1(a).
“Registration Statement” means a registration statement under the Securities Act prepared by the Company and filed with the Commission relating to, inter alia, the Remarketing of the Remarketed Convertible Notes pursuant to Section 5(a) hereunder, including all exhibits thereto and the documents incorporated or deemed to be incorporated by reference in the prospectus contained in such registration statement, and any pre-effective or post-effective amendments thereto.
“Remarketed Convertible Notes” means the aggregate Convertible Notes underlying the Pledged Convertible Notes and the Separate Convertible Notes, if any, subject to Remarketing as identified to the Remarketing Agents by the Purchase Contract Agent and the Custodial Agent, respectively, in each case promptly after 5:00 p.m., New York City time, on the Business Day immediately preceding the first Remarketing Date in accordance with the Purchase Contract and Pledge Agreement and shall include: (a) the Convertible Notes underlying the Pledged Convertible Notes of the Holders of Corporate Units who have not effected a Collateral Substitution or a Cash Merger Early Settlement, in each case prior to the second Business Day immediately preceding the first Remarketing Date, or an Early Settlement prior to April 14, 2010, and Holders of Corporate Units who have not notified the Purchase Contract Agent prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the first Remarketing Date of their intention to effect a Cash Settlement of the related Purchase Contracts pursuant to the terms of the Purchase Contract and Pledge Agreement or who have so notified the Purchase Contract Agent but failed to make the required cash payment prior to 5:00 p.m., New York City time, on the Business Day immediately preceding the first Remarketing Date, and (b) the Separate Convertible Notes of the holders of Separate Convertible Notes, if any, who have elected to have their Separate Convertible Notes remarketed in such Remarketing prior to 5:00 p.m., New York City time, on the second Business Day immediately preceding the first Remarketing Date, pursuant to the terms of the Purchase Contract and Pledge Agreement.
“Remarketing” means the remarketing of the Remarketed Convertible Notes pursuant to this Remarketing Agreement on any Remarketing Date.
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| “Remarketing Date” has the meaning specified in Section 2(b). |
“Remarketing Fee” has the meaning specified in Section 4.
“Remarketing Materials” means the Registration Statement, the Preliminary Prospectus, the Statutory Prospectus, the Prospectus or any other information furnished by the Company to the Remarketing Agents for distribution to investors in connection with the Remarketing.
“Remarketing Settlement Date” means the Purchase Contract Settlement Date.
“Reset Rate” has the meaning specified in Section 2(c).
“Securities” has the meaning specified in Section 9.
“Statutory Prospectus” means, as of any time, the prospectus or prospectus supplement relating to the Remarketed Convertible Notes that is included as part of the Registration Statement immediately prior to that time, including the documents incorporated or deemed to be incorporated by reference therein.
“Transaction Documents” means this Agreement, the Purchase Contract and Pledge Agreement and the Supplemental Indenture No. 1, in each case as amended or supplemented from time to time.
“Trustee” means The Bank of New York Trust Company, N.A.
“Underwriting Agreement” has the meaning specified in Section 3(a).
SECTION 2. Appointment and Obligations of the Remarketing Agents.(a) The Company hereby appoints Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated as the exclusive Remarketing Agents, and, subject to the terms and conditions set forth herein, Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated hereby accept appointment as Remarketing Agents, for the purpose of (i) remarketing the Remarketed Convertible Notes on behalf of the holders thereof, (ii) determining, in consultation with the Company, in the manner provided for herein and in the Purchase Contract and Pledge Agreement and the Supplemental Indenture No. 1, the Reset Rate for the Convertible Notes, and (iii) performing such other duties as are assigned to the Remarketing Agents in the Transaction Documents.
(b) Unless a Termination Event has occurred prior to such date, the Remarketing Agents shall use their reasonable efforts to remarket the Remarketed Convertible Notes at the Remarketing Price on May 10, 2010 and, unless a Successful Remarketing has occurred on such date, on May 11, 2010 (each, a
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“Remarketing Date”). It is understood and agreed that the Remarketing on any Remarketing Date will be considered successful and no further attempts will be made if the resulting proceeds are at least equal to the Remarketing Price. |
(c) In connection with each Remarketing, the Remarketing Agents shall determine, in consultation with the Company, an annual rate of interest on the Convertible Notes equal to 3-month LIBOR, reset quarterly on each LIBOR Reset Date beginning on the Remarketing Settlement Date, plus or minus a spread, rounded to the nearest one-thousandth (0.001) of one percent per annum, that the Convertible Notes should bear (the “Reset Rate”) in order for the Remarketed Convertible Notes to have an aggregate market value equal to at least the Remarketing Price and that in the sole reasonable discretion of the Remarketing Agents will enable them to remarket all of the Remarketed Convertible Notes at no less than the Remarketing Price in such Remarketing. The Reset Rate may be equal to or higher than 3-month LIBOR minus 3.500%, but may not be lower than 3-month LIBOR minus 3.500%. However, in no event shall the Reset Rate exceed the maximum rate permitted by applicable law or be less than 0%.
(d) If, by 4:00 p.m., New York City time, on the second Remarketing Date, (1) the Remarketing Agents are unable to remarket all of the Remarketed Convertible Notes, other than to the Company, at a price equal to or greater than the Remarketing Price pursuant to the terms and conditions hereof or (2) the Remarketing did not occur on such Remarketing Date because one of the conditions set forth in Section 6 hereof was not satisfied, a Failed Remarketing shall be deemed to have occurred, and the Remarketing Agents shall advise by telephone (promptly confirmed in writing) the Depositary, the Purchase Contract Agent, the Collateral Agent and the Company. Whether or not there has been a Failed Remarketing will be determined in the sole reasonable discretion of the Remarketing Agents. In the event of a Failed Remarketing, the applicable interest rate on the Convertible Notes will not be reset, and will continue to be the Initial Interest Rate set forth in the Supplemental Indenture No. 1.
(e) In the event of a Successful Remarketing, by approximately 4:30 p.m., New York City time, on the applicable Remarketing Date, the Remarketing Agents shall advise, by telephone (promptly confirmed in writing in the case of clause (1)):
| (1) | the Depositary, the Purchase Contract Agent, the Trustee and the Company of the Reset Rate determined by the Remarketing Agents in such Remarketing and the principal amount of Remarketed Convertible Notes sold in such Remarketing; |
| | |
| (2) | each purchaser (or the Depositary Participant thereof) of Remarketed Convertible Notes of the Reset Rate and the principal |
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| | amount of Remarketed Convertible Notes such purchaser is to purchase; |
| |
| (3) | each such purchaser (if other than a Depositary Participant) to give instructions to its Depositary Participant to pay the purchase price on the Remarketing Settlement Date in same day funds against delivery of the Remarketed Convertible Notes purchased through the facilities of the Depositary; and |
| | |
| (4) | each such purchaser (or Depositary Participant thereof) that the Remarketed Convertible Notes will not be delivered until the Remarketing Settlement Date, and that if such purchaser wishes to trade the Remarketed Convertible Notes that it has purchased prior to the third Business Day preceding the Remarketing Settlement Date, such purchaser will have to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement. |
(f) The proceeds from a Successful Remarketing (i) with respect to the Convertible Notes that are components of the Corporate Units shall be paid to the Collateral Agent in accordance with Section 5.02 of the Purchase Contract and Pledge Agreement and (ii) with respect to the Separate Convertible Notes, shall be paid to the Custodial Agent for payment to the holders of such Separate Convertible Notes in accordance with Section 5.02 of the Purchase Contract and Pledge Agreement.
(g) The right of each holder of Remarketed Convertible Notes to have such Remarketed Convertible Notes remarketed and sold on any Remarketing Date shall be subject to the conditions that (i) a Termination Event has not occurred prior to such Remarketing Date, (ii) the Remarketing Agents are able to find a purchaser or purchasers for Remarketed Convertible Notes at the Remarketing Price based on the Reset Rate, and (iii) such purchaser or purchasers on the Remarketing Settlement Date of the Remarketed Convertible Notes deliver the purchase price therefor to the Remarketing Agents as and when required.
(h) It is understood and agreed that the Remarketing Agents shall not have any obligation whatsoever to purchase any Remarketed Convertible Notes, whether in the Remarketing or otherwise, and shall in no way be obligated to provide funds to make payment upon tender of Remarketed Convertible Notes for Remarketing or to otherwise expend or risk its own funds or incur or to be exposed to financial liability in the performance of its duties under this Agreement. Neither the Company nor the Remarketing Agents, nor any agent of the Company or the Remarketing Agents, shall be obligated in any case to provide funds to make payment upon tender of the Remarketed Convertible Notes for Remarketing.
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SECTION 3. Representations and Warranties of the Company.The Company represents and warrants (except as may be adapted as necessary to relate to the Remarketed Convertible Notes and to the Remarketing Materials, if any, or to any changed circumstances or events occurring subsequent to the date of this Agreement, such adaptations being reasonably acceptable to counsel to the Remarketing Agents), (i) on and as of the date any Remarketing Materials are first distributed in connection with any Remarketing (the “Commencement Date”), (ii) on and as of the applicable Remarketing Date and (iii) on and as of the Remarketing Settlement Date, that:
(a) Each of the representations and warranties of the Company as set forth in Sections 3(a) through 3(c), Sections 3(k) through 3(1), Sections 3(n) through 3(o), Section 3(p)(i), Section 3(q) and Sections 3(s) through 3(t)(i) of the Underwriting Agreement dated March 14, 2007 (the “Underwriting Agreement”) among the Company and Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as Representatives of the Underwriters identified in Schedule II thereto, is true and correct as if made on each of the dates specified above;provided that for purposes of this Section 3(a), any reference in such sections of the Underwriting Agreement to (i) the “Registration Statement”, the “Prospectus”, the “Statutory Prospectus”, the “Disclosure Package” and the “Preliminary Prospectus” shall be deemed to refer to the correlative terms as defined herein, (ii) the “Closing Date” shall be deemed to refer to the Remarketing Settlement Date, (iii) the “Securities” shall be deemed to refer to the Remarketed Convertible Notes, and (iv) “this Underwriting Agreement” shall be ignored.
(b) The Registration Statement has been declared effective by the Commission; and no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been initiated or threatened by the Commission.
(c) At the time of filing of the Registration Statement and as of the applicable Remarketing Date and the Remarketing Settlement Date, the Company was not and will not be an “ineligible issuer” (as defined in Rule 405 under the Securities Act). The documents incorporated or deemed to be incorporated by reference in the Preliminary Prospectus and the Prospectus, on the date filed with the Commission pursuant to the Exchange Act, complied in all material respects with the applicable provisions of the Exchange Act and the rules and regulations of the Commission thereunder or pursuant to said rules and regulations will be deemed to comply therewith; and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated or deemed to be incorporated by reference in the Preliminary Prospectus or the Prospectus or any further amendment or supplement thereto, when such documents are filed with the Commission, will
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comply in all material respects to the requirements of the Exchange Act or pursuant to said rules and regulations will be deemed to comply therewith. As of the latest date any part of the Registration Statement became, or is deemed to have become, effective by the Commission under the Securities Act, the Registration Statement did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the time that any Preliminary Prospectus is delivered to the Remarketing Agents for its use in remarketing the Remarketed Convertible Notes, such Preliminary Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. At the time the Prospectus is delivered to the Remarketing Agents for its use in making confirmations of sales of the Remarketed Convertible Notes and as of the Remarketing Settlement Date, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, on said dates and at such times, the documents then incorporated or deemed to be incorporated by reference in the Prospectus, when read together with the Prospectus, will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The foregoing representations and warranties in this paragraph (c) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Remarketing Agents or on behalf of the Remarketing Agents specifically for use in connection with the preparation of the Registration Statement, the Preliminary Prospectus, or the Prospectus or to any statements in or omissions from the statement of eligibility of the Trustee on Form T-1 under the TIA filed as an exhibit to the Registration Statement (the “Statement of Eligibility”).
(d) The Registration Statement as of the latest date any part of the Registration Statement became effective, or is deemed to have become effective by the Commission under the Securities Act, complied (and the Preliminary Prospectus and the Prospectus, if any, and any further amendments or supplements to the Registration Statement or the Prospectus, when they become effective or are filed with the Commission, as the case may be, will comply) in all material respects to the requirements of the Securities Act.
(e) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required for the Remarketing or the consummation by the Company of the transactions contemplated by the Transaction Documents except such as may be or have been obtained under the Securities Act, the TIA and such as may be required under the blue sky laws of any jurisdiction in connection with the Remarketing.
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(f) The Company is not required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended.
(g) As of the applicable Remarketing Date, the Disclosure Package, and each electronic roadshow agreed to in writing by the Company and the Remarketing Agents, when taken together with the Disclosure Package, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The preceding sentence does not apply to statements in or omissions from the Disclosure Package made in reliance upon and in conformity with written information furnished to the Company by the Remarketing Agents or on behalf of the Remarketing Agents specifically for use in connection with the preparation of the Disclosure Package.
(h) Each Issuer Free Writing Prospectus and the final term sheet prepared and filed pursuant to Section 5(b) hereof does not include any information that conflicts with the information contained in the Registration Statement, the Prospectus or the Statutory Prospectus, including any document incorporated or deemed to be incorporated by reference therein that has not been superseded or modified. If there occurs an event or development as a result of which the Disclosure Package would include an untrue statement of a material fact or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will notify promptly the Remarketing Agents so that any use of the Disclosure Package may cease until it is amended or supplemented. The foregoing two sentences do not apply to statements in or omissions from the Disclosure Package in reliance upon and in conformity with written information furnished to the Company by the Remarketing Agents or on behalf of the Remarketing Agents specifically for use in connection with the preparation of the Disclosure Package.
SECTION 4. Fees. In the event of a Successful Remarketing of the Remarketed Convertible Notes, the Company shall pay the Remarketing Agents a remarketing fee to be agreed upon in writing by the Company and each Remarketing Agent prior to any such Remarketing (the “Remarketing Fee”). Such Remarketing Fee shall be paid by the Company on the Remarketing Settlement Date in cash by wire transfer of immediately available funds to an account designated by each Remarketing Agent.
SECTION 5. Covenants of the Company.The Company covenants and agrees as follows:
(a) to prepare the Registration Statement, and the Prospectus, in a form approved by the Remarketing Agents, to file any such Prospectus pursuant to the
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Securities Act within the period required by the Securities Act and the rules and regulations thereunder and to use commercially reasonable efforts to cause the Registration Statement to be declared effective by the Commission prior to the second Business Day immediately preceding the first Remarketing Date;
(b) to prepare a final term sheet, containing solely a description of final terms of the Remarketed Convertible Notes and the offering thereof, in a form approved by the Remarketing Agents and to file such term sheet pursuant to Rule 433(d) within the time required by such Rule. Such term sheet shall be an Issuer Free Writing Prospectus and the prior written consent of the parties hereto shall be deemed to have been given in respect of such Issuer Free Writing Prospectus;
(c) to file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that may, in the reasonable judgment of the Company or the Remarketing Agents, be required by the Securities Act or requested by the Commission;
(d) to advise the Remarketing Agents, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Remarketing Agents with copies thereof;
(e) to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a Prospectus is required (but for Rule 172 under the Securities Act) in connection with the offering or sale of the Remarketed Convertible Notes;
(f) to advise the Remarketing Agents, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus, of the suspension of the qualification of any of the Remarketed Convertible Notes for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus or for additional information, and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Prospectus or any Issuer Free Writing Prospectus or suspending any such qualification, to use promptly its best efforts to obtain its withdrawal;
(g) to furnish promptly to the Remarketing Agents such copies of the following documents as the Remarketing Agents shall reasonably request: (A)
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conformed copies of the Registration Statement as originally filed with the Commission and each amendment thereto (in each case excluding exhibits); (B) the Preliminary Prospectus and any amended or supplemented Preliminary Prospectus; (C) the Disclosure Package; (D) the Prospectus and any amended or supplemented Prospectus; and (E) any document incorporated by reference in the Disclosure Package (excluding exhibits thereto);
(h) during such period of time as the Remarketing Agents are required by law to deliver a prospectus (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) after a Remarketing Date, if any event relating to or affecting the Company, or of which the Company shall be advised by either Remarketing Agent in writing, shall occur which in the Company’s opinion should be set forth in a supplement or amendment to the Prospectus or the Disclosure Package in order to make the Prospectus or the Disclosure Package not misleading in the light of the circumstances when it (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) is delivered to a purchaser of the Remarketed Convertible Notes, the Company will amend or supplement the Prospectus or the Disclosure Package by preparing and filing with the Commission and furnishing to the Remarketing Agents a reasonable number of copies of a supplement or supplements or an amendment or amendments to the Prospectus or the Disclosure Package, so that, as supplemented or amended, the Prospectus or the Disclosure Package will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances when the Prospectus (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act) or the Disclosure Package is delivered to a purchaser, not misleading. Unless such event relates solely to the activities of either Remarketing Agent (in which case such Remarketing Agent shall assume the expense of preparing any such amendment or supplement), the expenses of complying with this Section 5(h) shall be borne by the Company;
(i) the Company will not file any amendment to the Registration Statement or any supplement to the Prospectus or the Disclosure Package, in each case relating to the Remarketed Convertible Notes, without prior notice to the Remarketing Agents and to Davis Polk & Wardwell (“Counsel for the Remarketing Agents”), or any such amendment or supplement to which said Counsel shall reasonably object on legal grounds in writing;
(j) the Company will make generally available to its security holders, as soon as practicable, an earning statement (which need not be audited) covering a period of at least twelve months beginning after the “effective date of the registration statement” within the meaning of Rule 158 under the Securities Act, which earning statement shall be in such form, and be made generally available to security holders in such a manner, as to meet the requirements of the last
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paragraph of Section 11(a) of the Securities Act and Rule 158 under the Securities Act;
(k) to take such action as the Remarketing Agents may reasonably request in order to qualify the Remarketed Convertible Notes for offer and sale under the securities or “blue sky” laws of such jurisdictions as the Remarketing Agents may reasonably request;provided that in no event shall the Company be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction;
(l) to pay: (1) the costs incident to the preparation and filing of the Registration Statement and any post-effective amendments thereto; (2) the qualification of the Securities under the blue sky laws of various jurisdictions in an amount not to exceed $3,500; (3) the printing and delivery to the Remarketing Agents of reasonable quantities of copies of the Registration Statement, the preliminary (and any supplemental) blue sky survey, any Preliminary Prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendment or supplement thereto, except as otherwise provided in paragraph (g) of this Section 5; (4) the costs of filings or other notices (if any) with or to, as the case may be, the National Association of Securities Dealers, Inc. (the “NASD”) in connection with its review of the terms of the offering, (5) all other costs and expenses incident to the performance of the obligations of the Company hereunder and the Remarketing Agents hereunder; and (6) the reasonable fees and expenses of counsel to the Remarketing Agents in connection with its duties hereunder;
(m) to furnish the Remarketing Agents with such information and documents as the Remarketing Agents may reasonably request in connection with the transactions contemplated hereby, and to make reasonably available to the Remarketing Agents and any accountant, attorney or other advisor retained by the Remarketing Agents such information that parties would customarily require in connection with a due diligence investigation conducted in accordance with applicable securities laws and to cause the Company’s officers, directors, employees and accountants to participate, to the extent requested, in all such discussions and to supply all such information reasonably requested by any such Person in connection with such investigation; and
(n) the Company agrees that, unless it has obtained or will obtain, as the case may be, the prior written consent of each Remarketing Agent, and each Remarketing Agent agrees with the Company that, unless it has obtained or will obtain, as the case may be, the prior written consent of the Company, it has not made and will not make any offer relating to the Remarketed Convertible Notes that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a Free Writing Prospectus required to be filed by the Company with the Commission or retained by the Company under Rule 433 under the Securities Act, other than the final term sheet prepared and filed pursuant to Section 5(b) hereto,
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under the Securities Act; any such Free Writing Prospectus consented to by the Remarketing Agents or the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the Securities Act applicable to any Permitted Free Writing Prospectus, including, if applicable, in respect of timely filing with the Commission, legending and record keeping.
SECTION 6. Conditions to the Remarketing Agents’ Obligations.The obligations of the Remarketing Agents hereunder shall be subject to the following conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Securities Act prior to 5:30 P.M., New York City time, on the second Business Day following its use by the Remarketing Agents, or such other time and date as may be agreed upon by the Company and the Remarketing Agents.
(b) No stop order suspending the effectiveness of the Registration Statement or preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus shall be in effect at or prior to the Remarketing Settlement Date; no proceedings for such purpose or pursuant to Section 8A of the Securities Act against the Company or relating to the offering of the Remarketed Convertible Notes shall be pending before, or, to the knowledge of the Company or either of the Remarketing Agents, threatened by, the Commission on the Remarketing Date;
(c) There shall not have occurred any of the following: (a)(i) trading in the securities of the Company or generally shall have been suspended or limited on the New York Stock Exchange by the NYSE, the Commission or other governmental authority, (ii) minimum or maximum ranges for prices shall have been generally established on the New York Stock Exchange by The New York Stock Exchange, Inc., the Commission or other governmental authority, (iii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearing services in the United States shall have occurred, (iv) any material outbreak or escalation of hostilities or any calamity or crisis that, in the judgment of either of the Remarketing Agents, is material and adverse, or (v) any material adverse change in financial, political or economic conditions in the United States or elsewhere shall have occurred and (b) in the case of any of the events specified in clauses (a)(i) through (v), such event singly or together with any other such event makes it, in the judgment of either of the Remarketing Agents, impracticable or
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inadvisable to proceed with the Remarketing or to enforce contracts for the sale of any of the Remarketed Convertible Notes.
(d) The representations and warranties of the Company contained herein shall be true and correct on and as of the applicable Remarketing Date and the Remarketing Settlement Date, and the Company, the Purchase Contract Agent and the Collateral Agent shall have performed all covenants and agreements contained herein or in the Purchase Contract and Pledge Agreement to be performed on their part at or prior to such Remarketing Date and such Remarketing Settlement Date.
(e) The Company shall have furnished to the Remarketing Agents a certificate, dated the applicable Remarketing Settlement Date, of the President, a Vice President, the Treasurer or an Assistant Treasurer of the Company stating that: (1) no order suspending the effectiveness of the Registration Statement, or preventing or suspending the use of the Prospectus or any Issuer Free Writing Prospectus, or prohibiting the sale of the Remarketed Convertible Notes is in effect, and no proceedings for such purpose are pending before or, to the knowledge of such officer, threatened by the Commission; (2) the representations and warranties of the Company in Section 3 hereof are true and correct on and as of the applicable Remarketing Settlement Date and the Company has performed in all material respects all covenants and agreements contained herein to be performed on its part at or prior to such Remarketing Settlement Date; and (3) the Registration Statement, as of the latest date any part of the Registration Statement became, or is deemed to have become, effective by the Commission under the Securities Act, and the Remarketing Materials, as of their respective dates, did not contain any untrue statement of a material fact and did not omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Prospectus does not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) On the applicable Remarketing Date and the Remarketing Settlement Date, the Remarketing Agents shall have received a letter addressed to the Remarketing Agents and dated such date, in form and substance satisfactory to the Remarketing Agents, of the independent registered public accountants of the Company, containing statements and information of the type ordinarily included in accountants’ “comfort letters” with respect to certain financial information contained in the Remarketing Materials, if any.
(g) Counsel for the Company reasonably acceptable to the Remarketing Agents shall have furnished to the Remarketing Agents its or their opinion or opinions, addressed to the Remarketing Agents and dated the Remarketing Settlement Date, in form and substance reasonably satisfactory to the
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Remarketing Agents addressing such matters as are set forth in such counsel’s opinion or opinions furnished pursuant to Section 7(d) of the Underwriting Agreement, adapted as necessary to relate to the Remarketed Convertible Notes and to the Remarketing Materials, if any, or to any changed circumstances or events occurring subsequent to the date of this Agreement, such adaptations being reasonably acceptable to counsel to the Remarketing Agents.
(h) Counsel for the Remarketing Agents shall have furnished to the Remarketing Agents its opinion, addressed to the Remarketing Agents and dated the Remarketing Settlement Date, in form and substance reasonably satisfactory to the Remarketing Agents.
(i) Subsequent to the Commencement Date and prior to the Remarketing Settlement Date, there shall not have occurred any downgrading, withdrawal or suspension in the rating accorded any of the Company’s securities by any “nationally recognized statistical rating organization,” as such term is defined for purposes of Rule 436(g)(2) under the Securities Act that currently has publicly released a rating of the Company’s securities and no such organization shall have publicly announced that it has under surveillance or review, with negative implications, its rating of any of the Company’s securities.
SECTION 7. Indemnification.(a) The Company agrees to indemnify and hold harmless each Remarketing Agent, the directors, officers, employees, Affiliates and agents of each Remarketing Agent and each person who controls any Remarketing Agent within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other U.S. federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or in the Prospectus, any Preliminary Prospectus, the Statutory Prospectus, or any Issuer Free Writing Prospectus or the information contained in the final term sheet required to be prepared and filed pursuant to Section 5(b) hereto, or in any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action;provided,however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any Remarketing Agent specifically for inclusion
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therein. This indemnity agreement will be in addition to any liability that the Company may otherwise have.
(b) Each Remarketing Agent severally, and not jointly, agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to each Remarketing Agent, but only with reference to written information relating to such Remarketing Agent furnished to the Company by or on behalf of such Remarketing Agent specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability that any Remarketing Agent may otherwise have. The Company acknowledges that the statements contained in the “Underwriting” section of any Preliminary Prospectus and the Statutory Prospectus (i) in the third sentence of the fifth paragraph of text, (ii) in the second sentence of the sixth paragraph of text and (iii) in the ninth, tenth and eleventh paragraphs of text of such section constitute the only information furnished in writing by or on behalf of the Remarketing Agents for inclusion in any Preliminary Prospectus the Statutory Prospectus or any Issuer Free Writing Prospectus, or in any amendment or supplement thereto.
(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below);provided,however, that such counsel shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of no more than one such separate counsel if (i) the use of counsel chosen by the indemnifying party to
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represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and (ii) does not include a statement or an admission of fault, culpability by failure to act, by or on behalf of any indemnified party.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 7 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and the Remarketing Agents severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, damage, liability or action) (collectively “Losses”) to which the Company and one or more of the Remarketing Agents may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Remarketing Agents on the other in connection with the Remarketing of the Remarketed Convertible Notes;provided,however, that in no case shall any Remarketing Agent be responsible for any amount in excess of the amount by which the Remarketing Fee exceeds the amount of any damages that such Remarketing Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Remarketing Agents severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Remarketing Agents on the other in connection with the statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. Relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information
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provided by the Company on the one hand or the Remarketing Agents on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Remarketing Agents agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation that does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 7, each person who controls a Remarketing Agent within the meaning of either the Securities Act or the Exchange Act and each director, officer, employee, Affiliate and agent of a Remarketing Agent shall have the same rights to contribution as such Remarketing Agent, and each person who controls the Company within the meaning of either the Securities Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d).
SECTION 8. Resignation and Removal of the Remarketing Agents.Either of the Remarketing Agents may resign and be discharged from its duties and obligations hereunder, and the Company may remove either of the Remarketing Agents, by giving 10 days’ prior written notice, in the case of a resignation, to the Company and the Purchase Contract Agent and, in the case of a removal, to the removed Remarketing Agent and the Purchase Contract Agent.
In any such case, the Company will use commercially reasonable efforts to appoint a successor Remarketing Agent and enter into a remarketing agreement (or an appropriate amendment to this Agreement) with such person as soon as reasonably practicable. The provisions of Section 7 shall survive the resignation or removal of any Remarketing Agent pursuant to this Agreement.
SECTION 9. Dealing in Securities.A Remarketing Agent, when acting as a Remarketing Agent or in its individual or any other capacity, may, to the extent permitted by law, buy, sell, hold and deal in any of the Remarketed Convertible Notes, Corporate Units, Treasury Units or any of the securities of the Company (together, the “Securities”). A Remarketing Agent may exercise any vote or join in any action which any beneficial owner of such Securities may be entitled to exercise or take pursuant to the Indenture with like effect as if it did not act in any capacity hereunder. A Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or have an interest in any financial or other transaction with the Company as freely as if it did not act in any capacity hereunder.
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SECTION 10. Remarketing Agents’ Performance; Duty of Care.The duties and obligations of the Remarketing Agents hereunder shall be determined solely by the express provisions of this Agreement and the other Transaction Documents. No implied covenants or obligations of or against the Remarketing Agents shall be read into this Agreement or any of the other Transaction Documents. In the absence of bad faith on the part of a Remarketing Agent, a Remarketing Agent may conclusively rely upon any document furnished to it, as to the truth of the statements expressed in any of such documents. A Remarketing Agent shall be protected in acting upon any document or communication reasonably believed by it to have been signed, presented or made by the proper party or parties except as otherwise set forth herein. A Remarketing Agent shall have no obligation to determine whether there is any limitation under applicable law on the Reset Rate on the Convertible Notes or, if there is any such limitation, the maximum permissible Reset Rate on the Convertible Notes, and it shall rely solely upon written notice from the Company (which the Company agrees to provide prior to the third Business Day before the applicable Remarketing Date) as to whether or not there is any such limitation and, if so, the maximum permissible Reset Rate. A Remarketing Agent, acting under this Agreement, shall incur no liability to the Company or to any holder of Remarketed Convertible Notes in its individual capacity or as Remarketing Agent for any action or failure to act, on its part in connection with a Remarketing or otherwise, except if such liability is judicially determined to have resulted from its failure to comply with the material terms of this Agreement or bad faith, gross negligence or willful misconduct on its part. The provisions of this Section 10 shall survive the termination of this Agreement and shall survive the resignation or removal of any Remarketing Agent pursuant to this Agreement.
SECTION 11. Survival of Certain Representations and Obligations.Any other provision of this Agreement to the contrary notwithstanding, (a) the indemnity and contribution agreements contained in Section 7 hereof, and the representations and warranties and other agreements of the Company and the Remarketing Agents contained in this Agreement shall remain in full force and effect regardless of (i) any investigation made by or on behalf of a Remarketing Agent or by or on behalf of the Company or its directors or officers, or any of the other persons referred to in Section 7 hereof and (ii) acceptance of and payment for the Remarketed Convertible Notes, and (b) the indemnity and contribution agreements contained in Section 7 shall remain operative and in full force and effect regardless of any termination of this Agreement.
SECTION 12. Termination.This Agreement shall automatically terminate (i) as to a Remarketing Agent on the effective date of the resignation or removal of such Remarketing Agent pursuant to Section 8 hereof and (ii) on the earlier of (x) the occurrence of a Termination Event and (y) the Business Day immediately following the Remarketing Settlement Date. If this Agreement is terminated pursuant to any of the other provisions hereof, except as otherwise
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provided herein, the Company shall not be under any liability to either of the Remarketing Agents and the Remarketing Agents shall not be under any liability to the Company, except that if this Agreement is terminated by a Remarketing Agent with respect to such Remarketing Agent because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, the Company will reimburse such Remarketing Agent for all of its out-of-pocket expenses (including the fees and disbursements of its counsel) reasonably incurred by it. Notwithstanding any termination of this Agreement, in the event there has been a Successful Remarketing, the obligations set forth in Section 4 hereof shall survive and remain in full force and effect until all amounts payable under said Section 4 shall have been paid in full. In addition, Sections 7 and 10 hereof shall survive the termination of this Agreement or the resignation or removal of the Remarketing Agents.
SECTION 13. Miscellaneous.THE RIGHTS AND DUTIES OF THE PARTIES TO THIS REMARKETING AGREEMENT SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CHOICE OF LAW PRINCIPLES THAT MIGHT CALL FOR THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. EACH PARTY HERETO, AND EACH HOLDER OF A UNIT BY ACCEPTANCE THEREOF, HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. This Agreement shall become effective when a fully executed copy hereof is delivered to the Remarketing Agents by the Company. This Agreement may be executed in any number of separate counterparts, each of which, when so executed and delivered, shall be deemed to be an original and all of which, taken together, shall constitute but one and the same agreement. This Agreement shall inure to the sole benefit of each of the Company, the Remarketing Agents, and the Purchase Contract Agent, except that with respect to the provisions of Section 7 hereof, such provisions shall also be deemed to be for the benefit of each director, officer and other persons referred to in Section 7 hereof, and their respective successors. Should any part of this Agreement for any reason be declared invalid, such declaration shall not affect the validity of any remaining portion, which remaining portion shall remain in full force and effect as if this Agreement had been executed with the invalid portion thereof eliminated. Nothing herein is intended or shall be construed to give to any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of any provision in this Agreement. The term “successor” as used in this Agreement shall not include any purchaser, as such purchaser, of any Securities from a Remarketing Agent.
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SECTION 14. Notices.All communications hereunder shall be in writing and, if to the Remarketing Agents, shall be delivered or sent by mail, telex or facsimile transmission to Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, Attention: General Counsel (fax: 212-816-7912) and Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: Serkan Savasoglu (fax: 212 404-9481); if to the Company, shall be delivered or sent by mail, telex or facsimile transmission to the Company, 1000 Stanley Drive, New Britain, CT 06053, Attention: Donald Riccitelli (fax: 860-827-3911); and if to the Purchase Contract Agent, shall be delivered or sent by mail or facsimile transmission to The Bank of New York Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago, Illinois 60602. Any such statements, requests, notices or agreements shall take effect at the time of receipt thereof.
SECTION 15. Counterparts.This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original but all such counterparts shall together constitute one and the same instrument.
SECTION 16. Headings.The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.
SECTION 17. Severability.If any provision of this Agreement shall be held or deemed to be or shall, in fact, be invalid, inoperative or unenforceable as applied in any particular case in any or all jurisdictions because it conflicts with any provisions of any constitution, statute, rule or public policy or for any other reason, then, to the extent permitted by law, such circumstances shall not have the effect of rendering the provision in question invalid, inoperative or unenforceable in any other case, circumstance or jurisdiction, or of rendering any other provision or provisions of this Agreement invalid, inoperative or unenforceable to any extent whatsoever.
SECTION 18. Amendments.This Agreement may be amended by an instrument in writing signed by the parties hereto. Each of the Company and the Purchase Contract Agent agrees that it will not enter into, cause or permit any amendment or modification of the Transaction Documents or any other instruments or agreements relating to the Convertible Notes or the Corporate Units that would in any way adversely affect the rights, duties and obligations of the Remarketing Agents, without the prior written consent of such Remarketing Agent.
SECTION 19. Successors and Assigns.Except in the case of a succession pursuant to the terms of the Purchase Contract and Pledge Agreement, the rights and obligations of the Company hereunder may not be assigned or delegated to any other Person without the prior written consent of the Remarketing Agents.
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The rights and obligations of the Remarketing Agents hereunder may not be assigned or delegated to any other Person (other than an affiliate of such Remarketing Agent) without the prior written consent of the Company.
If the foregoing correctly sets forth the agreement by and among the Company, the Remarketing Agents and the Purchase Contract Agent, please indicate your acceptance in the space provided for that purpose below.
[SIGNATURES ON THE FOLLOWING PAGE]
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| | Very truly yours, |
| | |
| | THE STANLEY WORKS |
| |
| | |
| | By: _________________________________________________ |
| | Name: |
| | Title: |
| | |
| CONFIRMED AND ACCEPTED: | |
| | |
CITIGROUP GLOBAL MARKETS
INC., as Remarketing Agent | |
| |
| | |
| By: _________________________________________________ | |
| Name: | |
| Title: | |
| | |
MORGAN STANLEY & CO.
INCORPORATED, as Remarketing
Agent | |
| |
| | |
| By: _________________________________________________ | |
| Name: | |
| Title: | |
| | |
THE BANK OF NEW YORK TRUST
COMPANY, N.A.,
not individually, but solely as Purchase
Contract Agent and as attorney-in-fact for
the Holders of the Purchase Contracts | |
| | |
| By: _________________________________________________ | |
| Name: | |
| Title: | |
