EXHIBIT 4.1
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THE CHUBB CORPORATION
and
BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
PURCHASE CONTRACT AGREEMENT
Dated as of June 24, 2003
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ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions.............................................................................. 1
SECTION 1.02. Compliance Certificates and Opinions..................................................... 15
SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent................................... 16
SECTION 1.04. Acts of Holders; Record Dates............................................................ 16
SECTION 1.05. Notices.................................................................................. 17
SECTION 1.06. Notice to Holders; Waiver................................................................ 17
SECTION 1.07. Effect of Headings and Table of Contents................................................. 19
SECTION 1.08. Successors and Assigns................................................................... 19
SECTION 1.09. Separability Clause...................................................................... 19
SECTION 1.10. Benefits of Agreement.................................................................... 19
SECTION 1.11. Governing Law............................................................................ 19
SECTION 1.12. Legal Holidays........................................................................... 20
SECTION 1.13. Counterparts............................................................................. 20
SECTION 1.14. Inspection of Agreement.................................................................. 20
SECTION 1.15. Appointment of Financial Institution as Agent for the Company............................ 20
SECTION 1.16. No Waiver................................................................................ 20
ARTICLE 2 CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.......................................................... 21
SECTION 2.02. Form of Purchase Contract Agent's Certificate of Authentication.......................... 22
ARTICLE 3 THE UNITS
SECTION 3.01. Amount; Form and Denominations........................................................... 22
SECTION 3.02. Rights and Obligations Evidenced by the Certificates..................................... 22
SECTION 3.03. Execution, Authentication, Delivery and Dating........................................... 23
SECTION 3.04. Temporary Certificates................................................................... 24
SECTION 3.05. Registration; Registration of Transfer and Exchange...................................... 24
SECTION 3.06. Book-Entry Interests..................................................................... 26
SECTION 3.07. Notices to Holders....................................................................... 27
SECTION 3.08. Appointment of Successor Depositary...................................................... 27
SECTION 3.09. Definitive Certificates.................................................................. 27
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates....................................... 27
SECTION 3.11. Persons Deemed Owners.................................................................... 29
SECTION 3.12. Cancellation............................................................................. 29
SECTION 3.13. Creation of Treasury Units by Substitution of Treasury Securities........................ 30
SECTION 3.14. Recreation of Corporate Units............................................................ 32
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination Event.............................. 33
SECTION 3.16. No Consent to Assumption................................................................. 34
ARTICLE 4 THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved................................. 34
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SECTION 4.02. Notice and Voting........................................................................ 35
SECTION 4.03. Special Event Redemption................................................................. 36
ARTICLE 5 THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock....................................................... 37
SECTION 5.02. Remarketing; Payment of Stated Amount.................................................... 39
SECTION 5.03. Issuance of Shares of Common Stock....................................................... 50
SECTION 5.04. Adjustment of Settlement Rate............................................................ 51
SECTION 5.05. Notice of Adjustments and Certain Other Events........................................... 60
SECTION 5.06. Termination Event; Notice................................................................ 60
SECTION 5.07. Early Settlement......................................................................... 61
SECTION 5.08. Intentionally Omitted.................................................................... 63
SECTION 5.09. No Fractional Shares..................................................................... 63
SECTION 5.10. Charges and Taxes........................................................................ 64
SECTION 5.11. Contract Adjustment Payments............................................................. 64
SECTION 5.12. Deferral of Contract Adjustment Payments................................................. 69
ARTICLE 6 REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract Adjustment Payments
and to Purchase Shares of Common Stock............................................................ 70
SECTION 6.02. Restoration of Rights and Remedies....................................................... 71
SECTION 6.03. Rights and Remedies Cumulative........................................................... 71
SECTION 6.04. Delay or Omission Not Waiver............................................................. 71
SECTION 6.05. Undertaking for Costs.................................................................... 71
SECTION 6.06. Waiver of Stay or Extension Laws......................................................... 72
ARTICLE 7 THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities...................................................... 72
SECTION 7.02. Notice of Default........................................................................ 73
SECTION 7.03. Certain Rights of Purchase Contract Agent................................................ 73
SECTION 7.04. Not Responsible for Recitals or Issuance of Units........................................ 75
SECTION 7.05. May Hold Units........................................................................... 75
SECTION 7.06. Money Held in Custody.................................................................... 75
SECTION 7.07. Compensation and Reimbursement........................................................... 75
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility................................ 76
SECTION 7.09. Resignation and Removal; Appointment of Successor........................................ 76
SECTION 7.10. Acceptance of Appointment by Successor................................................... 78
SECTION 7.11. Merger, Conversion, Consolidation or Succession to Business.............................. 78
SECTION 7.12. Preservation of Information; Communications to Holders................................... 79
SECTION 7.13. No Obligations of Purchase Contract Agent................................................ 79
SECTION 7.14. Tax Compliance........................................................................... 79
ARTICLE 8 SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders....................................... 80
SECTION 8.02. Supplemental Agreements with Consent of Holders.......................................... 81
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SECTION 8.03. Execution of Supplemental Agreements..................................................... 82
SECTION 8.04. Effect of Supplemental Agreements........................................................ 82
SECTION 8.05. Reference to Supplemental Agreements..................................................... 82
ARTICLE 9 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property
Except under Certain Conditions................................................................... 82
SECTION 9.02. Rights and Duties of Successor Corporation............................................... 83
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to Purchase Contract
Agent............................................................................................. 84
ARTICLE 10 COVENANTS
SECTION 10.01. Performance under Purchase Contracts..................................................... 84
SECTION 10.02. Maintenance of Office or Agency.......................................................... 84
SECTION 10.03. Company to Reserve Common Stock.......................................................... 85
SECTION 10.04. Covenants as to Common Stock............................................................. 85
SECTION 10.05. Statements of Officers of the Company as to Default...................................... 85
SECTION 10.06. Tax Treatment............................................................................ 85
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EXHIBITS
Exhibit A - Form of Corporate Units Certificate
Exhibit B - Form of Treasury Units Certificate For Treasury Units Containing
Treasury Securities Maturing on July 15, 2006
Exhibit C - Form of Treasury Units Certificate For Treasury Units Containing
Treasury Securities Maturing on August 15, 2006
Exhibit D - Instruction to Purchase Contract Agent
Exhibit E - Notice from Purchase Contract Agent to Holders
Exhibit F - Notice to Settle by Separate Cash
Exhibit G - Notice from Purchase Contract Agent to Collateral Agent
Exhibit H - Form of Remarketing Agreement
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PURCHASE CONTRACT AGREEMENT, dated as of June 24, 2003, between THE
CHUBB CORPORATION, a New Jersey corporation (the "COMPANY"), and BANK ONE TRUST
COMPANY, N.A., a national banking association, acting as purchase contract agent
for the Holders of Units (as defined herein) from time to time (the "PURCHASE
CONTRACT AGENT").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Units.
All things necessary to make the Purchase Contracts (as defined
herein), when the Certificates (as defined herein) are executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent, as provided in this Agreement, the valid obligations of
the Company, and to constitute these presents a valid agreement of the Company,
in accordance with its terms, have been done. For and in consideration of the
premises and the purchase of the Units by the Holders thereof, it is mutually
agreed as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular, and nouns
and pronouns of the masculine gender include the feminine and neuter genders;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section, Exhibit or other subdivision; and
(d) the following terms have the meanings given to them in this Section
1.01(d):
"ACCOUNTING EVENT" means the receipt at any time prior to the earlier
of the date of any Successful Remarketing and the Purchase Contract Settlement
Date by the audit committee of the Board of Directors of a written report in
accordance with Statement on Auditing Standards ("SAS") No. 97, "Amendment to
SAS No. 50-Reports on the Application of Accounting
Principles," from the Company's independent auditors, provided at the request of
the management of the Company, to the effect that, as a result of a change in
accounting rules after the date of original issuance of the Senior Notes, the
Company must either (a) account for the Purchase Contracts as derivatives under
SFAS 133 (or any successor accounting standard) or (b) account for the Units
using the if-converted method under SFAS 128 (or any successor accounting
standard), and that, in either case, such accounting treatment will cease to
apply upon redemption of the Senior Notes.
"ACT" has the meaning, with respect to any Holder, set forth in Section
1.04.
"ADJUSTED APPLICABLE MARKET VALUE" has the meaning set forth in Section
5.01.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGREEMENT" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"APPLICABLE MARKET VALUE" has the meaning set forth in Section 5.01.
"APPLICABLE OWNERSHIP INTEREST" shall mean, with respect to a Corporate
Unit and the Treasury Portfolio represented by such Corporate Unit, (i) a 2.5%
undivided beneficial ownership interest in $1,000 face amount of U.S. treasury
securities (or principal or interest strips thereof) included in such Treasury
Portfolio that mature on or prior to August 15, 2006, and (ii) (x) for the
scheduled Payment Date on the Senior Notes that occurs on the Purchase Contract
Settlement Date, in the case of a Successful Remarketing prior to the Final
Remarketing Date, or (y) for each scheduled Payment Date on the Senior Notes
that occurs after the Special Event Redemption Date to and including the
Purchase Contract Settlement Date, in the case of a Special Event Redemption, a
0.0140625 % undivided beneficial ownership interest in $1,000 face amount of
U.S. treasury securities (or principal or interest strips thereof) included in
such Treasury Portfolio that mature on or prior to the business day immediately
preceding such scheduled Payment Date.
"APPLICABLE PRINCIPAL AMOUNT" means the aggregate principal amount of
the Senior Notes that are represented by Corporate Units.
"APPLICANTS" has the meaning set forth in Section 7.12(b).
"BANKRUPTCY CODE" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
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"BENEFICIAL OWNER" means, with respect to a Book-Entry Interest, a
Person who is the beneficial owner of such Book-Entry Interest as reflected on
the books of the Depositary or on the books of a Person maintaining an account
with such Depositary (directly as a Depositary Participant or as an indirect
participant, in each case in accordance with the rules of such Depositary).
"BOARD OF DIRECTORS" means the board of directors of the Company or a
duly authorized committee of that board.
"BOARD RESOLUTION" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Purchase Contract Agent.
"BOOK-ENTRY INTEREST" means a beneficial interest in a Global
Certificate, registered in the name of a Depositary or a nominee thereof,
ownership and transfers of which shall be maintained and made through book
entries by such Depositary as described in Section 3.06.
"BUSINESS DAY" or "business day" means any day other than a Saturday or
Sunday or any other day on which banking institutions and trust companies in New
York City, New York are permitted or required by applicable law to remain closed
or a day on which the Indenture Trustee or the Collateral Agent is closed for
business; provided that for purposes of the second paragraph of Section 1.12
only, the term "Business Day" shall also be deemed to exclude any day on which
DTC is closed.
"CASH MERGER" has the meaning set forth in Section 5.04(b)(2).
"CASH MERGER EARLY SETTLEMENT" has the meaning set forth in Section
5.04(b)(2).
"CASH MERGER EARLY SETTLEMENT DATE" has the meaning set forth in
Section 5.04(b)(2).
"CASH SETTLEMENT" has the meaning set forth in Section 5.02(c)(i).
"CERTIFICATE" means a Corporate Units Certificate or a Treasury Units
Certificate.
"CLOSING PRICE" has the meaning set forth in Section 5.01(a).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in Section 1.01(d) of the Pledge
Agreement.
"COLLATERAL ACCOUNT" has the meaning set forth in Section 1.01(d) of
the Pledge Agreement.
"COLLATERAL AGENT" means BNY Midwest Trust Company, an Illinois trust
company, as Collateral Agent under the Pledge Agreement until a successor
Collateral Agent shall have
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become such pursuant to the applicable provisions of the Pledge Agreement, and
thereafter "Collateral Agent" shall mean the Person who is then the Collateral
Agent thereunder.
"COLLATERAL SUBSTITUTION" means (i) with respect to a Corporate Unit in
connection with the creation of a Treasury Unit from such Corporate Unit, (x)
the substitution for the Pledged Senior Note represented by such Corporate Unit
by Treasury Securities in accordance with Section 3.13, or (y) the substitution
for the Pledged Applicable Ownership Interest in the Treasury Portfolio
represented by such Corporate Unit by Treasury Securities in accordance with
Section 3.13, or (ii) with respect to a Treasury Unit in connection with the
recreation of a Corporate Unit from such Treasury Unit, (x) the substitution for
the Pledged Treasury Securities represented by such Treasury Unit (if the
Applicable Ownership Interest in the Treasury Portfolio has not replaced the
Senior Note represented by the Corporate Unit) by Senior Notes in accordance
with Section 3.14, or (y) the substitution for the Pledged Treasury Securities
represented by such Treasury Unit (if the Applicable Ownership Interest in the
Treasury Portfolio has replaced the Senior Note represented by the Corporate
Unit) by the appropriate Applicable Ownership Interest in the Treasury Portfolio
in accordance with Section 3.14.
"COMMON STOCK" means the common stock, par value $1.00 per share, of
the Company.
"COMPANY" means the Person named as the "COMPANY" in the first
paragraph of this instrument until a successor shall have become such pursuant
to the applicable provision of this Agreement, and thereafter "COMPANY" shall
mean such successor.
"CONSTITUENT PERSON" has the meaning set forth in Section 5.04(b).
"CONTRACT ADJUSTMENT PAYMENTS" means the payments payable by the
Company on the Payment Dates in respect of each Purchase Contract, at a rate per
year of 4.75% of the Stated Amount per Purchase Contract.
"CORPORATE TRUST OFFICE" means the office of the Purchase Contract
Agent at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at 153 West
51st Street, New York, New York, 10019 (Fax: (212) 373-1383).
"CORPORATE UNIT" means the collective rights and obligations of a
Holder of a Corporate Units Certificate in respect of (i) the Purchase Contracts
represented thereby and (ii) the Senior Notes (or the appropriate Applicable
Ownership Interest in the Treasury Portfolio, as the case may be) (subject in
each case (except for the appropriate Applicable Ownership Interest specified in
clause (ii) of the definition of such term) to the Pledge thereof) represented
thereby.
"CORPORATE UNITS CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Corporate Units
specified on such certificate.
"COUPON RATE" means the percentage rate per annum at which each Senior
Note will bear interest initially.
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"CURRENT MARKET PRICE" has the meaning set forth in Section 5.04(a)(8).
"CUSTODIAL AGENT" means BNY Midwest Trust Company, an Illinois trust
company, as Custodial Agent under the Pledge Agreement until a successor
Custodial Agent shall have become such pursuant to the applicable provisions of
the Pledge Agreement, and thereafter "CUSTODIAL AGENT" shall mean the Person who
is then the Custodial Agent thereunder.
"DEFERRED CONTRACT ADJUSTMENT PAYMENTS" has the meaning provided in
Section 5.12.
"DEPOSITARY" means a clearing agency registered under Section 17A of
the Exchange Act that is designated to act as Depositary for the Units as
contemplated by Sections 3.06 and 3.08.
"DEPOSITARY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Depositary effects
book entry transfers and pledges of securities deposited with the Depositary.
"DTC" means The Depository Trust Company.
"EARLY SETTLEMENT" has the meaning set forth in Section 5.07.
"EARLY SETTLEMENT AMOUNT" has the meaning set forth in Section 5.07.
"EARLY SETTLEMENT DATE" has the meaning set forth in Section 5.07.
"EARLY SETTLEMENT RATE" has the meaning set forth in Section 5.07.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any
statute successor thereto, in each case as amended from time to time, and the
rules and regulations promulgated thereunder.
"EXCHANGE PROPERTY" has the meaning set forth in Section 5.04(b).
"EXPIRATION DATE" has the meaning set forth in Section 1.04(e).
"EXPIRATION TIME" has the meaning set forth in Section 5.04(a)(6).
"FAILED FINAL REMARKETING" has the meaning set forth in Section
5.02(d).
"FAILED INITIAL REMARKETING" has the meaning set forth in Section
5.02(a).
"FAILED REMARKETING" shall mean any of (i) a Failed Initial
Remarketing, (ii) a Failed Second Remarketing, (iii) a Failed Third Remarketing
or (iv) a Failed Final Remarketing.
"FAILED SECOND REMARKETING" has the meaning set forth in Section
5.02(b).
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"FAILED THIRD REMARKETING" has the meaning set forth in Section
5.02(b).
"FINAL REMARKETING" has the meaning set forth in Section 5.02(d).
"FINAL REMARKETING DATE" means the third Business Day immediately
preceding the Purchase Contract Settlement Date.
"FINAL REMARKETING FEE" has the meaning set forth in Section 5.02(d).
"GLOBAL CERTIFICATE" means a Certificate that evidences all or part of
the Units and is registered in the name of the Depositary or a nominee thereof.
"HOLDER" means, with respect to a Unit, the Person in whose name the
Unit evidenced by a Certificate is registered in the Security Register;
provided, however, that solely for the purpose of determining whether the
Holders of the requisite number of Units have voted on any matter (and not for
any other purpose hereunder), if the Unit remains in the form of one or more
Global Certificates and if the Depositary that is the registered holder of such
Global Certificate has sent an omnibus proxy assigning voting rights to the
Depositary Participants to whose accounts the Units are credited on the record
date, the term "HOLDER" shall mean each such Depositary Participant acting at
the direction of the Beneficial Owners holding through such Depositary
Participant.
"INDEBTEDNESS" means indebtedness of any kind of the Company.
"INDENTURE" means the Indenture, dated as of October 25, 1989, between
the Company and the Indenture Trustee (including any provisions of the TIA that
are deemed incorporated therein), pursuant to which the Senior Notes will be
issued.
"INDENTURE TRUSTEE" means Bank One Trust Company, N.A. (successor in
interest to The First National Bank of Chicago), as trustee under the Indenture,
or any successor thereto.
"INITIAL REMARKETING" has the meaning set forth in Section 5.02(a).
"INITIAL REMARKETING DATE" means the third Business Day immediately
preceding May 16, 2006.
"ISSUER ORDER" or "ISSUER REQUEST" means a written order or request
signed in the name of the Company by (i) either its Chief Executive Officer, its
President or one of its Vice Presidents, and (ii) either its Corporate Secretary
or one of its Assistant Corporate Secretaries or its Treasurer or one of its
Assistant Treasurers, and delivered to the Purchase Contract Agent.
"NON-ELECTING SHARE" has the meaning set forth in Section 5.04(b).
"NYSE" has the meaning set forth in Section 5.01.
"OFFICERS' CERTIFICATE" means a certificate signed by (i) either the
Company's Chief Executive Officer, its President or one of its Vice Presidents,
and (ii) either the Company's
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Corporate Secretary or one of its Assistant Corporate Secretaries or its
Treasurer or one of its Assistant Treasurers, and delivered to the Purchase
Contract Agent. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Agreement (other than the
Officers' Certificate provided for in Section 10.05) shall include:
(i) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(ii) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(iii) a statement that, in the opinion of each such officer,
each such officer has made such examination or investigation as is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel to the Company (and who may be an employee of the Company), and who
shall be reasonably acceptable to the Purchase Contract Agent. An opinion of
counsel may rely on certificates as to matters of fact.
"OUTSTANDING UNITS" means, with respect to any Unit and as of the date
of determination, all Units evidenced by Certificates theretofore authenticated,
executed and delivered under this Agreement, except:
(i) if a Termination Event has occurred, (x) Corporate Units
representing Senior Notes or Applicable Ownership Interests in the
Treasury Portfolio that have been theretofore deposited with the
Purchase Contract Agent in trust for the Holders of such Corporate
Units and (y) Treasury Units;
(ii) Units evidenced by Certificates theretofore cancelled by
the Purchase Contract Agent or delivered to the Purchase Contract Agent
for cancellation or deemed cancelled pursuant to the provisions of this
Agreement; and
(iii) Units evidenced by Certificates in exchange for or in
lieu of which other Certificates have been authenticated, executed on
behalf of the Holder and delivered pursuant to this Agreement, other
than any such Certificate in respect of which there shall have been
presented to the Purchase Contract Agent proof satisfactory to it that
such Certificate is held by a protected purchaser in whose hands the
Units evidenced by such Certificate are valid obligations of the
Company;
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provided, however, that in determining whether the Holders of the requisite
number of the Units have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Units owned by the Company or any Affiliate
of the Company shall be disregarded and deemed not to be Outstanding Units,
except that, in determining whether the Purchase Contract Agent shall be
authorized and protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Units that a
Responsible Officer of the Purchase Contract Agent actually knows to be so owned
shall be so disregarded. Units so owned that have been pledged in good faith may
be regarded as Outstanding Units if the pledgee establishes to the satisfaction
of the Purchase Contract Agent the pledgee's right so to act with respect to
such Units and that the pledgee is not the Company or any Affiliate of the
Company.
"PAYMENT DATE" means each February 16, May 16, August 16 and November
16 of each year, commencing August 16, 2003.
"PERMITTED INVESTMENTS" has the meaning set forth in Section 1.01(d) of
the Pledge Agreement.
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, limited
liability company, trust, unincorporated organization or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"PLAN" means an employee benefit plan that is subject to ERISA, a plan
or individual retirement account that is subject to Section 4975 of the Code or
any entity whose assets are considered assets of any such plan.
"PLEDGE" means the pledge under the Pledge Agreement of the Senior
Notes, the Treasury Securities or the appropriate Applicable Ownership Interest
(as specified in clause (i) of the definition of such term) in the Treasury
Portfolio, as the case may be, in each case represented by the Units (it being
understood that the appropriate Applicable Ownership Interest (as specified in
clause (ii) of the definition of such term) in the Treasury Portfolio shall not
be subject to the Pledge).
"PLEDGE AGREEMENT" means the Pledge Agreement, dated as of June 24,
2003, among the Company, the Collateral Agent, the Custodial Agent, the
Securities Intermediary and the Purchase Contract Agent, on its own behalf and
as attorney-in-fact for the Holders from time to time of the Units, as amended
from time to time.
"PLEDGED APPLICABLE OWNERSHIP INTERESTS" has the meaning set forth in
Section 1.01(d) of the Pledge Agreement.
"PLEDGED SENIOR NOTES" has the meaning set forth in Section 1.01(d) of
the Pledge Agreement.
"PLEDGED TREASURY SECURITIES" has the meaning set forth in Section
1.01(d) of the Pledge Agreement.
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"PREDECESSOR CERTIFICATE" means a Predecessor Corporate Units
Certificate or a Predecessor Treasury Units Certificate.
"PREDECESSOR CORPORATE UNITS CERTIFICATE" of any particular Corporate
Units Certificate means every previous Corporate Units Certificate evidencing
all or a portion of the rights and obligations of the Company and the Holder
under the Corporate Units evidenced thereby; and, for the purposes of this
definition, any Corporate Units Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Corporate Units Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Corporate Units Certificate.
"PREDECESSOR TREASURY UNITS CERTIFICATE" of any particular Treasury
Units Certificate means every previous Treasury Units Certificate evidencing all
or a portion of the rights and obligations of the Company and the Holder under
the Treasury Units evidenced thereby; and, for the purposes of this definition,
any Treasury Units Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury Units
Certificate shall be deemed to evidence the same rights and obligations of the
Company and the Holder as the mutilated, destroyed, lost or stolen Treasury
Units Certificate.
"PRICING COMMITTEE RESOLUTIONS" means the resolutions of the Pricing
Committee of the Company's Board of Directors dated as of June 18, 2003.
"PRIMARY TREASURY DEALER" shall mean a primary U.S. government
securities dealer.
"PROCEEDS" has the meaning set forth in Section 1.01(d) of the Pledge
Agreement.
"PRO RATA" shall mean pro rata to each Holder according to the
aggregate Stated Amount of the Units held by such Holder in relation to the
aggregate Stated Amount of all Units outstanding.
"PROSPECTUS" means the prospectus relating to the delivery of shares of
any securities in connection with an Early Settlement pursuant to Section 5.07
or a Cash Merger Early Settlement of Purchase Contracts pursuant to Section
5.04(b)(2), in the form in which first filed, or transmitted for filing, with
the Securities and Exchange Commission after the effective date of the
Registration Statement pursuant to Rule 424(b) under the Securities Act,
including the documents incorporated by reference therein as of the date of such
Prospectus.
"PURCHASE CONTRACT" means, with respect to any Unit, the purchase
contract represented by such Unit and obligating the Company (i) to sell,
against the Holder's payment of the Stated Amount, shares of Common Stock and
(ii) to pay the Holder thereof Contract Adjustment Payments, in each case on the
terms and subject to the conditions set forth in Article Five hereof.
"PURCHASE CONTRACT AGENT" means the Person named as the "PURCHASE
CONTRACT AGENT" in the first paragraph of this Agreement until a successor
Purchase Contract Agent shall have become such pursuant to the applicable
provisions of this Agreement, and thereafter
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"PURCHASE CONTRACT AGENT" shall mean such Person or any subsequent successor who
is appointed pursuant to this Agreement.
"PURCHASE CONTRACT SETTLEMENT DATE" means August 16, 2006.
"PURCHASE CONTRACT SETTLEMENT FUND" has the meaning set forth in
Section 5.03.
"PURCHASED SHARES" has the meaning set forth in Section 5.04(a)(6).
"QUOTATION AGENT" means any Primary Treasury Dealer selected by the
Company.
"RECORD DATE" for any distribution or Contract Adjustment Payment
payable on any Payment Date means, as to any Global Certificate or any other
Certificate, the first business day of the calendar month in which the relevant
Payment Date falls; provided that the Company may, at its option, select any
other day as the Record Date for any Payment Date so long as such Record Date
selected is more than one Business Day but less than sixty Business Days prior
to such Payment Date.
"REDEMPTION AMOUNT" means, for each Senior Note, an amount equal to the
product of the principal amount of that Senior Note and a fraction, the
numerator of which is the Treasury Portfolio Purchase Price and the denominator
of which is the Applicable Principal Amount.
"REDEMPTION PRICE" means, for each Senior Note, the Redemption Amount
plus any accrued and unpaid interest on such Senior Note to but excluding the
Special Event Redemption Date.
"REFERENCE DEALER" means a dealer engaged in trading of convertible
securities.
"REFERENCE PRICE" has the meaning set forth in Section 5.01.
"REGISTRATION STATEMENT" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the delivery by the
Company of any securities in connection with an Early Settlement on the Early
Settlement Date or a Cash Merger Early Settlement of Purchase Contracts on the
Cash Merger Early Settlement Date under Section 5.04(b)(2), including all
exhibits thereto and the documents incorporated by reference in the prospectus
contained in such registration statement, and any post-effective amendments
thereto.
"REMARKETED SENIOR NOTES" means, as of the applicable Remarketing Date,
the Senior Notes that are represented by Corporate Units, and each Separate
Senior Note for which the Holder has elected to have such Separate Senior Note
included in the applicable Remarketing.
"REMARKETING" means the remarketing of the Senior Notes by the
Remarketing Agent pursuant to the Remarketing Agreement.
"REMARKETING AGENT" means the remarketing agent specified pursuant to
the Remarketing Agreement.
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"REMARKETING AGREEMENT" means the Remarketing Agreement substantially
in the form of Exhibit H hereto to be entered into prior to the Initial
Remarketing Date among the Company, Citigroup Global Markets Inc., Goldman,
Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and the Purchase
Contract Agent, as amended from time to time.
"REMARKETING DATE" means any of (i) the Initial Remarketing Date, (ii)
the Second Remarketing Date, (iii) the Third Remarketing Date and (iv) the Final
Remarketing Date.
"REMARKETING FEE" has the meaning set forth in Section 5.02(a).
"REMARKETING PER SENIOR NOTE PRICE" means the Treasury Portfolio
Purchase Price divided by the number of Senior Notes represented by Corporate
Units and remarketed in the Initial Remarketing, the Second Remarketing or the
Third Remarketing, as the case may be.
"REORGANIZATION EVENT" has the meaning set forth in Section 5.04(b).
"RESET RATE" means (i) in the case of a Successful Remarketing prior to
the Final Remarketing Date, the interest rate per annum on the Senior Notes
determined by the Remarketing Agent as necessary to remarket the Remarketed
Senior Notes at a price per Remarketed Senior Note such that the aggregate price
for the Remarketed Senior Notes is equal to approximately (but not less than)
100.50% of the sum of the Treasury Portfolio Purchase Price and Separate Senior
Notes Purchase Price, and (ii) in the case of a Successful Remarketing on the
Final Remarketing Date, the interest rate per annum on the Senior Notes
determined by the Remarketing Agent as necessary to remarket the Remarketed
Senior Notes at a price per Remarketed Senior Note such that the aggregate price
for the Remarketed Senior Notes is equal to approximately 100.50% (but not less
than 100%, net of any Remarketing Fee) of the aggregate principal amount of the
Remarketed Senior Notes; provided that if there are no Corporate Units
outstanding and none of the Holders elect to have Separate Senior Notes held by
them remarketed, or in the case of a Failed Remarketing, the interest rate
payable on the Senior Notes will not be reset and the interest rate payable on
the Senior Notes shall continue to be 2.25% per year; provided further that in
no event shall the Reset Rate exceed the maximum rate, if any, permitted by
applicable law.
"RESPONSIBLE OFFICER" means, with respect to the Purchase Contract
Agent, any officer of the Purchase Contract Agent assigned by the Purchase
Contract Agent to administer this Purchase Contract Agreement.
"RIGHTS" has the meaning set forth in Section 5.04(a)(11).
"RIGHTS AGREEMENT" has the meaning set forth in Section 5.04(a)(11).
"SECOND REMARKETING" has the meaning set forth in Section 5.02(b).
"SECOND REMARKETING DATE" means the third Business Day immediately
preceding June 16, 2006.
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"SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time, and the rules and
regulations promulgated thereunder.
"SECURITIES INTERMEDIARY" means BNY Midwest Trust Company, an Illinois
trust company, as Securities Intermediary under the Pledge Agreement until a
successor Securities Intermediary shall have become such pursuant to the
applicable provisions of the Pledge Agreement, and thereafter "SECURITIES
INTERMEDIARY" shall mean such successor or any subsequent successor who is
appointed pursuant to the Pledge Agreement.
"SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective
meanings set forth in Section 3.05.
"SENIOR NOTES" means the series of notes designated the senior notes
due August 16, 2008 to be issued by the Company under the Indenture.
"SEPARATE SENIOR NOTES" means Senior Notes that are no longer
represented by Corporate Units.
"SEPARATE SENIOR NOTES PURCHASE PRICE" means the amount in cash equal
to the product of the Remarketing Per Senior Note Price multiplied by the number
of Separate Senior Notes remarketed in the Initial Remarketing, the Second
Remarketing or the Third Remarketing, as the case may be.
"SETTLEMENT RATE" has the meaning set forth in Section 5.01.
"SPECIAL EVENT" means either a Tax Event or an Accounting Event.
"SPECIAL EVENT REDEMPTION" means the redemption of the Senior Notes
pursuant to the Indenture following the occurrence of a Special Event.
"SPECIAL EVENT REDEMPTION DATE" means the date upon which a Special
Event Redemption is scheduled to occur pursuant to the Indenture.
"STATED AMOUNT" means $25.00.
"SUCCESSFUL FINAL REMARKETING" has the meaning set forth in Section
5.02(d).
"SUCCESSFUL INITIAL REMARKETING" has the meaning set forth in Section
5.02(a).
"SUCCESSFUL REMARKETING" means any of (i) a Successful Initial
Remarketing, (ii) a Successful Second Remarketing, (iii) a Successful Third
Remarketing or (iv) a Successful Final Remarketing.
"SUCCESSFUL SECOND REMARKETING" has the meaning set forth in Section
5.02(b).
"SUCCESSFUL THIRD REMARKETING" has the meaning set forth in Section
5.02(b).
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"TAX EVENT" means the receipt by the Company of an opinion of counsel,
rendered by a law firm having a recognized national tax practice, at any time
prior to the earlier of the date of any Successful Remarketing and the Purchase
Contract Settlement Date, to the effect that, as a result of any amendment to,
change in or announced proposed change in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, or as a result of any official administrative
decision, pronouncement, judicial decision or action interpreting or applying
such laws or regulations, which amendment or change is effective or which
proposed change, pronouncement, action or decision is announced on or after the
date of original issuance of the Senior Notes, there is more than an
insubstantial increase in the risk that interest payable by the Company on the
Senior Notes is not, or within 90 days of the date of such opinion, will not be,
deductible by the Company, in whole or in part, for United States federal income
tax purposes.
"TERMINATION DATE" means the date, if any, on which a Termination Event
occurs.
"TERMINATION EVENT" means the occurrence of any of the following
events:
(i) at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or court order shall have been
entered granting relief under the Bankruptcy Code, adjudicating the
Company to be insolvent, or approving as properly filed a petition
seeking reorganization or liquidation of the Company or any other
similar applicable Federal or state law and if such judgment, decree or
order shall have been entered more than 60 days prior to the Purchase
Contract Settlement Date, such decree or order shall have continued
undischarged and unstayed for a period of 60 days;
(ii) at any time on or prior to the Purchase Contract
Settlement Date, a judgment, decree or court order for the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company or of its property, or for the termination or
liquidation of its affairs, shall have been entered and if such
judgment, decree or order shall have been entered more than 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree
or order shall have continued undischarged and unstayed for a period of
60 days; or
(iii) at any time on or prior to the Purchase Contract
Settlement Date, the Company shall file a petition for relief under the
Bankruptcy Code, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer or consent
seeking reorganization or liquidation under the Bankruptcy Code or any
other similar applicable Federal or State law, or shall consent to the
filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of it or of its property, or shall make an assignment for
the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due.
"THIRD REMARKETING" has the meaning set forth in Section 5.02(b).
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"THIRD REMARKETING DATE" means the third Business Day immediately
preceding July 16, 2006.
"THRESHOLD APPRECIATION PRICE" has the meaning set forth in Section
5.01.
"TIA" means the Trust Indenture Act of 1939, as amended from time to
time, or any successor legislation.
"TRADING DAY" has the meaning set forth in Section 5.01.
"TREASURY PORTFOLIO" means a portfolio of (1) U.S. treasury securities
(or principal or interest strips thereof) that mature on or prior to August 15,
2006 in an aggregate amount at maturity equal to the Applicable Principal
Amount, and (2) (x) in the case of a Successful Remarketing prior to the Final
Remarketing Date, for the scheduled Payment Date on the Senior Notes that occurs
on the Purchase Contract Settlement Date, U.S. treasury securities (or principal
or interest strips thereof) that mature on or prior to August 15, 2006 in an
aggregate amount at maturity equal to the aggregate interest payment (assuming
no reset of the interest rate) that would have been due on the Purchase Contract
Settlement Date on the Applicable Principal Amount, and (y) in the case of a
Special Event Redemption, for each scheduled Payment Date that occurs after the
Special Event Redemption Date to and including the Purchase Contract Settlement
Date, U.S. treasury securities (or principal or interest strips thereof) that
mature on or prior to the business day immediately preceding such scheduled
Payment Date in an aggregate amount at maturity equal to the aggregate interest
payment (assuming no reset of the interest rate) that would have been due on
such scheduled Payment Date on the Applicable Principal Amount.
"TREASURY PORTFOLIO PURCHASE PRICE" means the lowest aggregate ask-side
price quoted by a Primary Treasury Dealer to the Quotation Agent between 9:00
a.m. and 11:00 a.m. (New York City time) (i) in the case of a Special Event
Redemption, on the third Business Day immediately preceding the Special Event
Redemption Date for the purchase of the applicable Treasury Portfolio for
settlement on the Special Event Redemption Date, and (ii) in the case of any
Successful Remarketing prior to the Final Remarketing Date, on the date of such
Successful Remarketing for the purchase of the applicable Treasury Portfolio for
settlement on the third Business Day immediately following the date of such
Successful Remarketing.
"TREASURY SECURITIES" means(i) zero-coupon U.S. treasury securities
that mature on July 15, 2006 (CUSIP No. 912820BT3) and, during the period
between July 15, 2006 and August 15, 2006, the Proceeds from such Treasury
Securities, and (ii) zero-coupon U.S. treasury securities that mature on August
15, 2006 (CUSIP No. 912833CQ1).
"TREASURY UNIT" means, following the substitution of Treasury
Securities for Pledged Senior Notes or the Pledged Applicable Ownership Interest
in the Treasury Portfolio as collateral to secure a Holder's obligations under
the Purchase Contract, the collective rights and obligations of a Holder of a
Treasury Units Certificate in respect of (i) the Purchase Contracts represented
thereby and (ii) such Treasury Securities (subject to the Pledge thereof)
represented thereby.
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"TREASURY UNITS CERTIFICATE" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Treasury Units specified
on such certificate.
"UNDERWRITERS" means the underwriters identified in Schedule II to the
Underwriting Agreement.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement, dated June
18, 2003, among the Company and the Underwriters.
"UNIT" means a Corporate Unit or a Treasury Unit, as the case may be.
"VICE PRESIDENT" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
SECTION 1.02. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Purchase Contract Agent to take any
action in accordance with any provision of this Agreement, the Company shall
furnish to the Purchase Contract Agent an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with, except that in the case of any such
application or request as to which the furnishing of such document is
specifically required by any provision of this Agreement relating to such
particular application or request, no additional certificate need be furnished.
Every certificate with respect to compliance with a condition or
covenant provided for in this Agreement (other than the Officers' Certificate
provided for in Section 10.05) shall include:
(i) a statement that each individual signing such certificate
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in
such certificate are based;
(iii) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is
necessary to enable such individual to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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SECTION 1.03. Form of Documents Delivered to Purchase Contract Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which its certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company unless such counsel knows, or in the exercise
of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Purchase Contract Agent and, where it is hereby expressly required, to
the Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Agreement and (subject to Section 7.01) conclusive in favor of
the Purchase Contract Agent and the Company, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Purchase Contract
Agent deems sufficient.
(c) The ownership of Units shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Unit shall bind every future Holder of
the same Unit and the Holder of every Certificate evidencing such Unit issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
16
Purchase Contract Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Certificate.
(e) The Company may set any date as a record date for the purpose of
determining the Holders of Outstanding Units entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Agreement to be given, made or taken by
Holders of Units. If any record date is set pursuant to this paragraph, the
Holders of the Outstanding Corporate Units and the Outstanding Treasury Units,
as the case may be, on such record date, and no other Holders, shall be entitled
to take the relevant action with respect to the Corporate Units or the Treasury
Units, as the case may be, whether or not such Holders remain Holders after such
record date; provided that no such action shall be effective hereunder unless
taken prior to or on the applicable Expiration Date by Holders of the requisite
number of Outstanding Units on such record date. Nothing contained in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and be of no effect), and nothing
contained in this paragraph shall be construed to render ineffective any action
taken by Holders of the requisite number of Outstanding Units on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Purchase Contract Agent in writing and to each Holder of Units in
the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section 1.04(e),
the Company may designate any date as the "EXPIRATION DATE" and from time to
time may change the Expiration Date to any earlier or later day; provided that
no such change shall be effective unless notice of the proposed new Expiration
Date is given to the Purchase Contract Agent in writing, and to each Holder of
Units in the manner set forth in Section 1.06, prior to or on the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration Date
with respect thereto, subject to its right to change the Expiration Date as
provided in this paragraph. Notwithstanding the foregoing, no Expiration Date
shall be later than the 180th day after the applicable record date.
SECTION 1.05. Notices.
Any notice or communication is duly given if in writing and delivered
in Person or mailed by first-class mail (registered or certified, return receipt
requested), telecopier (with receipt confirmed) or overnight air courier
guaranteeing next day delivery, to the others' address; provided that notice
shall be deemed given to the Purchase Contract Agent only upon receipt thereof:
17
If to the Purchase Contract Agent:
Bank One Trust Company, N.A.
153 West 51st Street
New York, New York 10019
Attention: Corporate Trust Administration
Fax: (212) 373-1383
If to the Company:
The Chubb Corporation
15 Mountain View Road
Warren, New Jersey 07061-1615
Attention: General Counsel
Fax: (908) 903-3607
If to the Collateral Agent:
BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
If to the Indenture Trustee:
Bank One Trust Company, N.A.
153 West 51st Street
New York, New York 10019
Attention: Corporate Trust Administration
Fax: (212) 373-1383
The Purchase Contract Agent shall send to the Indenture Trustee at the
telecopier number set forth above a copy of any notices in the form of Exhibits
D, E, F or G it sends or receives.
SECTION 1.06. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Agreement provides for notice in any
manner, such notice may be waived in writing by the
18
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Purchase Contract Agent, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Purchase
Contract Agent shall constitute a sufficient notification for every purpose
hereunder.
SECTION 1.07. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Agreement by the Company and the
Purchase Contract Agent shall bind their respective successors and assigns,
whether so expressed or not.
SECTION 1.09. Separability Clause.
In case any provision in this Agreement or in the Units shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.
SECTION 1.10. Benefits of Agreement.
Nothing contained in this Agreement or in the Units, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and, to the extent provided hereby, the Holders, any
benefits or any legal or equitable right, remedy or claim under this Agreement.
The Holders from time to time shall be beneficiaries of this Agreement and shall
be bound by all of the terms and conditions hereof and of the Units evidenced by
their Certificates by their acceptance of delivery of such Certificates.
SECTION 1.11. Governing Law.
This Agreement and the Purchase Contracts represented by the Units
shall be governed by, and construed in accordance with, the laws of the State of
New York.
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SECTION 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day
(notwithstanding any other provision of this Agreement, the Purchase Contracts
or the Senior Notes), Contract Adjustment Payments or other distributions shall
not be paid on such date, but Contract Adjustment Payments or such other
distributions shall be paid on the next succeeding Business Day, unless such
Business Day is in the next succeeding calendar year, in which case such
Contract Adjustment Payments or other distributions shall be paid on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such Payment Date.
In any case where the Purchase Contract Settlement Date or any Early
Settlement Date or Cash Merger Early Settlement Date shall not be a Business Day
(notwithstanding any other provision of this Agreement or the Units), Purchase
Contracts shall not be performed and Early Settlement and Cash Merger Early
Settlement shall not be effected on such date, but Purchase Contracts shall be
performed or Early Settlement or Cash Merger Early Settlement shall be effected,
as applicable, on the next succeeding Business Day with the same force and
effect as if made on such Purchase Contract Settlement Date, Early Settlement
Date or Cash Merger Early Settlement Date, as applicable.
SECTION 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall together
constitute one and the same instrument.
SECTION 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by any
Holder or Beneficial Owner.
SECTION 1.15. Appointment of Financial Institution as Agent for the
Company.
The Company may appoint a financial institution (which may be the
Collateral Agent) to act as its agent in performing its obligations and in
accepting and enforcing performance of the obligations of the Purchase Contract
Agent and the Holders, under this Agreement and the Purchase Contracts, by
giving notice of such appointment in the manner provided in Section 1.05 hereof.
Any such appointment shall not relieve the Company in any way from its
obligations hereunder.
SECTION 1.16. No Waiver.
No failure on the part of the Company, the Purchase Contract Agent, the
Collateral Agent, the Securities Intermediary or any of their respective agents
to exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the Company, the Collateral
Agent, the Securities Intermediary or any of their respective agents of any
right, power
20
or remedy hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. The remedies herein are cumulative
and are not exclusive of any remedies provided by law.
ARTICLE 2
CERTIFICATE FORMS
SECTION 2.01. Forms of Certificates Generally.
The Certificates (including the form of Purchase Contract represented
by each Unit evidenced thereby) shall be in substantially the form set forth in
Exhibit A hereto (in the case of Certificates evidencing Corporate Units),
Exhibit B hereto (in the case of Certificates evidencing Treasury Units
containing Treasury Securities maturing on July 15, 2006) or Exhibit C hereto
(in the case of Certificates evidencing Treasury Units containing Treasury
Securities maturing on August 15, 2006), with such letters, numbers or other
marks of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as may be required by the rules of any
securities exchange on which the Units are listed or any depositary therefor, or
as may, consistently herewith, be determined by the officers of the Company
executing such Certificates, as evidenced by their execution of the
Certificates.
The definitive Certificates shall be produced in any manner as
determined by the officers of the Company executing the Certificates evidencing
the Units, consistent with the provisions of this Agreement, as evidenced by
their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (THE "DEPOSITARY"), THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR
CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE
(OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY
TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED
EXCEPT IN LIMITED CIRCUMSTANCES.
21
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.02. Form of Purchase Contract Agent's Certificate of
Authentication.
The form of the Purchase Contract Agent's certificate of authentication
of the Units shall be in substantially the form set forth on the form of the
applicable Certificates.
ARTICLE 3
THE UNITS
SECTION 3.01. Amount; Form and Denominations.
The aggregate number of Units evidenced by Certificates authenticated,
executed on behalf of the Holders and delivered hereunder is limited to
18,400,000, except for Certificates authenticated, executed and delivered upon
registration of transfer of, in exchange for, or in lieu of, other Certificates
pursuant to Sections 3.04, 3.05, 3.10, 3.13, 3.14 or 8.05.
The Certificates shall be issuable only in registered form and only in
denominations of a single Corporate Unit or Treasury Unit and any integral
multiple thereof.
SECTION 3.02. Rights and Obligations Evidenced by the Certificates.
Each Corporate Units Certificate shall evidence the number of Corporate
Units specified therein, with each such Corporate Unit representing (1) the
ownership by the Holder thereof of a beneficial interest in a Senior Note or the
Applicable Ownership Interest in the Treasury Portfolio, as the case may be,
subject to the Pledge of such Senior Note or the Applicable Ownership Interest
(as specified in clause (i) of the definition of such term) in the Treasury
Portfolio, as the case may be, by such Holder pursuant to the Pledge Agreement,
and (2) the rights and obligations of the Holder thereof and the Company under
one Purchase Contract. The Purchase Contract Agent is hereby authorized, as
attorney-in-fact for, and on behalf of, the Holder of each Corporate Unit, to
pledge, pursuant to the Pledge Agreement, the Senior Note and the Applicable
Ownership Interest (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, if any, represented by such Corporate Unit, to the
Collateral Agent for the benefit of the Company, and to grant to the Collateral
Agent, for the benefit of the Company, a security interest in the right, title
and interest of such Holder in such Senior Note and the
22
Applicable Ownership Interest (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, if any, to secure the obligation of the
Holder under each Purchase Contract to pay the Stated Amount of such Purchase
Contract and thereby purchase shares of Common Stock.
Upon the formation of a Treasury Unit pursuant to Section 3.13, each
Treasury Unit Certificate shall evidence the number of Treasury Units specified
therein, with each such Treasury Unit representing (1) the ownership by the
Holder thereof of a 1/40 undivided beneficial interest in a Treasury Security
with a principal amount equal to $1,000, subject to the Pledge of such interest
by such Holder pursuant to the Pledge Agreement, and (2) the rights and
obligations of the Holder thereof and the Company under one Purchase Contract.
The Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and
on behalf of, the Holder of each Treasury Unit, to pledge, pursuant to the
Pledge Agreement, such Holder's interest in the Treasury Security represented by
such Treasury Unit to the Collateral Agent, for the benefit of the Company, and
to grant to the Collateral Agent, for the benefit of the Company, a security
interest in the right, title and interest of such Holder in such Treasury
Security to secure the obligation of the Holder under each Purchase Contract to
pay the Stated Amount of such Purchase Contract and thereby purchase shares of
Common Stock.
Prior to the purchase of shares of Common Stock under any Purchase
Contract, such Purchase Contract shall not entitle the Holder of the Unit
representing such Purchase Contract to any of the rights of a holder of shares
of Common Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as a shareholder
in respect of the meetings of shareholders or for the election of directors of
the Company or for any other matter, or any other rights whatsoever as a
shareholder of the Company.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the
execution and delivery of this Agreement, and at any time and from time to time
thereafter, the Company may deliver Certificates executed by the Company to the
Purchase Contract Agent for authentication, execution on behalf of the Holders
and delivery, together with its Issuer Order for authentication of such
Certificates, and the Purchase Contract Agent in accordance with such Issuer
Order shall authenticate, execute on behalf of the Holders and deliver such
Certificates.
The Certificates shall be executed on behalf of the Company by its
Chairman of the Board of Directors, its Vice Chairman of the Board of Directors,
its Chief Executive Officer, its President, its Treasurer, its Secretary or one
of its Vice Presidents. The signature of any of these officers on the
Certificates may be manual or facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Certificates.
23
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized officer of the Purchase Contract Agent, as such
Holder's attorney-in-fact. Such signature by an authorized officer of the
Purchase Contract Agent shall be conclusive evidence that the Holder of such
Certificate has entered into the Purchase Contracts evidenced by such
Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by an authorized officer of the Purchase Contract Agent by manual
signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder.
SECTION 3.04. Temporary Certificates.
Pending the preparation of definitive Certificates, the Company shall
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu
of such definitive Certificates, temporary Certificates that are in
substantially the form set forth in Exhibit A, Exhibit B or Exhibit C hereto, as
the case may be, with such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved
thereon as may be required by the rules of any securities exchange on which the
Corporate Units or Treasury Units, as the case may be, are listed, or as may,
consistently herewith, be determined by the officers of the Company executing
such Certificates, as evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause definitive
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Certificates, the temporary Certificates shall be exchangeable for
definitive Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Company shall execute and deliver to the Purchase Contract
Agent, and the Purchase Contract Agent shall authenticate, execute on behalf of
the Holder, and deliver in exchange therefor, one or more definitive
Certificates of like tenor and denominations and evidencing a like number of
Units as the temporary Certificate or Certificates so surrendered. Until so
exchanged, the temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Units evidenced thereby as
definitive Certificates.
SECTION 3.05. Registration; Registration of Transfer and Exchange.
The Purchase Contract Agent shall keep at the Corporate Trust Office a
register (the "SECURITY REGISTER") in which, subject to such reasonable
regulations as it may prescribe, the Purchase Contract Agent shall provide for
the registration of Certificates and of transfers of Certificates (the Purchase
Contract Agent, in such capacity, the "SECURITY REGISTRAR"). The
24
Security Registrar shall record separately the registration and transfer of the
Certificates evidencing Corporate Units and Treasury Units.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Company shall execute and deliver to the Purchase
Contract Agent, and the Purchase Contract Agent shall authenticate, execute on
behalf of the designated transferee or transferees, and deliver, in the name of
the designated transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like number of Corporate
Units or Treasury Units, as the case may be.
At the option of the Holder, Certificates may be exchanged for other
Certificates, of any authorized denominations and evidencing a like number of
Corporate Units or Treasury Units, as the case may be, upon surrender of the
Certificates to be exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver the Certificates that
the Holder making the exchange is entitled to receive.
All Certificates issued upon any registration of transfer or exchange
of a Certificate shall evidence the ownership of the same number of Corporate
Units or Treasury Units, as the case may be, and be entitled to the same
benefits and subject to the same obligations under this Agreement as the
Corporate Units or Treasury Units, as the case may be, evidenced by the
Certificate surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Purchase Contract Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Purchase Contract Agent duly executed, by
the Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Company and the Purchase Contract Agent may
require payment from the Holder of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration of
transfer or exchange of Certificates, other than any exchanges pursuant to
Sections 3.04, 3.06 and 8.05 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder
and deliver any Certificate in exchange for any other Certificate presented or
surrendered for registration of transfer or for exchange on or after the
Business Day immediately preceding the earliest to occur of any Early Settlement
Date with respect to such Certificate, any Cash Merger Early Settlement Date
with respect to such Certificate, the Purchase Contract Settlement Date or the
Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of
the applicable conditions specified above in this Section and receipt of
appropriate registration or transfer instructions from such Holder, the Purchase
Contract Agent shall:
25
(i) if the Purchase Contract Settlement Date (including upon
any Cash Settlement) or an Early Settlement Date or a Cash Merger Early
Settlement Date with respect to such other Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts represented by the Units evidenced by such other Certificate;
or
(ii) if a Termination Event shall have occurred prior to the
Purchase Contract Settlement Date, transfer the Senior Notes, the
Treasury Securities, or the appropriate Applicable Ownership Interest
in the Treasury Portfolio, as the case may be, evidenced thereby, in
each case subject to the applicable conditions and in accordance with
the applicable provisions of Section 3.15 and Article Five hereof.
SECTION 3.06. Book-Entry Interests.
The Certificates, on original issuance, will be issued in the form of
one or more fully registered Global Certificates, to be delivered to the
Depositary or its custodian by, or on behalf of, the Company. The Company hereby
designates DTC as the initial Depositary. Such Global Certificates shall
initially be registered on the books and records of the Company in the name of
Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive
a definitive Certificate representing such Beneficial Owner's interest in such
Global Certificate, except as provided in Section 3.09. The Purchase Contract
Agent shall enter into an agreement with the Depositary if so requested by the
Company. Unless and until definitive, fully registered Certificates have been
issued to Beneficial Owners pursuant to Section 3.09:
(i) the provisions of this Section 3.06 shall be in full force
and effect;
(ii) the Company and the Purchase Contract Agent shall be
entitled to deal with the Depositary for all purposes of this Agreement
(including, without limitation, making payments of Contract Adjustment
Payments and receiving approvals, votes or consents hereunder) as the
Holder of the Units and the sole holder of the Global Certificates and
shall have no obligation to the Beneficial Owners;
(iii) to the extent that the provisions of this Section 3.06
conflict with any other provisions of this Agreement, the provisions of
this Section 3.06 shall control; and
(iv) the rights of the Beneficial Owners shall be exercised
only through the Depositary and shall be limited to those established
by law and agreements between such Beneficial Owners and the Depositary
or the Depositary Participants.
Transfers of securities evidenced by Global Certificates shall be made through
the facilities of the Depositary, and any cancellation of, or increase or
decrease in the number of, such securities (including the creation of Treasury
Units and the recreation of Corporate Units pursuant to Sections 3.13 and 3.14,
respectively) shall be accomplished by making appropriate annotations on the
Schedule of Increases and Decreases for such Global Certificate.
26
SECTION 3.07. Notices to Holders.
Whenever a notice or other communication to the Holders is required to
be given under this Agreement, the Company or the Company's agent shall give
such notices and communications to the Holders and, with respect to any Units
registered in the name of the Depositary or the nominee of the Depositary, the
Company or the Company's agent shall, except as set forth herein, have no
obligations to the Beneficial Owners.
SECTION 3.08. Appointment of Successor Depositary.
If the Depositary elects to discontinue its services as securities
depositary with respect to the Units, the Company may, in its sole discretion,
appoint a successor Depositary with respect to the Units.
SECTION 3.09. Definitive Certificates.
If:
(i) the Depositary notifies the Company that it is unwilling
or unable to continue its services as securities depositary with
respect to the Units and no successor Depositary has been appointed
pursuant to Section 3.08 within 90 days after such notice; or
(ii) the Depositary ceases to be a "clearing agency"
registered under Section 17A of the Exchange Act when the Depositary is
required to be so registered to act as the Depositary and so notifies
the Company, and no successor Depositary has been appointed pursuant to
Section 3.08 within 90 days after such notice; or
(iii) the Company determines in its discretion that the Global
Certificates shall be exchangeable for definitive Certificates,
then (x) definitive Certificates evidencing the Units shall be prepared by the
Company and delivered to the Purchase Contract Agent and (y) upon surrender of
the Global Certificates evidencing the Units by the Depositary, accompanied by
registration instructions, the Company shall cause definitive Certificates to be
delivered to Beneficial Owners in accordance with the instructions of the
Depositary. The Company and the Purchase Contract Agent shall not be liable for
any delay in delivery of such instructions and may conclusively rely on and
shall be authorized and protected in relying on, such instructions. Each
definitive Certificate so delivered shall evidence Units of the same kind and
tenor as the Global Certificate so surrendered in respect thereof.
SECTION 3.10. Mutilated, Destroyed, Lost and Stolen Certificates.
If any mutilated Certificate is surrendered to the Purchase Contract
Agent, the Company shall execute and deliver to the Purchase Contract Agent, and
the Purchase Contract Agent shall authenticate, execute on behalf of the Holder,
and deliver in exchange therefor, a new Certificate,
27
evidencing the same number of Corporate Units or Treasury Units, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.
If there shall be delivered to the Company and the Purchase Contract
Agent (i) evidence to their satisfaction of the destruction, loss or theft of
any Certificate, and (ii) such security or indemnity as may be required by them
to hold each of them and any agent of any of them harmless, then, in the absence
of notice to the Company or the Purchase Contract Agent that such Certificate
has been acquired by a protected purchaser, the Company shall execute and
deliver to the Purchase Contract Agent, and the Purchase Contract Agent shall
authenticate, execute on behalf of the Holder, and deliver to the Holder, in
lieu of any such destroyed, lost or stolen Certificate, a new Certificate,
evidencing the same number of Corporate Units or Treasury Units, as the case may
be, and bearing a Certificate number not contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be obligated to
execute and deliver to the Purchase Contract Agent, and the Purchase Contract
Agent shall not be obligated to authenticate, execute on behalf of the Holder,
and deliver to the Holder, a Certificate on or after the Business Day
immediately preceding the earliest of any Early Settlement Date with respect to
such lost or mutilated Certificate, any Cash Merger Early Settlement Date with
respect to such lost or mutilated Certificate, the Purchase Contract Settlement
Date or the Termination Date. In lieu of delivery of a new Certificate, upon
satisfaction of the applicable conditions specified above in this Section and
receipt of appropriate registration or transfer instructions from such Holder,
the Purchase Contract Agent shall:
(i) if the Purchase Contract Settlement Date or Early
Settlement Date or Cash Merger Early Settlement Date with respect to
such lost, stolen, destroyed or mutilated Certificate has occurred,
deliver the shares of Common Stock issuable in respect of the Purchase
Contracts represented by the Units evidenced by such Certificate; or
(ii) if a Cash Settlement with respect to such lost or
mutilated Certificate or if a Termination Event shall have occurred
prior to the Purchase Contract Settlement Date, transfer the Senior
Notes, the Treasury Securities or the appropriate Applicable Ownership
Interest (as specified in clause (i) of the definition of such term) in
the Treasury Portfolio, as the case may be, evidenced thereby, in each
case subject to the applicable conditions and in accordance with the
applicable provisions of Section 3.15 and Article Five hereof.
Upon the issuance of any new Certificate under this Section, the
Company and the Purchase Contract Agent may require the payment by the Holder of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other fees and expenses (including, without
limitation, the fees and expenses of the Purchase Contract Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in lieu of any
destroyed, lost or stolen Certificate shall constitute an original additional
contractual obligation of the Company and of the Holder in respect of the Units
evidenced thereby, whether or not the destroyed, lost or
28
stolen Certificate (and the Units evidenced thereby) shall be at any time
enforceable by anyone, and shall be entitled to all the benefits and be subject
to all the obligations of this Agreement equally and proportionately with any
and all other Certificates delivered hereunder.
The provisions of this Section are exclusive and shall preclude, to the
extent lawful, all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Certificates.
SECTION 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration of transfer,
the Company and the Purchase Contract Agent, and any agent of the Company or the
Purchase Contract Agent, may treat the Person in whose name such Certificate is
registered as the owner of the Units evidenced thereby for purposes of (subject
to any applicable record date) any payment or distribution on the Senior Notes
or on the Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio (if any), as applicable,
payment of Contract Adjustment Payments and performance of the Purchase
Contracts and for all other purposes whatsoever in connection with such Units,
whether or not such payment, distribution, or performance shall be overdue and
notwithstanding any notice to the contrary, and neither the Company nor the
Purchase Contract Agent, nor any agent of the Company or the Purchase Contract
Agent, shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global Certificate,
nothing contained herein shall prevent the Company, the Purchase Contract Agent
or any agent of the Company or the Purchase Contract Agent from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary (or its nominee), as a Holder, with respect to such Global
Certificate, or impair, as between such Depositary and the related Beneficial
Owner, the operation of customary practices governing the exercise of rights of
the Depositary (or its nominee) as Holder of such Global Certificate. None of
the Company, the Purchase Contract Agent or any agent of the Company or the
Purchase Contract Agent will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of a Global Certificate or maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 3.12. Cancellation.
All Certificates surrendered for delivery of shares of Common Stock on
or after the Purchase Contract Settlement Date or upon the transfer of Senior
Notes, or for delivery of the appropriate Applicable Ownership Interest in the
Treasury Portfolio or Treasury Securities, as the case may be, after the
occurrence of a Termination Event or pursuant to a Cash Settlement, an Early
Settlement or a Cash Merger Early Settlement, or upon the registration of
transfer or exchange of a Unit, or a Collateral Substitution or the recreation
of Corporate Units shall, if surrendered to any Person other than the Purchase
Contract Agent, be delivered to the Purchase Contract Agent along with
appropriate written instructions regarding the cancellation thereof and, if not
already cancelled, shall be promptly cancelled by it. The Company may at any
time deliver to the Purchase Contract Agent for cancellation any Certificates
previously authenticated,
29
executed and delivered hereunder that the Company may have acquired in any
manner whatsoever, and all Certificates so delivered shall, upon an Issuer
Order, be promptly cancelled by the Purchase Contract Agent. No Certificates
shall be authenticated, executed on behalf of the Holder and delivered in lieu
of or in exchange for any Certificates cancelled as provided in this Section,
except as expressly permitted by this Agreement. All cancelled Certificates
held by the Purchase Contract Agent shall be disposed of in accordance with its
customary practices.
If the Company or any Affiliate of the Company shall acquire any
Certificate, such acquisition shall not operate as a cancellation of such
Certificate unless and until such Certificate is delivered to the Purchase
Contract Agent cancelled or for cancellation.
SECTION 3.13. Creation of Treasury Units by Substitution of Treasury
Securities.
Unless the Treasury Portfolio has replaced the Senior Notes represented
by the Corporate Units, and subject to the conditions set forth in this
Agreement, a Holder may, at any time from and after the date of this Agreement
and prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date, effect a Collateral
Substitution and separate the Senior Notes represented by such Holder's
Corporate Units from the Purchase Contracts so represented by substituting, for
such Senior Notes, Treasury Securities in an aggregate principal amount at
maturity equal to the aggregate principal amount of such Senior Notes; provided
that Holders may make such Collateral Substitutions only in integral multiples
of 40 Corporate Units. To effect such substitution, the Holder must:
(1) deposit with the Securities Intermediary Treasury
Securities having an aggregate principal amount at
maturity equal to the aggregate principal amount of the
Senior Notes represented by such Corporate Units; and
(2) transfer the related Corporate Units to the Purchase
Contract Agent accompanied by a notice to the Purchase
Contract Agent, substantially in the form of Exhibit D
hereto, (i) stating that the Holder has deposited the
relevant amount of Treasury Securities with the Securities
Intermediary and (ii) requesting that the Purchase
Contract Agent instruct the Collateral Agent to release
the Senior Notes represented by such Corporate Units,
whereupon the Purchase Contract Agent shall promptly
provide an instruction to such effect to the Collateral
Agent, substantially in the form of Exhibit A to the
Pledge Agreement.
Upon receipt of the Treasury Securities described in clause (1) above
and the instruction described in clause (2) above, in accordance with the terms
of the Pledge Agreement, the Collateral Agent will cause the Securities
Intermediary to effect the release of such Senior Notes from the Pledge, free
and clear of the Company's security interest therein, and the transfer of such
Senior Notes to the Purchase Contract Agent on behalf of the Holder. Upon
receipt of such Senior Notes, the Purchase Contract Agent shall promptly:
(i) cancel the related Corporate Units;
30
(ii) transfer the Senior Notes to the Holder (such Senior
Notes shall be tradeable as a separate security, independent of the
resulting Treasury Units); and
(iii) authenticate, execute on behalf of such Holder and
deliver Treasury Units in book-entry form or, if applicable, in the
form of a Treasury Units Certificate executed by the Company in
accordance with Section 3.03, representing the same number of Purchase
Contracts as were represented by the cancelled Corporate Units.
Holders who elect to separate the Senior Notes from the related
Purchase Contracts and to substitute Treasury Securities for such Senior Notes
shall be responsible for any fees or expenses (including, without limitation,
fees and expenses payable to the Collateral Agent for its services as Collateral
Agent) in respect of the substitution, and neither the Company nor the Purchase
Contract Agent shall be responsible for any such fees or expenses.
If the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units and subject to the conditions set forth in this Agreement, a
Holder may, at any time on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date, substitute Treasury Securities
for the Applicable Ownership Interests in the Treasury Portfolio represented by
such Corporate Units, but only in integral multiples of 64,000 Corporate Units.
In such an event, the Holder shall transfer Treasury Securities to the
Securities Intermediary, and the Purchase Contract Agent shall instruct the
Collateral Agent to release the Pledge of and transfer to the Holder the
appropriate Applicable Ownership Interests in the Treasury Portfolio in the
manner set forth above.
In the event a Holder making a Collateral Substitution pursuant to this
Section 3.13 fails to effect a book-entry transfer of the Corporate Units or
fails to deliver Corporate Units Certificates to the Purchase Contract Agent
after depositing Treasury Securities with the Securities Intermediary, any
distributions on the Senior Notes or Applicable Ownership Interest in the
Treasury Portfolio represented by such Corporate Units shall be held in the name
of the Purchase Contract Agent or its nominee in trust for the benefit of such
Holder, until such Corporate Units are so transferred or the Corporate Units
Certificate is so delivered, as the case may be, or, such Holder provides
evidence satisfactory to the Company and the Purchase Contract Agent that such
Corporate Units Certificate has been destroyed, lost or stolen, together with
any indemnity that may be required by the Purchase Contract Agent and the
Company.
Except as described in Section 5.02 or in this Section 3.13 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
represented by a Corporate Unit remains in effect, such Corporate Units shall
not be separable into the Purchase Contracts and Senior Notes or Applicable
Ownership Interests in the Treasury Portfolio, as the case may be, represented
thereby, and the rights and obligations of the Holder in respect of the Senior
Notes or Applicable Ownership Interests in the Treasury Portfolio, as the case
may be, and the Purchase Contract represented by such Corporate Units may be
acquired, and may be transferred and exchanged, only as a Corporate Unit.
31
SECTION 3.14. Recreation of Corporate Units.
Unless the Treasury Portfolio has replaced the Senior Notes represented
by the Corporate Units, and subject to the conditions set forth in this
Agreement, a Holder of Treasury Units may recreate Corporate Units at any time
on or prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that
Holders of Treasury Units may only recreate Corporate Units in integral
multiples of 40 Treasury Units. To recreate Corporate Units, the Holder must:
(1) transfer to the Securities Intermediary Senior Notes
having an aggregate principal amount equal to the
aggregate principal amount at stated maturity of the
Treasury Securities represented by the Treasury Units; and
(2) transfer the related Treasury Units to the Purchase
Contract Agent accompanied by a notice to the Purchase
Contract Agent, substantially in the form of Exhibit D
hereto, (i) stating that the Holder has transferred the
relevant amount of Senior Notes to the Securities
Intermediary and (ii) requesting that the Purchase
Contract Agent instruct the Collateral Agent to release
the Treasury Securities represented by such Treasury
Units, whereupon the Purchase Contract Agent shall
promptly provide an instruction to such effect to the
Collateral Agent, substantially in the form of Exhibit C
to the Pledge Agreement.
Upon receipt of the Senior Notes described in clause (1) above and the
instruction described in clause (2) above, in accordance with the terms of the
Pledge Agreement, the Collateral Agent will cause the Securities Intermediary to
effect the release of the Treasury Securities having a corresponding aggregate
principal amount at maturity from the Pledge, free and clear of the Company's
security interest therein, and the transfer thereof to the Purchase Contract
Agent on behalf of the Holder. Upon receipt of such Treasury Securities, the
Purchase Contract Agent shall promptly:
(i) cancel the related Treasury Units;
(ii) transfer the Treasury Securities to the Holder; and
(iii) authenticate, execute on behalf of such Holder and
deliver Corporate Units in book-entry form or, if applicable, in the
form of a Corporate Units Certificate executed by the Company in
accordance with Section 3.03, representing the same number of Purchase
Contracts as were represented by the cancelled Treasury Units.
Holders who elect to recreate Corporate Units shall be responsible for
any fees or expenses (including, without limitation, fees and expenses payable
to the Collateral Agent for its services as Collateral Agent) in respect of the
recreation, and neither the Company nor the Purchase Contract Agent shall be
responsible for any such fees or expenses.
32
If the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units, a Holder may at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date substitute the
Applicable Ownership Interests in the Treasury Portfolio for Treasury
Securities, but only in multiples of 64,000 Treasury Units. In such an event,
the Holder shall transfer the Applicable Ownership Interests in the Treasury
Portfolio to the Collateral Agent in an amount such that the aggregate principal
amount at maturity of the portion of such Applicable Ownership Interests in the
Treasury Portfolio (as specified in clause (i) of the definition of such term)
is equal to the aggregate Stated Amount of the Purchase Contracts underlying
such Treasury Units, and the Purchase Contract Agent shall instruct the
Collateral Agent to release the Pledge of and transfer to the Holder Treasury
Securities in the manner set forth above.
Except as provided in Section 5.02 or in this Section 3.14 or in
connection with a Cash Settlement, an Early Settlement, a Cash Merger Early
Settlement or a Termination Event, for so long as the Purchase Contract
represented by a Treasury Unit remains in effect, such Treasury Unit shall not
be separable into its constituent parts and the rights and obligations of the
Holder of such Treasury Unit in respect of the 1/40 of a Treasury Security and
the Purchase Contract represented by such Treasury Unit may be acquired, and may
be transferred and exchanged, only as a Treasury Unit.
SECTION 3.15. Transfer of Collateral upon Occurrence of Termination
Event.
Upon the occurrence of a Termination Event and the transfer to the
Purchase Contract Agent of the Senior Notes, the appropriate Applicable
Ownership Interests in the Treasury Portfolio or the Treasury Securities, as the
case may be, represented by the Corporate Units or the Treasury Units, as the
case may be, pursuant to the terms of the Pledge Agreement, the Purchase
Contract Agent shall request transfer instructions with respect to such Senior
Notes, the appropriate Applicable Ownership Interests in the Treasury Portfolio
or Treasury Securities, as the case may be, from each Holder by written request,
substantially in the form of Exhibit E hereto, mailed to such Holder at its
address as it appears in the Security Register.
Upon book-entry transfer of the Corporate Units or the Treasury Units
or delivery of a Corporate Units Certificate or Treasury Units Certificate to
the Purchase Contract Agent with such transfer instructions, the Purchase
Contract Agent shall transfer the Senior Notes, the appropriate Applicable
Ownership Interests in the Treasury Portfolio or Treasury Securities, as the
case may be, represented by such Corporate Units or Treasury Units, as the case
may be, to such Holder by book-entry transfer, or other appropriate procedures,
in accordance with such instructions. In the event a Holder of Corporate Units
or Treasury Units fails to effect such transfer or delivery, the Senior Notes,
the appropriate Applicable Ownership Interests in the Treasury Portfolio or
Treasury Securities, as the case may be, represented by such Corporate Units or
Treasury Units, as the case may be, and any distributions thereon, shall be held
in the name of the Purchase Contract Agent or its nominee in trust for the
benefit of such Holder, until the earlier to occur of:
33
(i) the transfer of such Corporate Units or Treasury Units or
surrender of the Corporate Units Certificate or Treasury Units
Certificate or the receipt by the Company and the Purchase Contract
Agent from such Holder of satisfactory evidence that such Corporate
Units Certificate or Treasury Units Certificate has been destroyed,
lost or stolen, together with any indemnity that may be required by the
Purchase Contract Agent and the Company; and
(ii) the expiration of the time period specified in the
abandoned property laws of the relevant State in which the Purchase
Contract Agent holds such property.
SECTION 3.16. No Consent to Assumption.
Each Holder of a Unit, by acceptance thereof, shall be deemed expressly
to have withheld any consent to the assumption under Section 365 of the
Bankruptcy Code or otherwise, of the Purchase Contract by the Company or its
trustee, receiver, liquidator or a person or entity performing similar functions
in the event that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or Federal law providing for reorganization or
liquidation.
ARTICLE 4
THE SENIOR NOTES AND APPLICABLE OWNERSHIP INTERESTS IN THE TREASURY PORTFOLIO
SECTION 4.01. Interest Payments; Rights to Interest Payments Preserved.
Any payment on any Senior Note or on the appropriate Applicable
Ownership Interests (as specified in clause (ii) of the definition of such term)
in the Treasury Portfolio, as the case may be, which is paid on any Payment Date
shall, subject to receipt thereof by the Purchase Contract Agent from the
Collateral Agent as provided by the terms of the Pledge Agreement, be paid to
the Person in whose name the Corporate Units Certificate (or one or more
Predecessor Corporate Units Certificates) representing such Senior Note or the
appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, is registered at the close of business on the Record Date for such
Payment Date.
Each Corporate Units Certificate evidencing Senior Notes or the
appropriate Applicable Ownership Interests in the Treasury Portfolio delivered
under this Agreement upon registration of transfer of or in exchange for or in
lieu of any other Corporate Units Certificate shall carry the right to accrued
and unpaid interest or distributions, and to accrue interest or distributions,
which were carried by the Senior Notes or the appropriate Applicable Ownership
Interests in the Treasury Portfolio represented by such other Corporate Units
Certificate.
In the case of any Corporate Unit with respect to which (A) Cash
Settlement of the Purchase Contract represented by such Corporate Unit is
properly effected pursuant to Section
34
5.02 hereof, (B) Early Settlement of the Purchase Contract represented by such
Corporate Unit is properly effected pursuant to Section 5.07 hereof, (C) Cash
Merger Early Settlement of the Purchase Contract represented by such Corporate
Unit is properly effected pursuant to Section 5.04(b)(2) hereof, (D) a
Collateral Substitution is properly effected pursuant to Section 3.13, or (E) a
Successful Initial Remarketing occurs with respect to the Senior Note that is
represented by such Corporate Unit, in each case on a date that is after any
Record Date and prior to or on the next succeeding Payment Date, interest on the
Senior Notes or distributions on the appropriate Applicable Ownership Interests
in the Treasury Portfolio, as the case may be, represented by such Corporate
Unit otherwise payable on such Payment Date shall be payable on such Payment
Date notwithstanding such Cash Settlement, Early Settlement, Cash Merger Early
Settlement, Collateral Substitution or Initial Remarketing, and such payment or
distributions shall, subject to receipt thereof by the Purchase Contract Agent,
be payable to the Person in whose name the Corporate Units Certificate (or one
or more Predecessor Corporate Units Certificates) was registered at the close of
business on the Record Date.
Except as otherwise expressly provided in the immediately preceding
paragraph, in the case of any Corporate Units with respect to which Cash
Settlement, Early Settlement or Cash Merger Early Settlement of the Purchase
Contract represented by such Corporate Unit is properly effected, or with
respect to which a Collateral Substitution has been effected, payments on the
related Senior Notes or distributions on the appropriate Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, that would otherwise be
payable or made after the Purchase Contract Settlement Date, Early Settlement
Date, Cash Merger Early Settlement Date or the date of the Collateral
Substitution, as the case may be, shall not be payable hereunder to the Holder
of such Corporate Units; provided, however, that to the extent that such Holder
continues to hold Separate Senior Notes or Applicable Ownership Interests in the
Treasury Portfolio that were formerly represented by such Holder's Corporate
Units, such Holder shall be entitled to receive interest on such Separate Senior
Notes or distributions on the Applicable Ownership Interests in the Treasury
Portfolio.
SECTION 4.02. Notice and Voting.
Under the terms of the Pledge Agreement, the Purchase Contract Agent
will be entitled to exercise the voting and any other consensual rights
pertaining to the Pledged Senior Notes, but only to the extent instructed in
writing by the Holders as described below. Upon receipt of notice of any meeting
at which holders of Senior Notes are entitled to vote or upon any solicitation
of consents, waivers or proxies of holders of Senior Notes, the Purchase
Contract Agent shall, as soon as practicable thereafter, mail, first class,
postage pre-paid, to the Holders of Corporate Units a notice:
(i) containing such information as is contained in the notice
or solicitation;
(ii) stating that each Holder on the record date set by the
Purchase Contract Agent therefor (which, to the extent possible, shall
be the same date as the record date for determining the holders of
Senior Notes, as the case may be, entitled to vote) shall be
35
entitled to instruct the Purchase Contract Agent as to the exercise of
the voting rights pertaining to such Senior Notes represented by their
Corporate Units; and
(iii) stating the manner in which such instructions may be
given.
Upon the written request of the Holders of Corporate Units on such record date
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum number of Senior Notes, as the case may be, as to which
any particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Purchase Contract Agent
shall abstain from voting the Senior Notes represented by such Corporate Unit.
The Company hereby agrees, if applicable, to solicit Holders of Corporate Units
to timely instruct the Purchase Contract Agent in order to enable the Purchase
Contract Agent to vote such Senior Notes.
The Holders of Corporate Units and Treasury Units shall have no voting
or other rights in respect of Common Stock.
SECTION 4.03. Special Event Redemption.
(a) If the Company elects to redeem the Senior Notes on any Payment
Date following the occurrence of a Special Event as permitted by the Indenture,
it shall notify the Collateral Agent in writing that a Special Event has
occurred and that it intends to redeem the Senior Notes and the Special Event
Redemption Date. On the Special Event Redemption Date, the Collateral Agent
shall surrender the Pledged Senior Notes to the Indenture Trustee against
delivery of an amount equal to the aggregate Redemption Price for such Pledged
Senior Notes. Thereafter, pursuant to the terms of the Pledge Agreement, the
Collateral Agent shall cause the Securities Intermediary to apply an amount
equal to the aggregate Redemption Amount of such funds to purchase on behalf of
the Holders of Corporate Units the Treasury Portfolio and promptly remit the
remaining portion of such funds to the Purchase Contract Agent for payment to
the Holders of such Corporate Units.
(b) Upon the occurrence of a Special Event Redemption, (i) the
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio will be substituted as Collateral for the
Pledged Senior Notes and will be held by the Securities Intermediary in
accordance with the terms of the Pledge Agreement to secure the obligation of
each Holder of a Corporate Unit to pay the Stated Amount of the related Purchase
Contract and thereby purchase Common Stock of the Company thereunder, (ii) the
Holders of Corporate Units and the Collateral Agent shall have such security
interest rights and obligations with respect to such Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) as the
Holders of Corporate Units and the Collateral Agent had in respect of the Senior
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement, and (iii) any reference herein to the Senior Notes shall be
deemed to be a reference to such Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio. The
Company may cause to be made in any Corporate Units Certificates thereafter to
be issued such change in phraseology and form (but not in substance) as may be
appropriate to
36
reflect the substitution of the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio for Senior
Notes as Collateral.
(c) The Holders of Separate Senior Notes shall directly receive the
redemption price for the Separate Senior Notes.
ARTICLE 5
THE PURCHASE CONTRACTS
SECTION 5.01. Purchase of Shares of Common Stock.
(a) Each Purchase Contract shall obligate the Holder of the related
Units to purchase, and the Company to sell, on the Purchase Contract Settlement
Date at a price equal to the Stated Amount, a number of newly issued shares of
Common Stock (subject to Section 5.09) equal to the Settlement Rate unless an
Early Settlement, a Cash Merger Early Settlement or a Termination Event with
respect to such Purchase Contract shall have occurred. The "SETTLEMENT RATE" is
equal to:
(i) if the Adjusted Applicable Market Value (as defined below)
is greater than $71.40 (the "THRESHOLD APPRECIATION PRICE"), 0.3501
shares of Common Stock per Purchase Contract;
(ii) if the Adjusted Applicable Market Value is less than or
equal to the Threshold Appreciation Price but greater than or equal to
$59.50 (the "REFERENCE PRICE"), the number of shares of Common Stock
per Purchase Contract having a value equal to the Stated Amount divided
by the Adjusted Applicable Market Value;
(iii) if the Adjusted Applicable Market Value is less than the
Reference Price, 0.4202 shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in Section 5.04 (and in each case
rounded upward or downward to the nearest 1/10,000th of a share).
The "APPLICABLE MARKET VALUE" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a), the Applicable Market Value, and (ii) at
the time of and after any adjustment of the Settlement Rate pursuant to
paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of
37
Section 5.04(a), the Applicable Market Value multiplied by a fraction of which
the numerator shall be the Settlement Rate immediately after such adjustment
pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section
5.04(a) and the denominator shall be the Settlement Rate immediately prior to
such adjustment; provided, however, that if such adjustment to the Settlement
Rate is required to be made pursuant to the occurrence of any of the events
contemplated by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section
5.04(a) during the period taken into consideration for determining the
Applicable Market Value, appropriate and customary adjustments shall be made to
the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means:
(i) the closing sale price as of the close of the principal
trading session (or, if no closing price is reported, the last reported
sale price) per share on the New York Stock Exchange, Inc. (the "NYSE")
on such date;
(ii) if the Common Stock is not listed for trading on the NYSE
on any such date, the closing sale price (or, if no closing price is
reported, the last reported sale price) per share as reported in the
composite transactions for the principal United States national or
regional securities exchange on which the Common Stock is so listed;
(iii) if the Common Stock is not so listed on a United States
national or regional securities exchange, the last reported sale price
per share as reported by The Nasdaq National Market, Inc.;
(iv) if the Common Stock is not so reported by the Nasdaq
National Market, Inc., the last quoted bid price for the Common Stock
in the over-the-counter market as reported by the National Quotation
Bureau or similar organization; or
(v) if the bid price referred to in clause (iv) is not
available, the market value of Common Stock on such date as determined
by a nationally recognized independent investment banking firm retained
by the Company for purposes of determining the Closing Price.
A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
(b) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance of such Unit:
(i) irrevocably authorizes the Purchase Contract Agent to
enter into and perform the Purchase Contract represented thereby on its
behalf as its attorney-in-fact (including, without limitation, the
execution of Certificates on behalf of such Holder);
(ii) agrees to be bound by the terms and provisions thereof;
38
(iii) covenants and agrees to perform its obligations under
such Purchase Contract for so long as such Holder remains a Holder of a
Corporate Unit or a Treasury Unit representing such Purchase Contract;
(iv) consents to the provisions hereof;
(v) irrevocably authorizes the Purchase Contract Agent to
enter into and perform this Agreement and the Pledge Agreement on its
behalf and in its name as its attorney-in-fact;
(vi) consents to, and agrees to be bound by, the Pledge of
such Holder's right, title and interest in and to the Collateral
Account, including the Senior Notes and the Applicable Ownership
Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio or the Treasury Securities pursuant to the
Pledge Agreement; and
(vii) for United States federal, state and local tax purposes,
agrees to (i) treat an acquisition of the Corporate Units as an
acquisition of the Senior Note and Purchase Contract represented by
each Corporate Unit, (ii) treat the Senior Notes as indebtedness of the
Company and (iii) treat itself as the owner of the applicable interest
in the Collateral Account, including the Senior Notes and the
Applicable Ownership Interests in the Treasury Portfolio (as specified
in clause (i) of the definition of such term) or the Treasury
Securities,
provided that upon a Termination Event, the rights of the Holder of such Units
under the Purchase Contract may be enforced without regard to any other rights
or obligations.
(c) Each Holder of a Corporate Unit or a Treasury Unit, by its
acceptance thereof, further covenants and agrees that to the extent and in the
manner provided in Section 5.02 and the Pledge Agreement, but subject to the
terms thereof, the Treasury Securities or the Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio, as applicable, on the Purchase Contract Settlement Date, shall be
paid by the Collateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contract and such Holder shall acquire no right,
title or interest in such Proceeds.
(d) Upon registration of transfer of a Certificate, the transferee
shall be bound (without the necessity of any other action on the part of such
transferee) by the terms of this Agreement, the Purchase Contracts represented
by such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
represented by the Certificate so transferred and the Pledge Agreement. The
Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants and agrees, to be bound by the provisions
of this paragraph.
SECTION 5.02. Remarketing; Payment of Stated Amount.
39
(a) (i) Unless a Special Event Redemption has occurred prior
to the Initial Remarketing Date, the Company shall engage the
Remarketing Agent pursuant to the Remarketing Agreement for Remarketing
the Senior Notes. By 11:00 a.m. (New York City time) on the Business
Day immediately preceding the Initial Remarketing Date, the Purchase
Contract Agent shall notify the Remarketing Agent of the aggregate
principal amount of Pledged Senior Notes, and the Custodial Agent shall
notify the Remarketing Agent of the aggregate principal amount of
Separate Senior Notes (if any) that are to be remarketed pursuant to
clause (ii) below. Concurrently, the Collateral Agent, pursuant to the
terms of the Pledge Agreement, will present for Remarketing the Pledged
Senior Notes, and the Custodial Agent, pursuant to clause (ii) below,
will present for Remarketing the Separate Senior Notes, to the
Remarketing Agent. Upon receipt of such notice from the Purchase
Contract Agent and Custodial Agent and the Pledged Senior Notes and
Separate Senior Notes (if any) from the Collateral Agent and Custodial
Agent, the Remarketing Agent will, on the Initial Remarketing Date, use
its reasonable efforts to remarket (based on the Reset Rate) (the
"INITIAL REMARKETING") such Pledged Senior Notes and Separate Senior
Notes on such date at a price of approximately (but not less than)
100.50% of the sum of the Treasury Portfolio Purchase Price plus the
Separate Senior Notes Purchase Price. If the Remarketing Agent is able
to remarket the Pledged Senior Notes and Separate Senior Notes at a
price not less than 100.50% of the Treasury Portfolio Purchase Price
plus the Separate Senior Notes Purchase Price (a "SUCCESSFUL INITIAL
REMARKETING"), the portion of the proceeds from such Successful Initial
Remarketing equal to the Treasury Portfolio Purchase Price will be
applied to purchase the Treasury Portfolio. The Remarketing Agent shall
deduct as a remarketing fee (the "REMARKETING FEE") an amount not
exceeding 25 basis points (0.25%) of the sum of the Treasury Portfolio
Purchase Price plus the Separate Senior Notes Purchase Price. None of
the Company, the Purchase Contract Agent, or any Holders of Corporate
Units or holders of Separate Senior Notes whose Senior Notes or
Separate Senior Notes, as applicable, are so remarketed will otherwise
be responsible for the payment of any Remarketing Fee in connection
therewith. With respect to Separate Senior Notes, the proceeds of a
Successful Initial Remarketing in excess of the Remarketing Fee
attributable to the Separate Senior Notes will be remitted to the
Custodial Agent for payment to the holders of Separate Senior Notes.
With respect to Pledged Senior Notes, the proceeds of a Successful
Initial Remarketing in excess of the sum of the Treasury Portfolio
Purchase Price plus the Remarketing Fee with respect to such Pledged
Senior Notes will be remitted to the Purchase Contract Agent for
payment to the Holders of the related Corporate Units. The Treasury
Portfolio will be substituted for the Pledged Senior Notes and the
appropriate Applicable Ownership Interests (as specified in clause (i)
of the definition of such term) in the Treasury Portfolio will be
pledged to the Collateral Agent to secure the obligation of the Holders
of Corporate Units to pay the Stated Amount for the Common Stock under
the related Purchase Contracts on the Purchase Contract Settlement
Date.
Following the occurrence of a Successful Initial Remarketing, the
Holders of Corporate Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the
Applicable Ownership Interests (as specified in clause (i) of the
40
definition of such term) in the Treasury Portfolio as the Holder of
Corporate Units and the Collateral Agent had in respect of the Senior
Notes, subject to the Pledge thereof as provided in the Pledge
Agreement, and any reference herein or in the Certificates to the
Senior Notes shall be deemed to be a reference to such Applicable
Ownership Interests in the Treasury Portfolio and any reference herein
or in the Certificates to interest on the Senior Notes shall be deemed
to be a reference to corresponding distributions on such Applicable
Ownership Interests in the Treasury Portfolio. The Company may cause to
be made in any Corporate Units Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of such Applicable Ownership
Interests in the Treasury Portfolio for Senior Notes.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Senior Notes and the Separate Senior Notes
(if any) in the Initial Remarketing (other than to the Company) at a
price not less than 100.50% of the sum of the Treasury Portfolio
Purchase Price plus the Separate Senior Notes Purchase Price or the
Initial Remarketing is not settled in accordance with the Remarketing
Agreement for any reason, including the failure to fulfill a condition
precedent set forth in the Remarketing Agreement, the Initial
Remarketing will be deemed to have failed (a "FAILED INITIAL
REMARKETING"). Upon a Failed Initial Remarketing, the Remarketing Agent
shall return the Pledged Senior Notes and Separate Senior Notes (if
any) subject to such Remarketing to the Collateral Agent or the
Custodial Agent, as the case may be.
(ii) Prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the applicable Remarketing Date, but
no earlier than the Payment Date immediately preceding such date,
Holders of Separate Senior Notes may elect to have their Separate
Senior Notes remarketed under the Remarketing Agreement by delivering
their Separate Senior Notes, along with a notice of such election,
substantially in the form of Exhibit F to the Pledge Agreement, to the
Custodial Agent. After such time, such election shall become an
election to have such Separate Senior Notes remarketed in such
Remarketing and, if such Remarketing fails, in any subsequent
Remarketing. The Custodial Agent shall hold Separate Senior Notes in an
account separate from the Collateral Account in which the Pledged
Senior Notes shall be held. Holders of Separate Senior Notes electing
to have their Separate Senior Notes remarketed will also have the right
to withdraw that election by written notice to the Custodial Agent,
substantially in the form of Exhibit G to the Pledge Agreement, on or
prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the applicable Remarketing Date, upon which
notice the Custodial Agent shall return such Separate Senior Notes to
such Holder. By 11:00 a.m. on the Business Day immediately preceding
the applicable Remarketing Date, the Custodial Agent shall notify the
Remarketing Agent of the aggregate principal amount of the Separate
Senior Notes to be remarketed and will deliver to the Remarketing Agent
for remarketing all such Separate Senior Notes delivered to the
Custodial Agent pursuant to Section 5.07(c) of the Pledge Agreement and
not validly withdrawn prior to such date.
41
(iii) Not later than seven calendar days nor more than 15
calendar days prior to the applicable Remarketing Date, the Company
shall request the Depositary or its nominee to notify the Beneficial
Owners or Depositary Participants holding Units of the procedures to be
followed in such Remarketing.
(iv) The Company agrees to use commercially reasonable efforts
to ensure that, if required by applicable law, a registration statement
with regard to the full amount of the Senior Notes to be remarketed in
the Initial Remarketing, the Second Remarketing, the Third Remarketing
or the Final Remarketing, as the case may be, shall be effective with
the Securities and Exchange Commission in a form that will enable the
Remarketing Agent to use it in connection with such Remarketing.
(v) The Company shall cause a notice of a Failed Remarketing
to be published (with a copy of such notice to be provided to the
Purchase Contract Agent) on the Business Day immediately following the
applicable Remarketing Date, in a daily newspaper in the English
language of general circulation in the City of New York, which is
expected to be The Wall Street Journal.
(b) (i) Unless a Special Event Redemption has occurred prior
to the Second Remarketing Date, if a Failed Initial Remarketing occurs,
the Remarketing Agent will use its reasonable efforts to remarket the
Senior Notes (a "SECOND REMARKETING") on the Second Remarketing Date.
By 11:00 a.m. (New York City time) on the Business Day immediately
preceding the Second Remarketing Date for such Second Remarketing, the
Purchase Contract Agent shall notify the Remarketing Agent of the
aggregate principal amount of Pledged Senior Notes, and the Custodial
Agent shall notify the Remarketing Agent of the aggregate principal
amount of Separate Senior Notes (if any) that are to be remarketed
pursuant to Section 5.02(a)(ii). Concurrently, the Collateral Agent,
pursuant to the terms of the Pledge Agreement, and the Custodial Agent,
pursuant to Section 5.02(a)(ii), will present for Remarketing the
Pledged Senior Notes and the Separate Senior Notes (if any) that are to
be remarketed to the Remarketing Agent. Upon receipt of such notice
from the Purchase Contract Agent and the Custodial Agent and Pledged
Senior Notes and Separate Senior Notes (if any) from the Collateral
Agent and the Custodial Agent, the Remarketing Agent will, on the
Second Remarketing Date, use its reasonable efforts to remarket (based
on the Reset Rate) such Pledged Senior Notes and Separate Senior Notes
on such date at a price of approximately (but not less than) 100.50% of
the sum of the Treasury Portfolio Purchase Price plus the Separate
Senior Notes Purchase Price. If the Remarketing Agent is able to
remarket the Pledged Senior Notes and Separate Senior Notes at a price
not less than 100.50% of the Treasury Portfolio Purchase Price plus the
Separate Senior Notes Purchase Price (a "SUCCESSFUL SECOND
REMARKETING"), the portion of the proceeds from such Successful Second
Remarketing equal to the Treasury Portfolio Purchase Price will be
applied to purchase the Treasury Portfolio. The Remarketing Agent shall
deduct the Remarketing Fee from any amount of such proceeds in excess
of the sum of the Treasury Portfolio Purchase Price plus the Separate
Senior Notes Purchase Price. None of the Company, the Purchase Contract
Agent or any Holders of Corporate Units or holders of Separate Senior
Notes
42
whose Senior Notes or Separate Senior Notes are so remarketed will
otherwise be responsible for the payment of any Remarketing Fee in
connection therewith. With respect to Separate Senior Notes, the
proceeds of the Second Remarketing in excess of the Remarketing Fee
attributable to the Separate Senior Notes will be remitted to the
Custodial Agent for payment to the holders of Separate Senior Notes.
With respect to Pledged Senior Notes, the proceeds of the Second
Remarketing in excess of the sum of the Treasury Portfolio Purchase
Price plus the Remarketing Fee with respect to such Pledged Senior
Notes will be remitted to the Purchase Contract Agent for payment to
the Holders of the related Corporate Units. The Treasury Portfolio will
be substituted for the Pledged Senior Notes and the appropriate
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio will be pledged to
the Collateral Agent to secure the obligation of the Holders of
Corporate Units to pay the Stated Amount for the Common Stock under the
related Purchase Contracts on the Purchase Contract Settlement Date.
Following the occurrence of a Successful Second Remarketing, the
Holders of Corporate Units and the Collateral Agent shall have such
security interests, rights and obligations with respect to the
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio as the Holder of
Corporate Units and the Collateral Agent had in respect of the related
Senior Notes, subject to the Pledge thereof as provided in the Pledge
Agreement, and any reference herein or in the Certificates to the
Senior Notes shall be deemed to be a reference to such Applicable
Ownership Interests in the Treasury Portfolio and any reference herein
or in the Certificates to interest on the Senior Notes shall be deemed
to be a reference to corresponding distributions on such Applicable
Ownership Interests in the Treasury Portfolio. The Company may cause to
be made in any Corporate Units Certificates thereafter to be issued
such change in phraseology and form (but not in substance) as may be
appropriate to reflect the substitution of such Applicable Ownership
Interests in the Treasury Portfolio for Senior Notes.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Senior Notes and Separate Senior Notes (if
any) in a Second Remarketing (other than to the Company) at a price not
less than 100.50% of the sum of the Treasury Portfolio Purchase Price
plus the Separate Senior Notes Purchase Price or the Second Remarketing
is not settled in accordance with the Remarketing Agreement for any
reason, including the failure to fulfill a condition precedent set
forth in the Remarketing Agreement, the Second Remarketing will be
deemed to have failed (a "FAILED SECOND REMARKETING"). Upon a Failed
Second Remarketing, the Remarketing Agent shall return the Pledged
Senior Notes and the Separate Senior Notes (if any) subject to such
Remarketing to the Collateral Agent or the Custodial Agent, as the case
may be.
(ii) Unless a Special Event Redemption has occurred prior to
the Third Remarketing Date, if a Failed Second Remarketing occurs, the
Remarketing Agent will use its reasonable efforts to remarket the
Senior Notes (a "THIRD REMARKETING") on the Third Remarketing Date. By
11:00 a.m. (New York City time) on the Business Day
43
immediately preceding the Third Remarketing Date for such Third
Remarketing, the Purchase Contract Agent shall notify the Remarketing
Agent of the aggregate principal amount of Pledged Senior Notes, and
the Custodial Agent shall notify the Remarketing Agent of the aggregate
principal amount of Separate Senior Notes (if any) that are to be
remarketed pursuant to Section 5.02(a)(ii). Concurrently, the
Collateral Agent, pursuant to the terms of the Pledge Agreement, and
the Custodial Agent, pursuant to Section 5.02(a)(ii), will present for
Remarketing the Pledged Senior Notes and the Separate Senior Notes (if
any) that are to be remarketed to the Remarketing Agent. Upon receipt
of such notice from the Purchase Contract Agent and the Custodial Agent
and such Pledged Senior Notes and Separate Senior Notes from the
Collateral Agent and the Custodial Agent, the Remarketing Agent will,
on the Third Remarketing Date, use its reasonable efforts to remarket
(based on the Reset Rate) such Pledged Senior Notes and Separate Senior
Notes on such date at a price of approximately (but not less than)
100.50% of the sum of the Treasury Portfolio Purchase Price plus the
Separate Senior Notes Purchase Price. If the Remarketing Agent is able
to remarket the Pledged Senior Notes and the Separate Senior Notes at a
price not less than 100.50% of the Treasury Portfolio Purchase Price
plus the Separate Senior Notes Purchase Price (a "SUCCESSFUL THIRD
REMARKETING"), the portion of the proceeds from such Successful Third
Remarketing equal to the Treasury Portfolio Purchase Price will be
applied to purchase the Treasury Portfolio. The Remarketing Agent shall
deduct the Remarketing Fee from any amount of such proceeds in excess
of the sum of the Treasury Portfolio Purchase Price plus the Separate
Senior Notes Purchase Price. None of the Company, the Purchase Contract
Agreement or any Holders of Corporate Units or holders of Separate
Senior Notes whose Senior Notes or Separate Senior Notes are so
remarketed will otherwise be responsible for the payment of any
Remarketing Fee in connection therewith. With respect to Separate
Senior Notes, the proceeds of the Third Remarketing in excess of the
Remarketing Fee attributable to the Separate Senior Notes will be
remitted to the Custodial Agent for payment to the holders of Separate
Senior Notes. With respect to Pledged Senior Notes, the proceeds of the
Third Remarketing in excess of the sum of the Treasury Portfolio
Purchase Price plus the Remarketing Fee with respect to such Pledged
Senior Notes will be remitted to the Purchase Contract Agent for
payment to the Holders of the related Corporate Units. The Treasury
Portfolio will be substituted for the Pledged Senior Notes and the
appropriate Applicable Ownership Interests (as specified in clause (i)
of the definition of such term) in the Treasury Portfolio will be
pledged to the Collateral Agent to secure the obligation of the Holders
of Corporate Units to pay the Stated Amount for the Common Stock under
the related Purchase Contracts on the Purchase Contract Settlement
Date.
Following the occurrence of a Successful Third Remarketing, the Holders
of Corporate Units and the Collateral Agent shall have such security
interests (with respect to the Collateral Agent), rights and
obligations with respect to the Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio as the Holder of Corporate Units and the Collateral Agent had
in respect of the Senior Notes, subject to the Pledge thereof as
provided in the Pledge Agreement, and any reference herein or in the
Certificates to the Senior Notes shall be deemed to be a
44
reference to such Applicable Ownership Interests in the Treasury
Portfolio and any reference herein or in the Certificates to interest
on the Senior Notes shall be deemed to be a reference to corresponding
distributions on such Applicable Ownership Interests in the Treasury
Portfolio. The Company may cause to be made in any Corporate Units
Certificates thereafter to be issued such change in phraseology and
form (but not in substance) as may be appropriate to reflect the
substitution of such Applicable Ownership Interests in the Treasury
Portfolio for Senior Notes.
If, in spite of using its reasonable efforts, the Remarketing Agent
cannot remarket the Pledged Senior Notes and the Separate Senior Notes
(if any) in a Third Remarketing (other than to the Company) at a price
not less than 100.50% of the sum of the Treasury Portfolio Purchase
Price plus the Separate Senior Notes Purchase Price or the Third
Remarketing is not settled in accordance with the Remarketing Agreement
for any reason, including the failure to fulfill a condition precedent
set forth in the Remarketing Agreement, the Third Remarketing will be
deemed to have failed (a "FAILED THIRD REMARKETING"). Upon a Failed
Third Remarketing, the Remarketing Agent shall return the Pledged
Senior Notes and the Separate Senior Notes (if any) subject to such
Remarketing to the Collateral Agent or the Custodial Agent, as the case
may be.
(c) (i) Unless a Special Event Redemption, an Early Settlement
or a Cash Merger Early Settlement has occurred prior to the Final
Remarketing Date, if no Successful Remarketing has occurred prior to
the Final Remarketing Date, each Holder shall have the right to satisfy
such Holder's obligations under the Purchase Contract on the Purchase
Contract Settlement Date in cash by notifying the Purchase Contract
Agent by use of a notice in substantially the form of Exhibit F hereto
of its intention to pay in cash ("CASH SETTLEMENT") prior to 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date. Promptly following 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding
the Purchase Contract Settlement Date, the Purchase Contract Agent
shall notify the Collateral Agent and the Indenture Trustee of the
receipt of such notices from Holders intending to make a Cash
Settlement.
(ii) A Holder of a Corporate Unit who has so notified the
Purchase Contract Agent of its intention to effect a Cash Settlement
shall pay the Stated Amount to the Securities Intermediary for deposit
in the Collateral Account prior to 5:00 p.m. (New York City time) on
the fourth Business Day immediately preceding the Purchase Contract
Settlement Date, in lawful money of the United States by certified or
cashiers' check or wire transfer, in each case in immediately available
funds payable to or upon the order of the Securities Intermediary. Any
cash so received shall be invested promptly by the Securities
Intermediary in Permitted Investments and paid to the Company on the
Purchase Contract Settlement Date in settlement of the Purchase
Contracts in accordance with the terms of this Agreement and the Pledge
Agreement. Any funds received by the Securities Intermediary in respect
of the investment earnings from such Permitted Investments in excess of
the Stated Amount for the shares of Common Stock to be
45
purchased by such Holder shall be distributed to the Purchase Contract
Agent when received for payment to the Holder.
(iii) If a Holder of a Corporate Unit does not notify the
Purchase Contract Agent of its intention to make a Cash Settlement in
accordance with paragraph 5.02(c)(i) above, or does notify the Purchase
Contract Agent in accordance with paragraph 5.02(c)(i) above but fails
to make such payment as required by paragraph 5.02(c)(ii) above, such
Holder shall be deemed to have consented to the disposition of the
Pledged Senior Notes pursuant to the Final Remarketing as described in
paragraph 5.02(d) below.
(iv) Promptly after 5:00 p.m. (New York City time) on the
fourth Business Day preceding the Purchase Contract Settlement Date,
the Collateral Agent, based on cash payments received by the Securities
Intermediary pursuant to Section 5.02(c)(ii) hereof, shall promptly
notify the Purchase Contract Agent and the Indenture Trustee of the
aggregate principal amount of Senior Notes to be tendered for purchase
in the Final Remarketing in a notice pursuant to the terms of the
Pledge Agreement.
(d) (i) Unless a Special Event Redemption, an Early Settlement
or a Cash Merger Early Settlement has occurred prior to the Final
Remarketing Date, if a Failed Third Remarketing has occurred, the
Senior Notes of such Holders of Corporate Units who have not notified
the Purchase Contract Agent of their intention to effect a Cash
Settlement as provided in paragraph 5.02(c)(i) above, or who have so
notified the Purchase Contract Agent in accordance with paragraph
5.02(c)(i) above but have failed to make such payment as required by
paragraph 5.02(c)(ii) above, and the Separate Senior Notes of any
holder who has elected for its Separate Senior Notes to be remarketed
pursuant to Section 5.02(a)(ii) will be sold by the Remarketing Agent
(the "FINAL REMARKETING") on the third Business Day immediately
preceding the Purchase Contract Settlement Date (the "FINAL REMARKETING
DATE"). In order to facilitate the Final Remarketing, the Purchase
Contract Agent, based on the notices specified in Section 5.02(c)(iv),
and the Collateral Agent, based on the notices specified in Section
5.02(a)(ii), shall notify the Remarketing Agent, by 11:00 a.m. (New
York City time) on the Business Day immediately preceding the Final
Remarketing Date, of the aggregate principal amount of Pledged Senior
Notes or aggregate principal amount of Separate Senior Notes that are
to be remarketed pursuant to Section 5.02(a)(ii), as the case may be,
to be remarketed. Concurrently, the Collateral Agent, pursuant to the
terms of the Pledge Agreement, and the Custodial Agent shall cause such
Pledged Senior Notes and Separate Senior Notes to be presented to the
Remarketing Agent for Remarketing.
(ii) Upon receipt of such notice from the Purchase Contract
Agent and the Collateral Agent and the Pledged Senior Notes and
Separate Senior Notes (if any) from the Collateral Agent or Custodial
Agent, as set forth in clause (i) above, the Remarketing Agent shall,
on the Final Remarketing Date, use its reasonable efforts to remarket
(based on the Reset Rate) such Pledged Senior Notes and the Separate
Senior Notes on such date equal to approximately 100.50% (or, if the
Remarketing Agent is unable to remarket the Pledged Senior Notes and
the Separate Senior Notes at such price, at a price
46
below 100.50%, but in no event less than 100%, net of the Final
Remarketing Fee) of the aggregate principal amount of such Senior
Notes and Separate Senior Notes being remarketed, as provided in the
Remarketing Agreement. If the Remarketing Agent is able to remarket
the Senior Notes and Separate Senior Notes at a price equal to or
greater than 100% (net of the Final Remarketing Fee) of the aggregate
principal amount of the Senior Notes and Separate Senior Notes (if
any) (a "SUCCESSFUL FINAL REMARKETING"), the Remarketing Agent will
remit the proceeds attributable to the Remarketing of the Pledged
Senior Notes from such Successful Final Remarketing to the Securities
Intermediary. The Remarketing Agent shall deduct as the remarketing
fee (the "FINAL REMARKETING FEE") an amount not exceeding 25 basis
points (0.25%) of the aggregate principal amount of the remarketed
Pledged Senior Notes and Separate Senior Notes (if any); provided
that such fee shall be payable out of, and only to the extent of,
remarketing proceeds, if any, in excess of such amount. With respect
to Separate Senior Notes, any proceeds of the Final Remarketing in
excess of the Final Remarketing Fee attributable to the Separate
Senior Notes will be remitted to the Custodial Agent for payment to
the holders of Separate Senior Notes. The proceeds from the
Remarketing remitted to the Securities Intermediary shall be invested
by the Collateral Agent in Permitted Investments, in accordance with
the Pledge Agreement, and then applied to satisfy in full the
obligations of such Holders of Corporate Units to pay the Stated
Amount for the shares of Common Stock under the related Purchase
Contracts on the Purchase Contract Settlement Date. Any proceeds in
excess of those required to pay the Stated Amount and the Final
Remarketing Fee will be remitted to the Purchase Contract Agent for
payment to the Holders of the related Corporate Units.
(iii) If, in spite of using its reasonable efforts, the
Remarketing Agent cannot remarket the Pledged Senior Notes and Separate
Senior Notes (if any) at a price not less than 100% (net of the Final
Remarketing Fee) of the aggregate principal amount of the Pledged
Senior Notes and Separate Senior Notes to be remarketed in the Final
Remarketing (other than to the Company) or the Final Remarketing is not
settled in accordance with the Remarketing Agreement for any reason,
including the failure to fulfill a condition precedent set forth in the
Remarketing Agreement, the remarketing will be deemed to have failed (a
"FAILED FINAL REMARKETING"). Upon a Failed Final Remarketing, the
Remarketing Agent shall return the remarketed Pledged Senior Notes and
Separate Senior Notes (if any) to the Collateral Agent or the Custodial
Agent, as the case may be. Upon a Failed Final Remarketing, a default
shall be deemed to have occurred under this Agreement and the Pledge
Agreement and in accordance with the terms of the Pledge Agreement, the
Collateral Agent, for the benefit of the Company, shall exercise its
rights as a secured party with respect to the Pledged Senior Notes,
including, without limitation, those actions specified in paragraph
5.02(e) below; provided that if upon a Failed Final Remarketing, the
Collateral Agent exercises such rights for the benefit of the Company
with respect to such Senior Notes, any accrued and unpaid interest on
such Senior Notes shall become payable by the Company to the Purchase
Contract Agent for payment to the Beneficial Owner of the Corporate
Units to which such Senior Notes relate.
47
(e) With respect to any Pledged Senior Notes that are subject to a
Failed Final Remarketing, and any Senior Notes that are represented by a
Corporate Unit with respect to which the Holder has notified the Purchase
Contract Agent of his intent to effect Cash Settlement and failed to deliver the
Stated Amount pursuant to Section 5.02(c)(ii), in each case resulting in an
event of default under this Agreement, the Collateral Agent for the benefit of
the Company reserves all of its rights as a secured party with respect thereto
and, subject to applicable law and paragraph 5.02(i) below, may, in full
satisfaction of the Holders' obligations under the Purchase Contracts among
other things, (A) retain the Senior Notes in accordance with applicable law or
(B) dispose of the Senior Notes in accordance with applicable law, which in each
case shall constitute payment in full for the aggregate Stated Amount for the
shares of Common Stock to be purchased under the Purchase Contracts.
(f) (i) Unless a Holder of a Treasury Unit or a Corporate Unit
(if the Treasury Portfolio has replaced the Senior Notes represented by
such Corporate Unit) effects an Early Settlement of the Purchase
Contract represented by such Unit through the early delivery of cash to
the Purchase Contract Agent in the manner described in Section 5.07 or
a Cash Merger Early Settlement of the Purchase Contract represented by
such Unit through the early delivery of cash to the Purchase Contract
Agent in the manner described in Section 5.04(b)(2), each Holder of a
Treasury Unit or a Corporate Unit who intends to effect Cash Settlement
of the Purchase Contract represented by such Unit shall so notify the
Purchase Contract Agent by use of a notice in substantially the form of
Exhibit F hereto prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement
Date. Prior to 11:00 a.m. (New York City time) on the next succeeding
Business Day, the Purchase Contract Agent shall notify the Collateral
Agent of the receipt of such notices from such Holders intending to
make a Cash Settlement. Holders of Treasury Units may make Cash
Settlements only in integral multiples of 40 Corporate Units.
(ii) A Holder of a Treasury Unit or a Corporate Unit (if the
Treasury Portfolio has replaced the Senior Note represented by such
Corporate Unit) who has so notified the Purchase Contract Agent of its
intention to make a Cash Settlement in accordance with paragraph
5.02(f)(i) above shall pay the Stated Amount to the Securities
Intermediary for deposit in the Collateral Account prior to 5:00 p.m.
(New York City time) on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, in lawful money of the United
States by certified or cashiers' check or wire transfer, in each case
in immediately available funds payable to or upon the order of the
Securities Intermediary. Any cash received by the Securities
Intermediary shall be invested promptly by the Collateral Agent in
Permitted Investments and paid to the Company on the Purchase Contract
Settlement Date in settlement of the Purchase Contract in accordance
with the terms of this Agreement and the Pledge Agreement. Any funds
received by the Securities Intermediary in respect of the investment
earnings from the investment in such Permitted Investments in excess of
the Stated Amount for the shares of Common Stock to be purchased by
such Holder shall be distributed to the Purchase Contract Agent when
received for payment to the Holder.
48
(iii) If a Holder of a Treasury Unit or a Corporate Unit (if
the Treasury Portfolio has replaced the Senior Note represented by such
Corporate Unit) fails to notify the Purchase Contract Agent of its
intention to make a Cash Settlement in accordance with Section
5.02(f)(i), or does notify the Purchase Contract Agent as provided in
Section 5.02(f)(i) of its intention to pay the Stated Amount in cash,
but fails to make such payment as required by Section 5.02(f)(ii), then
upon the maturity of the Pledged Treasury Securities or the appropriate
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio held by the
Securities Intermediary on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date, the principal amount
of the Treasury Securities or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio received by the Collateral Agent shall be
invested promptly in Permitted Investments. On the Purchase Contract
Settlement Date, an amount equal to the Stated Amount shall be remitted
to the Company as payment of such Holder's obligation to pay such
Stated Amount under the related Purchase Contracts without receiving
any instructions from the Holder. In the event the sum of the Proceeds
from related Pledged Treasury Securities or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio and the Proceeds from such
Permitted Investments is in excess of the aggregate Stated Amount, the
Collateral Agent shall cause the Securities Intermediary to distribute
such excess to the Purchase Contract Agent for the benefit of the
Holder of the related Treasury Units or Corporate Units when received.
(g) Any distribution to Holders of any payments described above shall
be payable at the office of the Purchase Contract Agent in New York City
maintained for that purpose or, at the option of the Holder, by check mailed to
the address of the Person entitled thereto at such address as it appears on the
Security Register.
(h) Upon Cash Settlement of any Purchase Contract:
(i) the Collateral Agent will in accordance with the terms of
the Pledge Agreement cause the Pledged Senior Notes, the appropriate
Applicable Ownership Interests (as specified in clause (i) of the
definition of such term) in the Treasury Portfolio or the Pledged
Treasury Securities, as the case may be, represented by the relevant
Units to be released from the Pledge, free and clear of any security
interest of the Company, and transferred to the Purchase Contract Agent
for delivery to the Holder thereof or its designee as soon as
practicable; and
(ii) subject to the receipt thereof, the Purchase Contract
Agent shall, by book-entry transfer or other appropriate procedures, in
accordance with written instructions provided by the Holder thereof,
transfer such Senior Notes, or the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio or such Treasury Securities, as the case may
be (or, if no such instructions are given to the Purchase Contract
Agent by the Holder, the Purchase Contract Agent shall hold such Senior
Notes or the appropriate Applicable Ownership
49
Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio or such Treasury Securities, as the case may
be, and any interest payment thereon, in the name of the Purchase
Contract Agent or its nominee in trust for the benefit of such Holder
until the expiration of the time period specified in the abandoned
property laws of the relevant state where such property is held).
(i) The obligations of the Holders to pay the Stated Amount are
non-recourse obligations and, except to the extent satisfied by Early
Settlement, Cash Merger Early Settlement or Cash Settlement, are payable solely
out of the proceeds of any Collateral pledged to secure the obligations of the
Holders, and in no event will Holders be liable for any deficiency between the
proceeds of the disposition of Collateral and the Stated Amount.
(j) The Company shall not be obligated to issue any shares of Common
Stock in respect of a Purchase Contract or deliver any certificates thereof to
the Holder of the related Units unless the Company shall have received payment
of the Stated Amount for the Common Stock to be purchased thereunder in the
manner herein set forth.
SECTION 5.03. Issuance of Shares of Common Stock. Unless a Termination Event, an
Early Settlement or a Cash Merger Early Settlement shall have occurred, subject
to Section 5.04(b), on the Purchase Contract Settlement Date upon receipt of the
aggregate Stated Amount payable on all Outstanding Units, the Company shall
issue and deposit with the Purchase Contract Agent, for the benefit of the
Holders of the Outstanding Units, one or more certificates representing newly
issued shares of Common Stock registered in the name of the Purchase Contract
Agent (or its nominee) as custodian for the Holders (such certificates for
shares of Common Stock, together with any dividends or distributions for which a
record date and payment date for such dividend or distribution has occurred
after the Purchase Contract Settlement Date, being hereinafter referred to as
the "PURCHASE CONTRACT SETTLEMENT FUND") to which the Holders are entitled
hereunder.
Subject to the foregoing, upon surrender of a Certificate to the Purchase
Contract Agent on or after the Purchase Contract Settlement Date, Early
Settlement Date or Cash Merger Early Settlement Date, as the case may be,
together with settlement instructions thereon duly completed and executed, the
Holder of such Certificate shall be entitled to receive forthwith in exchange
therefor a certificate representing that number of newly issued whole shares of
Common Stock which such Holder is entitled to receive pursuant to the provisions
of this Article Five (after taking into account all Units then held by such
Holder), together with cash in lieu of fractional shares as provided in Section
5.09 and any dividends or distributions with respect to such shares constituting
part of the Purchase Contract Settlement Fund, but without any interest thereon,
and the Certificate so surrendered shall forthwith be cancelled. Such shares
shall be registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder to the Purchase
Contract Agent. If any shares of Common Stock issued in respect of a Purchase
Contract are to be registered to a Person other than the Person in whose name
the Certificate evidencing such Purchase Contract is registered (but excluding
any Depositary or nominee thereof), no such registration shall be made unless
the Person requesting such registration has paid any transfer and other taxes
required by reason of such registration in a name other than that of the
registered Holder of the Certificate evidencing
50
such Purchase Contract or has established to the satisfaction of the Company
that such tax either has been paid or is not payable.
SECTION 5.04. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits, Etc.
(1) In case the Company shall pay or make a dividend or other
distribution on Common Stock in Common Stock, the Settlement Rate in effect at
the close of business on the date fixed for the determination of shareholders
entitled to receive such dividend or other distribution shall be increased by
dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination; and
(ii) the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution,
such increase to become effective immediately at the opening of business on the
day following the date fixed for such determination. For the purposes of this
paragraph (1), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
any shares issuable in respect of any scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company agrees that it shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, warrants or options, other
than pursuant to any dividend reinvestment plans or share purchase plans, to all
holders of its Common Stock (not being available on an equivalent basis to
Holders of the Units upon settlement of the Purchase Contracts represented by
such Units) entitling them, for a period expiring within 45 days after the
record date for the determination of shareholders entitled to receive such
rights, warrants or options, to subscribe for or purchase shares of Common Stock
at a price per share less than the Current Market Price per share of Common
Stock on the date of announcement of such issuance, the Settlement Rate in
effect at the close of business on the date of such announcement shall be
increased by dividing such Settlement Rate by a fraction of which:
(i) the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date of such
announcement plus the number of shares of Common Stock that the
aggregate of the offering price of the total number of shares of Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price; and
(ii) the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date of such
announcement plus the number of shares of Common Stock so offered for
subscription or purchase,
51
such increase to become effective immediately after the opening of
business on the Business Day following the date of such announcement. The
Company agrees that it shall notify the Purchase Contract Agent if any issuance
of such rights, warrants or options is cancelled or not completed following the
announcement thereof and the Settlement Rate shall thereupon be readjusted to
the Settlement Rate in effect immediately prior to the date of such
announcement. For the purposes of this paragraph (2), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include any shares issuable in respect of any
scrip certificates issued in lieu of fractions of shares of Common Stock. The
Company agrees that it shall not issue any such rights, warrants or options in
respect of shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided or
split into a greater number of shares of Common Stock, the Settlement Rate in
effect at the close of business on the day preceding the day upon which such
subdivision or split becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Settlement Rate in effect
at the close of business on the day preceding the day upon which such
combination becomes effective shall be proportionately reduced, such increase or
reduction, as the case may be, to become effective immediately at the opening of
business on the day following the day upon which such subdivision, split or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness or assets
(including shares of capital stock, securities, cash and property but excluding
any rights, warrants or options referred to in paragraph (2) of this Section
5.04(a), any dividend or distribution paid exclusively in cash and any dividend
or distribution referred to in paragraph (1) of this Section 5.04(a)), the
Settlement Rate in effect at the close of business on the date fixed for the
determination of shareholders entitled to receive such distribution shall be
adjusted by dividing such rate by a fraction of which:
(i) the numerator shall be the Current Market Price per share
of Common Stock on the date fixed for such determination less the then
fair market value (as reasonably determined by the Board of Directors,
whose determination shall be conclusive and the basis for which shall
be described in a Board Resolution) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share of
Common Stock; and
(ii) the denominator shall be such Current Market Price per
share of Common Stock,
such adjustment to become effective at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution. In any case in which this paragraph (4) is
applicable, paragraph (2) of this Section 5.04(a) shall not be applicable. In
the event that such dividend or distribution is not so paid or made, the
Settlement Rate shall again be adjusted to be the Settlement Rate that would
then be in effect if such dividend or distribution had not been declared.
52
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed in
a Reorganization Event to which Section 5.04(b) applies, as part of a
distribution referred to in paragraph (4) of this Section or as a regular
quarterly cash distribution) in an aggregate amount that, combined together with
(I) the aggregate amount of any other distributions (other than regular
quarterly cash distributions) to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment of such
distribution (the "TRAILING 12 MONTH PERIOD") and in respect of which no
adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has
been made and (II) the aggregate amount of any cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration (other than
consideration payable in respect of any odd-lot tender offer) payable in respect
of any tender or exchange offer by the Company or any of its subsidiaries and
calculated as of the expiration of such tender or exchange offer for all or any
portion of the Common Stock concluded within the Trailing 12 Month Period and in
respect of which no adjustment pursuant to this paragraph (5) or paragraph (6)
of this Section has been made, exceeds 10% of the product of the Current Market
Price per share of the Common Stock on the date for the determination of holders
of shares of Common Stock entitled to receive such distribution multiplied by
the number of shares of Common Stock outstanding on such date, then, in such
case, the Settlement Rate in effect at the close of business on such record date
shall be adjusted by dividing such rate by a fraction of which:
(i) the numerator shall be the Current Market Price of Common
Stock on such record date less the amount of cash so distributed (and
not excluded as provided above) applicable to one share of Common
Stock; and
(ii) the denominator shall be the Current Market Price of
Common Stock,
such increase to be effective at the opening of business on the day following
the record date; provided, however, that in the event the portion of cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price per share of Common Stock on the record date, in lieu
of the foregoing adjustment, adequate provision shall be made so that each
holder of a Unit shall have the right to receive upon settlement of the Units
the amount of cash such Holder would have received had such Holder settled each
Unit on the record date. In the event that such dividend or distribution is not
so paid or made, the Settlement Rate shall again be adjusted to be the
Settlement Rate that would then be in effect if such dividend or distribution
had not been declared.
(6) If the Company or any subsidiary of the Company shall make a tender
or exchange offer (other than any odd-lot tender offer) for all or any portion
of the Common Stock and upon expiration of such tender or exchange offer (as
amended upon the expiration thereof) the Company or its subsidiary shall be
required to pay to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of Purchased Shares (as
herein defined) any consideration, then if the sum of (I) the fair market value
of the aggregate consideration to be paid in such tender offer or exchange offer
(as reasonably determined by the Board of Directors, whose determination shall
be conclusive and the basis for which shall be
53
described in a Board Resolution) plus (II) the aggregate of the cash plus the
fair market value (as reasonably determined by the Board of Directors, whose
determination shall be conclusive and the basis for which shall be described in
a Board Resolution), as of the expiration of such tender or exchange offer, of
consideration payable in respect of any other tender or exchange offer (other
than consideration payable in respect of any odd-lot tender offer), by the
Company or any subsidiary of the Company for all or any portion of Common Stock
expiring within the 12 months preceding the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to this paragraph
(6) has been made, plus (III) the aggregate amount of any distributions (other
than regular quarterly cash distributions) to all holders of Common Stock made
exclusively in cash within the 12 months preceding the expiration of such tender
or exchange offer and in respect of which no adjustment pursuant to paragraph
(5) has been made, exceeds 10% of the product of the Current Market Price per
share of Common Stock as of the last time (the "EXPIRATION TIME") tenders could
have been made pursuant to such tender or exchange offer (as it may be amended)
times the number of shares of Common Stock outstanding (including any tendered
shares) at the Expiration Time, then, the Settlement Rate in effect at the close
of business on the day of the Expiration Time shall be adjusted by dividing by a
fraction:
(i) the numerator of which shall be equal to (A) the product
of (I) the Current Market Price per share of Common Stock on the date
of the Expiration Time and (II) the number of shares of Common Stock
outstanding (including any tendered shares) on the date of the
Expiration Time less (B) the amount of cash plus the fair market value
(determined as aforesaid) of the aggregate consideration payable to
shareholders based on the transactions described in clauses (I), (II)
and (III) above (assuming in the case of clause (I) the acceptance, up
to any maximum specified in the terms of the tender or exchange offer,
of Purchased Shares); and
(ii) the denominator of which shall be equal to the product of
(A) the Current Market Price per share of Common Stock as of the
Expiration Time and (B) the number of shares of Common Stock
outstanding (including any tendered shares) as of the Expiration Time
less the number of all shares validly tendered and not withdrawn as of
the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "PURCHASED SHARES"),
such adjustment to become effective at the opening of business on the date
following the date of the Expiration Time.
(7) The reclassification of Common Stock into securities including
securities other than Common Stock (other than any reclassification upon a
Reorganization Event to which Section 5.04(b) applies) shall be deemed to
involve:
(i) a distribution of such securities other than Common Stock
to all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such distribution"
and the "date fixed for such determination" within the meaning of
paragraph (4) of this Section); and
54
(ii) a subdivision, split or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior
to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such
subdivision or split becomes effective" or "the day upon which such
combination becomes effective", as the case may be, and "the day upon
which such subdivision, split or combination becomes effective" within
the meaning of paragraph (3) of this Section).
(8) The "CURRENT MARKET PRICE" per share of Common Stock on any date of
determination means the average of the daily Closing Prices on each of the
twenty (20) consecutive Trading Days ending on the earlier of such date of
determination and the day before the "ex date" with respect to the issuance or
distribution requiring the computation. For purposes of this paragraph, the term
"ex date," when used with respect to any issuance or distribution, shall mean
the first date on which Common Stock trades regular way on such exchange or in
such market without the right to receive such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be calculated to the
nearest 1/10,000th of a share of Common Stock (or if there is not a nearest
1/10,000th of a share, to the next lower 1/10,000th of a share). No adjustment
in the Settlement Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent thereof; provided, however, that
any adjustments which by reason of this subparagraph are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
(10) The Company may, but shall not be required to, make such increases
in the Settlement Rate, in addition to those required by this Section, as the
Board of Directors considers to be advisable in order to avoid or diminish any
income tax to any holders of shares of Common Stock resulting from any dividend
or distribution of stock or issuance of rights or warrants to purchase or
subscribe for stock or from any event treated as such for income tax purposes or
for any other reason.
(11) The Company has entered into a Rights Agreement dated as of March 12, 1999
(the "RIGHTS AGREEMENT") with EquiServe Trust Company, N.A. pursuant to which
share purchase rights (the "RIGHTS") have been, and may in the future be, issued
in respect of shares of Common Stock. Each share of Common Stock issued upon
settlement of any Purchase Contract pursuant to this Article 5 shall be entitled
to receive the appropriate number of Rights, if any, and the certificates
representing the Common Stock issued upon such settlement shall bear such
legends, if any, in each case as provided by and subject to the terms of the
Rights Agreement as in effect at the time of such settlement. If after the date
of this Agreement the Rights separate from the Common Stock in accordance with
the provisions of the Rights Agreement so that a Holder would not be entitled to
receive any Rights in respect of the Common Stock issuable upon settlement of
such Purchase Contract, the Settlement Rate will be adjusted as provided in this
Section 5.04 on the separation date, subject to readjustment in the event of the
expiration, termination or redemption of the Rights. In lieu of any such
adjustment, the Company may amend the Rights Agreement to provide that upon
settlement Holders will receive, in addition to
55
the Common Stock issuable upon such settlement, the Rights that would have
attached to such shares of Common Stock if the Rights had not become separated
from the Common Stock pursuant to the provisions of the Rights Agreement. If the
Company hereafter adopts any stockholder rights plan similar to the Rights
Agreement, a Holder shall be entitled to receive upon settlement of its Purchase
Contracts in addition to the shares of Common Stock issuable upon settlement the
related rights for the Common Stock whether or not the rights under the future
stockholder rights plan have separated from the Common Stock at the time of
settlement but otherwise subject to the generally applicable terms of such plan
and no additional adjustment to the Settlement Rate shall be made for the future
stockholder rights plan under this Section 5.04.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event.
(1) In the event of:
(i) any consolidation or merger of the Company with or into
another Person (other than a merger or consolidation in which the
Company is the continuing corporation and in which the shares of Common
Stock outstanding immediately prior to the merger or consolidation are
not exchanged for cash, securities or other property of the Company or
another corporation);
(ii) any sale, transfer, lease or conveyance to another Person
of the property of the Company as an entirety or substantially as an
entirety;
(iii) any statutory share exchange of the Company with another
Person (other than in connection with a merger or acquisition); or
(iv) any liquidation, dissolution or termination of the
Company other than as a result of or after the occurrence of a
Termination Event (any event described in clauses (i), (ii), (iii) and
(iv), a "REORGANIZATION EVENT"),
each Purchase Contract shall become, without the consent of the Holder of the
Unit representing such Purchase Contract, an agreement to purchase only the kind
of securities, cash and other property receivable upon consummation of such
Reorganization Event by a holder of Common Stock immediately prior to the
closing date of such Reorganization Event.
The amount of such securities, cash and other property receivable upon
settlement of each such Purchase Contract after the consummation of the
Reorganization Event shall be based on the value as of such settlement date of
the hypothetical amount of securities, cash and other property that would have
been received upon consummation of the Reorganization Event in exchange for the
maximum number of Common Stock deliverable under a Purchase Contract immediately
prior to the closing date of the Reorganization Event (collectively, the
"EXCHANGE PROPERTY"). In determining the kind and amount of the Exchange
Property pursuant to the foregoing, it will be assumed that such holder of
Common Stock is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which
56
such sale or transfer was made, as the case may be (any such Person, a
"CONSTITUENT PERSON"), or an Affiliate of a Constituent Person to the extent
such Reorganization Event provides for different treatment of Common Stock held
by Affiliates of the Company and non-affiliates and such Holder failed to
exercise its rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Reorganization Event (provided that
if the kind or amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of Common Stock held
immediately prior to such Reorganization Event by other than a Constituent
Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("NON-ELECTING SHARE"), then for the purpose of
this Section the kind and amount of securities, cash and other property
receivable upon such Reorganization Event by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares).
The actual amount of Exchange Property receivable upon settlement of each
Purchase Contract shall be (1) in the case of settlement on the Purchase
Contract Settlement Date or pursuant to Section 5.04(b)(2), a variable amount
based upon the applicable Settlement Rate and the Adjusted Applicable Market
Value of the Exchange Property at such time and (2) in the case of any Early
Settlement, determined in accordance with the procedures described under Section
5.07 using the Settlement Rate that results in the minimum amount of Exchange
Property being delivered under such Purchase Contract.
For purposes of this Section 5.04(b)(1) and Section 5.04(b)(2), the term
"Adjusted Applicable Market Value" shall be deemed to refer to the "Adjusted
Applicable Market Value" of the Exchange Property, and such value shall be
determined (A) with respect to any publicly traded securities that comprise all
or part of the Exchange Property, based on the Closing Price of such securities,
(B) in the case of any cash that comprises all or part of the Exchange Property,
based on the amount of such cash and (C) in the case of any other property that
comprises all or part of the Exchange Property, based on the value of such
property, as determined by a nationally recognized independent investment
banking firm retained by the Company for this purpose; provided that prior to
the separation of the Rights or any similar stockholder rights from the Common
Stock, such Rights or similar stockholder rights shall be deemed to have no
value. The term "Closing Price" shall be deemed to refer to the closing sale
price, last quoted bid price or mid-point of the last bid and ask prices, as the
case may be, of any publicly traded securities that comprise all or part of the
Exchange Property. The term "Trading Day" shall be deemed to refer to any
publicly traded securities that comprise all or part of the Exchange Property.
In the event of such a Reorganization Event, the Person formed by such
consolidation, merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation, dissolution or termination of the
Company, the Company or a liquidating trust created in connection therewith,
shall execute and deliver to the Purchase Contract Agent an agreement
supplemental hereto providing that each Holder of an Outstanding Unit shall have
the rights provided by this Section 5.04(b). Such supplemental agreement shall
provide for adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section
57
5.04. The above provisions of this Section 5.04 shall similarly apply to
successive Reorganization Events.
(2) In the event of a consolidation or merger of the Company with or
into another Person or any merger of another Person into the Company (other than
a merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock), in each case in which 30%
or more of the total consideration paid to the Company's shareholders consists
of cash or cash equivalents (a "CASH MERGER"), a Holder of a Unit may settle
("CASH MERGER EARLY SETTLEMENT") the Purchase Contract represented by such Unit,
upon the conditions set forth below, at the Settlement Rate in effect
immediately prior to the closing of the Cash Merger; provided that (i) the Cash
Merger Early Settlement Date (as defined below) is no later than the fifth
Business Day immediately preceding the Purchase Contract Settlement Date and
(ii) no Cash Merger Early Settlement will be permitted pursuant to this Section
5.04(b)(2) unless, at the time such Cash Merger Early Settlement is effected,
there is an effective Registration Statement with respect to any securities to
be issued and delivered in connection with such Cash Merger Early Settlement, if
such a Registration Statement is required (in the view of counsel, which need
not be in the form of a written opinion, for the Company) under the Securities
Act. If such a Registration Statement is so required, the Company covenants and
agrees to use commercially reasonable efforts to (A) have in effect a
Registration Statement covering any securities to be delivered in respect of the
Purchase Contracts being settled and (B) provide a Prospectus in connection
therewith, in each case in a form that may be used in connection with such Cash
Merger Early Settlement. If a Holder effects a Cash Merger Early Settlement of
some or all of its Purchase Contracts, such Holder shall be entitled to receive,
on the Cash Merger Early Settlement Date, the aggregate amount of any Deferred
Contract Adjustment Payments and any Accrued and Unpaid Contract Adjustment
Payments since the immediately preceding Payment Date with respect to such
Purchase Contracts. The Company shall pay such amount as a credit against the
amount otherwise payable by the Holders to effect such Cash Merger Early
Settlement.
Within five Business Days of the completion of a Cash Merger, the Company shall
provide written notice to Holders of Units of such completion of a Cash Merger,
which shall specify the deadline for submitting the notice to settle early in
cash pursuant to this Section 5.04(b)(2), the date on which such Cash Merger
Early Settlement shall occur (which date shall be 10 days after the date of such
written notice by the Company, but which shall in no event be later than the
fifth Business Day immediately preceding the Purchase Contract Settlement Date)
(the "CASH MERGER EARLY SETTLEMENT DATE"), the applicable Settlement Rate and
the amount (per share of Common Stock) of cash, securities and other
consideration receivable by the Holder upon settlement, including the amount of
Contract Adjustment Payments receivable upon settlement.
Corporate Units Holders and Treasury Units Holders may only effect Cash Merger
Early Settlement pursuant to this Section 5.04(b)(2) in integral multiples of 40
Corporate Units or Treasury Units, as the case may be. If the Treasury Portfolio
has replaced the Senior Notes represented by the Corporate Units, Corporate
Units Holders may only effect Cash Merger Early Settlement pursuant to this
Section 5.04(b)(2) in multiples of 64,000 Corporate Units. Other than the
provisions relating to timing of notice and settlement, which shall be as set
forth above,
58
the provisions of Section 5.01(a) shall apply with respect to a Cash Merger
Early Settlement pursuant to this Section 5.04(b)(2).
In order to exercise the right to effect Cash Merger Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, no later than 5:00 p.m. (New York City time) on the third
Business Day immediately preceding the Cash Merger Early Settlement Date, such
Certificate to the Purchase Contract Agent at the Corporate Trust Office duly
endorsed for transfer to the Company or in blank with the form of Election to
Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds) in an amount equal to
the product of (A) the Stated Amount times (B) the number of Purchase Contracts
with respect to which the Holder has elected to effect Cash Merger Early
Settlement, less the amount of any Contract Adjustment Payments payable to the
Holder on the Cash Merger Early Settlement Date.
If a Holder properly effects an effective Cash Merger Early Settlement in
accordance with the provisions of this Section 5.04(b)(2), the Company will
deliver (or will cause the Collateral Agent to deliver) to the Holder on the
Cash Merger Early Settlement Date:
(i) the kind and amount of securities, cash and other property
receivable upon such Cash Merger by a Holder of the number of shares of
Common Stock issuable on account of each Purchase Contract if the
Purchase Contract Settlement Date had occurred immediately prior to
such Cash Merger (based on the Settlement Rate in effect at such time),
assuming such Holder of Common Stock is not a Constituent Person or an
Affiliate of a Constituent Person to the extent such Cash Merger
provides for different treatment of Common Stock held by Affiliates of
the Company and non-affiliates and such Holder failed to exercise its
rights of election, if any, as to the kind or amount of securities,
cash and other property receivable upon such Cash Merger (provided that
if the kind or amount of securities, cash and other property receivable
upon such Cash Merger is not the same for each non-electing share, then
for the purpose of this Section 5.04(b)(2), the kind and amount of
securities, cash and other property receivable upon such Cash Merger by
each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). For
the avoidance of doubt, for the purposes of determining the Adjusted
Applicable Market Value (in connection with determining the appropriate
Settlement Rate to be applied in the foregoing sentence), the date of
the closing of the Cash Merger shall be deemed to be the Purchase
Contract Settlement Date;
(ii) the Senior Notes, the Applicable Ownership Interests in
the Treasury Portfolio or Treasury Securities, as the case may be,
related to the Purchase Contracts with respect to which the Holder is
effecting a Cash Merger Early Settlement; and
(iii) if so required under the Securities Act, a Prospectus as
contemplated by this Section 5.04(b)(2).
59
(c) All calculations and determinations pursuant to this Section 5.04
shall be made by the Company or its agent and the Purchase Contract Agent shall
have no responsibility with respect thereto.
(d) The Corporate Units or the Treasury Units of the Holders who do not
elect Cash Merger Early Settlement in accordance with the foregoing will
continue to remain outstanding and be subject to settlement on the Purchase
Contract Settlement Date in accordance with the terms hereof.
SECTION 5.05. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein provided, the
Company shall within 10 Business Days following the occurrence of an event that
requires an adjustment to the Settlement Rate pursuant to Section 5.04 (or if
the Company is not aware of such occurrence, as soon as practicable after
becoming so aware):
(i) compute the adjusted Settlement Rate in accordance with
Section 5.04 and prepare and transmit to the Purchase Contract Agent an
Officers' Certificate setting forth the Settlement Rate, the method of
calculation thereof in reasonable detail, and the facts requiring such
adjustment and upon which such adjustment is based; and
(ii) provide a written notice to the Holders of the Units of
the occurrence of such event and a statement in reasonable detail
setting forth the method by which the adjustment to the Settlement Rate
was determined and setting forth the adjusted Settlement Rate.
(b) The Purchase Contract Agent shall not at any time be under any duty
or responsibility to any Holder of Units to determine whether any facts exist
which may require any adjustment of the Settlement Rate, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed in making the same. The Purchase Contract Agent
shall be fully authorized and protected in relying on any Officers' Certificate
delivered pursuant to Section 5.05(a)(i) and any adjustment contained therein
and the Purchase Contract Agent shall not be deemed to have knowledge of any
adjustment unless and until it has received such certificate. The Purchase
Contract Agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at the time be issued or delivered with respect to any
Purchase Contract; and the Purchase Contract Agent makes no representation with
respect thereto. The Purchase Contract Agent shall not be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common Stock
pursuant to a Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article.
SECTION 5.06. Termination Event; Notice.
The Purchase Contracts and all obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights of the Holders to
receive and the obligation
60
of the Company to pay any Contract Adjustment Payments (including any accrued
and unpaid Contract Adjustment Payments and any Deferred Contract Adjustment
Payments), if the Company shall have such obligation, and the rights and
obligations of Holders to purchase Common Stock, shall immediately and
automatically terminate, without the necessity of any notice or action by any
Holder, the Purchase Contract Agent or the Company, if, prior to or on the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon and after the occurrence of a Termination Event, the Units shall thereafter
represent solely the right to receive the Senior Notes, the Treasury Securities
or the appropriate Applicable Ownership Interests in the Treasury Portfolio, as
the case may be, represented by such Units, in accordance with the provisions of
Section 5.04 of the Pledge Agreement. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register.
SECTION 5.07. Early Settlement. (a) Subject to and upon compliance with the
provisions of this Section 5.07, at the option of the Holder thereof, Purchase
Contracts represented by Units may be settled early ("EARLY SETTLEMENT") at any
time prior to 5:00 p.m. (New York City time) on the fifth Business Day
immediately preceding the Purchase Contract Settlement Date; provided that no
Early Settlement will be permitted pursuant to this Section 5.07 unless, at the
time such Early Settlement is effected, there is an effective Registration
Statement with respect to any securities to be issued and delivered in
connection with such Early Settlement, if such a Registration Statement is
required (in the view of counsel, which need not be in the form of a written
opinion, for the Company) under the Securities Act. If such a Registration
Statement is so required, the Company covenants and agrees to use commercially
reasonable efforts to (A) have in effect a Registration Statement covering any
securities to be delivered in respect of the Purchase Contracts being settled
and (B) provide a Prospectus in connection therewith, in each case in a form
that may be used in connection with such Early Settlement.
(b) In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts, the Holder of the Certificate evidencing
Units shall deliver, at any time prior to 5:00 a.m. (New York City time) on the
fifth Business Day immediately preceding the Purchase Contract Settlement Date,
such Certificate to the Purchase Contract Agent at the Corporate Trust Office
duly endorsed for transfer to the Company or in blank with the form of Election
to Settle Early on the reverse thereof duly completed and accompanied by payment
(payable to the Company in immediately available funds) in an amount (the "EARLY
SETTLEMENT AMOUNT") equal to:
(i) the sum of (A) the product of (I) the Stated Amount, times
(II) the number of Purchase Contracts with respect to which the Holder
has elected to effect Early Settlement, plus (B) if such delivery is
made with respect to any Purchase Contracts during the period from the
close of business on any Record Date next preceding any Payment Date to
the opening of business on such Payment Date, an amount equal to the
Contract Adjustment Payments payable on such Payment Date with respect
to such Purchase Contracts, less
61
(ii) the amount of any Deferred Contract Adjustment Payments
payable to such Holder as a result of such Early Settlement.
Except as provided in the immediately preceding sentence, no payment shall be
made upon Early Settlement of any Purchase Contract on account of any Contract
Adjustment Payments accrued on such Purchase Contract since the immediately
preceding Payment Date or on account of any dividends on the Common Stock issued
upon such Early Settlement. However, a Holder effecting an Early Settlement of
some or all of its Purchase Contracts shall be entitled to receive, on the date
it receives the shares of Common Stock referred to in Section 5.07(d), the
amount of any Deferred Contract Adjustment Payments with respect to such
Purchase Contracts, calculated as of the immediately preceding Payment Date. The
amount of such Deferred Contract Adjustment Payments shall be credited against
the amount otherwise payable by the Holder to effect such Early Settlement as
set forth in clause (ii) above. If the foregoing requirements are first
satisfied with respect to Purchase Contracts represented by any Units at or
prior to 5:00 p.m. (New York City time) on a Business Day, such day shall be the
"EARLY SETTLEMENT DATE" with respect to such Units and if such requirements are
first satisfied after 5:00 p.m. (New York City time) on a Business Day or on a
day that is not a Business Day, the "EARLY SETTLEMENT DATE" with respect to such
Units shall be the next succeeding Business Day.
Upon the receipt of such Certificate and Early Settlement Amount from the
Holder, the Purchase Contract Agent shall pay to the Company such Early
Settlement Amount, the receipt of which payment the Company shall confirm in
writing. The Purchase Contract Agent shall then, in accordance with Section 5.06
of the Pledge Agreement, notify the Collateral Agent that (A) such Holder has
elected to effect an Early Settlement, which notice shall set forth the number
of such Purchase Contracts as to which such Holder has elected to effect Early
Settlement, (B) the Purchase Contract Agent has received from such Holder, and
paid to the Company as confirmed in writing by the Company, the related Early
Settlement Amount and (C) all conditions to such Early Settlement have been
satisfied.
Holders of Treasury Units may only effect Early Settlement pursuant to this
Section 5.07 in integral multiples of 40 Treasury Units. If the Treasury
Portfolio has replaced the Senior Notes represented by the Corporate Units,
Corporate Units Holders may only effect Early Settlement pursuant to this
Section 5.07 in integral multiples of 64,000 Corporate Units.
Upon Early Settlement of the Purchase Contracts, the rights of the Holders to
receive and the obligation of the Company to pay any accrued and unpaid Contract
Adjustment Payments since the immediately preceding Payment Date and any future
Contract Adjustment Payments with respect to such Purchase Contracts shall
immediately and automatically terminate.
(c) Upon Early Settlement of Purchase Contracts by a Holder of the
related Units, the Company shall issue, and the Holder shall be entitled to
receive, 0.3501 shares of Common Stock on account of each Purchase Contract as
to which Early Settlement is effected (the "EARLY SETTLEMENT RATE"). The Early
Settlement Rate shall be adjusted in the same manner and at the same time as the
Settlement Rate is adjusted pursuant to Section 5.04.
62
(d) No later than the third Business Day after the applicable Early
Settlement Date, the Company shall cause:
(i) the shares of Common Stock issuable upon Early Settlement
of Purchase Contracts to be issued and delivered, together with payment
in lieu of any fraction of a share, as provided in Section 5.09; and
(ii) the related Senior Notes or the Applicable Ownership
Interests in the Treasury Portfolio, as applicable, in the case of
Corporate Units, or the related Treasury Securities, in the case of
Treasury Units, to be released from the Pledge by the Collateral Agent
and transferred, in each case, to the Purchase Contract Agent for
delivery to the Holder thereof or its designee.
(e) Upon Early Settlement of any Purchase Contracts, and subject to
receipt of shares of Common Stock from the Company and the Senior Notes, the
Applicable Ownership Interests in the Treasury Portfolio or Treasury Securities,
as the case may be, from the Securities Intermediary, as applicable, the
Purchase Contract Agent shall, in accordance with the instructions provided by
the Holder thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Units:
(i) transfer to the Holder the Senior Notes, the Applicable
Ownership Interests in the Treasury Portfolio or Treasury Securities,
as the case may be, represented by such Units,
(ii) deliver to the Holder a certificate or certificates for
the full number of shares of Common Stock issuable upon such Early
Settlement, together with payment in lieu of any fraction of a share,
as provided in Section 5.09, and
(iii) if so required under the Securities Act, deliver a
Prospectus for the shares of Common Stock issuable upon such Early
Settlement as contemplated by Section 5.07(a).
(f) In the event that Early Settlement is effected with respect to
Purchase Contracts represented by less than all the Units evidenced by a
Certificate, upon such Early Settlement the Company shall execute and the
Purchase Contract Agent shall execute on behalf of the Holder, authenticate and
deliver to the Holder thereof, at the expense of the Company, a Certificate
evidencing the Units as to which Early Settlement was not effected.
(g) A Holder of a Unit who effects Early Settlement may elect to have
the Senior Notes no longer represented by a Corporate Unit remarketed in
accordance with the provisions of Section 5.02.
SECTION 5.08. Intentionally Omitted.
SECTION 5.09. No Fractional Shares.
63
No fractional shares or scrip representing fractional shares of Common Stock
shall be issued or delivered upon settlement on the Purchase Contract Settlement
Date, or upon Early Settlement or Cash Merger Early Settlement of any Purchase
Contracts. If Certificates evidencing more than one Purchase Contract shall be
surrendered for settlement at one time by the same Holder, the number of full
shares of Common Stock that shall be delivered upon settlement shall be computed
on the basis of the aggregate number of Purchase Contracts evidenced by the
Certificates so surrendered. Instead of any fractional share of Common Stock
that would otherwise be deliverable upon settlement of any Purchase Contracts on
the Purchase Contract Settlement Date, or upon Early Settlement or Cash Merger
Early Settlement, the Company, through the Purchase Contract Agent, shall make a
cash payment in respect of such fractional interest in an amount equal to the
percentage of such fractional share times the Applicable Market Value calculated
as if the date of such settlement were the Purchase Contract Settlement Date.
The Company shall provide the Purchase Contract Agent from time to time with
sufficient funds to permit the Purchase Contract Agent to make all cash payments
required by this Section 5.09 in a timely manner.
SECTION 5.10. Charges and Taxes.
The Company will pay all stock transfer and similar taxes attributable to the
initial issuance and delivery of the shares of Common Stock pursuant to the
Purchase Contracts; provided, however, that the Company shall not be required to
pay any such tax or taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Unit or any issuance of a share of
Common Stock in a name other than that of the registered Holder of a Certificate
surrendered in respect of the Units evidenced thereby, other than in the name of
the Purchase Contract Agent, as custodian for such Holder, and the Company shall
not be required to issue or deliver such share certificates or Certificates
unless or until the Person or Persons requesting the transfer or issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
SECTION 5.11. Contract Adjustment Payments.
(a) Subject to Section 5.11(d) and Section 5.12, the Company shall pay,
on each Payment Date, the Contract Adjustment Payments payable in respect of
each Purchase Contract to the Person in whose name a Certificate is registered
at the close of business on the Record Date relating to such Payment Date. The
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in the Borough of Manhattan, New York City maintained for that
purpose. If the book-entry system for the Units has been terminated, the
Contract Adjustment Payments will be payable, at the option of the Company, by
check mailed to the address of the Person entitled thereto at such Person's
address as it appears on the Security Register, or by wire transfer to the
account designated by such Person by a prior written notice to the Purchase
Contract Agent. If any date on which Contract Adjustment Payments are to be made
is not a Business Day, then payment of the Contract Adjustment Payments payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest in respect of any such delay); provided that if such
Business Day is in the next succeeding calendar year, then payment of the
Contract Adjustment Payments will be made on the Business Day
64
immediately preceding such Business Day. Contract Adjustment Payments payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months. The Contract Adjustment Payments will accrue from June 24, 2003.
(b) Upon the occurrence of a Termination Event, the Company's
obligation to pay future Contract Adjustment Payments (including any accrued
Contract Adjustment Payments and any Deferred Contract Adjustment Payments)
shall cease.
(c) Each Certificate delivered under this Agreement upon registration
of transfer of or in exchange for or in lieu of (including as a result of a
Collateral Substitution or the recreation of Corporate Units) any other
Certificate shall carry the right to accrued and unpaid Contract Adjustment
Payments and Deferred Contract Adjustment Payments, which right was carried by
the Purchase Contracts represented by such other Certificates.
(d) In the case of any Unit with respect to which Early Settlement or
Cash Merger Early Settlement of the Purchase Contract represented by such Unit
is effected on a date that is after any Record Date and prior to or on the next
succeeding Payment Date, Contract Adjustment Payments otherwise payable on such
Payment Date shall be payable on such Payment Date notwithstanding such Early
Settlement or Cash Merger Early Settlement, and such Contract Adjustment
Payments shall be paid to the Person in whose name the Certificate evidencing
such Unit is registered at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Unit with respect to which Early Settlement or Cash Merger Early
Settlement of the Purchase Contract represented by such Unit is effected,
Contract Adjustment Payments that would otherwise be payable after the Early
Settlement or Cash Merger Early Settlement Date with respect to such Purchase
Contract shall not be payable.
(e) The Company's obligations with respect to Contract Adjustment
Payments, if any, will be subordinated and junior in right of payment to the
Company's obligations under any Indebtedness.
(f) In the event (x) of any payment by, or distribution of assets of,
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution, winding-up, liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, or (y) subject to the provisions of Section
5.11(h) below, that (i) a default shall have occurred and be continuing with
respect to the payment of principal, interest or any other monetary amounts due
and payable on any Indebtedness and such default shall have continued beyond the
period of grace, if any, specified in the instrument evidencing such
Indebtedness (and the Purchase Contract Agent shall have received written notice
thereof from the Company or one or more holders of Indebtedness or their
representative or representatives or the trustee or trustees under any indenture
pursuant to which any such Indebtedness may have been issued), or (ii) the
maturity of any Indebtedness shall have been accelerated because of a default in
respect of such Indebtedness (and the Purchase Contract Agent shall have
received written notice thereof from the Company or one or more holders of
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Indebtedness or their representative or representatives or the trustee or
trustees under any indenture pursuant to which any such Indebtedness may have
been issued), then:
(i) the holders of all Indebtedness shall first be entitled to
receive, in the case of clause (x) above, payment of all amounts due or
to become due upon all Indebtedness and, in the case of subclauses (i)
and (ii) of clause (y) above, payment of all amounts due thereon, or
provision shall be made for such payment in money or money's worth,
before the Holders of any of the Units are entitled to receive any
Contract Adjustment Payments on the Purchase Contracts represented by
the Units;
(ii) any payment by, or distribution of assets of, the Company
of any kind or character, whether in cash, property or securities, to
which the Holders of any of the Units would be entitled except for the
provisions of Section 5.11(e) through (q), shall be paid or delivered
by the Person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the representative or representatives of the holders of Indebtedness or
to the trustee or trustees under any indenture under which any
instruments evidencing any of such Indebtedness may have been issued,
ratably according to the aggregate amounts remaining unpaid on account
of such Indebtedness held or represented by each, to the extent
necessary to make payment in full of all Indebtedness remaining unpaid
after giving effect to any concurrent payment or distribution (or
provision therefor) to the holders of such Indebtedness, before any
payment or distribution is made of such Contract Adjustment Payments to
the Holders of such Units; and
(iii) in the event that, notwithstanding the foregoing, any
payment by, or distribution of assets of, the Company of any kind or
character, whether in cash, property or securities, shall be received
by the Purchase Contract Agent or the Holders of any of the Units when
such payment or distribution is prohibited pursuant to Section 5.11(e)
through (q), such payment or distribution shall be paid over to the
representative or representatives of the holders of Indebtedness or to
the trustee or trustees under any indenture pursuant to which any
instruments evidencing any such Indebtedness may have been issued,
ratably as aforesaid, for application to the payment of all
Indebtedness remaining unpaid until all such Indebtedness shall have
been paid in full, after giving effect to any concurrent payment or
distribution (or provision therefor) to the holders of such
Indebtedness.
(g) For purposes of Section 5.11(e) through (q), the words "cash,
property or securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or any other
Person provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in Section 5.11(e) through
(q) with respect to such Contract Adjustment Payments on the Units to the
payment of all Indebtedness which may at the time be outstanding; provided that
(i) the indebtedness or guarantee of indebtedness, as the case may be, that
constitutes Indebtedness is assumed by the Person, if any, resulting from any
such reorganization or readjustment, and (ii)
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the rights of the holders of the Indebtedness are not, without the consent of
each such holder adversely affected thereby, altered by such reorganization or
readjustment;
(h) Any failure by the Company to make any payment on or perform any
other obligation under Indebtedness, other than any indebtedness incurred by the
Company or assumed or guaranteed, directly or indirectly, by the Company for
money borrowed (or any deferral, renewal, extension or refunding thereof) or any
indebtedness or obligation as to which the provisions of Section 5.11(e) through
(g) shall have been waived by the Company in the instrument or instruments by
which the Company incurred, assumed, guaranteed or otherwise created such
indebtedness or obligation, shall not be deemed a default or event of default if
(i) the Company shall be disputing its obligation to make such payment or
perform such obligation and (ii) either (A) no final judgment relating to such
dispute shall have been issued against the Company which is in full force and
effect and is not subject to further review, including a judgment that has
become final by reason of the expiration of the time within which a party may
seek further appeal or review, and (B) in the event a judgment that is subject
to further review or appeal has been issued, the Company shall in good faith be
prosecuting an appeal or other proceeding for review and a stay of execution
shall have been obtained pending such appeal or review.
(i) Subject to the irrevocable payment in full of all Indebtedness, the
Holders of the Units shall be subrogated (equally and ratably with the holders
of all obligations of the Company which by their express terms are subordinated
to Indebtedness of the Company to the same extent as payment of the Contract
Adjustment Payments in respect of the Purchase Contracts represented by the
Units is subordinated and which are entitled to like rights of subrogation) to
the rights of the holders of Indebtedness to receive payments or distributions
of cash, property or securities of the Company applicable to the Indebtedness
until all such Contract Adjustment Payments owing on the Units shall be paid in
full, and as between the Company, its claimholders other than holders of such
Indebtedness and the Holders, no such payment or distribution made to the
holders of Indebtedness by virtue of Section 5.11(e) through (q) that otherwise
would have been made to the Holders shall be deemed to be a payment by the
Company on account of such Indebtedness, it being understood that the provisions
of Section 5.11(e) through (q) are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
Indebtedness, on the other hand.
(j) Nothing contained in Section 5.11(e) through (q) or elsewhere in
this Agreement or in the Units is intended to or shall impair, as among the
Company, its claimholders other than the holders of Indebtedness and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders such Contract Adjustment Payments on the Units as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders and claimholders
of the Company other than the holders of Indebtedness, nor shall anything herein
or therein prevent the Purchase Contract Agent or any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Agreement, subject to the rights, if any, under Section 5.11(e) through (q), of
the holders of Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
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(k) Upon payment or distribution of assets of the Company referred to
in Section 5.11(e) through (q), the Purchase Contract Agent and the Holders
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any such dissolution, winding up, liquidation or
reorganization proceeding affecting the affairs of the Company is pending or
upon a certificate of the trustee in bankruptcy, receiver, assignee for the
benefit of creditors, liquidating trustee or Purchase Contract Agent or other
person making any payment or distribution, delivered to the Purchase Contract
Agent or to the Holders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to these Section 5.11(e) through (q).
(l) The Purchase Contract Agent shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself to be a
holder of Indebtedness (or a trustee or representative on behalf of such holder)
to establish that such notice has been given by a holder of Indebtedness or a
trustee or representative on behalf of any such holder or holders. In the event
that the Purchase Contract Agent determines in good faith that further evidence
is required with respect to the right of any Person as a holder of Indebtedness
to participate in any payment or distribution pursuant to Section 5.11(e)
through (q), the Purchase Contract Agent may request such Person to furnish
evidence to the reasonable satisfaction of the Purchase Contract Agent as to the
amount of Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under Section 5.11(e) through (q), and,
if such evidence is not furnished, the Purchase Contract Agent may defer payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
(m) Nothing contained in Section 5.11(e) through (q) shall affect the
obligations of the Company to make, or prevent the Company from making, payment
of the Contract Adjustment Payments, except as otherwise provided in these
Section 5.11(e) through (q).
(n) Each Holder of Units, by its acceptance thereof, authorizes and
directs the Purchase Contract Agent on its behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in Section
5.11 (e) through (q) and appoints the Purchase Contract Agent its
attorney-in-fact, as the case may be, for any and all such purposes.
(o) The Company shall give prompt written notice to the Purchase
Contract Agent of any fact known to the Company that would prohibit the making
of any payment of moneys to or by the Purchase Contract Agent in respect of the
Units pursuant to the provisions of this Section. Notwithstanding the provisions
of Section 5.11(e) through (q) or any other provisions of this Agreement, the
Purchase Contract Agent shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of moneys to or by the
Purchase Contract Agent, or the taking of any other action by the Purchase
Contract Agent, unless and until the Purchase Contract Agent shall have received
written notice thereof mailed or delivered to the Purchase Contract Agent from
the Company, any Holder, or the holder or representative of
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any Indebtedness; provided that if at least two Business Days prior to the date
upon which by the terms hereof any such moneys may become payable for any
purpose, the Purchase Contract Agent shall not have received with respect to
such moneys the notice provided for in this Section, then, anything herein
contained to the contrary notwithstanding, the Purchase Contract Agent shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received and shall not be affected by any notice
to the contrary that may be received by it within two Business Days prior to or
on or after such date.
(p) The Purchase Contract Agent in its individual capacity shall be
entitled to all the rights set forth in this Section with respect to any
Indebtedness at the time held by it, to the same extent as any other holder of
Indebtedness and nothing in this Agreement shall deprive the Purchase Contract
Agent of any of its rights as such holder.
(q) No right of any present or future holder of any Indebtedness to
enforce the subordination herein shall at any time or in any way be prejudiced
or impaired by any act or failure to act on the part of the Company or by any
noncompliance by the Company with the terms, provisions and covenants of this
Agreement, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
(r) Nothing in this Section 5.11 shall apply to claims of, or payments
to, the Purchase Contract Agent under or pursuant to Section 7.07.
(s) With respect to the holders of Indebtedness, (i) the duties and
obligations of the Purchase Contract Agent shall be determined solely by the
express provisions of this Agreement; (ii) the Purchase Contract Agent shall not
be liable to any such holders if it shall, acting in good faith, mistakenly pay
over or distribute to the Holders or to the Company or any other Person cash,
property or securities to which any holders of Indebtedness shall be entitled by
virtue of this Section 5.11 or otherwise; (iii) no implied covenants or
obligations shall be read into this Agreement against the Purchase Contract
Agent; and (iv) the Purchase Contract Agent shall not be deemed to be a
fiduciary as to such holders.
SECTION 5.12. Deferral of Contract Adjustment Payments. (a) The Company
has the right to defer payment of all or part of the Contract Adjustment
Payments in respect of each Purchase Contract until no later than the Purchase
Contract Settlement Date (or, in the event of an effective Early Settlement or
Cash Merger Early Settlement, the Early Settlement Date or Cash Merger Early
Settlement Date, as the case may be), but only if the Company shall give the
Holders and the Purchase Contract Agent written notice of its election to defer
such payment (specifying the amount to be deferred) at least ten Business Days
prior to the earlier of (i) the next succeeding Payment Date or (ii) the date
the Company is required to give notice of the Record Date or Payment Date with
respect to payment of such Contract Adjustment Payments to the NYSE or other
applicable self-regulatory organization or to Holders, but in any event not less
than one Business Day prior to such Record Date. If the Company so elects to
defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Contract Adjustment
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Payments at a rate equal to 7.00% per annum, compounding on each succeeding
Payment Date, until such deferred installments are paid in full (such deferred
installments of Contract Adjustment Payments together with the accrued
additional Contract Adjustment Payments thereon, being referred to herein as the
"DEFERRED CONTRACT ADJUSTMENT PAYMENTS"). Deferred Contract Adjustment Payments
shall be due on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section.
(b) In the event that the Company elects to defer the payment of
Contract Adjustment Payments on the Purchase Contracts until the Purchase
Contract Settlement Date (or, in the event of an effective Early Settlement or
Cash Merger Early Settlement, the Early Settlement Date or Cash Merger Early
Settlement Date, as the case may be), each Holder will receive on the Purchase
Contract Settlement Date, Early Settlement Date or Cash Merger Early Settlement
Date, as applicable, the aggregate amount of Deferred Contract Adjustment
Payments to the extent such amounts are not deducted from the Stated Amount in
the case of a Cash Settlement, any Early Settlement or any Cash Merger Early
Settlement. The Company shall pay such amount on the Purchase Contract
Settlement Date (or, in the event of an effective Early Settlement or Cash
Merger Early Settlement, the Early Settlement Date or Cash Merger Early
Settlement Date, as the case may be) in the manner described in Section 5.11(a).
(c) In the event the Company exercises its option to defer the payment
of Contract Adjustment Payments, then, until all Deferred Contract Adjustment
Payments have been paid, the Company shall not, and shall not permit any of its
subsidiaries to, declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment with respect
to, any of its capital stock or their capital stock; provided that the Company's
subsidiaries will not be restricted from declaring or paying such dividends, or
making such distributions, to the Company or any of the Company's other
subsidiaries as a result of the foregoing.
ARTICLE 6
REMEDIES
SECTION 6.01. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Shares of Common Stock.
Each Holder of a Unit shall have the right, which is absolute and
unconditional, (i) subject to Article 5, to receive each Contract Adjustment
Payment with respect to the Purchase Contract represented by such Unit on the
applicable Payment Date and (ii) except upon and following a Termination Event,
to purchase shares of Common Stock pursuant to such Purchase Contract and, in
each such case, to institute suit for the enforcement of any such right to
receive
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Contract Adjustment Payments and the right to purchase shares of Common Stock,
and such rights shall not be impaired without the consent of such Holder.
SECTION 6.02. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any right or
remedy under this Agreement and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to such Holder, then
and in every such case, subject to any determination in such proceeding, the
Company and such Holder shall be restored severally and respectively to their
former positions hereunder, and thereafter all rights and remedies of such
Holder shall continue as though no such proceeding had been instituted.
SECTION 6.03. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Certificates in the last paragraph of
Section 3.10, no right or remedy herein conferred upon or reserved to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.04. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right upon a default
or remedy upon a default shall impair any such right or remedy or constitute a
waiver of any such right. Every right and remedy given by this Article or by law
to the Holders may be exercised from time to time, and as often as may be deemed
expedient, by such Holders.
SECTION 6.05. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of a Unit, by its
acceptance of such Unit shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Agreement, or in any suit against the Purchase Contract Agent for any
action taken, suffered or omitted by it as Purchase Contract Agent, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and costs against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section shall not apply to any suit instituted by the Purchase Contract Agent,
to any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% of the Outstanding Units, or to any suit instituted by
any Holder for the enforcement of interest on any Senior Notes or Contract
Adjustment Payments on or after the respective Payment Date therefor in respect
of any Unit held by such Holder, or for enforcement of the right to purchase
shares of Common Stock under the Purchase Contracts represented by any Unit held
by such Holder.
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SECTION 6.06. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Purchase Contract Agent or the Holders, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
THE PURCHASE CONTRACT AGENT
SECTION 7.01. Certain Duties and Responsibilities.
(a) The Purchase Contract Agent:
(1) undertakes to perform, with respect to the Units, such duties and
only such duties as are specifically set forth in this Agreement, the Pledge
Agreement and the Remarketing Agreement and no implied covenants or obligations
shall be read into this Agreement, the Pledge Agreement or the Remarketing
Agreement against the Purchase Contract Agent; and
(2) in the absence of bad faith or gross negligence on its part, may,
with respect to the Units, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Purchase Contract Agent and conforming to the
requirements of this Agreement or the Pledge Agreement or the Remarketing
Agreement, as applicable, but in the case of any certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Purchase Contract Agent, the Purchase Contract Agent shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Agreement, the Pledge Agreement or the Remarketing Agreement, as applicable
(but need not confirm or investigate the accuracy of the mathematical
calculations or other facts stated therein).
(b) No provision of this Agreement, the Pledge Agreement or the
Remarketing Agreement shall be construed to relieve the Purchase Contract Agent
from liability for its own grossly negligent action, its own grossly negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
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(2) the Purchase Contract Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
conclusively determined by a court of competent jurisdiction that the Purchase
Contract Agent was grossly negligent in ascertaining the pertinent facts; and
(3) no provision of this Agreement or the Pledge Agreement or the
Remarketing Agreement shall require the Purchase Contract Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) Whether or not therein expressly so provided, every provision of
this Agreement, the Pledge Agreement and the Remarketing Agreement relating to
the conduct or affecting the liability of or affording protection to the
Purchase Contract Agent shall be subject to the provisions of this Section.
(d) The Purchase Contract Agent is authorized to execute and deliver
the Pledge Agreement and the Remarketing Agreement in its capacity as Purchase
Contract Agent.
SECTION 7.02. Notice of Default.
Within 30 days after the occurrence of any default by the Company
hereunder of which a Responsible Officer of the Purchase Contract Agent has
actual knowledge, the Purchase Contract Agent shall transmit by mail to the
Company and the Holders of Units, as their names and addresses appear in the
Security Register, notice of such default hereunder, unless such default shall
have been cured or waived.
SECTION 7.03. Certain Rights of Purchase Contract Agent.
Subject to the provisions of Section 7.01:
(1) the Purchase Contract Agent may, in the absence of bad faith,
conclusively rely and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, Senior Note, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer
Request, and any resolution of the Board of Directors of the Company may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Agreement or the Pledge
Agreement or the Remarketing Agreement the Purchase Contract Agent shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting to take any action hereunder, the Purchase Contract Agent (unless other
evidence be herein specifically prescribed in this
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Agreement) may, in the absence of bad faith on its part, conclusively rely upon
an Officers' Certificate of the Company;
(4) the Purchase Contract Agent may consult with counsel of its
selection appointed with due care by it hereunder and the advice of such counsel
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(5) the Purchase Contract Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Purchase Contract Agent, in its discretion, may make
reasonable further inquiry or investigation into such facts or matters related
to the execution, delivery and performance of the Purchase Contracts as it may
see fit, and, if the Purchase Contract Agent shall determine to make such
further inquiry or investigation, it shall be entitled to examine the relevant
books, records and premises of the Company, personally or by agent or attorney;
(6) the Purchase Contract Agent may execute any of the powers hereunder
or perform any duties hereunder either directly or by or through agents,
attorneys, custodians or nominees or an Affiliate and the Purchase Contract
Agent shall not be responsible for any misconduct or negligence on the part of
any agent, attorney, custodian or nominee or an Affiliate appointed with due
care by it hereunder;
(7) the Purchase Contract Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Holders pursuant to this Agreement, unless
such Holders shall have offered to the Purchase Contract Agent security or
indemnity satisfactory to the Purchase Contract Agent against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(8) the Purchase Contract Agent shall not be liable for any action
taken, suffered, or omitted to be taken by it in the absence of bad faith or
gross negligence by it;
(9) the Purchase Contract Agent shall not be deemed to have notice of
any default hereunder unless a Responsible Officer of the Purchase Contract
Agent has actual knowledge thereof or unless written notice of any event that is
in fact such a default is received by the Purchase Contract Agent at the
Corporate Trust Office of the Purchase Contract Agent, and such notice
references the Units and this Agreement;
(10) the Purchase Contract Agent may request that the Company deliver
an Officers' Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Agreement, which Officers' Certificate may be signed by any person authorized to
sign an Officers' Certificate, including any person specified as so authorized
in any such certificate previously delivered and not superseded;
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(11) the rights, privileges, protections, immunities and benefits given
to the Purchase Contract Agent, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Purchase Contract
Agent in each of its capacities hereunder, and to each agent, custodian and
other Person employed to act hereunder; and
(12) The Purchase Contract Agent shall not be required to initiate or
conduct any litigation or collection proceedings hereunder and shall have no
responsibilities with respect to any default hereunder except as expressly set
forth herein.
SECTION 7.04. Not Responsible for Recitals or Issuance of Units.
The recitals contained herein, in the Pledge Agreement, the Remarketing
Agreement and in the Certificates shall be taken as the statements of the
Company, and the Purchase Contract Agent assumes no responsibility for their
accuracy or validity. The Purchase Contract Agent makes no representations as to
the validity or sufficiency of either this Agreement or of the Units, or of the
Pledge Agreement or the Pledge or the Collateral and shall have no
responsibility for perfecting or maintaining the perfection of any security
interest in the Collateral. The Purchase Contract Agent shall not be accountable
for the use or application by the Company of the proceeds in respect of the
Purchase Contracts.
SECTION 7.05. May Hold Units.
Any Security Registrar or any other agent of the Company, or the
Purchase Contract Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Units and may otherwise deal with
the Company, the Collateral Agent or any other Person with the same rights it
would have if it were not Security Registrar or such other agent, or the
Purchase Contract Agent. The Company may become the owner or pledgee of Units.
SECTION 7.06. Money Held in Custody.
Money held by the Purchase Contract Agent in custody hereunder need not
be segregated from the Purchase Contract Agent's other funds except to the
extent required by law or provided herein. The Purchase Contract Agent shall be
under no obligation to invest or pay interest on any money received by it
hereunder except as otherwise provided hereunder or agreed in writing with the
Company.
SECTION 7.07. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Purchase Contract Agent compensation for all services
rendered by it hereunder, under the Pledge Agreement and under the Remarketing
Agreement as the Company and the Purchase Contract Agent shall from time to time
agree in writing;
(2) except as otherwise expressly provided for herein, to reimburse the
Purchase Contract Agent upon its request for all reasonable expenses,
disbursements and advances
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incurred or made by the Purchase Contract Agent in accordance with any provision
of this Agreement, the Pledge Agreement and the Remarketing Agreement (including
the reasonable compensation and the expenses and disbursements of its agents and
counsel) in connection with the negotiation, preparation, execution and delivery
and performance of this Agreement, the Pledge Agreement and the Remarketing
Agreement and any modification, supplement or waiver of any of the terms
thereof, except any such expense, disbursement or advance as may be attributable
to its gross negligence, willful misconduct or bad faith; and
(3) to indemnify the Purchase Contract Agent and any predecessor
Purchase Contract Agent (and each of its directors, officers, agents and
employees (collectively, the "INDEMNITEES") for, and to hold it harmless
against, any loss, claim, damage, fine, penalty, liability or expense (including
reasonable fees and expenses of counsel) incurred without gross negligence,
willful misconduct or bad faith on its part, arising out of or in connection
with the acceptance or administration of its duties hereunder and under the
Pledge Agreement and the Remarketing Agreement, including the Indemnitees'
reasonable costs and expenses of defending themselves against any claim (whether
asserted by the Company, a Holder or any other person) or liability in
connection with the exercise or performance of any of the Purchase Contract
Agent's powers or duties hereunder or thereunder.
The provisions of this Section shall survive the resignation and
removal of the Purchase Contract Agent and the termination of this Agreement.
SECTION 7.08. Corporate Purchase Contract Agent Required; Eligibility.
There shall at all times be a Purchase Contract Agent hereunder which
shall be a Person organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having (or being a member of
a bank holding company having) a combined capital and surplus of at least
$50,000,000, subject to supervision or examination by Federal or State authority
and having a corporate trust office in the Borough of Manhattan, New York City,
if there be such a Person in the Borough of Manhattan, New York City, qualified
and eligible under this Article and willing to act on reasonable terms. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Purchase Contract Agent
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 7.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Purchase Contract Agent and no
appointment of a successor Purchase Contract Agent pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Purchase Contract Agent in accordance with the applicable requirements of
Section 7.10.
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(b) The Purchase Contract Agent may resign at any time by giving
written notice thereof to the Company 60 days prior to the effective date of
such resignation. If the instrument of acceptance by a successor Purchase
Contract Agent required by Section 7.10 shall not have been delivered to the
Purchase Contract Agent within 30 days after the giving of such notice of
resignation, the resigning Purchase Contract Agent may petition, at the expense
of the Company, any court of competent jurisdiction for the appointment of a
successor Purchase Contract Agent.
(c) The Purchase Contract Agent may be removed at any time by Act of
the Holders of a majority in number of the Outstanding Units delivered to the
Purchase Contract Agent and the Company. If the instrument of acceptance by a
successor Purchase Contract Agent required by Section 7.10 shall not have been
delivered to the Purchase Contract Agent within 30 days after such Act, the
Purchase Contract Agent being removed may petition any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(d) If at any time:
(1) the Purchase Contract Agent fails to comply with Section
310(b) of the TIA, as if the Purchase Contract Agent were an indenture
trustee under an indenture qualified under the TIA, and shall fail to
resign after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Unit for at least six months;
(2) the Purchase Contract Agent shall cease to be eligible
under Section 7.08 and shall fail to resign after written request
therefor by the Company or by any such Holder; or
(3) the Purchase Contract Agent shall become incapable of
acting or shall be adjudged a bankrupt or insolvent or a receiver of
the Purchase Contract Agent or of its property shall be appointed or
any public officer shall take charge or control of the Purchase
Contract Agent or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a
Unit for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Purchase Contract Agent and the appointment of a successor Purchase Contract
Agent.
(e) If the Purchase Contract Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Purchase
Contract Agent for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Purchase Contract Agent and shall comply with the applicable
requirements of Section 7.10. If no successor Purchase Contract Agent shall have
been so appointed by the Company and accepted appointment in the manner required
by Section 7.10, any Holder who has been a bona fide Holder of a Unit for at
least six months, on behalf of itself and all others similarly situated, or the
Purchase Contract
77
Agent may petition at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Purchase Contract Agent.
(f) The Company shall give, or shall cause such successor Purchase
Contract Agent to give, notice of each resignation and each removal of the
Purchase Contract Agent and each appointment of a successor Purchase Contract
Agent by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in the applicable
Security Register. Each notice shall include the name of the successor Purchase
Contract Agent and the address of its Corporate Trust Office.
SECTION 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Purchase
Contract Agent, every such successor Purchase Contract Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Purchase
Contract Agent an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Purchase Contract Agent shall become
effective and such successor Purchase Contract Agent, without any further act,
deed or conveyance, shall become vested with all the rights, powers, agencies
and duties of the retiring Purchase Contract Agent; but, on the request of the
Company or the successor Purchase Contract Agent, such retiring Purchase
Contract Agent shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Purchase Contract Agent all the
rights, powers and trusts of the retiring Purchase Contract Agent and duly
assign, transfer and deliver to such successor Purchase Contract Agent all
property and money held by such retiring Purchase Contract Agent hereunder.
(b) Upon request of any such successor Purchase Contract Agent, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Purchase Contract Agent all such
rights, powers and agencies referred to in paragraph (a) of this Section.
(c) No successor Purchase Contract Agent shall accept its appointment
unless at the time of such acceptance such successor Purchase Contract Agent
shall be qualified and eligible under this Article.
SECTION 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Purchase Contract Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Purchase Contract Agent shall
be a party, or any Person succeeding to all or substantially all the corporate
trust business of the Purchase Contract Agent, shall be the successor of the
Purchase Contract Agent hereunder, provided that such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Certificates shall have been authenticated and executed on behalf of the
Holders, but not delivered, by the Purchase Contract Agent then in office, any
successor by merger, conversion or consolidation to such Purchase
78
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 Pledge Agreement, the Remarketing
Agreement or any Purchase Contract in respect of the obligations of the Holder
of any Unit thereunder. The Company agrees, and each Holder of a Certificate, by
its acceptance thereof, shall be deemed to have agreed, that the Purchase
Contract Agent's execution of the Certificates on behalf of the Holders shall be
solely as agent and attorney-in-fact for the Holders, and that the Purchase
Contract Agent shall have no obligation to perform such Purchase Contracts on
behalf of the Holders, except to the extent expressly provided in Article Five
hereof. Anything contained in this Agreement to the contrary notwithstanding, in
no event shall the Purchase Contract Agent or its officers, directors, employees
or agents be liable under this Agreement, the Pledge Agreement or the
Remarketing Agreement to any third party for indirect, incidental, special,
punitive, or consequential loss or damage of any kind whatsoever, including lost
profits, whether or not the likelihood of such loss or damage was known to the
Purchase Contract Agent and regardless of the form of action.
SECTION 7.14. Tax Compliance.
(a) The Purchase Contract Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification, information reporting
and withholding (including "backup" withholding) requirements imposed by
applicable tax laws, regulations or administrative practice with respect to (i)
any payments made with respect to the Units or (ii) the issuance, delivery,
holding, transfer, redemption or exercise of rights under the Units. Such
79
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.
(b) The Purchase Contract Agent shall comply in accordance with the
terms hereof with any written direction received from the Company with respect
to the execution or certification of any required documentation and the
application of such requirements to particular payments or Holders or in other
particular circumstances, and may for purposes of this Agreement conclusively
rely on any such direction in accordance with the provisions of Section
7.01(a)(2) hereof.
(c) The Purchase Contract Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available, on written request, to the Company or its authorized representative
within a reasonable period of time after receipt of such request.
ARTICLE 8
SUPPLEMENTAL AGREEMENTS
SECTION 8.01. Supplemental Agreements Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Purchase Contract Agent, at any time and from time to
time, may enter into one or more agreements supplemental hereto, in form
satisfactory to the Company and the Purchase Contract Agent, to:
(1) evidence the succession of another Person to the Company,
and the assumption by any such successor of the covenants of the
Company herein and in the Certificates;
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Purchase Contract Agent;
(3) add to the covenants of the Company for the benefit of the
Holders, or surrender any right or power herein conferred upon the
Company;
(4) make provision with respect to the rights of Holders
pursuant to the requirements of Section 5.04(b); or
(5) except as provided for in Section 5.04, cure any
ambiguity, correct or supplement any provisions herein which may be
inconsistent with any other provisions herein, or make any other
provisions with respect to such matters or questions arising
80
under this Agreement, provided that such action shall not adversely
affect the interests of the Holders in any material respect.
SECTION 8.02. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority of the
Outstanding Units voting together as one class, including without limitation the
consent of the Holders obtained in connection with a tender or an exchange
offer, by Act of said Holders delivered to the Company and the Purchase Contract
Agent, the Company, when authorized by a Board Resolution, and the Purchase
Contract Agent may enter into an agreement or agreements supplemental hereto for
the purpose of modifying in any manner the terms of the Purchase Contracts, or
the provisions of this Agreement or the rights of the Holders in respect of the
Units; provided, however, that, except as contemplated herein, no such
supplemental agreement shall, without the unanimous consent of the Holders of
each outstanding Purchase Contract affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral required to be
Pledged to secure a Holder's obligations under the Purchase Contract,
unless such change is not adverse to the Holders, impair the right of
the Holder of any Purchase Contract to receive distributions on the
related Collateral or otherwise adversely affect the Holder's rights in
or to such Collateral or adversely alter the rights in or to such
Collateral;
(3) impair the right to institute suit for the enforcement of
any Purchase Contract or payment of any Contract Adjustment Payments;
(4) reduce the number of shares of Common Stock or the amount
of any other property to be purchased pursuant to any Purchase
Contract, increase the price to purchase shares of Common Stock or any
other property upon settlement of any Purchase Contract or change the
Purchase Contract Settlement Date or the right to Early Settlement or
Cash Merger Early Settlement or otherwise adversely affect the Holder's
rights under the Purchase Contract;
(5) reduce any Contract Adjustment Payments or change any
place where, or the coin or currency in which, any Contract Adjustment
Payment is payable; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any modification
or amendment to the provisions of this Agreement, the Purchase
Contracts or the Pledge Agreement;
provided that if any amendment or proposal referred to above would adversely
affect only the Corporate Units or the Treasury Units, then only the affected
class of Holders as of the record date for the Holders entitled to vote thereon
will be entitled to vote on such amendment or proposal, and such amendment or
proposal shall not be effective except with the consent of Holders of not less
than a majority of such class; and provided, further, that the unanimous
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consent of the Holders of each outstanding Purchase Contract of such class
affected thereby shall be required to approve any amendment or proposal
specified in clauses (1) through (6) above.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental agreement, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 8.03. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created by, any
supplemental agreement permitted by this Article or the modifications thereby of
the agencies created by this Agreement, the Purchase Contract Agent shall be
provided, and (subject to Section 7.01) shall be fully authorized and protected
in relying upon, an Opinion of counsel stating that the execution of such
supplemental agreement is authorized or permitted by this Agreement and an
Officers' Certificate stating that any and all conditions precedent to the
execution and delivery of such supplemental agreement have been satisfied. The
Purchase Contract Agent may, but shall not be obligated to, enter into any such
supplemental agreement which affects the Purchase Contract Agent's own rights,
duties or immunities under this Agreement or otherwise.
SECTION 8.04. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this Article,
this Agreement shall be modified in accordance therewith, and such supplemental
agreement shall form a part of this Agreement for all purposes; and every Holder
of Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder, shall be bound thereby.
SECTION 8.05. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any supplemental agreement pursuant to this
Article may, and shall if required by the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent as to any matter
provided for in such supplemental agreement. If the Company shall so determine,
new Certificates so modified as to conform, in the opinion of the Purchase
Contract Agent and the Company, to any such supplemental agreement may be
prepared and executed by the Company and authenticated, executed on behalf of
the Holders and delivered by the Purchase Contract Agent in exchange for
outstanding Certificates.
ARTICLE 9
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 9.01. Covenant Not to Consolidate, Merge, Convey, Transfer or
Lease Property Except under Certain Conditions.
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The Company covenants that it will not consolidate with, convert into,
or merge with and into, any other corporation or sell, assign, transfer, lease
or convey all or substantially all of its properties and assets to any Person,
unless:
(i) either the Company shall be the continuing corporation, or
the successor (if other than the Company) shall be a corporation
organized and existing under the laws of the United States of America
or a State thereof or the District of Columbia and such corporation
shall expressly assume all the obligations of the Company under the
Purchase Contracts, this Agreement, the Pledge Agreement, the Indenture
(including any supplement thereto) and the Remarketing Agreement by one
or more supplemental agreements in form reasonably satisfactory to the
Purchase Contract Agent and the Collateral Agent, executed and
delivered to the Purchase Contract Agent and the Collateral Agent by
such corporation; and
(ii) the Company or such successor corporation, as the case
may be, shall not, immediately after such consolidation, conversion,
merger, sale, assignment, transfer, lease or conveyance, be in default
of payment obligations under the Purchase Contracts, this Agreement,
the Pledge Agreement, the Indenture (including any supplement thereto)
or the Remarketing Agreement or in material default in the performance
of any other covenants under any of the foregoing agreements.
SECTION 9.02. Rights and Duties of Successor Corporation.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance and upon any such assumption by a
successor corporation in accordance with Section 9.01, such successor
corporation shall succeed to and be substituted for the Company with the same
effect as if it had been named herein as the Company. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of The Chubb Corporation, any or all of the Certificates evidencing Units
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Purchase Contract Agent; and, upon the order of such
successor corporation, instead of the Company, and subject to all the terms,
conditions and limitations in this Agreement prescribed, the Purchase Contract
Agent shall authenticate and execute on behalf of the Holders and deliver any
Certificates which previously shall have been signed and delivered by the
officers of the Company to the Purchase Contract Agent for authentication and
execution, and any Certificate evidencing Units which such successor corporation
thereafter shall cause to be signed and delivered to the Purchase Contract Agent
for that purpose. All the Certificates issued shall in all respects have the
same legal rank and benefit under this Agreement as the Certificates theretofore
or thereafter issued in accordance with the terms of this Agreement as though
all of such Certificates had been issued at the date of the execution hereof.
In case of any such merger, consolidation, share exchange, sale,
assignment, transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing Units
thereafter to be issued as may be appropriate.
83
SECTION 9.03. Officers' Certificate and Opinion of Counsel Given to
Purchase Contract Agent.
The Purchase Contract Agent, subject to Sections 7.01 and 7.03, shall
receive an Opinion of Counsel as conclusive evidence that any such merger,
consolidation, share exchange, sale, assignment, transfer, lease or conveyance,
and any such assumption, complies with the provisions of this Article and an
Officers' Certificate that all conditions precedent to the consummation of any
such merger, consolidation, share exchange, sale, assignment, transfer, lease or
conveyance have been met.
ARTICLE 10
COVENANTS
SECTION 10.1. Performance under Purchase Contracts.
The Company covenants and agrees for the benefit of the Holders from
time to time of the Units that it will duly and punctually perform its
obligations under the Purchase Contracts in accordance with the terms of the
Purchase Contracts and this Agreement.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, New York City an
office or agency where Certificates may be presented or surrendered for
acquisition of shares of Common Stock upon settlement of the Purchase Contracts
on the Purchase Contract Settlement Date or upon Early Settlement or Cash Merger
Early Settlement and for transfer of Collateral upon occurrence of a Termination
Event, where Certificates may be surrendered for registration of transfer or
exchange, for a Collateral Substitution or recreation of Corporate Units and
where notices and demands to or upon the Company in respect of the Units and
this Agreement may be served. The Company will give prompt written notice to the
Purchase Contract Agent of the location, and any change in the location, of such
office or agency. The Company initially designates Bank One Trust Company, N.A.,
55 Water Street, 1st Floor, Jeanette Park Entrance, New York, New York 10041 as
such office of the Company. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Purchase
Contract Agent with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the address set forth in the previous
sentence, and the Company hereby appoints the Purchase Contract Agent as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where Certificates may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
84
Borough of Manhattan, New York City for such purposes. The Company will give
prompt written notice to the Purchase Contract Agent of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates as the place of payment for the Units the
Corporate Trust Office and appoints the Purchase Contract Agent at its Corporate
Trust Office as paying agent in such city.
SECTION 10.03. 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
represented by the Units evidenced by Outstanding Certificates.
SECTION 10.04. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock that may be
issued against tender of payment in respect of any Purchase Contract represented
by the Outstanding Units will, upon issuance, be duly authorized, validly
issued, fully paid and nonassessable.
SECTION 10.05. Statements of Officers of the Company as to Default.
The Company will deliver to the Purchase Contract Agent, within 120
days after the end of each fiscal year of the Company (which as of the date
hereof is December 31) ending after the date hereof, an Officers' Certificate,
stating whether or not to the knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions hereof, and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
SECTION 10.06. Tax Treatment. The Company covenants and agrees, and by
purchasing a Corporate Unit each Holder agrees, for United States federal, state
and local tax purposes, to (i) treat a Holder's acquisition of the Corporate
Units as the acquisition of the Senior Note and Purchase Contracts represented
by the Corporate Units, (ii) treat the Senior Notes as indebtedness of the
Company and (iii)each Holder as the owner of the applicable interest in the
Collateral Account, including the Senior Notes and Applicable Ownership
Interests in the Treasury Portfolio or the Treasury Securities.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
THE CHUBB CORPORATION
By: /s/ JOHN D. FINNEGAN
------------------------------------
John D. Finnegan
Chief Executive Officer
BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By: /s/ SANDRA WHALEN
------------------------------------
Sandra Whalen
Vice President
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 AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS THE
NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITARY"), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS
CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE
(OTHER THAN A TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. 1 CUSIP No. 171232 50 7
Number of Corporate Units: 18,400,000
THE CHUBB CORPORATION
Corporate Units
This Corporate Units Certificate certifies that [Cede & Co.] [_______] is the
registered Holder of the number of Corporate Units set forth above [For
inclusion in Global Certificates only - or such other number of Corporate Units
as is reflected in the Schedule of Increases or Decreases in the Global
Certificate attached hereto]. Each Corporate Unit represents (i) either (a) the
beneficial ownership by the Holder of $25.00 principal amount of Senior Notes
due August 16, 2008 (the "SENIOR NOTES") of The Chubb Corporation, a New Jersey
corporation (the "COMPANY"), subject to the Pledge of such Senior Note by such
Holder pursuant to the Pledge.
A-1
Agreement, or (b) upon the occurrence of a Special Event Redemption prior to the
Purchase Contract Settlement Date or a Successful Remarketing of the Senior
Notes prior to the Final Remarketing Date, the appropriate Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio by such Holder pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract with the
Company. All capitalized terms used herein which are defined in the Purchase
Contract Agreement (as defined on the reverse hereof) have the meaning set forth
therein.
Pursuant to the Pledge Agreement, the Senior Notes or the appropriate
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio, as the case may be, represented by each
Corporate Unit evidenced hereby have been pledged to the Collateral Agent, for
the benefit of the Company, to secure the obligations of the Holder under the
Purchase Contract represented by such Corporate Unit.
The Pledge Agreement provides that all payments of the principal amount
with respect to any of the Pledged Senior Notes or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, or interest or distributions on
any Pledged Senior Notes (as defined in the Pledge Agreement) or the appropriate
Applicable Ownership Interests (as specified in clause (ii) of the definition of
such term) in the Treasury Portfolio, as the case may be, represented by the
Corporate Units received by the Securities Intermediary shall be paid by wire
transfer in same day funds (i) in the case of (A) interest on Pledged Senior
Notes or distributions with respect to the appropriate Applicable Ownership
Interests (as specified in clause (ii) of the definition of such term) in the
Treasury Portfolio, as the case may be, and (B) any payments of the principal
amount of any Senior Notes or with respect to the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, that have been released from the
Pledge pursuant to the Pledge Agreement, to the Purchase Contract Agent to the
account designated by the Purchase Contract Agent, no later than 2:00 p.m., New
York City time, on the Business Day such payment is received by the Securities
Intermediary (provided that in the event such payment is received by the
Securities Intermediary on a day that is not a Business Day or after 12:30 p.m.,
New York City time, on a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next succeeding Business Day) and
(ii) in the case of payments with respect to the principal amount of the Senior
Notes or with respect to the appropriate Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio, to the Company on the Purchase Contract Settlement Date (as described
herein) in accordance with the terms of the Pledge Agreement, in full
satisfaction of the respective obligations of the Holders of the Corporate Units
representing such Pledged Senior Notes or the Applicable Ownership Interests (as
specified in clause (i) of the definition of such term) in the Treasury
Portfolio, as the case may be, under the Purchase Contracts represented by such
Corporate Units. Interest on the Senior Notes and distributions on the
appropriate Applicable Ownership Interests (as specified in clause (ii) of the
definition of such term) in the Treasury Portfolio, as the case may be,
represented by a Corporate Units evidenced hereby, which are payable quarterly
in arrears on February 16, May 16, August 16, and
A-2
November 16 of each year, commencing August 16, 2003 (a "PAYMENT DATE"), shall,
subject to receipt thereof by the Purchase Contract Agent from the Securities
Intermediary, be paid to the Person in whose name this Corporate Units
Certificate (or a Predecessor Corporate Units Certificate) is registered at the
close of business on the Record Date for such Payment Date.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 per share ("COMMON STOCK"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract, all as provided in the
Purchase Contract Agreement and more fully described on the reverse hereof. The
Stated Amount for the shares of Common Stock purchased pursuant to each Purchase
Contract evidenced hereby, if not paid earlier, shall be paid on the Purchase
Contract Settlement Date by application of payment received in respect of the
principal amount with respect to any Pledged Senior Notes pursuant to the
Remarketing or the appropriate Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio, as the
case may be, pledged to secure the obligations under such Purchase Contract of
the Holder of the Corporate Units of which such Purchase Contract is a part.
Each Purchase Contract evidenced hereby obligates the holder to agree,
for United States federal, state and local tax purposes, to (i) treat an
acquisition of the Corporate Units as an acquisition of the Senior Notes and
Purchase Contracts represented by the Corporate Units and (ii) treat itself as
owner of the applicable interest in the Collateral Account, including the Senior
Notes and the Applicable Ownership Interests in the Treasury Portfolio.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract represented by a Corporate Unit evidenced hereby, an amount
(the "CONTRACT ADJUSTMENT PAYMENTS") equal to 4.75% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Corporate Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.
Interest on the Senior Notes and distributions on the Applicable
Ownership Interests (as specified in clause (ii) of the definition of such term)
and the Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the
Corporate Units has been terminated, the Contract Adjustment Payments will be
payable, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Security
Register, or by wire transfer to the account designated by such Person by a
prior written notice to the Purchase Contract Agent.
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Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Corporate Units
Certificate shall not be entitled to any benefit under the Pledge Agreement or
the Purchase Contract Agreement or be valid or obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
The Chubb Corporation
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: BANK ONE TRUST COMPANY,
N.A., not individually but solely as
Attorney-in-Fact of such Holder
By: ____________________________________
Name:
Title:
DATED:__________________
A-5
CERTIFICATE OF AUTHENTICATION
OF PURCHASE CONTRACT AGENT
This is one of the Corporate Units Certificates referred to in the
within mentioned Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By: ____________________________________
Name:
Title:
Dated: ____________________
A-6
(FORM OF REVERSE OF CORPORATE UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of June 24, 2003 (as may be supplemented from time
to time, the "PURCHASE CONTRACT AGREEMENT"), between the Company and Bank One
Trust Company, N.A., as Purchase Contract Agent (including its successors
hereunder, the "PURCHASE CONTRACT AGENT"), to which Purchase Contract Agreement
and supplemental agreements thereto reference is hereby made for a description
of the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Purchase Contract Agent, the Company, and the
Holders and of the terms upon which the Corporate Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Corporate Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 per share ("COMMON STOCK"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract. The "SETTLEMENT RATE" is
equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is
greater than $71.40 (the "THRESHOLD APPRECIATION PRICE"), 0.3501 shares of
Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than or equal to
the Threshold Appreciation Price but greater than or equal to $59.50 (the
"REFERENCE PRICE"), the number of shares of Common Stock per Purchase Contract
having a value equal to the Stated Amount divided by the Adjusted Applicable
Market Value; and
(3) if the Adjusted Applicable Market Value is less than the Reference
Price, 0.4202 shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby that is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Corporate Units to purchase at the Stated Amount, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
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The "APPLICABLE MARKET VALUE" means the average of the Closing Price
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date subject to adjustments set forth under Section 5.04 of the Purchase
Contract Agreement.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means:
(1) the closing sale price as of the close of the principal trading
session (or, if no closing price is reported, the last reported sale price) per
share on the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price (or, if no closing price is reported, the last
reported sale price) per share as reported in the composite transactions for the
principal United States national or regional securities exchange on which Common
Stock is so listed;
(3) if the Common Stock is not so listed on a United States national or
regional securities exchange, the last reported sale price per share as reported
by The Nasdaq National Market, Inc.;
(4) if the Common Stock is not so reported by the Nasdaq National
Market, Inc., the last quoted bid price for Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar organization; or
(5) if such bid price, referred to in clause (4), is not available, the
market value of Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.
A-8
A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Corporate Units Certificate may pay the Stated Amount for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement or from the proceeds of the Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) in the
Treasury Portfolio or a Remarketing of the related Pledged Senior Notes. Unless
the Treasury Portfolio has replaced the Senior Notes represented by Corporate
Units, a Holder of Corporate Units who (1) does not, on or prior to 5:00 p.m.
(New York City time) on the fifth Business Day immediately preceding the
Purchase Contract Settlement Date, notify the Purchase Contract Agent of its
intention to effect a Cash Settlement, or who does so notify the Purchase
Contract Agent but fails to make an effective Cash Settlement prior to 5:00 p.m.
(New York City time) on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date, or (2) on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day prior to the Purchase Contract Settlement
Date, does not make an effective Early Settlement, shall pay the Stated Amount
for the shares of Common Stock to be delivered under the related Purchase
Contract from the proceeds of the sale of the related Pledged Senior Notes held
by the Collateral Agent unless the Holder has previously made a Cash Merger
Early Settlement. Unless the Treasury Portfolio has replaced the Senior Notes
represented by Corporate Units, such sale will be made by the Remarketing Agent
pursuant to the terms of the Remarketing Agreement on the Final Remarketing
Date. If the Treasury Portfolio has replaced the Senior Notes represented by
Corporate Units, a Holder of Corporate Units who does not notify the Purchase
Contract Agent, on or prior to 5:00 p.m. (New York City time) on the fifth
Business Day immediately preceding the Purchase Contract Settlement Date of its
intention to effect a Cash Settlement shall pay the Stated Amount for the shares
of Common Stock to be delivered under the related Purchase Contract from the
proceeds at maturity of the Applicable Ownership Interests (as defined in clause
(i) of the definition of such term) in the Treasury Portfolio.
If, as provided in the Purchase Contract Agreement, upon the occurrence
of a Failed Final Remarketing, the Collateral Agent, for the benefit of the
Company, exercises its rights as a secured creditor with respect to the Pledged
Senior Notes related to this Corporate Units Certificate, any accrued and unpaid
interest on such Pledged Senior Notes shall become payable by the Company to the
Purchase Contract Agent for payment to the Beneficial Owner of the Corporate
Units to which such Senior Notes relate.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received
A-9
payment of the aggregate Stated Amount for the shares of Common Stock to be
purchased thereunder in the manner set forth in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby and all obligations and rights
of the Company and the Holder hereunder shall terminate if a Termination Event
shall occur. Upon the occurrence of a Termination Event, the Company shall give
written notice to the Purchase Contract Agent and to the Holders, at their
addresses as they appear in the Security Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged Senior
Notes or the appropriate Applicable Ownership Interests (as specified in clause
(i) of the definition of such term) in the Treasury Portfolio represented by
each Corporate Unit from the Pledge. A Corporate Unit shall thereafter represent
the right to receive the Senior Note or the appropriate Applicable Ownership
Interests in the Treasury Portfolio represented by such Corporate Units in
accordance with the terms of the Purchase Contract Agreement and the Pledge
Agreement.
Under the terms of the Pledge Agreement and the Purchase Contract
Agreement, the Purchase Contract Agent will be entitled to exercise the voting
and any other consensual rights pertaining to the Pledged Senior Notes, but only
to the extent instructed in writing by the Holders. Upon receipt of notice of
any meeting at which holders of Senior Notes are entitled to vote or upon the
solicitation of consents, waivers or proxies of holders of Senior Notes, the
Purchase Contract Agent shall, as soon as practicable thereafter, mail to the
Corporate Units Holders a notice:
(1) containing such information as is contained in the notice or
solicitation;
(2) stating that each Corporate Units Holder on the record date set by
the Purchase Contract Agent therefor (which, to the extent possible, shall be
the same date as the record date for determining the holders of Senior Notes
entitled to vote) shall be entitled to instruct the Purchase Contract Agent as
to the exercise of the voting rights pertaining to the Senior Notes represented
by such Holder's Corporate Units; and
(3) stating the manner in which such instructions may be given.
Upon the written request of the Corporate Units Holders on such record date,
received by the Purchase Contract Agent at least six days prior to such meeting,
the Purchase Contract Agent shall endeavor insofar as practicable to vote or
cause to be voted, in accordance with the instructions set forth in such
requests, the maximum aggregate principal amount of Senior Notes as to which any
particular voting instructions are received. In the absence of specific
instructions from the Holder of a Corporate Unit, the Purchase Contract Agent
shall abstain from voting the Senior Note evidenced by such Corporate Unit.
Upon the occurrence of a Special Event Redemption, the Collateral Agent
shall surrender the Pledged Senior Notes against delivery of an amount equal to
the aggregate Redemption Price
A-10
of the Pledged Senior Notes and shall deposit funds in the Collateral Account in
exchange for the Pledged Senior Notes. Thereafter, pursuant to the terms of the
Pledge Agreement, the Collateral Agent shall cause the Securities Intermediary
to apply an amount equal to the aggregate Redemption Amount of such funds to
purchase on behalf of the Holders of Corporate Units, the Treasury Portfolio,
and promptly (a) transfer the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio to the
Collateral Account to secure the obligations of each Holder of Corporate Units
to purchase shares of Common Stock under the Purchase Contracts represented by
such Corporate Units, (b) transfer the Applicable Ownership Interests (as
specified in clause (ii) of the definition of such term) in the Treasury
Portfolio to the Purchase Contract Agent for the benefit of the Holders of such
Corporate Units and (C) remit the remaining portion of such funds to the
Purchase Contract Agent for payment to the Holders of such Corporate Units.
Upon the occurrence of a Successful Remarketing of Senior Notes prior
to the Final Remarketing Date, pursuant to the terms of the Remarketing
Agreement, the Remarketing Agent will apply an amount equal to the Treasury
Portfolio Purchase Price to purchase on behalf of the Holders of Corporate
Units, the Treasury Portfolio, and, after deducting the Remarketing Fee to the
extent permitted under the terms of the Remarketing Agreement, promptly remit
the remaining portion of such proceeds of such Successful Remarketing to the
Purchase Contract Agent for payment to the Holders of such Corporate Units.
Following the occurrence of (i) a Special Event Redemption prior to the
Purchase Contract Settlement Date, or (ii) a Successful Remarketing of the
Senior Notes prior to the Final Remarketing Date, the Holders of Corporate Units
and the Collateral Agent shall have such security interest rights and
obligations with respect to the Applicable Ownership Interests (as specified in
clause (i) of the definition of such term) in the Treasury Portfolio as the
Holder of Corporate Units and the Collateral Agent had in respect of the Senior
Notes, as the case may be, subject to the Pledge thereof as provided in the
Pledge Agreement and any reference herein to the Senior Notes shall be deemed to
be a reference to such Treasury Portfolio.
The Corporate Units Certificates are issuable only in registered form
and only in denominations of a single Corporate Unit and any integral multiple
thereof. The transfer of any Corporate Units Certificate will be registered and
Corporate Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute a Treasury Security for a Senior Note, thereby creating Treasury
Units, shall be responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract Agreement, for so long as
the Purchase Contract represented by a Corporate Units remains in effect, such
Corporate Units shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Corporate Units in
A-11
respect of the Senior Notes and Purchase Contract represented by such Corporate
Units may be transferred and exchanged only as a Corporate Unit.
Unless the Treasury Portfolio has replaced the Senior Notes represented
by the Corporate Units, and subject to the conditions set forth in the Purchase
Contract Agreement, the Holder of Corporate Units may substitute, at any time
prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, for the Pledged Senior Notes
securing such Holder's obligations under the related Purchase Contracts,
Treasury Securities in an aggregate principal amount at maturity equal to the
aggregate principal amount of the Pledged Senior Notes in accordance with the
terms of the Purchase Contract Agreement and the Pledge Agreement. From and
after such Collateral Substitution, each Unit for which such Pledged Treasury
Securities secures the Holder's obligation under the Purchase Contract shall be
referred to as a "TREASURY UNIT". A Holder may make such Collateral Substitution
only in integral multiples of 40 Corporate Units for 40 Treasury Units.
If the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units, a Holder may, at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date,
substitute Treasury Securities for the Applicable Ownership Interests in the
Treasury Portfolio, but only in integral multiples of 64,000 Corporate Units. In
such an event, the Holder shall transfer Treasury Securities to the Collateral
Agent, and the Purchase Contract Agent shall instruct the Collateral Agent to
release the Pledge of and transfer to the Holder the appropriate Applicable
Ownership Interests in the Treasury Portfolio.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Corporate Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City. If the book-entry system for the Corporate
Units has been terminated, the Contract Adjustment Payments will be payable, at
the option of the Company, by check mailed to the address of the Person entitled
thereto at such Person's address as it appears on the Security Register, or by
wire transfer to the account designated by such Person by a prior written notice
to the Purchase Contract Agent.
The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be). If the Company so elects
to defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Purchase Contract Payments
at a rate equal to 7.00% per annum, compounding on each succeeding Payment Date,
until such deferred installments are paid. In the event that the Company elects
to defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early
A-12
Settlement Date or Cash Merger Early Settlement Date, as the case may be), each
Holder will receive on the Purchase Contract Settlement Date, Early Settlement
Date or Cash Merger Early Settlement Date, as applicable, the aggregate amount
of Deferred Contract Adjustment Payments to the extent such fees are not
deducted from the Stated Amount in the case of a Cash Settlement or any Early
Settlement or Cash Merger Early Settlement.
The Purchase Contracts and all obligations and rights of the Company and the
Holders thereunder, including, without limitation, the rights of the Holders to
receive and the obligation of the Company to pay any Contract Adjustment
Payments, shall immediately and automatically terminate, without the necessity
of any notice or action by any Holder, the Purchase Contract Agent or the
Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly, but in no event later than two Business Days
thereafter, give written notice to the Purchase Contract Agent, the
Collateral Agent and the Holders, at their addresses as they appear in the
Security Register. Upon and after the occurrence of a Termination Event, the
Collateral Agent shall release the Senior Notes or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, from the Pledge in accordance
with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
represented by Units may be settled early at any time prior to 5:00 p.m. (New
York City time) on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date ("EARLY SETTLEMENT") as provided in the Purchase
Contract Agreement. In order to exercise the right to effect Early Settlement
with respect to any Purchase Contract evidenced by this Certificate, the Holder
of this Corporate Units Certificate shall deliver to the Purchase Contract Agent
at the Corporate Trust Office an Election to Settle Early form set forth below
duly completed and accompanied by payment in the form of immediately available
funds payable to the order of the Company in an amount (the "EARLY SETTLEMENT
AMOUNT") equal to:
(i) the sum of (A) the product of (I) the Stated Amount, times (II) the
number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (B) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts, less
(ii) the amount of any Deferred Contract Adjustment Payments payable to
such Holder as a result of such Early Settlement.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Senior Notes or Pledge Applicable Ownership Interests (as
specified in clause (i) of the
A-13
definition of such term) represented by such Units shall be released from the
Pledge as provided in the Pledge Agreement and the Holder shall be entitled to
receive a number of shares of Common Stock on account of each Purchase Contract
represented by a Corporate Unit as to which Early Settlement is effected equal
to 0.3501 shares of Common Stock per Purchase Contract (the "EARLY SETTLEMENT
RATE"). The Early Settlement Rate shall be adjusted in the same manner and at
the same time as the Settlement Rate is adjusted as provided in Section 5.04 of
the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Corporate Units may
effect Cash Merger Early Settlement of the Purchase Contract represented by such
Corporate Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Corporate Units, the Pledged Senior Notes or Pledged
Applicable Ownership Interests (as specified in clause (i) of the definition of
such term) in the Treasury Portfolio represented by such Corporate Units shall
be released from the Pledge as provided in the Pledge Agreement.
Upon registration of transfer of this Corporate Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Corporate Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Corporate Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts represented by the Corporate Units evidenced hereby
on its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code, agrees to be bound by the terms and provisions thereof,
covenants and agrees to perform its obligations under such Purchase Contracts,
consents to the provisions of the Purchase Contract Agreement, authorizes the
Purchase Contract Agent to enter into and perform the Purchase Contract
Agreement and the Pledge Agreement on its behalf as its attorney-in-fact, and
consents to the Pledge of the Senior Notes or the appropriate Applicable
Ownership Interests (as specified in clause (i) of the definition of such term)
in the Treasury Portfolio, as the case may be, represented by this Corporate
Units Certificate pursuant to the Pledge Agreement. The Holder further covenants
and agrees that, to the extent and in the manner provided in the Purchase
Contract Agreement and the Pledge Agreement, but subject to the terms thereof,
payments with respect to the aggregate principal amount of the Pledged Senior
Notes or the appropriate Applicable Ownership Interests (as specified in clause
(i) of the definition of such term) in the Treasury Portfolio, as the case may
be, on the Purchase Contract Settlement Date shall be paid by
A-14
the Collateral Agent to the Company in satisfaction of such Holder's obligations
under such Purchase Contract and such Holder shall acquire no right, title or
interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of not less than a
majority of the Outstanding Units.
The Purchase Contracts shall be governed by, and construed in
accordance with, the laws of the State of New York.
Prior to due presentment of this Certificate for registration of
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Corporate Units Certificate is registered as the owner of the
Corporate Units evidenced hereby for the purpose of receiving payments of
interest payable on the Senior Notes, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
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ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ______________________ Custodian ____________________
(cust) (minor)
Under Uniform Gifts to Minors Act of _______________
_____________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Corporate Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing attorney __________________, to transfer
said Corporate Units Certificates on the books of The Chubb Corporation, with
full power of substitution in the premises.
Dated: __________________________ Signature ______________________________
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Corporate Units Certificates in every
particular, without alteration or
enlargement or any change whatsoever.
Signature Guarantee: ________________________________________
A-16
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts represented by the number of Corporate Units
evidenced by this Corporate Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ____________________________ ___________________________________
Signature
Signature Guarantee: ______________
(if assigned to another person)
If shares are to be registered in the REGISTERED HOLDER
name of and delivered to a Person other
than the Holder, please (i) print such
Person's name and address and (ii) Please print name and address of
provide a guarantee of your signature: Registered Holder:
______________________________________ ___________________________________
Name Name
______________________________________ ___________________________________
Address Address
______________________________________ ___________________________________
______________________________________ ___________________________________
______________________________________ ___________________________________
Social Security or other
Taxpayer Identification
Number, if any ___________________________________
A-17
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Corporate Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement following a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts represented by the
number of Corporate Units evidenced by this Corporate Units Certificate
specified below. The undersigned Holder directs that a certificate for shares of
Common Stock or other securities deliverable upon such [Early Settlement] [Cash
Merger Early Settlement] be registered in the name of, and delivered, together
with a check in payment for any fractional share and any Corporate Units
Certificate representing any Corporate Units evidenced hereby as to which [Early
Settlement] [Cash Merger Early Settlement] of the related Purchase Contracts is
not effected, to the undersigned at the address indicated below unless a
different name and address have been indicated below. Pledged Senior Notes or
the appropriate Applicable Ownership Interests in the Treasury Portfolio, as the
case may be, deliverable upon such [Early Settlement] [Cash Merger Early
Settlement] will be transferred in accordance with the transfer instructions set
forth below. If shares are to be registered in the name of a Person other than
the undersigned, the undersigned will pay any transfer tax payable incident
thereto.
Dated: _____________________________ __________________________________
Signature
Signature Guarantee: _________________________
A-18
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Corporate REGISTERED HOLDER
Units Certificates are to be registered
in the name of and delivered to and
Pledged Senior Notes or the Applicable
Ownership Interests in the Treasury
Portfolio, as the case may be, are to
be transferred to a Person other than
the Holder, please print such Person's
name and address:
Please print name and address of
Registered Holder:
______________________________________ ____________________________________
Name Name
______________________________________ ____________________________________
Address Address
______________________________________ ____________________________________
______________________________________ ____________________________________
______________________________________ ____________________________________
Social Security or other
Taxpayer Identification
Number, if any ____________________________________
A-19
Transfer Instructions for Pledged Senior Notes or the Applicable Ownership
Interests in the Treasury Portfolio, as the case may be, transferable upon
[Early Settlement] [Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
A-20
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Corporate
Amount of increase in Amount of decrease in Units evidenced by this
Number of Corporate Number of Corporate Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
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A-21
EXHIBIT B
(FORM OF FACE OF TREASURY UNIT CERTIFICATE
For Treasury Units containing Treasury securities maturing
on July 15, 2006)
[For inclusion in Global Certificate only - THIS CERTIFICATE IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. 1 CUSIP No. 171232 60 6
Number of Treasury Units: 0
The Chubb Corporation
Treasury Units
This Treasury Units Certificate certifies that [Cede & Co.]
[__________________] is the registered Holder of the number of Treasury Units
set forth above [For inclusion in Global Certificates only - or such other
number of Treasury Units as is reflected in the Schedule of
B-1
Increases or Decreases in the Global Certificate attached hereto]. Each
Treasury Unit represents (i) a 1/40 undivided beneficial ownership interest of a
Treasury Security having a principal amount at maturity equal to $1,000, subject
to the Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and (ii) the rights and obligations of the Holder under one Purchase
Contract with The Chubb Corporation, a New Jersey corporation (the "COMPANY").
All capitalized terms used herein which are defined in the Purchase Contract
Agreement (as defined on the reverse hereof) have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities represented
by each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract represented by such Treasury Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Treasury Units
Certificate to purchase, and the Company to sell, on August 16, 2006 (the
"PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the "STATED
AMOUNT"), a number of newly issued shares of common stock, par value $1.00 per
share ("COMMON STOCK"), of the Company, equal to the Settlement Rate, unless on
or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement or Cash Merger Early Settlement with
respect to such Purchase Contract, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The Stated Amount for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of the proceeds from the Treasury Securities at
maturity pledged to secure the obligations of the Holder under such Purchase
Contract of the Treasury Units of which such Purchase Contract is a part.
Each Purchase Contract evidenced hereby obligates the holder to agree,
for United States federal, state and local tax purposes, to (i) treat an
acquisition of the Treasury Units as an acquisition of the Treasury Securities
and Purchase Contracts represented by the Treasury Units and (ii) treat itself
as owner of the applicable interest in the Collateral Account, including the
Treasury Securities.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract represented by a Treasury Unit evidenced hereby, an amount
(the "CONTRACT ADJUSTMENT PAYMENTS") equal to 4.75% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Treasury Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.
Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the
Treasury Units has been terminated, the Contract Adjustment Payments will be
payable, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Security
Register, or by wire transfer to the account designated by such Person by a
prior written notice to the Purchase Contract Agent.
B-2
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Treasury Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
The Chubb Corporation
By:_____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: BANK ONE TRUST COMPANY,
N.A., not individually but solely as
Attorney-in-Fact of such Holder
By: ____________________________________
Authorized Officer
Dated:_____________________
B-4
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By: ____________________________________
Authorized Officer
Dated:_________________
B-5
(REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of June 24, 2003 (as may be supplemented from time
to time, the "PURCHASE CONTRACT AGREEMENT") between the Company and Bank One
Trust Company, N.A., as Purchase Contract Agent (including its successors
thereunder, herein called the "PURCHASE CONTRACT AGENT"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 per share ("COMMON STOCK"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract. The "SETTLEMENT RATE" is
equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is
greater than $71.40 (the "THRESHOLD APPRECIATION PRICE"), 0.3501 shares of
Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than or equal to
the Threshold Appreciation Price but greater than or equal to $59.50 (the
"REFERENCE PRICE"), the number of shares of Common Stock per Purchase Contract
having a value equal to the Stated Amount divided by the Adjusted Applicable
Market Value; and
(3) if the Adjusted Applicable Market Value is less than the Reference
Price, 0.4202 shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Stated Amount, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
B-6
The "APPLICABLE MARKET VALUE" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means the:
(1) closing sale price as of the close of the principal trading session
(or, if no closing price is reported, the last reported sale price) per share on
the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price (or, if no closing price is reported, the last
reported sale price) per share as reported in the composite transactions for the
principal United States national or regional securities exchange on which the
Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States national or
regional securities exchange, the last reported sale price per share as reported
by The Nasdaq National Market, Inc.;
(4) if the Common Stock is not so reported by the Nasdaq National
Market, Inc. the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization; or
(5) if such bid price, referred to in clause (4), is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.
B-7
A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Stated Amount for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement of each such Purchase Contract or by applying a
principal amount of the Pledged Treasury Securities represented by such Holder's
Treasury Unit equal to the Stated Amount of such Purchase Contract to the
purchase of the Common Stock. A Holder of Treasury Units who (1) does not on or
prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, notify the Purchase Contract
Agent of its intention to effect a Cash Settlement, or who does so notify the
Purchase Contract Agent but fails to make an effective Cash Settlement prior to
5:00 p.m. (New York City time) on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, (2) on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day prior to the Purchase Contract Settlement
Date, does not make an effective Early Settlement, or (3) on or prior to 5:00
p.m. (New York City time) on the fifth Business Day prior to the Purchase
Contract Settlement Date, does not make an effective Cash Merger Early
Settlement, shall pay the Stated Amount for the shares of Common Stock to be
issued under the related Purchase Contract from the proceeds of the Pledged
Treasury Securities.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate Stated Amount for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be). If the Company so elects
to defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Purchase Contract Payments
at a rate equal to 7.00% per annum, compounding on each succeeding Payment Date,
until such deferred installments are paid. In the event that the Company elects
to defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement, as the case may be), each Holder will receive on
B-8
the Purchase Contract Settlement Date or Early Settlement Date, as applicable,
the aggregate amount of Deferred Contract Adjustment Payments to the extent such
fees are not deducted from the Stated Amount in the case of a Cash Settlement or
any Early Settlement or Cash Merger Early Settlement.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly, but in no event later than two Business Days
thereafter, give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) represented by each Treasury Unit. A Treasury Unit shall thereafter
represent the right to receive the Proceeds of the Treasury Security represented
by such Treasury Unit, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
The Treasury Units Certificates are issuable only in registered form
and only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes for Treasury Securities, thereby recreating Corporate
Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract represented by a Treasury Unit remains in effect, such
Treasury Unit shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract represented by such Treasury Unit may be
transferred and exchanged only as a Treasury Unit.
Unless the Treasury Portfolio has replaced the Senior Notes represented
by the Corporate Units and subject to the conditions set forth in the Purchase
Contract Agreement, a Holder of Treasury Units may recreate, at any time prior
to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, Corporate Units by delivering
to the Securities Intermediary Senior Notes with an aggregate principal amount,
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase
B-9
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Units shall be referred to as a "CORPORATE UNIT". Any such creation
of Corporate Units may be effected only in multiples of 40 Treasury Units for 40
Corporate Units.
If the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units, a Holder may at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date substitute the
Applicable Ownership Interests in the Treasury Portfolio for Treasury
Securities, but only in integral multiples of 64,000 Treasury Units. In such
event, the Holder shall transfer to the Collateral Agent the Applicable
Ownership Interest in the Treasury Portfolio in an amount such that the
aggregate principal amount at maturity of the portion of such Applicable
Ownership Interest in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) is equal to the aggregate Stated Amount of the Purchase
Contracts underlying such Treasury Units, and the Purchase Contract Agent shall
instruct the Collateral Agent to release the Pledge of and transfer to the
Holder the Treasury Securities.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Holder, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Security Register.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Treasury Unit shall thereafter
represent the right to receive the interest in the Treasury Security represented
by such Treasury Unit, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
represented by Units may be settled early ("EARLY SETTLEMENT") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contract evidenced by this Certificate,
the Holder of this Treasury Units Certificate shall deliver to the Purchase
Contract Agent at the Corporate Trust Office an Election to Settle Early form
set forth below duly
B-10
completed and accompanied by payment in the form of immediately available funds
payable to the order of the Company in an amount (the "EARLY SETTLEMENT AMOUNT")
equal to:
(i) the sum of (A) the product of (I) the Stated Amount, times (II) the
number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (B) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts, less
(ii) the amount of any Deferred Contract Adjustment Payments payable to
such Holder as a result of such Early Settlement.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities represented by such Units shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract represented by a Treasury Unit as to which Early
Settlement is effected equal to 0.3501 shares of Common Stock per Purchase
Contract (the "EARLY SETTLEMENT RATE"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract represented by such
Treasury Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Treasury Units, the Pledged Treasury Securities
represented by such Treasury Units shall be released from the Pledge as provided
in the Pledge Agreement.
Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts represented by the Treasury Units evidenced hereby on
its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code,
B-11
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Purchase Contract
Agent to enter into and perform the Purchase Contract Agreement and the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of
the Treasury Securities represented by this Treasury Units Certificate pursuant
to the Pledge Agreement. The Holder further covenants and agrees, that, to the
extent and in the manner provided in the Purchase Contract Agreement and the
Pledge Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount of the Pledged Treasury Securities on the Purchase
Contract Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of not less than a
majority of the Outstanding Units.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
Prior to due presentment of this Certificate for registration or
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Treasury Units Certificate is registered as the owner of the
Treasury Units evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
B-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ______________________ Custodian ____________________
(cust) (minor)
Under Uniform Gifts to Minors Act of ________________
_____________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________ attorney to transfer said
Treasury Units Certificates on the books of The Chubb Corporation, with full
power of substitution in the premises.
Dated: _____________________________ _____________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Treasury Units
Certificates in every particular,
without alteration or enlargement or
any change whatsoever.
Signature Guarantee: __________________________________
B-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts represented by the number of Treasury Units
evidenced by this Treasury Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: ________________________________ ______________________________________
Signature
Signature Guarantee: _________________
(if assigned to another person)
If shares are to be registered in the REGISTERED HOLDER
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:
Please print name and address of
Registered Holder:
_______________________________________ ______________________________________
Name Name
_______________________________________ ______________________________________
Address Address
_______________________________________ ______________________________________
_______________________________________ ______________________________________
_______________________________________ ______________________________________
Social Security or other
Taxpayer Identification ______________________________________
Number, if any
B-14
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement upon a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts represented by the
number of Treasury Units evidenced by this Treasury Units Certificate specified
below. The option to effect [Early Settlement] [Cash Merger Early Settlement]
may be exercised only with respect to Purchase Contracts represented by Treasury
Units with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of Common
Stock or other securities deliverable upon such [Early Settlement] [Cash Merger
Early Settlement] be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which Cash Merger Early
Settlement of the related Purchase Contracts is not effected, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. Pledged Treasury Securities deliverable upon such [Early
Settlement] [Cash Merger Early Settlement] will be transferred in accordance
with the transfer instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: _____________________________ ___________________________________
Signature
Signature Guarantee: ______________________________
B-15
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury REGISTERED HOLDER
Units Certificates are to be
registered in the name of and
delivered to and Pledged Treasury
Securities are to be transferred to a
Person other than the Holder, please
print such Person's name and address:
Please print name and address of
Registered Holder:
______________________________________ ________________________________________
Name Name
______________________________________ ________________________________________
Address Address
______________________________________ ________________________________________
______________________________________ ________________________________________
______________________________________ ________________________________________
Social Security or other
Taxpayer Identification
Number, if any ________________________________________
B-16
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
B-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Treasury
Amount of increase in Amount of decrease in Units evidenced by this
Number of Treasury Number of Treasury Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
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B-18
EXHIBIT C
(FORM OF FACE OF TREASURY UNIT CERTIFICATE
For Treasury Units containing Treasury Securities
maturing on August 15, 2006)
[For inclusion in Global Certificate only - THIS CERTIFICATE IS A GLOBAL
CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITARY"), THE
DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS
EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A
TRANSFER OF THIS CERTIFICATE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
No. 2 CUSIP No. 171232 70 5
Number of Treasury Units: 0
The Chubb Corporation
Treasury Units
This Treasury Units Certificate certifies that [Cede & Co.]
[__________________] is the registered Holder of the number of Treasury Units
set forth above [For inclusion in Global Certificates only - or such other
number of Treasury Units as is reflected in the Schedule of Increases or
Decreases in the Global Certificate attached hereto]. Each Treasury Unit
represents (i) a 1/40 undivided beneficial ownership interest of a Treasury
Security having a principal amount at maturity equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder
C-1
pursuant to the Pledge Agreement, and (ii) the rights and obligations of the
Holder under one Purchase Contract with The Chubb Corporation, a New Jersey
corporation (the "COMPANY"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement (as defined on the reverse hereof) have the
meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities represented
by each Treasury Unit evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the Holder
under the Purchase Contract represented by such Treasury Unit. Each Purchase
Contract evidenced hereby obligates the Holder of this Treasury Units
Certificate to purchase, and the Company to sell, on August 16, 2006 (the
"PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the "STATED
AMOUNT"), a number of newly issued shares of common stock, par value $1.00 per
share ("COMMON STOCK"), of the Company, equal to the Settlement Rate, unless on
or prior to the Purchase Contract Settlement Date there shall have occurred a
Termination Event or an Early Settlement or Cash Merger Early Settlement with
respect to such Purchase Contract, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The Stated Amount for
the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby, if not paid earlier, shall be paid on the Purchase Contract
Settlement Date by application of the proceeds from the Treasury Securities at
maturity pledged to secure the obligations of the Holder under such Purchase
Contract of the Treasury Units of which such Purchase Contract is a part.
Each Purchase Contract evidenced hereby obligates the holder to agree,
for United States federal, state and local tax purposes, to (i) treat an
acquisition of the Treasury Units as an acquisition of the Treasury Securities
and Purchase Contracts represented by the Treasury Units and (ii) treat itself
as owner of the applicable interest in the Collateral Account, including the
Treasury Securities.
The Company shall pay, on each Payment Date, in respect of each
Purchase Contract represented by a Treasury Unit evidenced hereby, an amount
(the "CONTRACT ADJUSTMENT PAYMENTS") equal to 4.75% per year of the Stated
Amount. Such Contract Adjustment Payments shall be payable to the Person in
whose name this Treasury Units Certificate is registered at the close of
business on the Record Date for such Payment Date. The Company may, at its
option, defer such Contract Adjustment Payments.
Contract Adjustment Payments will be payable at the office of the
Purchase Contract Agent in New York City. If the book-entry system for the
Treasury Units has been terminated, the Contract Adjustment Payments will be
payable, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such Person's address as it appears on the Security
Register, or by wire transfer to the account designated by such Person by a
prior written notice to the Purchase Contract Agent.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
C-2
Unless the certificate of authentication hereon has been executed by
the Purchase Contract Agent by manual signature, this Treasury Units Certificate
shall not be entitled to any benefit under the Pledge Agreement or the Purchase
Contract Agreement or be valid or obligatory for any purpose.
C-3
IN WITNESS WHEREOF, the Company and the Holder specified above have
caused this instrument to be duly executed.
The Chubb Corporation
By:_____________________________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts)
By: BANK ONE TRUST COMPANY,
N.A., not individually but solely as
Attorney-in-Fact of such Holder
By: ____________________________________
Authorized Officer
Dated:_____________________
C-4
CERTIFICATE OF AUTHENTICATION OF
PURCHASE CONTRACT AGENT
This is one of the Treasury Units referred to in the within-mentioned
Purchase Contract Agreement.
By: BANK ONE TRUST COMPANY, N.A.,
as Purchase Contract Agent
By: ____________________________________
Authorized Officer
Dated:_________________
C-5
(REVERSE OF TREASURY UNIT CERTIFICATE)
Each Purchase Contract evidenced hereby is governed by a Purchase
Contract Agreement, dated as of June 24, 2003 (as may be supplemented from time
to time, the "PURCHASE CONTRACT AGREEMENT") between the Company and Bank One
Trust Company, N.A., as Purchase Contract Agent (including its successors
thereunder, herein called the "PURCHASE CONTRACT AGENT"), to which the Purchase
Contract Agreement and supplemental agreements thereto reference is hereby made
for a description of the respective rights, limitations of rights, obligations,
duties and immunities thereunder of the Purchase Contract Agent, the Company and
the Holders and of the terms upon which the Treasury Units Certificates are, and
are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Treasury Units Certificate to purchase, and the Company to sell, on August 16,
2006 (the "PURCHASE CONTRACT SETTLEMENT DATE"), at a price equal to $25.00 (the
"STATED AMOUNT"), a number of newly issued shares of common stock, par value
$1.00 per share ("COMMON STOCK"), of the Company, equal to the Settlement Rate,
unless on or prior to the Purchase Contract Settlement Date there shall have
occurred a Termination Event or an Early Settlement or Cash Merger Early
Settlement with respect to such Purchase Contract. The "SETTLEMENT RATE" is
equal to:
(1) if the Adjusted Applicable Market Value (as defined below) is
greater than $71.40 (the "THRESHOLD APPRECIATION PRICE"), 0.3501 shares of
Common Stock per Purchase Contract;
(2) if the Adjusted Applicable Market Value is less than or equal to
the Threshold Appreciation Price but greater than or equal to $59.50 (the
"REFERENCE PRICE"), the number of shares of Common Stock per Purchase Contract
having a value equal to the Stated Amount divided by the Adjusted Applicable
Market Value; and
(3) if the Adjusted Applicable Market Value is less than the Reference
Price, 0.4202 shares of Common Stock per Purchase Contract;
in each case subject to adjustment as provided in the Purchase Contract
Agreement (and in each case rounded upward or downward to the nearest 1/10,000th
of a share).
No fractional shares of Common Stock will be issued upon settlement of
Purchase Contracts, as provided in Section 5.09 of the Purchase Contract
Agreement.
Each Purchase Contract evidenced hereby, which is settled through Early
Settlement or Cash Merger Early Settlement shall obligate the Holder of the
related Treasury Units to purchase at the Stated Amount, and the Company to
sell, a number of newly issued shares of Common Stock equal to the Early
Settlement Rate (in the case of an Early Settlement) or applicable Settlement
Rate (in the case of a Cash Merger Early Settlement).
C-6
The "APPLICABLE MARKET VALUE" means the average of the Closing Prices
per share of Common Stock on each of the 20 consecutive Trading Days ending on
the third Trading Day immediately preceding the Purchase Contract Settlement
Date, subject to adjustments set forth under Section 5.04 hereof.
The "ADJUSTED APPLICABLE MARKET VALUE" means (i) prior to any
adjustment of the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5),
(6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement, the
Applicable Market Value, and (ii) at the time of and after any adjustment of the
Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10)
of Section 5.04(a) of the Purchase Contract Agreement, the Applicable Market
Value multiplied by a fraction, the numerator of which shall be the Settlement
Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4),
(5), (6), (7) or (10) of Section 5.04(a) of the Purchase Contract Agreement and
the denominator of which shall be the Settlement Rate immediately prior to such
adjustment; provided, however, that if such adjustment to the Settlement Rate is
required to be made pursuant to the occurrence of any of the events contemplated
by paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of Section 5.04(a) of the
Purchase Contract Agreement during the period taken into consideration for
determining the Applicable Market Value, appropriate and customary adjustments
shall be made to the Settlement Rate.
The "CLOSING PRICE" per share of Common Stock on any date of
determination means the:
(1) closing sale price as of the close of the principal trading session
(or, if no closing price is reported, the last reported sale price) per share on
the New York Stock Exchange, Inc. (the "NYSE") on such date;
(2) if the Common Stock is not listed for trading on the NYSE on any
such date, the closing sale price (or, if no closing price is reported, the last
reported sale price) per share as reported in the composite transactions for the
principal United States national or regional securities exchange on which the
Common Stock is so listed;
(3) if the Common Stock is not so listed on a United States national or
regional securities exchange, the last reported sale price per share as reported
by The Nasdaq National Market, Inc.;
(4) if the Common Stock is not so reported by the Nasdaq National
Market, Inc., the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization; or
(5) if such bid price, referred to in clause (4), is not available, the
market value of the Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Company.
C-7
A "TRADING DAY" means a day on which the Common Stock (1) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (2) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Treasury Unit shall pay the Stated Amount for the shares of the
Common Stock purchased pursuant to each Purchase Contract evidenced hereby
either by effecting a Cash Settlement, an Early Settlement or, if applicable, a
Cash Merger Early Settlement of each such Purchase Contract or by applying a
principal amount of the Pledged Treasury Securities represented by such Holder's
Treasury Unit equal to the Stated Amount of such Purchase Contract to the
purchase of the Common Stock. A Holder of Treasury Units who (1) does not on or
prior to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, notify the Purchase Contract
Agent of its intention to effect a Cash Settlement, or who does so notify the
Purchase Contract Agent but fails to make an effective Cash Settlement prior to
5:00 p.m. (New York City time) on the fourth Business Day immediately preceding
the Purchase Contract Settlement Date, (2) on or prior to 5:00 p.m. (New York
City time) on the fifth Business Day prior to the Purchase Contract Settlement
Date, does not make an effective Early Settlement, or (3) on or prior to 5:00
p.m. (New York City time) on the fifth Business Day prior to the Purchase
Contract Settlement Date, does not make an effective Cash Merger Early
Settlement, shall pay the Stated Amount for the shares of Common Stock to be
issued under the related Purchase Contract from the proceeds of the Pledged
Treasury Securities.
The Company shall not be obligated to issue any shares of Common Stock
in respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment of the aggregate Stated Amount for
the shares of Common Stock to be purchased thereunder in the manner set forth in
the Purchase Contract Agreement.
The Company has the right to defer payment of all or part of the
Contract Adjustment Payments in respect of each Purchase Contract until no later
than the Purchase Contract Settlement Date (or in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement Date, as the case may be). If the Company so elects
to defer Contract Adjustment Payments, the Company shall pay additional Contract
Adjustment Payments on such deferred installments of Purchase Contract Payments
at a rate equal to 7.00% per annum, compounding on each succeeding Payment Date,
until such deferred installments are paid. In the event that the Company elects
to defer the payment of Contract Adjustment Payments on the Purchase Contracts
until the Purchase Contract Settlement Date (or, in the event of an effective
Early Settlement or Cash Merger Early Settlement, the Early Settlement Date or
Cash Merger Early Settlement, as the case may be), each Holder will receive on
C-8
the Purchase Contract Settlement Date or Early Settlement Date, as applicable,
the aggregate amount of Deferred Contract Adjustment Payments to the extent such
fees are not deducted from the Stated Amount in the case of a Cash Settlement or
any Early Settlement or Cash Merger Early Settlement.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly, but in no event later than two Business Days
thereafter, give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Pledged Treasury Securities (as defined in the Pledge
Agreement) represented by each Treasury Unit. A Treasury Unit shall thereafter
represent the right to receive the Proceeds of the Treasury Security represented
by such Treasury Unit, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
The Treasury Units Certificates are issuable only in registered form
and only in denominations of a single Treasury Unit and any integral multiple
thereof. The transfer of any Treasury Units Certificate will be registered and
Treasury Units Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Security Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents permitted by
the Purchase Contract Agreement. No service charge shall be required for any
such registration of transfer or exchange, but the Company and the Purchase
Contract Agent may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A Holder who elects to
substitute Senior Notes for Treasury Securities, thereby recreating Corporate
Units, shall be responsible for any fees or expenses associated therewith.
Except as provided in the Purchase Contract Agreement, for so long as the
Purchase Contract represented by a Treasury Unit remains in effect, such
Treasury Unit shall not be separable into its constituent parts, and the rights
and obligations of the Holder of such Treasury Unit in respect of the Treasury
Security and the Purchase Contract represented by such Treasury Unit may be
transferred and exchanged only as a Treasury Unit.
Unless the Treasury Portfolio has replaced the Senior Notes represented
by the Corporate Units and subject to the conditions set forth in the Purchase
Contract Agreement, a Holder of Treasury Units may recreate, at any time prior
to 5:00 p.m. (New York City time) on the fifth Business Day immediately
preceding the Purchase Contract Settlement Date, Corporate Units by delivering
to the Securities Intermediary Senior Notes with an aggregate principal amount,
equal to the aggregate principal amount at maturity of the Pledged Treasury
Securities in exchange for the release of such Pledged Treasury Securities in
accordance with the terms of the Purchase
C-9
Contract Agreement and the Pledge Agreement. From and after such substitution,
the Holder's Units shall be referred to as a "CORPORATE UNIT". Any such creation
of Corporate Units may be effected only in multiples of 40 Treasury Units for 40
Corporate Units.
If the Treasury Portfolio has replaced the Senior Notes represented by
the Corporate Units, a Holder may at any time on or prior to the second Business
Day immediately preceding the Purchase Contract Settlement Date substitute the
Applicable Ownership Interests in the Treasury Portfolio for Treasury
Securities, but only in integral multiples of 64,000 Treasury Units. In such
event, the Holder shall transfer to the Collateral Agent the Applicable
Ownership Interest in the Treasury Portfolio in an amount such that the
aggregate principal amount at maturity of the portion of such Applicable
Ownership Interests in the Treasury Portfolio (as specified in clause (i) of the
definition of such term) is equal to the aggregate Stated Amount of the Purchase
Contracts underlying such Treasury Units, and the Purchase Contract Agent shall
instruct the Collateral Agent to release the Pledge of and transfer to the
Holder the Treasury Securities.
The Company shall pay, on each Payment Date, the Contract Adjustment
Payments payable in respect of each Purchase Contract to the Person in whose
name the Treasury Units Certificate evidencing such Purchase Contract is
registered at the close of business on the Record Date for such Payment Date.
Contract Adjustment Payments will be payable at the office of the Purchase
Contract Agent in New York City or, at the option of the Holder, by check mailed
to the address of the Person entitled thereto at such address as it appears on
the Security Register.
The Purchase Contracts and all obligations and rights of the Company
and the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments, shall immediately and automatically terminate, without the
necessity of any notice or action by any Holder, the Purchase Contract Agent or
the Company, if, on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon the occurrence of a Termination
Event, the Company shall promptly but in no event later than two Business Days
thereafter give written notice to the Purchase Contract Agent, the Collateral
Agent and the Holders, at their addresses as they appear in the Security
Register. Upon and after the occurrence of a Termination Event, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement. A Treasury Unit shall thereafter
represent the right to receive the interest in the Treasury Security represented
by such Treasury Unit, in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
represented by Units may be settled early ("EARLY SETTLEMENT") as provided in
the Purchase Contract Agreement. In order to exercise the right to effect Early
Settlement with respect to any Purchase Contract evidenced by this Certificate,
the Holder of this Treasury Units Certificate shall deliver to the Purchase
Contract Agent at the Corporate Trust Office an Election to Settle Early form
set forth below duly
C-10
completed and accompanied by payment in the form of immediately available funds
payable to the order of the Company in an amount (the "EARLY SETTLEMENT AMOUNT")
equal to:
(i) the sum of (A) the product of (I) the Stated Amount, times (II) the
number of Purchase Contracts with respect to which the Holder has elected to
effect Early Settlement, plus (B) if such delivery is made with respect to any
Purchase Contracts during the period from the close of business on any Record
Date next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments payable on such
Payment Date with respect to such Purchase Contracts, less
(ii) the amount of any Deferred Contract Adjustment Payments payable to
such Holder as a result of such Early Settlement.
Upon Early Settlement of Purchase Contracts by a Holder of the related
Units, the Pledged Treasury Securities represented by such Units shall be
released from the Pledge as provided in the Pledge Agreement and the Holder
shall be entitled to receive a number of shares of Common Stock on account of
each Purchase Contract represented by a Treasury Unit as to which Early
Settlement is effected equal to 0.3501 shares of Common Stock per Purchase
Contract (the "EARLY SETTLEMENT RATE"). The Early Settlement Rate shall be
adjusted in the same manner and at the same time as the Settlement Rate is
adjusted as provided in Section 5.04 of the Purchase Contract Agreement.
Upon the occurrence of a Cash Merger, a Holder of Treasury Units may
effect Cash Merger Early Settlement of the Purchase Contract represented by such
Treasury Units pursuant to the terms of Section 5.04(b)(2) of the Purchase
Contract Agreement. Upon Cash Merger Early Settlement of Purchase Contracts by a
Holder of the related Treasury Units, the Pledged Treasury Securities
represented by such Treasury Units shall be released from the Pledge as provided
in the Pledge Agreement.
Upon registration of transfer of this Treasury Units Certificate, the
transferee shall be bound (without the necessity of any other action on the part
of such transferee, except as may be required by the Purchase Contract Agent
pursuant to the Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby and the
transferor shall be released from the obligations under the Purchase Contracts
evidenced by this Treasury Units Certificate. The Company covenants and agrees,
and the Holder, by its acceptance hereof, likewise covenants and agrees, to be
bound by the provisions of this paragraph.
The Holder of this Treasury Units Certificate, by its acceptance
hereof, authorizes the Purchase Contract Agent to enter into and perform the
related Purchase Contracts represented by the Treasury Units evidenced hereby on
its behalf as its attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the Company or its
trustee in the event that the Company becomes the subject of a case under the
Bankruptcy Code,
C-11
agrees to be bound by the terms and provisions thereof, covenants and agrees to
perform its obligations under such Purchase Contracts, consents to the
provisions of the Purchase Contract Agreement, authorizes the Purchase Contract
Agent to enter into and perform the Purchase Contract Agreement and the Pledge
Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of
the Treasury Securities represented by this Treasury Units Certificate pursuant
to the Pledge Agreement. The Holder further covenants and agrees, that, to the
extent and in the manner provided in the Purchase Contract Agreement and the
Pledge Agreement, but subject to the terms thereof, payments in respect to the
aggregate principal amount of the Pledged Treasury Securities on the Purchase
Contract Settlement Date shall be paid by the Collateral Agent to the Company in
satisfaction of such Holder's obligations under such Purchase Contract and such
Holder shall acquire no right, title or interest in such payments.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of not less than a
majority of the Outstanding Units.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
Prior to due presentment of this Certificate for registration or
transfer, the Company, the Purchase Contract Agent and its Affiliates and any
agent of the Company or the Purchase Contract Agent may treat the Person in
whose name this Treasury Units Certificate is registered as the owner of the
Treasury Units evidenced hereby for the purpose of receiving payments of
interest on the Treasury Securities, receiving payments of Contract Adjustment
Payments (subject to any applicable record date), performance of the Purchase
Contracts and for all other purposes whatsoever, whether or not any payments in
respect thereof be overdue and notwithstanding any notice to the contrary, and
neither the Company, the Purchase Contract Agent nor any such agent shall be
affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection
at the offices of the Purchase Contract Agent.
C-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM: as tenants in common
UNIF GIFT MIN ACT: ______________________ Custodian ____________________
(cust) (minor)
Under Uniform Gifts to Minors Act of ________________
_____________________________________________________
TENANT: as tenants by the entireties
JT TEN: as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the above list.
__________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
(Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee)
________________________________________________________________________________
(Please Print or Type Name and Address Including Postal Zip Code of Assignee)
the within Treasury Units Certificates and all rights thereunder, hereby
irrevocably constituting and appointing ____________ attorney to transfer said
Treasury Units Certificates on the books of The Chubb Corporation, with full
power of substitution in the premises.
Dated: __________________________ ___________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of
the within Treasury Units
Certificates in every particular,
without alteration or enlargement
or any change whatsoever.
Signature Guarantee: ______________________________________
C-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract Settlement
Date of the Purchase Contracts represented by the number of Treasury Units
evidenced by this Treasury Units Certificate be registered in the name of, and
delivered, together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name and address
have been indicated below. If shares are to be registered in the name of a
Person other than the undersigned, the undersigned will pay any transfer tax
payable incident thereto.
Dated: _______________________________ _______________________________________
Signature
Signature Guarantee: __________________
(if assigned to another person)
If shares are to be registered in the
name of and delivered to a Person other REGISTERED HOLDER
than the Holder, please (i) print such
Person's name and address and (ii) Please print name and address of
provide a guarantee of your signature: Registered Holder:
______________________________________ _______________________________________
Name Name
______________________________________ _______________________________________
Address Address
______________________________________ _______________________________________
______________________________________ _______________________________________
______________________________________ _______________________________________
______________________________________
Social Security or other
Taxpayer Identification
Number, if any _______________________________________
C-14
ELECTION TO SETTLE EARLY/CASH MERGER EARLY SETTLEMENT
The undersigned Holder of this Treasury Units Certificate hereby
irrevocably exercises the option to effect [Early Settlement] [Cash Merger Early
Settlement upon a Cash Merger] in accordance with the terms of the Purchase
Contract Agreement with respect to the Purchase Contracts represented by the
number of Treasury Units evidenced by this Treasury Units Certificate specified
below. The option to effect [Early Settlement] [Cash Merger Early Settlement]
may be exercised only with respect to Purchase Contracts represented by Treasury
Units with an aggregate Stated Amount equal to $1,000 or an integral multiple
thereof. The undersigned Holder directs that a certificate for shares of Common
Stock or other securities deliverable upon such [Early Settlement] [Cash Merger
Early Settlement] be registered in the name of, and delivered, together with a
check in payment for any fractional share and any Treasury Units Certificate
representing any Treasury Units evidenced hereby as to which Cash Merger Early
Settlement of the related Purchase Contracts is not effected, to the undersigned
at the address indicated below unless a different name and address have been
indicated below. Pledged Treasury Securities deliverable upon such [Early
Settlement] [Cash Merger Early Settlement] will be transferred in accordance
with the transfer instructions set forth below. If shares are to be registered
in the name of a Person other than the undersigned, the undersigned will pay any
transfer tax payable incident thereto.
Dated: ____________________________ ___________________________________
Signature
Signature Guarantee: ______________
C-15
Number of Units evidenced hereby as to which [Early Settlement] [Cash
Merger Early Settlement] of the related Purchase Contracts is being elected:
If shares of Common Stock or Treasury REGISTERED HOLDER
Units Certificates are to be registered
in the name of and delivered to and
Pledged Treasury Securities are to be
transferred to a Person other than the
Holder, please print such Person's name
and address:
Please print name and address of
Registered Holder:
________________________________________ ______________________________________
Name Name
________________________________________ ______________________________________
Address Address
________________________________________ ______________________________________
________________________________________ ______________________________________
________________________________________ ______________________________________
Social Security or other
Taxpayer Identification
Number, if any ______________________________________
C-16
Transfer Instructions for Pledged Treasury Securities Transferable upon [Early
Settlement] [Cash Merger Early Settlement] or a Termination Event:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
C-17
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been made:
Number of Treasury
Amount of increase in Amount of decrease in Units evidenced by this
Number of Treasury Number of Treasury Global Certificate Signature of authorized
Units evidenced by the Units evidenced by the following such signatory of Purchase
Date Global Certificate Global Certificate decrease or increase Contract Agent
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C-18
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Bank One Trust Company, N.A.
The Purchase Contract Agent
153 West 51st Street
New York, New York 10019
Fax: (212) 373-1383
Attention: Corporate Trust Administration
Re: [_______ Corporate Units] [_______ Treasury Units (containing
Treasury Securities maturing on [July][August] 15, 2006) of The Chubb
Corporation, a New Jersey corporation (the "COMPANY").
The undersigned Holder hereby notifies you that it has delivered to BNY
Midwest Trust Company, as Securities Intermediary, for credit to the Collateral
Account, $______ aggregate principal amount of [Senior Notes] [Treasury
Securities] in exchange for the [Pledged Senior Notes] [Pledged Treasury
Securities] held in the Collateral Account, in accordance with the Pledge
Agreement, dated as of June 24, 2003 (the "PLEDGE AGREEMENT"; unless otherwise
defined herein, terms defined in the Pledge Agreement are used herein as defined
therein), between you, the Company, the Collateral Agent, the Custodial Agent
and the Securities Intermediary. The undersigned Holder has paid all applicable
fees and expenses relating to such exchange. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Senior Notes] [Pledged Treasury Securities]
related to such [Corporate Units] [Treasury Units (containing Treasury
Securities maturing on [July][August] 15, 2006) ].
Date: ________________________________ ___________________________________
Signature
Signature Guarantee: ______________
D-1
Please print name and address of Registered Holder:
____________________________________ ___________________________________
Name Social Security or other Taxpayer
Identification Number, if any
Address
_____________________________
_____________________________
_____________________________
_____________________________
D-2
EXHIBIT E
NOTICE FROM PURCHASE CONTRACT AGENT
TO HOLDERS
(Transfer of Collateral upon Occurrence of a Termination Event)
[HOLDER]
_____________________________
_____________________________
Attention:
Telecopy: __________
Re: [__________ Corporate Units] [______ Treasury Units
(containing Treasury Securities maturing on
[July][August] 15, 2006)] of The Chubb Corporation, a
New Jersey corporation (the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of June 24,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the holders of Corporate Units and [Applicable Ownership
Interests (as specified in clause (i) of the definition of such term) and]
Treasury Units from time to time.
We hereby notify you that a Termination Event has occurred and that
[the Senior Notes] [Applicable Ownership Interests (as specified in clause (i)
of the definition of such term) in the Treasury Portfolio] [the Treasury
Securities] compromising a portion of your ownership interest in _____
[Corporate Units] [Treasury Units] have been released and are being held by us
for your account pending receipt of transfer instructions with respect to such
[Senior Notes][Treasury Securities] (the "RELEASED SECURITIES").
Pursuant to Section 3.15 of the Purchase Contract Agreement, we hereby
request written transfer instructions with respect to the Released Securities.
Upon receipt of your instructions and upon transfer to us of your [Corporate
Units][Treasury Units] effected through book-entry or by delivery to us of your
[Corporate Units Certificate][Treasury Units Certificate], we shall transfer the
Released Securities by book-entry transfer or other appropriate procedures, in
accordance with your instructions. In the event you fail to effect such transfer
or delivery, the Released Securities and any distributions thereon, shall be
held in our name, or a nominee in trust for your benefit, until such time as
such [Corporate Units][Treasury Units] are transferred or your [Corporate Units
Certificate] [Treasury Units Certificate] is surrendered or satisfactory
evidence
E-1
is provided that such [Corporate Units Certificate][Treasury Units Certificate]
has been destroyed, lost or stolen, together with any indemnification that we or
the Company may require.
Date: By: BANK ONE TRUST COMPANY, N.A.,
as the Purchase Contract Agent
________________________________________
Name:
Title: Authorized Signatory
E-2
EXHIBIT F
NOTICE TO SETTLE BY CASH
Bank One Trust Company, N.A.
The Purchase Contract Agent
153 West 51st Street
New York, New York 10019
Fax: (212) 373-1383
Attention: Corporate Trust Administration
Re: [_______ Corporate Units] [Treasury Units (containing
Treasury Securities maturing [July][August] 15,
2006)] of The Chubb Corporation, a New Jersey
corporation (the "COMPANY")
The undersigned Holder hereby irrevocably notifies you in accordance
with Section 5.02 of the Purchase Contract Agreement, dated as of June 24, 2003
(the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and you, as Purchase Contract Agent and as Attorney-in-Fact
for the Holders of the Purchase Contracts, that such Holder has elected to pay
to the Securities Intermediary for deposit in the Collateral Account, prior to
or on 11:00 a.m. (New York City time) on the fourth Business Day immediately
preceding the Purchase Contract Settlement Date (in lawful money of the United
States by certified or cashiers' check or wire transfer, in immediately
available funds), $______ as the Stated Amount for the shares of Common Stock
issuable to such Holder by the Company with respect to _____ Purchase Contracts
on the Purchase Contract Settlement Date. The undersigned Holder hereby
instructs you to notify promptly the Collateral Agent of the undersigned
Holders' election to make such Cash Settlement with respect to the Purchase
Contracts related to such Holder's [Corporate Units] [Treasury Units (containing
Treasury Securities maturing [July][August] 15, 2006)].
Date: ______________________________ ___________________________________
Signature
Signature Guarantee: ______________
Please print name and address of Registered Holder:
F-1
EXHIBIT G
NOTICE FROM PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Purchase Contract through Remarketing)
BNY Midwest Trust Company
The Collateral Agent
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602
Attention: Corporate Finance
Fax: (312) 827-8542
Re: __________ Corporate Units of The Chubb Corporation,
a New Jersey corporation (the "COMPANY")
Please refer to the Purchase Contract Agreement, dated as of June 24,
2003 (the "PURCHASE CONTRACT AGREEMENT"; unless otherwise defined herein, terms
defined in the Purchase Contract Agreement are used herein as defined therein),
between the Company and the undersigned, as Purchase Contract Agent and as
attorney-in-fact for the Holders of Corporate Units from time to time.
In accordance with Section 5.02 of the Purchase Contract Agreement and,
based on notices of [Early Settlements][Cash Settlements] received from Holders
of Corporate Units as of 5:00 p.m. (New York City time), on the fifth Business
Day immediately preceding the ______ Remarketing Date, we hereby notify you that
an aggregate principal amount of $______ Senior Notes are to be tendered for
purchase in the Remarketing.
Date: By: BANK ONE TRUST COMPANY, N.A.,
as the Purchase Contract Agent
___________________________________
Name:
Title: Authorized Signatory
G-1
EXHIBIT H
[FORM OF REMARKETING AGREEMENT]
Citigroup Global Markets Inc.
388 Greenwich Street,
New York, NY 10013
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center, North Tower
New York, NY 10080
Bank One Trust Company, N.A.
153 West 51st Street
New York, NY 10019
Ladies and Gentlemen:
This Agreement is dated [Insert Date] (the "AGREEMENT") by and among
The Chubb Corporation, a New Jersey corporation (the "COMPANY"), Citigroup
Global Markets Inc. ("CITIGROUP"), Goldman, Sachs & Co. ("GOLDMAN SACHS"),
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MERRILL LYNCH") and Bank
One Trust Company, N.A., a national banking association, not individually but
solely as Purchase Contract Agent (the "PURCHASE CONTRACT AGENT") and as
attorney-in-fact of the holders of Purchase Contracts (as defined in the
Purchase Contract Agreement referred to below).
SECTION 13.01. Definitions.
(a) Capitalized terms used and not defined in this Agreement shall have
the meanings set forth in the Purchase Contract Agreement, dated as of June 24,
2003, between the Company and Bank One Trust Company, N.A., as Purchase Contract
Agent, as amended from time to time (the "PURCHASE CONTRACT AGREEMENT").
(b) As used in this Agreement, the following terms have the following
meanings:
"PRELIMINARY PROSPECTUS" means any preliminary prospectus relating to
the Remarketed Senior Notes included in the Registration Statement, including
the documents incorporated by
H-1
reference therein as of the date of such Preliminary Prospectus; and any
reference to any amendment or supplement to such Preliminary Prospectus shall be
deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus, under the Exchange Act, and incorporated by reference in
such Preliminary Prospectus.
"PROSPECTUS" means the prospectus relating to the Remarketed Senior
Notes, in the form in which first filed, or transmitted for filing, with the
Commission after the effective date of the Registration Statement pursuant to
Rule 424(b), including the documents incorporated by reference therein as of the
date of such Prospectus; and any reference to any amendment or supplement to
such Prospectus shall be deemed to refer to and include any documents filed
after the date of such Prospectus, under the Exchange Act, and incorporated by
reference in such Prospectus.
"REGISTRATION STATEMENT" means a registration statement under the
Securities Act of 1933, as amended (the "SECURITIES ACT") prepared by the
Company covering, inter alia, the Remarketing of the Remarketed Senior Notes
pursuant to Section 5(a) hereunder, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in such
registration statement, and any post-effective amendments thereto. "Remarketed
Senior Notes" means the Pledged Senior Notes and the Separate Senior Notes, if
any, subject to Remarketing as identified to the Remarketing Agent by the
Purchase Contract Agent and the Custodial Agent, respectively, after 11:00 a.m.,
New York City time, on the Business Day immediately preceding the applicable
Remarketing Date, and shall include: (a) (i) in the case of the Initial
Remarketing, the Second Remarketing and the Third Remarketing, the Pledged
Senior Notes and (ii) in the case of the Final Remarketing, the Senior Notes of
the Holders of Corporate Units who have not notified the Purchase Contract Agent
prior to 5:00 p.m. on the fifth Business Day immediately preceding the Purchase
Contract Settlement Date of their intention to effect a Cash Settlement of the
related Purchase Contracts pursuant to the terms of the Purchase Contract
Agreement or who have so notified the Purchase Contract Agent but failed to make
the required cash payment on the fourth Business Day immediately preceding the
Purchase Contract Settlement Date pursuant to the terms of the Purchase Contract
Agreement, and (b) the Separate Senior Notes of the holders of Separate Senior
Notes, if any, who have elected to have their Separate Senior Notes be
remarketed in such Remarketing pursuant to the terms of the Purchase Contract
Agreement.
"REMARKETING" means the remarketing of the Remarketed Senior Notes
pursuant to this Remarketing Agreement.
"REMARKETING AGENT" means any of Citigroup, Goldman Sachs or Merrill
Lynch appointed as the Remarketing Agent by the Company pursuant to Section 2(a)
hereof.
"REMARKETING MATERIALS" means the Preliminary Prospectus, the
Prospectus or any other information furnished by the Company to the Remarketing
Agent for distribution to investors in connection with the Remarketing.
H-2
"SENIOR NOTES" means the senior notes due August 16, 2008 of the
Company.
"TRANSACTION DOCUMENTS" means this Agreement, the Purchase Contract
Agreement, the Pledge Agreement and the Indenture, in each case as amended or
supplemented from time to time.
SECTION 0.02. Appointment and Obligations of the Remarketing Agent.
(a) On or before the twentieth Business Day prior to the Initial
Remarketing Date (the "APPOINTMENT DATE"), the Company shall send written notice
appointing any of Citigroup, Goldman Sachs or Merrill Lynch as the exclusive
Remarketing Agent, subject to the terms and conditions set forth herein, for the
purpose of (i) Remarketing the Remarketed Senior Notes on behalf of the holders
thereof, (ii) determining, in consultation with the Company, in the manner
provided for herein and in the Purchase Contract Agreement and the Indenture,
the Reset Rate for the Senior Notes, and (iii) performing such other duties as
are assigned to the Remarketing Agent in the Transaction Documents. Each of
Citigroup, Goldman Sachs and Merrill Lynch hereby agree that if the Company
chooses to appoint it as the Remarketing Agent, it shall, subject to the terms
and conditions set forth herein, accept such appointment by the Company as the
exclusive Remarketing Agent.
(b) Unless a Special Event Redemption has occurred prior to such date,
on the third Business Day immediately preceding May 16, 2006 (the "INITIAL
REMARKETING DATE"), the Remarketing Agent shall use its reasonable efforts to
remarket ("INITIAL REMARKETING") the Remarketed Senior Notes, at a price (the
"REMARKETING PRICE"), based on the Reset Rate, equal to approximately (but not
less than) 100.50% of the sum of the Treasury Portfolio Purchase Price and the
Separate Senior Notes Purchase Price.
(c) In the case of a Failed Initial Remarketing and unless a Special
Event Redemption has occurred prior to such date, on the third Business Day
immediately preceding June 16, 2006 (the "SECOND REMARKETING DATE"), the
Remarketing Agent shall use its reasonable efforts to remarket (the "SECOND
REMARKETING") the Remarketed Senior Notes at the Remarketing Price. In the case
of a Failed Second Remarketing and unless a Special Event Redemption has
occurred prior to such date, on the third Business Day immediately preceding
July 16, 2006 (the "THIRD REMARKETING DATE"), the Remarketing Agent shall use
its reasonable efforts to remarket (the "THIRD REMARKETING") the Remarketed
Senior Notes at the Remarketing Price. In the case of a Failed Third Remarketing
and unless a Special Event Redemption has occurred prior to such date, on the
third Business Day immediately preceding the Purchase Contract Settlement Date
(the "FINAL REMARKETING DATE"), the Remarketing Agent shall use its reasonable
efforts to remarket (the "FINAL REMARKETING") the Remarketed Senior Notes at a
price (the "FINAL REMARKETING PRICE"), based on the Reset Rate, equal to
approximately 100.50% (or, if the Remarketing Agent is unable to remarket the
Remarketed Senior Notes at such rate, at a rate
H-3
below 100.50%, but in no event less than 100%, net of the Remarketing Fee) of
the aggregate principal amount of the Remarketed Senior Notes being remarketed
in such Final Remarketing. It is understood and agreed that the Remarketing on
any Remarketing Date, other than the Final Remarketing Date, will be considered
successful and no further attempts will be made if the resulting proceeds are at
least 100.25% (net of the Remarketing Fee) of the sum of the Treasury Portfolio
Purchase Price and the Separate Senior Notes Purchase Price. It is further
understood and agreed that the Final Remarketing will be considered successful
if the resulting proceeds are at least 100% (net of the Remarketing Fee) of the
aggregate principal amount of the Remarketed Senior Notes.
(d) In connection with each Remarketing, the Remarketing Agent shall
determine, in consultation with the Company, the rate per annum, rounded to the
nearest one-thousandth (0.001) of one percent per annum, that the Senior Notes
should bear (the "RESET RATE") in order for the Senior Notes of the Corporate
Unit holders to have an aggregate market value equal to the Remarketing Price or
the Final Remarketing Price, as the case may be, and that in the sole reasonable
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Senior Notes at the Remarketing Price or Final Remarketing Price, as
the case may be, in such Remarketing, provided that such rate shall not exceed
the maximum interest rate permitted by law.
(e) In the event of a Failed Remarketing or if no Senior Notes are
included in Corporate Units, and if none of the holders of the Separate Senior
Notes elect to have Senior Notes be remarketed in such Remarketing, the
applicable interest rate on the Senior Notes will not be reset and will continue
to be the Coupon Rate set forth in the Indenture, as supplemented from time to
time.
(f) If, by 4:00 p.m. (New York City time) on the applicable Remarketing
Date, the Remarketing Agent is unable to remarket all of the Remarketed Senior
Notes at the Remarketing Price or the Final Remarketing Price, as the case may
be, pursuant to the terms and conditions hereof, a Failed Remarketing shall be
deemed to have occurred, and the Remarketing Agent shall advise, by telephone
the Depositary, the Purchase Contract Agent and the Company, and return the
Remarketed Senior Notes to the Collateral Agent or the Custodial Agent, as the
case may be. Whether or not there has been a Failed Remarketing will be
determined in the sole reasonable discretion of the Remarketing Agent.
(g) In the event of a Successful Remarketing, by approximately 4:30
p.m. (New York City time) on the applicable Remarketing Date, the Remarketing
Agent shall advise, by telephone:
(1) the Depositary, the Purchase Contract Agent and the
Company of the Reset Rate determined by the Remarketing Agent in such
Remarketing and the number of Remarketed Senior Notes sold in such Remarketing;
H-4
(2) each purchaser (or the Depositary Participant
thereof) of Remarketed Senior Notes of the Reset Rate and the number of
Remarketed Senior Notes such purchaser is to purchase; and
(3) each such purchaser to give instructions to its
Depositary Participant to pay the purchase price on the third business day
immediately following the date of such Successful Remarketing in same day funds
against delivery of the Remarketed Senior Notes purchased through the facilities
of the Depositary.
The Remarketing Agent shall also, if required by the Securities Act or
the rules and regulations promulgated thereunder, deliver to each purchaser a
Prospectus in connection with the Remarketing.
(h) After deducting any fees specified in Section 4 below, the proceeds
from a Successful Remarketing (i) with respect to the Senior Notes that are
components of the Corporate Units, shall be paid to the Collateral Agent in
accordance with Sections 5.07 and 7.03 of the Pledge Agreement, as the case may
be, and Section 5.02 of the Purchase Contract Agreement and (ii) with respect to
the Separate Senior Notes, shall be paid to the Custodial Agent for payment to
the holders of such Separate Senior Notes in accordance with Section 5.02 of the
Purchase Contract Agreement and Section 7.03 of the Pledge Agreement.
(i) The right of each holder of Separate Senior Notes or Corporate
Units to have Remarketed Senior Notes remarketed and sold on any Remarketing
Date shall be subject to the conditions that (i) the Remarketing Agent conducts
an (A) Initial Remarketing, (B) a Second Remarketing in the event of a Failed
Initial Remarketing, (C) a Third Remarketing in the event of a Failed Second
Remarketing and (D) a Final Remarketing in the event of a Failed Third
Remarketing, each pursuant to the terms of this Agreement, (ii) a Special Event
Redemption has not occurred prior to such Remarketing Date, (iii) the
Remarketing Agent is able to find a purchaser or purchasers for Remarketed
Senior Notes at the Remarketing Price or the Final Remarketing Price, as the
case may be, based on the Reset Rate, and (iv) such purchaser or purchasers
deliver the purchase price therefor to the Remarketing Agent as and when
required.
(j) It is understood and agreed that the Remarketing Agent shall not
have any obligation whatsoever to purchase any Remarketed Senior Notes, whether
in the Remarketing or otherwise, and shall in no way be obligated to provide
funds to make payment upon tender of Remarketed Senior Notes for Remarketing or
to otherwise expend or risk its own funds or incur or to be exposed to financial
liability in the performance of its duties under this Agreement, and without
limitation of the foregoing, the Remarketing Agent shall not be deemed an
underwriter of the Remarketed Senior Notes. Neither the Company nor the
Remarketing Agent shall be obligated in any case to provide funds to make
payment upon tender of the Remarketed Senior Notes for Remarketing.
SECTION 0.03. Representations and Warranties of the Company.
H-5
The Company represents and warrants (i) on and as of the date any
Remarketing Materials are first distributed in connection with the Remarketing
(the "COMMENCEMENT DATE"), (ii) on and as of the applicable Remarketing Date and
(iii) on and as of the settlement date relating to such Remarketing Date, that:
(a) Each of the representations and warranties of the Company as set
forth in Sections 1(a) through 1(aa) of the Underwriting Agreement dated June
18, 2003 (the "UNDERWRITING AGREEMENT") among the Company and the Underwriters
identified in Schedule II thereto, is true and correct as if made on each of the
dates specified above; provided that for purposes of this Section 3(a), any
reference in such sections of the Underwriting Agreement to (i) the
"Registration Statement", the "Prospectus" or the "Preliminary Prospectus" shall
be deemed to refer to such terms as defined herein and (ii) the "Closing Date"
shall be deemed to refer to the applicable Remarketing Date.
(b) The Registration Statement, if any, in the form heretofore
delivered or to be delivered to the Remarketing Agent, has been declared
effective by the Commission in such form; and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission.
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information relating to
the Remarketing Agent furnished in writing to the Company by the Remarketing
Agent or its counsel expressly for use in the Prospectus.
(d) The Registration Statement, if any, conforms (and the Prospectus,
if any, and any further amendments or supplements to the Registration Statement
or the Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform) in all material respects to the requirements
of the Securities Act and the rules and regulations promulgated thereunder, and
the Registration Statement and the Remarketing Materials (and any amendment or
supplement thereto) as of their respective effective or filing dates and as of
the Commencement Date, applicable Remarketing Date and Purchase Contract
Settlement Date do
H-6
not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation and warranty
is made as to any statement of eligibility on Form T-1 filed or incorporated by
reference as part of the Registration Statement, the Prospectus or the
Remarketing Materials, or as to information relating to the Remarketing Agent
contained in or omitted from the Registration Statement, the Prospectus or the
Remarketing Materials in reliance upon and in conformity with written
information furnished to the Company by the Remarketing Agent.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
SECTION 0.04. Fees.
(a) In the event of a Successful Remarketing of the Remarketed Senior
Notes prior to the Final Remarketing Date, the Remarketing Agent may retain as a
remarketing fee (the "REMARKETING FEE") an amount not exceeding 25 basis points
(0.25%) of the sum of the Treasury Portfolio Purchase Price and the Separate
Senior Note Purchase Price.
(b) In the event of a Successful Final Remarketing, the Remarketing
Agent may retain as the Remarketing Fee an amount not exceeding 25 basis points
(0.25%) of the principal amount of the Remarketed Senior Notes.
SECTION 0.05. Covenants of the Company.
The Company covenants and agrees as follows:
(a) If and to the extent the Remarketed Senior Notes are required (in
the view of counsel, which need not be in the form of a written opinion, for
either the Remarketing Agent or the Company) to be registered under the
Securities Act as in effect at the time of the Remarketing,
(1) to prepare the Registration Statement and the
Prospectus, in a form approved by the Remarketing Agent, to file
any such Prospectus pursuant to the Securities Act within the
period required by the Securities Act and the rules and regulations
thereunder and to use commercially reasonable efforts to cause the
Registration Statement to be declared effective by the Commission
prior to the second Business Day immediately preceding the
applicable Remarketing Date;
(2) to file promptly with the Commission any amendment to
the Registration Statement or the Prospectus or any supplement to
the Prospectus that may, in the reasonable judgment of the Company
or the Remarketing Agent, be required by the Securities Act or
requested by the Commission;
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(3) to advise the Remarketing Agent, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been
filed and to furnish the Remarketing Agent with copies thereof;
(4) to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a Prospectus is required in connection with
the offering or sale of the Remarketed Senior Notes;
(5) to advise the Remarketing Agent, promptly after it
receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of the
Prospectus, of the suspension of the qualification of any of the
Remarketed Senior Notes for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or
for additional information, and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of
any Prospectus or suspending any such qualification, to use
promptly its best efforts to obtain its withdrawal;
(6) to furnish promptly to the Remarketing Agent such
copies of the following documents as the Remarketing Agent shall
reasonably request: (A) conformed copies of the Registration
Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits); (B) the
Preliminary Prospectus and any amended or supplemented Preliminary
Prospectus, (C) the Prospectus and any amended or supplemented
Prospectus; and (D) any document incorporated by reference in the
Prospectus (excluding exhibits thereto); and, if at any time when
delivery of a prospectus is required in connection with the
Remarketing, any event shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus
is delivered, not misleading, or if for any other reason it shall
be
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necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with
the Securities Act or the Exchange Act, to notify the Remarketing
Agent and, upon its request, to file such document and to prepare
and furnish without charge to the Remarketing Agent and to any
dealer in securities as many copies as the Remarketing Agent may
from time to time reasonably request of an amended or supplemented
Prospectus that will correct such statement or omission or effect
such compliance;
(7) prior to filing with the Commission (A) any amendment
to the Registration Statement or supplement to the Prospectus or
(B) any Prospectus pursuant to Rule 424 under the Securities Act,
to furnish a copy thereof to the Remarketing Agent and counsel to
the Remarketing Agent; and not to file any such amendment or
supplement that shall be reasonably disapproved by the Remarketing
Agent promptly after reasonable notice;
(8) as soon as practicable, but in any event not later
than eighteen months, after the effective date of the Registration
Statement, to make "generally available to its security holders" an
"earnings statement" of the Company and its subsidiaries complying
with (which need not be audited) Section 11(a) of the Securities
Act and the rules and regulations thereunder (including, at the
option of the Company, Rule 158 under the Securities Act). The
terms "GENERALLY AVAILABLE TO ITS SECURITY HOLDERS" and "EARNINGS
STATEMENT" shall have the meanings set forth in Rule 158 under the
Securities Act; and
(9) to take such action as the Remarketing Agent may
reasonably request in order to qualify the Remarketed Senior Notes
for offer and sale under the securities or "blue sky" laws of such
jurisdictions as the Remarketing Agent may reasonably request;
provided that in no event shall the Company be required to qualify
as a foreign corporation or to file a general consent to service of
process in any jurisdiction.
(b) To pay: (1) the costs incident to the preparation and printing of
the Registration Statement, if any, any Prospectus and any other Remarketing
Materials and any amendments or supplements thereto; (2) the costs of
distributing the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto; (3) any fees
and expenses of qualifying the Remarketed Senior Notes under the securities laws
of
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the several jurisdictions as provided in Section 5(a)(9) and of preparing,
printing and distributing a Blue Sky Memorandum, if any (including any related
fees and expenses of counsel to the Remarketing Agent); (4) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
and the Remarketing Agent hereunder; and (5) the reasonable fees and expenses of
counsel to the Remarketing Agent in connection with their duties hereunder.
(c) To furnish the Remarketing Agent with such information and
documents as the Remarketing Agent may reasonably request in connection with the
transactions contemplated hereby, and to make reasonably available to the
Remarketing Agent and any accountant, attorney or other advisor retained by the
Remarketing Agent such information that parties would customarily require in
connection with a due diligence investigation conducted in accordance with
applicable securities laws and to cause the Company's officers, directors,
employees and accountants to participate in all such discussions and to supply
all such information reasonably requested by any such Person in connection with
such investigation.
SECTION 0.06. Conditions to the Remarketing Agent's Obligations.
The obligations of the Remarketing Agent hereunder shall be subject to
the following conditions:
(a) The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission; and
any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied
with.
(b) (1) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, (2) trading of any securities of the
Company shall not have been materially suspended or limited on the New York
Stock Exchange, (3) a general moratorium on commercial banking activities in New
York shall not have been declared by either Federal or New York State
authorities, or (4) there shall not have occurred a material adverse change in
the financial markets, any outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war or other calamity or crisis, if the effect of any such event specified in
this clause (4) in the judgment of the Remarketing Agent makes it impracticable
or inadvisable to proceed with the Remarketing or the delivery of the Remarketed
Senior Notes on the terms and in the manner contemplated in the Transaction
Documents.
(c) The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the applicable
Remarketing Date, and the Company, the Purchase Contract Agent and the
Collateral Agent shall have performed in all material respects all covenants and
agreements contained herein or in the Purchase Contract
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Agreement or Pledge Agreement to be performed on their part at or prior to such
Remarketing Date.
(d) The Company shall have furnished to the Remarketing Agent a
certificate, dated the applicable Remarketing Date, of the Chief Executive
Officer and the Treasurer satisfactory to the Remarketing Agent stating that:
(1) no order suspending the effectiveness of the Registration Statement, if any,
or prohibiting the sale of the Remarketed Senior Notes is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of such
officers, threatened by the Commission; (2) the representations and warranties
of the Company in Section 3 are true and correct on and as of the applicable
Remarketing Date and the Company has performed in all material respects all
covenants and agreements contained herein to be performed on its part at or
prior to such Remarketing Date; and (3) the Registration Statement, as of its
effective date, and the Remarketing Materials, as of their respective dates, did
not contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading and the Prospectus did not contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(e) On the applicable Remarketing Date, the Remarketing Agent shall
have received a letter addressed to the Remarketing Agent and dated such date,
in form and substance satisfactory to the Remarketing Agent, of Ernst & Young
LLP, the independent accountants of the Company, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
with respect to certain financial information contained in the Remarketing
Materials, if any.
(f) Each of (1) the General Counsel to the Company, (2) Debevoise &
Plimpton, counsel to the Company and (3) Drinker, Biddle & Reath LLP, New Jersey
counsel to the Company, shall have furnished to the Remarketing Agent its
opinion, addressed to the Remarketing Agent and dated the Remarketing Date, in
form and substance reasonably satisfactory to the applicable Remarketing Agent
addressing such matters as are set forth in such counsel's opinion furnished
pursuant to Sections 6(b), 6(c) and 6(d) of the Underwriting Agreement, adapted
as necessary to relate to the securities being remarketed hereunder and to the
Remarketing Materials, if any, or to any changed circumstances or events
occurring subsequent to the date of this Agreement, such adaptations being
reasonably acceptable to counsel to the Remarketing Agent.
(g) Davis Polk & Wardwell, counsel for the Remarketing Agent, shall
have furnished to the Remarketing Agent its opinion, addressed to the
Remarketing Agent and dated the applicable Remarketing Date, in form and
substance satisfactory to the Remarketing Agent.
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(h) Subsequent to the execution and delivery of this Agreement and
prior to the applicable Remarketing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate an
improvement, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
SECTION 0.07. Indemnification.
(a) The Company will indemnify and hold harmless the Remarketing Agent,
its partners, directors and officers and each person, if any, who controls the
Remarketing Agent within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Remarketing Agent may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Prospectus, or any amendments or supplement thereto, or any related Preliminary
Prospectus or preliminary prospectus supplement, or any other Remarketing
Materials, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse the Remarketing Agent
for any legal or other expenses reasonably incurred by the Remarketing Agent in
connection with investigating or defending any such losses, claims, damages,
liabilities or action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by the Remarketing Agent specifically for use therein.
(b) The Remarketing Agent will indemnify and hold harmless the Company,
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement thereto,
or any related Preliminary Prospectus or Preliminary Prospectus supplement, or
any other Remarketing Materials, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by the
Remarketing Agent specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection
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with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In the case of parties
indemnified pursuant to subsection (a) above, counsel to the indemnified parties
shall be selected by the Remarketing Agent. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 (whether or
not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
SECTION 0.08. Contribution.
(a) If the indemnification provided for in Section 7 is unavailable to
or insufficient to hold harmless an indemnified party under Sections 7(a) or
7(b), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Remarketing Agent on the other from the offering of the
Remarketed Senior Notes or (ii) if the allocation provided by clause (i) is not
permitted by applicable law, in such proportions as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Remarketing Agent on the
other in connection with the statements of omissions which resulted in such
losses, claims, damages or liabilities as well as any relevant equitable
considerations. The relative benefits received by the Company on one hand and
the Remarketing Agent on the other hand in connection with the Remarketing shall
be deemed to be in the same proportions as the aggregate principal amount of the
Remarketed Senior Notes less the fee paid to the Remarketing Agent on the one
hand and the
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fee paid to the Remarketing Agent on the other hand bear to the aggregate
principal amount of the Remarketed Senior Notes. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Remarketing Agent on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (a) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (a). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (a) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (a), the Remarketing Agent shall not be required
to contribute any amount in excess of the amount by which the fees received by
it under Section 4 exceeds the amount of any damages which the Remarketing Agent
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(b) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the
Remarketing Agent and to each person, if any, who controls the Remarketing Agent
within the meaning of the Securities Act; and the obligations of the Remarketing
Agent under this Section 8 shall be in addition to any liability which the
Remarketing Agent may otherwise have and shall extend, upon the same terms and
conditions, to each director of the Company, to each officer of the Company who
signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act.
(c) The indemnity and contribution provisions contained in Section 7
and this Section 8 and the representations, warranties and other statements of
the Company contained in this Agreement shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Remarketing Agent or any person controlling the
Remarketing Agent, or the Company, its officers or director or any controlling
person of the Company, and the completion of the Remarketing.
SECTION 0.09. Resignation and Removal of the Remarketing Agent.
Any of Citigroup, Goldman Sachs or Merrill Lynch (the "REMARKETING
AGENT CANDIDATES") may resign and be discharged from its duties and obligations
hereunder, and the
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Company may remove any of the Remarketing Agent Candidates, by giving 30 days'
prior written notice, in the case of a resignation, to the Company and the
Depositary and, in the case of a removal, to the removed Remarketing Agent
Candidate and the Depositary; provided, however, that if only one Remarketing
Agent Candidate remains:
(a) such Remarketing Agent Candidate may not resign without reasonable
cause; and
(b) no such resignation nor any such removal shall become effective
until the Company shall have appointed at least one nationally recognized
broker-dealer as successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in which
it shall have agreed to conduct the Remarketing in accordance with the
Transaction Documents in all material respects.
In any such case, the Company will use commercially reasonable efforts
to appoint a successor Remarketing Agent and enter into such a remarketing
agreement with such person as soon as reasonably practicable. The provisions of
Section 7 and Section 8 shall survive the resignation or removal of any
Remarketing Agent Candidate pursuant to this Agreement.
SECTION 0.10. Dealing in Securities.
The Remarketing Agent, when acting as a Remarketing Agent or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the Remarketed Senior Notes, Corporate Units,
Treasury Units or any of the securities of the Company (together, the
"SECURITIES"). The Remarketing Agent may exercise any vote or join in any action
which any beneficial owner of such Securities may be entitled to exercise or
take pursuant to the Indenture with like effect as if it did not act in any
capacity hereunder. The Remarketing Agent, in its individual capacity, either as
principal or agent, may also engage in or have an interest in any financial or
other transaction with the Company as freely as if it did not act in any
capacity hereunder.
SECTION 0.11. Remarketing Agent's Performance; Duty of Care.
The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement and the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into this Agreement or any of the Transaction Documents. In
the absence of bad faith on the part of the Remarketing Agent, the Remarketing
Agent may conclusively rely upon any document furnished to it, as to the truth
of the statements expressed in any of such documents. The Remarketing Agent
shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties except as otherwise set forth herein. The Remarketing Agent, acting
under this Agreement, shall incur no liability to the Company or to any holder
of Remarketed Senior Notes in its individual capacity or as Remarketing Agent
for any action or failure to act, on its part in connection with a Remarketing
or otherwise, except if
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such liability is judicially determined to have resulted from its failure to
comply with the material terms of this Agreement or the gross negligence or
willful misconduct on its part. The provisions of this Section 11 shall survive
the termination of this Agreement and shall survive the resignation or removal
of any Remarketing Agent pursuant to this Agreement.
SECTION 0.12. Termination.
This Agreement shall automatically terminate (i) as to the Remarketing
Agent on the effective date of the resignation or removal of the Remarketing
Agent pursuant to Section 9 and (ii) on the earlier of (x) any Special Event
Redemption Date and (y) the Purchase Contract Settlement Date. If this Agreement
is terminated pursuant to any of the other provisions hereof, except as
otherwise provided herein, the Company shall not be under any liability to the
Remarketing Agent and the Remarketing Agent shall not be under any liability to
the Company, except that if this Agreement is terminated by the Remarketing
Agent because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, the
Company will reimburse the Remarketing Agent for all of its out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by it. Section 7, Section 8 and Section 11 hereof shall survive the
termination of this Agreement or the resignation or removal of the Remarketing
Agent.
SECTION 0.13. Notices.
All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Remarketing Agent Candidates, shall be delivered or sent
by mail, telex or facsimile transmission to:
Citigroup Global Markets, Inc.
388 Greenwich Street,
New York, NY 10013
Telecopier No.: [ ]
Attention: General Counsel
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Goldman Sachs & Co.
85 Broad Street
New York, NY 10004
Telecopier No.: [ ]
Attention: [ ]
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center, North Tower
New York, NY 10080
Telecopier No.: [ ]
Attention: [ ]
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to The Chubb Corporation, 15 Mountain View Road, Warren,
New Jersey 07061-1615, Attention: General Counsel (Telecopier No.: (908)
903-2003); and
(c) if to the Purchase Contract Agent, shall be delivered or sent by
mail, telex or facsimile transmission to Bank One Trust Company, N.A. , 153 West
51st Street, New York, New York, 10019, Attention: Corporate Trust
Administration.
Any such statements, requests, notices or agreements shall take effect
at the time of receipt thereof.
SECTION 0.14. Persons Entitles to Benefit of Agreement.
This Agreement shall inure to the benefit of and be binding upon each
party hereto and its respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
Remarketing Agent and the person or persons, if any, who control the Remarketing
Agent within the meaning of Section 15 of the Securities Act and (y) the
indemnity agreement of the Remarketing Agent contained in Section 7(b) of this
Agreement shall be deemed to be for the benefit of the Company's directors and
officers who sign the Registration Statement, if any, and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any
person, other than the persons referred to herein, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
SECTION 0.15. Survival.
The respective indemnities, representations, warranties and agreements
of the Company and the Remarketing Agent contained in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall survive
any Remarketing and shall remain in full
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force and effect, regardless of any investigation made by or on behalf of any of
them or any person controlling any of them.
SECTION 0.16. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of New York, without regard to conflicts of laws principles.
SECTION 0.17. Judicial Proceedings.
(a) Each party hereto expressly accepts and irrevocably submits to the
non-exclusive jurisdiction of the United States Federal or New York State court
sitting in the Borough of Manhattan, The City of New York, New York, over any
suit, action or proceeding arising out of or relating to this Agreement or the
Securities. To the fullest extent it may effectively do so under applicable law,
each party hereto irrevocably waives and agrees not to assert, by way of motion,
as a defense or otherwise, any claim that it is not subject to the jurisdiction
of any such court, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding brought in any such court
and any claim that any such suit, action or proceeding brought in any such court
has been brought in an inconvenient forum.
(b) Each party hereto agrees, to the fullest extent that it may
effectively do so under applicable law, that a judgment in any suit, action or
proceeding of the nature referred to in Section 17(a) brought in any such court
shall be conclusive and binding upon such party, subject to rights of appeal and
may be enforced in the courts of the United States of America or the State of
New York (or any other court the jurisdiction to which the Company is or may be
subject) by a suit upon such judgment.
SECTION 0.18. Couterparts.
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 0.19. Headings.
The headings herein are inserted for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of,
this Agreement.
SECTION 0.20. Severability.
If any provision of this Agreement shall be held or deemed to be or
shall, in fact, be invalid, inoperative or unenforceable as applied in any
particular case in any or all jurisdictions because it conflicts with any
provisions of any constitution, statute, rule or public policy or for any other
reason, then, to the extent permitted by law, such circumstances shall not have
the
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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 0.21. Amendments.
This Agreement may be amended by an instrument in writing signed by the
parties hereto. The Company agrees that it will not enter into, cause or permit
any amendment or modification of the Transaction Documents or any other
instruments or agreements relating to the Senior Notes or the Corporate Units
that would in any way adversely affect the rights, duties or obligations of any
of Citigroup, Goldman Sachs or Merrill Lynch, each as a potential Remarketing
Agent, without the prior written consent of the Remarketing Agent Candidates.
SECTION 0.22. Successors and Assigns.
The rights and obligations of the Company hereunder may not be assigned
or delegated to any other Person without the prior written consent of the
Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder
may not be assigned or delegated to any other Person (other than an affiliate of
the Remarketing Agent) without the prior written consent of the Company.
If the foregoing correctly sets forth the agreement by and between the
Company, the Remarketing Agent and the Purchase Contract Agent, please indicate
your acceptance in the space provided for that purpose below.
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[SIGNATURES ON THE FOLLOWING PAGE]
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Very truly yours,
THE CHUBB CORPORATION
By: _______________________________
John D. Finnegan
Chief Executive Officer
CONFIRMED AND ACCEPTED:
CITIGROUP GLOBAL MARKETS INC.
By:_____________________________
GOLDMAN, SACHS & CO.
By:_____________________________
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: _____________________________
BANK ONE TRUST COMPANY, N.A.
not individually but solely as Purchase Contract Agent
and as attorney-in-fact for the Holders of the Purchase Contracts
By:_____________________________
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